1 TAC — Administration

# 1 TAC — Administration

## **Part 1** OFFICE OF THE GOVERNOR

### **Chapter 3** PUBLIC SAFETY OFFICE

#### **Subchapter A** GENERAL GRANT PROGRAM PROVISIONS

##### **1 Tex. Admin. Code § 3.1** Applicability {#sec-3.1 omnilex-key=us-tx-regs-official--title-1--3.1}

Subchapters A through F of this chapter apply to all applications for funding and grants submitted to the Public Safety Office (PSO), Office of the Governor (OOG). A PSO-funded grantee must comply with the provisions of Subchapters A through F in effect on the date the grant is awarded by the OOG, unless a subsequent effective date is specified by the OOG in an original grant award or a grant adjustment. Grantees must comply with all applicable state and federal statutes, rules, regulations, and guidelines. In instances where both federal and state requirements apply to a grantee, the more restrictive requirement applies.

**History**
- *Source Note: The provisions of this §3.1 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.3** Definitions {#sec-3.3 omnilex-key=us-tx-regs-official--title-1--3.3}

(a) applicant: an agency or organization that has submitted a grant application or grant renewal documentation;

(b) approved budget categories: budget categories (including personnel, contractual and professional services, travel, equipment, construction, supplies and other direct operating expenses, and indirect costs) that contain a line item with a dollar amount greater than zero that is approved by the OOG through a grant award or a budget adjustment;

(c) CJAC: Criminal Justice Advisory Committee, a component of a COG. A CJAC must have a multi-disciplinary representation of members from the region. This representation must contain members from the following groups: citizens or parents, counties, municipalities, substance abuse prevention, education, juvenile justice, law enforcement, mental health, nonprofit organizations, prosecution or courts, and victim services. No single group or discipline may constitute more than one-third (1/3) of the CJAC;

(d) COG: a regional planning commission, council of governments, or similar regional planning agency created under Chapter 391, Texas Local Government Code;

(e) computing devices: machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or "peripherals") for printing, transmitting and receiving, or storing electronic information;

(f) condition of funding: a prerequisite placed on a grant because of a need for information, clarification, or submission of an outstanding requirement of the grant that may result in a hold being placed on the OOG-funded portion of a grant project;

(g) eGrants: the online grant management system used by PSO grant programs;

(h) equipment: tangible personal property (including information technology systems) having a useful life of more than one year and a per unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the grantee for financial statement purposes or $5,000;

(i) executive director: the executive director of PSO, who also serves in the capacity required by Texas Government Code 772.006(b);

(j) grant funds: OOG-funded and matching funds portions of a grant project;

(k) grantee: an applicant that receives a grant award;

(l) HSAC: Homeland Security Advisory Committee, a component of a COG. HSACs must consist of representatives from counties, municipalities, non-profit organizations, disciplines, and/or other stakeholders from within the region who are knowledgeable about terrorism preparedness and the threats, vulnerabilities and consequences relevant to the COG region;

(m) indirect costs: those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved;

(n) information technology systems: computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources;

(o) liquidation date: the date specified in an original grant award or a subsequent grant adjustment upon which a grantee must expend all outstanding liabilities;

(p) matching funds: the grantee's share of the project costs;

(q) OCM: the Office of Compliance and Monitoring of the OOG;

(r) OMB: the Executive Office of the President of the United States, Office of Management and Budget;

(s) OOG: the Office of the Governor;

(t) program income: gross income earned by the grantee that is directly generated by a supported activity of the grant or earned as a result of the grant award during the period of performance. Program income includes, but is not limited to, forfeitures, fees for services performed, the use of rental or real or personal property acquired under an award, the sale of commodities or items fabricated under an award, and license fees and royalties on patents and copyrights. Interest earned on advances of grant funds is not program income. Except as otherwise provided in applicable law, regulations or the terms and conditions of the award, program income does not include rebates, credits, discounts and interest earned on any of them;

(u) PSO: the Public Safety Office of the OOG. The PSO includes the following divisions:

(1) CJD: the Criminal Justice Division;

(2) CSTT: the Child Sex Trafficking Team;

(3) GAD: the Grants Administration Division; and

(4) HSGD: the Homeland Security Grants Division;

(v) RFA: Request for Applications, published in either eGrants or the *Texas Register* by PSO;

(w) simplified acquisition threshold: the dollar amount below which an entity may purchase property or services using small purchase methods. The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908;

(x) supplies: all tangible personal property other than those described in accordance with §3.3(h) of this chapter (relating to Definitions). A computing device is a supply if the acquisition cost is less than the lesser of the capitalizations level established by the grantee for financial statement purposes or $5,000, regardless of the length of its useful life; and

(y) UGMS: the Uniform Grant Management Standards or the Texas Grant Management Standards, as applicable.

**History**
- *Source Note: The provisions of this §3.3 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.5** Submission Process {#sec-3.5 omnilex-key=us-tx-regs-official--title-1--3.5}

(a) When applying for a grant pursuant to a RFA published by the PSO in either eGrants or the *Texas Register,* applicants must submit and certify their applications according to the requirements provided in the RFA.

(b) Applications for grants that are not submitted pursuant to an RFA may also be considered. Applicants shall be selected in accordance with §3.7(b) of this chapter (relating to Selection Process).

(c) Applicants must apply for funds using the procedures, forms, and certifications prescribed by PSO.

**History**
- *Source Note: The provisions of this §3.5 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.7** Selection Process {#sec-3.7 omnilex-key=us-tx-regs-official--title-1--3.7}

(a) All applications must be submitted and certified by the applicant's authorized official. For applications submitted and certified pursuant to an RFA, the PSO may select a review group, COG, or other designee to prioritize the applications and submit a priority listing to the PSO.

(b) PSO funding decisions shall be based upon the following factors:

(1) cost effectiveness;

(2) overall funding availability;

(3) PSO or state government priorities and strategies;

(4) legislative directives;

(5) identified gaps in services or resources;

(6) geographic distributions;

(7) the inherent value of the project's impact;

(8) whether the project has the potential to be a model program;

(9) whether delaying the project would have a significant negative impact on the area proposed to be served; and

(10) to the extent applicable, any additional factors listed in an RFA.

(c) For applications prioritized by a COG, the CJAC or HSAC, as appropriate, must prioritize the applications and prepare the priority listing. The COG's governing body must approve the priority listing. The OOG shall make final decisions on these applications based upon factors listed in subsection (b) of this section.

(d) During the review of an application, applicants may be instructed to submit additional information necessary to complete the grant review. Such requests for information do not serve as notice that the OOG intends to fund an application. PSO may make the necessary corrections to an application to bring it into compliance with state or federal requirements. Any corrections to an applicant's budget shall be reflected in the award documentation.

(e) Applicants shall be informed of decisions on their grant applications through either a Statement of Grant Award or a notification of denial.

**History**
- *Source Note: The provisions of this §3.7 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.9** Funding Decisions {#sec-3.9 omnilex-key=us-tx-regs-official--title-1--3.9}

(a) All funding decisions made by the OOG are final and are not subject to appeal. The receipt of an application does not obligate the OOG to fund the grant or to fund it at the amount requested.

(b) Neither the approval of a project nor any grant award shall obligate the OOG in any way to make any additional, supplemental, continuation, or other award.

**History**
- *Source Note: The provisions of this §3.9 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 5, 2001, 26 TexReg 9775; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.11** Grant and Supplemental Award Acceptance {#sec-3.11 omnilex-key=us-tx-regs-official--title-1--3.11}

The award documentation constitutes obligation of funds for use by the grantee in execution of the program or project covered by the award. Such obligation may be terminated without cause if the grantee's authorized official fails to accept the grant award within 45 calendar days of the date on which the OOG issues the Statement of Grant Award. PSO may extend this deadline upon written request from the applicant. Funds shall not be disbursed until acceptance of the grant by the grantee's authorized official.

**History**
- *Source Note: The provisions of this §3.11 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.21** Use of the Internet {#sec-3.21 omnilex-key=us-tx-regs-official--title-1--3.21}

Applicants and grantees must submit grant applications, progress reports, financial reports, and other information, as applicable, to PSO via the Internet or other electronic means.

**History**
- *Source Note: The provisions of this §3.21 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.23** Delegation of Authority {#sec-3.23 omnilex-key=us-tx-regs-official--title-1--3.23}

The executive director may delegate his or her authority or PSO's authority under this chapter.

**History**
- *Source Note: The provisions of this §3.23 adopted to be effective December 16, 2002, 27 TexReg 11729; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.25** Suspension of Rules {#sec-3.25 omnilex-key=us-tx-regs-official--title-1--3.25}

Except where prohibited by state or federal statute or rule the executive director may suspend any requirement in this chapter on a showing of good cause.

**History**
- *Source Note: The provisions of this §3.25 adopted to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925.*

#### **Subchapter B** GRANT BUDGET REQUIREMENTS

##### **1 Tex. Admin. Code § 3.73** Matching Funds Policy {#sec-3.73 omnilex-key=us-tx-regs-official--title-1--3.73}

(a) If matching funds are required on a grant, an applicant must ensure that it possesses or can acquire the require matching funds. A contractor or participating entity may contribute toward the matching funds requirement, but the applicant bears the responsibility for satisfying the matching funds requirement.

(b) Matching funds may either be cash or in-kind. Cash match includes actual cash spent by the grantee and must have a cost relationship to the award that is being matched. In-kind match includes the value of donated services. An applicant's use of matching funds must comply with the same statutes, rules, regulations, and guidelines applicable to the use of the OOG-funded portion of a grant project.

**History**
- *Source Note: The provisions of this §3.73 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.75** Personnel {#sec-3.75 omnilex-key=us-tx-regs-official--title-1--3.75}

(a) PSO shall determine the reasonableness of requested salaries and reserves the right to limit the OOG-financed portion of any salary.

(b) The OOG shall not pay any portion of the salary of, or any other compensation for, an elected or appointed government official.

(c) Compensation for grant-funded employees must be comparable to that of non-grant-funded employees performing similar work duties.

(d) Grantees may use grant funds to compensate staff members leaving employment for accrued leave (which includes, but is not limited to, annual leave, compensatory time, and sick leave) in accordance with the grantee's policy. These payments may only fund leave earned during the current grant period. The proportion of grant funds used to pay for leave cannot exceed the proportion of grant funds used to pay the staff member's salary.

**History**
- *Source Note: The provisions of this §3.75 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.77** Professional and Contractual Services {#sec-3.77 omnilex-key=us-tx-regs-official--title-1--3.77}

Grantees must establish a contract administration system to consistently ensure that contract deliverables are being provided as specified in the contracts.

**History**
- *Source Note: The provisions of this §3.77 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 21, 2009, 34 TexReg 3925.*

##### **1 Tex. Admin. Code § 3.79** Travel and Training {#sec-3.79 omnilex-key=us-tx-regs-official--title-1--3.79}

(a) Grant funds used for travel expenses must be used only in accordance with the grantee's established travel policies. If a grantee does not have established travel policies, then the grantee must use rates that are consistent with the state travel guidelines.

(b) Grantees must maintain records that properly document the completion of all grant-funded training courses.

**History**
- *Source Note: The provisions of this §3.79 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.81** Equipment {#sec-3.81 omnilex-key=us-tx-regs-official--title-1--3.81}

Applicants must include a detailed description of all proposed equipment purchases in their grant applications for approval. Grantees must request any additional equipment purchases through grant adjustments.

**History**
- *Source Note: The provisions of this §3.81 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective March 17, 2002, 27 TexReg 1693; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.83** Supplies and Direct Operating Expenses {#sec-3.83 omnilex-key=us-tx-regs-official--title-1--3.83}

Supplies and direct operating expenses are costs directly related to the grantee's day-to-day operation of the grant project that are not included in any of the grantee's other approved budget categories.

**History**
- *Source Note: The provisions of this §3.83 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925.*

##### **1 Tex. Admin. Code § 3.85** Indirect Costs {#sec-3.85 omnilex-key=us-tx-regs-official--title-1--3.85}

(a) If the applicant has an approved federally-recognized indirect cost rate negotiated between the applicant and the federal government and seeks to charge indirect costs to the grant, the applicant shall identify the indirect cost rate and provide supporting documentation as part of the application.

(b) If the applicant has a state-approved indirect cost rate negotiated between the applicant and the applicable state agency and seeks to charge indirect costs to the grant, the applicant shall identify the indirect cost rate and provide supporting documentation as part of the application.

(c) If the applicant has never received a federally-recognized or state-approved indirect cost rate, indirect costs may be approved in the grant project in an amount not to exceed ten percent of the approved modified total direct costs.

(d) Unless otherwise specified, indirect costs are allowable under PSO grants in accordance with applicable state and federal guidelines.

**History**
- *Source Note: The provisions of this §3.85 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.87** Program Income {#sec-3.87 omnilex-key=us-tx-regs-official--title-1--3.87}

Earned program income must be reported to PSO. Program income may only be used, with prior approval from PSO, for allowable project costs as reflected in an approved budget. Grantees may not carry forward program income from one grant year to the next. Grantees must refund to the OOG any program income remaining at the end of the grant period.

**History**
- *Source Note: The provisions of this §3.87 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective April 2, 2003, 28 TexReg 2737; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

#### **Subchapter D** CONDITIONS OF GRANT FUNDING

##### **1 Tex. Admin. Code § 3.2001** Conditions of Funding {#sec-3.2001 omnilex-key=us-tx-regs-official--title-1--3.2001}

When PSO determines that a grantee has failed to submit the necessary information or has failed to comply with any applicable statute, rule, regulation, guideline, or requirement, PSO may place a condition of funding on the grant which may invoke a hold on funds.

**History**
- *Source Note: The provisions of this §3.2001 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2009** Cooperative Working Agreement {#sec-3.2009 omnilex-key=us-tx-regs-official--title-1--3.2009}

(a) When a grantee intends to carry out a grant project by cooperating or participating with one or more outside organizations, the grantee must ensure that the cooperative working agreement is signed by each participating organization. Grantees must maintain on file a signed copy of all cooperative working agreements.

(b) Cooperative working agreements do not involve an exchange of funds.

**History**
- *Source Note: The provisions of this §3.2009 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2013** Pre-Approval Requirements for Procurement {#sec-3.2013 omnilex-key=us-tx-regs-official--title-1--3.2013}

(a) A grantee must submit a PSO-prescribed Procurement Questionnaire when any procurement is expected to exceed the simplified acquisition threshold or upon request. PSO may also request all related procurement documentation, such as requests for proposals, invitations for bids, or independent cost estimates.

(b) Grantees may not divide purchases or contracts to avoid the requirements of this section. For purposes of determining compliance, PSO shall consider groups of contracts with a single vendor or groups of purchases for the same or similar items as a single procurement.

**History**
- *Source Note: The provisions of this §3.2013 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2021** Resolutions {#sec-3.2021 omnilex-key=us-tx-regs-official--title-1--3.2021}

(a) Applications from non-profit corporations, local units of governments and other political subdivisions must include a resolution that contains the following:

(1) authorization for the submission of the application that clearly identifies the project for which funding is requested;

(2) a commitment to provide for all applicable matching funds;

(3) a designation of the name or title of an authorized official who is given the power to apply for, accept, reject, alter, or terminate a grant; and

(4) a written assurance that, in the event of loss or misuse of grant funds, the governing body shall return all funds to the OOG.

(b) If the designation under subsection (a)(3) of this section changes during the grant period, the grantee must submit a new resolution to the OOG.

**History**
- *Source Note: The provisions of this §3.2021 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2023** Tax-Exempt and Nonprofit Information {#sec-3.2023 omnilex-key=us-tx-regs-official--title-1--3.2023}

All nonprofit corporations must submit with their application, information about the agency's fiscal capability, including information from the Internal Revenue Service granting the corporation tax-exempt status.

**History**
- *Source Note: The provisions of this §3.2023 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925.*

##### **1 Tex. Admin. Code § 3.2025** Civil Rights Liaison {#sec-3.2025 omnilex-key=us-tx-regs-official--title-1--3.2025}

If applicable, an applicant must certify that the applicant has designated a civil rights liaison during the application process. The civil rights liaison shall serve as the grantee's civil rights point of contact and has the responsibility for ensuring that the grantee meets all applicable civil rights requirements. The designee shall act as the grantee's liaison in civil rights matters with the OOG and with the federal Office of Justice Programs.

**History**
- *Source Note: The provisions of this §3.2025 adopted to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

#### **Subchapter E** ADMINISTERING GRANTS

##### **1 Tex. Admin. Code § 3.2501** Grant Officials {#sec-3.2501 omnilex-key=us-tx-regs-official--title-1--3.2501}

(a) Each grant must have a project director, financial officer, and authorized official. No person shall serve in more than one capacity.

(b) Each grant official must have an e-mail address and access to the Internet.

(c) A grantee shall notify PSO within 20 calendar days of any change in the designated project director, financial officer, or authorized official; any change in the mailing address, e-mail address, fax number, or telephone number of each grant official and any change in the grantee's physical address.

**History**
- *Source Note: The provisions of this §3.2501 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2503** Obligating Funds {#sec-3.2503 omnilex-key=us-tx-regs-official--title-1--3.2503}

A grantee may not obligate grant funds before the beginning or after the end of the grant period specified in an original grant award or a subsequent grant adjustment.

**History**
- *Source Note: The provisions of this §3.2503 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2505** Retention of Records {#sec-3.2505 omnilex-key=us-tx-regs-official--title-1--3.2505}

(a) Grantees must maintain all financial records, supporting documents, statistical records, and all other records pertinent to the award for at least three years following the submission of a final expenditure report or the closure of the most recent audit report, whichever is later. Grantees may retain records in an electronic format. All records are subject to audit or monitoring during the entire retention period.

(b) Grantees must retain records for equipment, non-expendable personal property, and real property for a period of three years from the date of the item's disposition, replacement, or transfer.

(c) If any litigation, claim, or audit is started before the expiration of the three-year records retention period, the grantee must retain the records under review until the completion of the action and resolution of all issues which arise from it or until the end of the regular three-year period, whichever is later.

**History**
- *Source Note: The provisions of this §3.2505 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2507** Financial Status Reports {#sec-3.2507 omnilex-key=us-tx-regs-official--title-1--3.2507}

(a) Each grantee must submit financial status reports to PSO in the PSO-prescribed format no later than the designated deadlines for their submission.

(b) A financial status report reflecting cumulative expenditures from the start of the grant may be submitted as often as monthly but must be submitted at least quarterly. Grantees may only request an advance payment during the first month of the grant period to cover the first month's expenses.

(c) Grantees must ensure their final financial status report is submitted no later than the liquidation date or funds shall lapse and revert to the grantor agency. If grant funds are on hold for any reason, these funds shall lapse on the liquidation date and the grantee cannot recover them. The OOG shall not make payments to grantees that submit their final financial status report after the liquidation date.

**History**
- *Source Note: The provisions of this §3.2507 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2509** Equipment Inventory Reports {#sec-3.2509 omnilex-key=us-tx-regs-official--title-1--3.2509}

Grantees must maintain on file a current inventory report of all equipment purchased with grant funds during the grant period. This report must reconcile with the approved grant budget and the final financial status report, and must contain all required PSO data elements.

**History**
- *Source Note: The provisions of this §3.2509 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2513** Grant Adjustments {#sec-3.2513 omnilex-key=us-tx-regs-official--title-1--3.2513}

(a) The project director, financial officer, or authorized official may submit requests for grant adjustments.

(b) Adjustments consisting of increases or decreases in the amount of a grant or the reallocation of grant funds among or within approved budget categories are allowable only with prior PSO approval.

(c) Programmatic changes, such as requests to revise the scope, target, or focus of the project, or alter project activities require prior approval from PSO. Requests to extend the grant period must be submitted to and received by PSO, no later than the last day of the grant period.

**History**
- *Source Note: The provisions of this §3.2513 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2515** Bonding {#sec-3.2515 omnilex-key=us-tx-regs-official--title-1--3.2515}

Each nonprofit corporation receiving funds from the OOG must obtain and have on file a blanket fidelity bond that indemnifies the OOG against the loss and theft of the entire amount of grant funds. The cost of the bond is an eligible expense of the grant.

**History**
- *Source Note: The provisions of this §3.2515 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective July 16, 2000, 25 TexReg 6485; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2517** Remedies for Noncompliance {#sec-3.2517 omnilex-key=us-tx-regs-official--title-1--3.2517}

If a grantee fails to comply with any term or condition of a grant or any applicable statutes, rules, regulations, or guidelines, the OOG may:

(1) withhold all grant payments to a specific project or withhold all grant payments to all grant projects awarded to the grantee pending correction of the deficiency;

(2) disallow all or part of the cost of the activity or action that is not in compliance;

(3) withhold further grants from the program or grantee;

(4) terminate the grant in whole or in part; or

(5) exercise other legal remedies.

**History**
- *Source Note: The provisions of this §3.2517 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2519** Grant Reduction or Termination {#sec-3.2519 omnilex-key=us-tx-regs-official--title-1--3.2519}

(a) If a grantee seeks to terminate any approved grant, it must notify the OOG immediately.

(b) The OOG may reduce or terminate any grant when circumstances require reduction or termination, including, but not limited to when:

(1) a grantee fails to comply with any term or condition of the grant or the grantee has failed to comply with any applicable statute, rule, regulation, or guideline;

(2) the grantee and the OOG agree to do so;

(3) state or federal funds are no longer available to the OOG;

(4) conditions exist that make it unlikely that grant objectives will be accomplished; or

(5) the grantee has acted in bad faith.

(c) In the event that a grant is reduced or terminated by the OOG, the OOG shall notify the grantee in writing.

**History**
- *Source Note: The provisions of this §3.2519 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 5, 2001, 26 TexReg 9776; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2521** Payment of Outstanding Liabilities {#sec-3.2521 omnilex-key=us-tx-regs-official--title-1--3.2521}

Grantees must expend all outstanding liabilities no later than the liquidation date of the grant period specified in an original grant award or a subsequent grant adjustment. All payments made after the completion of the grant period must relate to obligations incurred during the grant period.

**History**
- *Source Note: The provisions of this §3.2521 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925.*

##### **1 Tex. Admin. Code § 3.2523** Violations of Laws {#sec-3.2523 omnilex-key=us-tx-regs-official--title-1--3.2523}

(a) A grantee must immediately notify the OOG in writing of any legal violations.

(b) A grantee must immediately notify the OOG in writing if a project or project personnel become involved in any civil or criminal litigation and the grantee must immediately forward a copy of any demand notices, subpoenas, lawsuits, or indictments to the OOG.

(c) If a federal or state court or administrative agency renders a judgment or order finding discrimination by a grantee based on race, color, national origin, sex, age, or disability, the grantee must immediately forward a copy of the judgment or order to the OOG.

(d) If any records are seized from a grantee by a law enforcement agency, or a state or federal agency, the grantee must immediately notify the OOG in writing of the seizure and must retain copies of the seized records.

**History**
- *Source Note: The provisions of this §3.2523 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2525** Evaluating Project Effectiveness {#sec-3.2525 omnilex-key=us-tx-regs-official--title-1--3.2525}

(a) Grantees must regularly evaluate their projects. PSO shall monitor grantees through progress reports, on-site visits, and desk reviews. Grantees must maintain information related to project evaluations in the project's files, and that information must be available for review.

(b) Grantees are responsible for managing the day-to-day operations of grant and sub-grant supported activities, including those of their contractors and subcontractors. Grantees must develop and maintain a standardized monitoring program incorporating best practices.

**History**
- *Source Note: The provisions of this §3.2525 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective August 6, 2007, 32 TexReg 4747; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2527** Grantee Reports {#sec-3.2527 omnilex-key=us-tx-regs-official--title-1--3.2527}

(a) Each grantee must submit reports regarding grant information, performance, and progress. To remain eligible for funding, the grantee must be able to show the scope of services provided and the impact and quality of those services.

(b) The OOG may place projects on financial hold for failure to submit complete and accurate progress reports. A grantee's history of delinquent or inaccurate reports may affect future funding decisions.

**History**
- *Source Note: The provisions of this §3.2527 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective February 17, 2005, 30 TexReg 661; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2529** Grant Management {#sec-3.2529 omnilex-key=us-tx-regs-official--title-1--3.2529}

(a) PSO has oversight responsibility for the grants it awards and may review the grantee's management and administration of grant funds and records at any time. Grantees must respond to all PSO inquiries or requests and must make all requested records available.

(b) The grantee is the entity legally and financially responsible for the grant. A grantee may not delegate its legal or financial responsibility.

**History**
- *Source Note: The provisions of this §3.2529 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective April 27, 2021, 46 TexReg 2709.*

#### **Subchapter F** PROGRAM MONITORING AND AUDITS

##### **1 Tex. Admin. Code § 3.2601** Monitoring {#sec-3.2601 omnilex-key=us-tx-regs-official--title-1--3.2601}

(a) PSO and OCM shall monitor the activities of grantees as necessary to ensure that grant funds are used for authorized purposes and that grantees achieve grant purposes.

(b) The monitoring program may consist of formal audits, monitoring reviews, and technical assistance. PSO or OCM may implement monitoring through on-site review at the grantee or sub-grantee location or through a desk review. PSO or OCM may request that grantees submit information to PSO or OCM to support any monitoring review.

(c) Grantees must make all records relevant to a monitoring review available. Failure to provide adequate documentation may result in disallowed costs or other remedies for noncompliance.

(d) After a monitoring review, the grantee shall be notified in writing through a preliminary report of any identified noncompliance. The preliminary report shall enumerate deficiencies and provide recommendations to cure the deficiencies.

(e) The grantee shall respond to the preliminary report and the deficiencies or recommendations, and submit to PSO or OCM a corrective action plan or, if the grantee believes correction action is not required in response to a deficiency or recommendation, an explanation under subsection (g) of this section within a time specified by PSO or OCM.

(f) The corrective action plan shall include:

(1) the titles of the persons responsible for implementing the corrective action plan;

(2) the corrective action to be taken; and

(3) the anticipated completion date.

(g) If the grantee believes corrective action is not required in response to a deficiency or recommendation, the response shall include an explanation and specific reasons. PSO or OCM shall determine whether the response is adequate to resolve the deficiency or recommendation.

(h) The grantee's response and the approved corrective action plan shall become part of the final report.

(i) The grantee shall resolve all identified findings within the time specified.

(j) PSO shall issue a final report:

(1) when PSO or OCM observes no deficiencies during the monitoring review; or

(2) after receiving the response by a grantee to the preliminary report.

**History**
- *Source Note: The provisions of this §3.2601 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective September 9, 2001, 26 TexReg 6645; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 22, 2006, 31 TexReg 4855; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective April 27, 2021, 46 TexReg 2709.*

##### **1 Tex. Admin. Code § 3.2603** Audits Not Performed by PSO or OCM {#sec-3.2603 omnilex-key=us-tx-regs-official--title-1--3.2603}

(a) Grantees must have audits performed in accordance with the requirements set forth in 2 CFR Part 200, Subpart F concerning Audit Requirements, and the State Single Audit requirements issued under UGMS.

(b) Grantees that meet the Single Audit requirements as set forth in either 2 CFR Part 200, Subpart F concerning Audit Requirements, or the State Single Audit requirements issued under UGMS, must submit to OCM a Single Audit reporting package within 30 calendar days of receiving the Single Audit report from the independent auditor or nine months after the end of the audit period, whichever is earlier.

(c) Grantees who are not required to have a Single Audit for any fiscal year in which the OOG award was made or expended, must submit a Certification of Single Audit Reporting Requirement Exemption form to OCM within 60 calendar days of the end of the grantee's fiscal year.

(d) All other audits performed by auditors independent of PSO or OCM must be maintained at the grantee's administrative offices and made available upon request. Grantees must notify PSO of any audit results that may adversely impact grant funds.

**History**
- *Source Note: The provisions of this §3.2603 adopted to be effective February 24, 2000, 25 TexReg 1297; amended to be effective December 16, 2002, 27 TexReg 11729; amended to be effective October 13, 2003, 28 TexReg 8873; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 21, 2009, 34 TexReg 3925; amended to be effective May 9, 2012, 37 TexReg 3389; amended to be effective January 1, 2015, 39 TexReg 10393; amended to be effective April 27, 2021, 46 TexReg 2709.*

#### **Subchapter H** TEXAS CRIME STOPPERS PROGRAM

##### **1 Tex. Admin. Code § 3.9000** Certification {#sec-3.9000 omnilex-key=us-tx-regs-official--title-1--3.9000}

(a) The Texas Crime Stoppers Council (Council) shall, on application by a crime stoppers organization as defined by §414.001(2) of the Texas Government Code (organization), determine whether the organization meets the requirements to be certified to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(b) The Council shall certify a crime stoppers organization to receive those repayments or payments if, considering the organization, continuity, leadership, community support, and general conduct of the organization, the Council determines that the repayments or payments will be spent to further the crime prevention purposes of the organization.

(c) Certification is valid for two years from the date of issuance or, if applicable, the effective date of continued certification. The Council may take action on a crime stoppers organization's Application for Continuing Certification prior to the expiration of the organization's current certification, and specify the effective date of the continued certification, provided that the effective date is no later than the expiration date of the current certification. If a crime stoppers organization's certification expires, the organization is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure, until the organization obtains certification.

(d) A private, nonprofit crime stoppers organization must submit the following information to the director of the Council in order to obtain initial certification:

(1) Documentation from the Internal Revenue Service granting the organization tax-exempt status;

(2) The dates and locations that the following persons completed a training course provided by the Criminal Justice Division of the Office of the Governor (CJD) and the Council, or their designee, within the year prior to submission of the organization's application for certification:

(A) one member of the organization's board of directors; and

(B) one of the organization's law enforcement/civilian coordinators; and

(C) the executive director of the organization (if applicable);

(3) A completed and signed Conditions of Certification Form;

(4) The name, mailing address, email address, telephone number, occupation, and board position of each member of the organization's board of directors;

(5) The name, mailing address, email address, and telephone number of each of the organization's law enforcement/civilian coordinators;

(6) The name, mailing address, email address, telephone number, and occupation of the executive director (if applicable);

(7) The description of the geographic territory or jurisdiction to which the organization desires to provide services; and

(8) Additional information specified by a vote of the Council for inclusion in the application for certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(e) A public crime stoppers organization must submit the following information to the director of the Council in order to obtain initial certification:

(1) Proof that one of the organization's law enforcement/civilian coordinators completed a training course provided by CJD and the Council, or their designee, within the year prior to submission of the organization's application for certification;

(2) A completed and signed Conditions of Certification Form;

(3) The name, mailing address, email address, telephone number, occupation, and board position of each member of the organization's governing board;

(4) The name, mailing address, email address, and telephone number of each of the organization's law enforcement/civilian coordinators;

(5) The name, mailing address, email address, telephone number, and occupation of the organization's executive director (if applicable);

(6) The description of the geographic territory or jurisdiction to which the organization desires to provide services; and

(7) Additional information specified by a vote of the Council for inclusion in the application for certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(f) If the organization is currently certified by the Council, the organization must submit the documentation described in subsection (d) or (e) of this section, as applicable, with the exception of the training documentation required by subsections (d)(2) and (e)(1), and the following additional information as part of its Application for Continuing Certification, in each case no more than 240 days and no less than 180 days prior to the expiration of the current certification:

(1) any Crime Stoppers Program Annual Reports that have not been submitted to the director of the Council as required by §3.9011 of this chapter;

(2) any Statistical Reports that have not been submitted to the director of the Council or the Council's designee as required by §3.9011 of this chapter;

(3) the dates and locations that the following persons completed, or plan to complete, a training course provided by CJD and the Council, or their designee, after the date of issuance or the effective date, as applicable, of the current certification:

(A) one member of a private, nonprofit organization's board of directors (if applicable);

(B) one of the organization's law enforcement/civilian coordinators; and

(C) the executive director of a private, nonprofit organization (if applicable); and

(4) additional information specified by a vote of the Council for inclusion in the Application for Continuing Certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(g) Certification awarded to an organization is awarded only as to the specific geographic territory or jurisdiction described in the certification award.

(h) Decisions regarding the certification of crime stoppers organizations shall be made by the Council.

(i) If an organization's certification is set to expire before the next anticipated Council meeting, subjecting the organization to the liquidation requirements of §414.010(c), Texas Government Code, and the Council determines that extraordinary circumstances have prevented an organization from submitting a completed Application for Continuing Certification, the Council may consider and take action to renew the organization's certification if it determines that the organization meets the certification requirements described in §414.011, Texas Government Code.

(j) The director of the Council will notify certified organizations of their requirements for continuing certification no less than 90 days prior to the deadline to submit the Application for Continuing Certification under subsection (f) of this section.

**History**
- *Source Note: The provisions of this §3.9000 adopted to be effective August 26, 1999, 24 TexReg 6467; amended to be effective August 26, 2003, 28 TexReg 6805; amended to be effective June 9, 2004, 29 TexReg 5591; amended to be effective February 22, 2007, 32 TexReg 613; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9005** Decertification {#sec-3.9005 omnilex-key=us-tx-regs-official--title-1--3.9005}

(a) During the two-year certification period, the Council shall decertify a crime stoppers organization if it determines that the organization no longer meets the certification requirements described in §3.9000(b) of this chapter, which may result from a violation of state law, federal law, or Subchapter H of this chapter.

(b) If a crime stoppers organization is decertified by the Council, the organization is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(c) The Council, or the Chairman of the Council, shall send written notification to the crime stoppers organization no later than 45 calendar days prior to the meeting at which the Council will consider the decertification of the organization. The written notification shall include the following:

(1) Reasons why the organization may no longer meet the certification requirements described in §3.9000(b) of this chapter; and

(2) The date, time, and location of the meeting at which the Council will consider the decertification of the organization.

(d) The crime stoppers organization shall submit a written response, which shall include an explanation and specific reasons why the organization believes that it should not be decertified. The written response must be received by the director of the Council at least 10 calendar days prior to the meeting at which the Council will consider the decertification of the organization.

(e) The Council shall render a decision regarding the decertification of the crime stoppers organization and shall notify the organization in writing of its decision.

(f) If a crime stoppers organization is decertified, the director of the Council shall notify the state comptroller, and the relevant courts, county auditors and community supervision and corrections departments in the organization's region, that the organization is decertified and is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(g) Not later than the 60th day after the date of decertification of the organization, the decertified organization shall forward all unexpended money received pursuant to §414.010 of the Texas Government Code to the state comptroller.

(h) The director of the Council may determine that a certified crime stoppers organization is at risk of no longer meeting the certification requirements or duties described in §3.9000 of this chapter. If the director of the Council makes such a determination, the director of the Council may create a corrective action plan to assist the organization in meeting those requirements or duties, including specifying the actions necessary to meet those requirements or duties and the time the organization has to complete them. If the organization no longer meets the certification requirements or duties described in §3.9000 of this chapter, the director of the Council must notify the Council.

**History**
- *Source Note: The provisions of this §3.9005 adopted to be effective August 26, 2003, 28 TexReg 6805; amended to be effective June 9, 2004, 29 TexReg 5591; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9006** Expiration or Non-Renewal of Certification {#sec-3.9006 omnilex-key=us-tx-regs-official--title-1--3.9006}

(a) At the end of the two-year certification period, a crime stoppers organization's certification will expire, unless the Council has approved the renewal of its certification. The Council will not renew the organization's certification and will decertify the organization if the Council determines that the organization no longer meets the certification requirements.

(b) If a crime stoppers organization's certification expires or is not renewed, the organization is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(c) If an organization has submitted a timely application to renew its certification:

(1) The Council shall send written notification to the crime stoppers organization no later than 45 calendar days prior to the meeting at which the Council will consider the renewal of certification of the organization. The written notification shall include the following:

(A) Any reasons why the organization may no longer meet the certification requirements described in §3.9000(b) of this chapter; and

(B) The date, time, and location of the meeting at which the Council will consider the certification renewal of the organization.

(2) The crime stoppers organization may submit a written response, which shall include an explanation and specific reasons why the organization believes that its certification should be renewed. The written response must be received by the director of the Council at least 10 calendar days prior to the meeting at which the Council will consider the renewed certification of the organization.

(3) The Council shall render a decision regarding the certification renewal of the crime stoppers organization and shall notify the organization in writing of its decision.

(d) If a crime stoppers organization's certification expires or is not renewed, the director of the Council shall notify the state comptroller, and the relevant courts, county auditors and community supervision and corrections departments in the organization's region, that the organization is decertified and is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(e) Not later than the 60th day after the date of expiration or non-renewal of the certification of the organization, the organization shall forward all unexpended money received pursuant to §414.010 of the Texas Government Code to the state comptroller.

**History**
- *Source Note: The provisions of this §3.9006 adopted to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9007** Closing of Business {#sec-3.9007 omnilex-key=us-tx-regs-official--title-1--3.9007}

(a) If a crime stoppers organization chooses to no longer operate or to dissolve during its two-year certification period or if the organization chooses to not apply for renewal of its certification, the organization shall send written notification to the Council.

(b) The written notification will effectively decertify the organization. The date of the notification will serve as the date of decertification.

(c) The closed or dissolved organization is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(d) Upon receipt of this notification and effective decertification, the director of the Council shall notify the state comptroller, and the relevant courts, county auditors and community supervision and corrections departments in the organization's region, that the organization is decertified and is not eligible to receive repayments of rewards under Articles 37.073 and 42.152 of the Texas Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure.

(e) Not later than the 60th day after the date of dissolution or decertification of the organization, the dissolved or decertified organization shall forward all unexpended money received pursuant to §414.010 of the Texas Government Code to the state comptroller.

**History**
- *Source Note: The provisions of this §3.9007 adopted to be effective February 22, 2007, 32 TexReg 613; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9008** Complaints or Allegations Against a Crime Stoppers Organization {#sec-3.9008 omnilex-key=us-tx-regs-official--title-1--3.9008}

Any complaint against a crime stoppers organization or allegation that a crime stoppers organization fails to meet the certification requirements described in §3.9000 of this chapter must be submitted in writing to the director of the Texas Crime Stoppers Council (Council). The Council may only consider complaints or allegations made against a crime stoppers organization that is certified, or has applied to be certified, by the Council pursuant to §3.9000 of this chapter.

**History**
- *Source Note: The provisions of this §3.9008 adopted to be effective June 12, 2011, 36 TexReg 3407.*

##### **1 Tex. Admin. Code § 3.9011** Crime Stoppers Program Reporting {#sec-3.9011 omnilex-key=us-tx-regs-official--title-1--3.9011}

(a) A crime stoppers organization that is certified by the Council must submit to the director of the Council a Crime Stoppers Program Annual Report no later than January 31 of each calendar year.

(b) A Crime Stoppers Program Annual Report must include the following information:

(1) The name, mailing address, email address, and telephone number of the crime stoppers organization, and the internet address of any website operated by the organization;

(2) The name, mailing address, email address, telephone number, occupation, and board position of each member of the organization's governing board;

(3) The name, mailing address, email address, telephone number, and occupation of the organization's executive director (if applicable);

(4) The name, mailing address, email address, and telephone number of each of the organization's law enforcement/civilian coordinators;

(5) A Probation Fee and Repayment Report for the prior calendar year. This report must include statements for all financial accounts containing funds originally obtained from repayments of rewards under Articles 37.073 and 42.152, Code of Criminal Procedure, or payments from a defendant under Chapter 42A of the Texas Code of Criminal Procedure, and documentation from the relevant courts or government agencies stating the amount of probation fees disbursed to the organization; and

(6) The Council will prescribe the specific or additional information to be included in reporting under this subsection that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the reporting under this subsection. The director of the Council will follow the records retention policies of the Office of the Governor and will publish a schedule by which the Criminal Justice Division will retain records and will publish procedures for organizations to submit updates or corrections to submitted information.

(c) A crime stoppers organization that is certified by the Council must submit to the director of the Council an information update form prescribed by the director of the Council or the Council within 30 days if the organization has a change in the composition of its executive board or its executive director (if applicable) or law enforcement coordinator.

(d) A crime stoppers organization that is certified by the Council shall submit to the director of the Council, or the Council's designee, a Statistical Report on a form prescribed by the Council no later than January 31 and July 31 of each calendar year.

**History**
- *Source Note: The provisions of this §3.9011 adopted to be effective February 22, 2007, 32 TexReg 613; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9015** Review {#sec-3.9015 omnilex-key=us-tx-regs-official--title-1--3.9015}

By accepting certification, a crime stoppers organization agrees to the following conditions of review:

(1) CJD will review the activities of a crime stoppers organization that is certified by the Council as necessary to ensure that the organization's finances and programs further the crime prevention purposes of the organization in compliance with the laws and rules governing crime stoppers organizations.

(2) CJD may perform a desk review or an on-site review at the organization's location. In addition, CJD may request that the organization submit relevant information to CJD to support any review.

(3) After a review, the organization shall be notified in writing of any noncompliance identified by CJD in the form of a preliminary report.

(4) The organization shall respond to the preliminary report within a time frame specified by CJD.

(5) The organization's response shall become part of the final report, which shall be submitted to the organization and the director of the Council.

(6) The director of the Council may create a corrective action plan for a noncompliant organization to assist the organization in coming back into compliance, which must specify the actions to be taken by the organization and the time the organization has to complete them.

(7) Any noncompliance, including an organization's failure to provide adequate documentation upon request, may serve as grounds for decertification or non-renewal of certification of the organization by the Council.

**History**
- *Source Note: The provisions of this §3.9015 adopted to be effective August 26, 2003, 28 TexReg 6805; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9017** Mergers of Certified Organizations {#sec-3.9017 omnilex-key=us-tx-regs-official--title-1--3.9017}

If a certified crime stoppers organization agrees with another certified crime stoppers organization to merge and form a multi-county or multi-jurisdictional (e.g., county and city) organization, the merged organization must apply for continuing certification, and the following procedures must be followed:

(1) The certified crime stoppers organizations that want to merge must have contiguous borders.

(2) The merging organizations must choose a name for the merged organization unless both organizations agree to operate under the name of one of the existing organizations.

(3) The merged organization must file the following documents with the director of the Council requesting certification under a new name (if applicable) and with the expanded geographic territory or jurisdiction:

(A) All required Texas Secretary of State, Texas Comptroller, and United States Internal Revenue Service (IRS) required forms and documentation for mergers and dissolutions, as applicable, or as specified by the director of the Council;

(B) IRS compliance documents for dissolution of a 501(c)(3) non-profit corporation and a 501(c)(3) letter authorizing the organization to operate under the new name (if applicable);

(C) Texas Secretary of State compliance documents for 501(c)(3) non-profit corporations, as applicable, or as specified by the director of the Council;

(D) Application for Continuing Certification under the new name (if applicable) and with an expanded geographic territory or jurisdiction;

(E) Copy of board of directors membership list of the merged organization, to include contact information for board members, the law enforcement coordinator, and the executive director (if applicable);

(F) The dates and locations that at least one board member (if applicable), the law enforcement coordinator, and an executive director (if applicable) received training as authorized by the Council within the 24-month period preceding the merger;

(G) Copies of the minutes of the boards of directors meetings of both certified crime stoppers organizations in which the boards voted to merge their organizations;

(H) Copy of a cooperative agreement or memorandum of understanding (MOU) between the merged organizations regarding the merger and a copy of each organization's minutes of the board of directors for the meeting where the agreement or MOU is approved; and

(I) Additional information specified by a vote of the Council for inclusion in the application for continuing certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(4) If the director of the Council determines that the merged organization meets all requirements within paragraphs (1) - (3) of this section, the merged organization will be presented to the Council for determination as to whether the merged organization meets the requirements for certification at the Council's next regularly scheduled meeting.

(5) Once the Council grants certification, the merged organization may merge or consolidate the separate rewards accounts of both organizations. The merged organization will also be eligible to apply to the relevant CSCDs to receive court fees under the provisions of Articles 37.073 and 42.152 and Chapter 42A, Texas Code of Criminal Procedure.

(6) The merged organization's "Excess Funds Accounts," as described in §414.010(d) of the Texas Government Code, may only be comprised of those funds that were previously in each individual organization's "Excess Funds Accounts."

(7) The certification is valid for a period of two years.

**History**
- *Source Note: The provisions of this §3.9017 adopted to be effective June 21, 2009, 34 TexReg 3929; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective July 1, 2012, 37 TexReg 4851; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9019** Mergers of Non-certified Organizations to Certified Organizations {#sec-3.9019 omnilex-key=us-tx-regs-official--title-1--3.9019}

If a certified crime stoppers organization agrees with a non-certified crime stoppers organization to merge and form a multi-county or multi-jurisdictional (e.g., county and city) organization, the merged organization must apply for continuing certification, and the following procedures must be followed:

(1) The certified crime stoppers organization that wants to merge with a non-certified 501(c)(3) crime stoppers organization must have contiguous borders.

(2) The merging organizations must choose a name for the merged organization unless both organizations agree to operate under the name of one of the existing organizations.

(3) The merged organization must file the following documents with the director of the Council requesting certification under a new name (if applicable) and with the expanded geographic territory or jurisdiction:

(A) All required Texas Secretary of State, Texas Comptroller, and United States Internal Revenue Service (IRS) required forms and documentation for mergers and dissolutions, as applicable, or as specified by the director of the Council;

(B) IRS compliance documents for dissolution of a 501(c)(3) non-profit corporation and a 501(c)(3) letter authorizing the organization to operate under the new name (if applicable);

(C) Texas Secretary of State compliance documents for 501(c)(3) non-profit corporations, as applicable, or as specified by the director of the Council;

(D) Application for Continuing Certification under the new name (if applicable) and with an expanded geographic territory or jurisdiction;

(E) Copies of financial reviews of all bank accounts held by the non-certified 501(c)(3) crime stoppers organization;

(F) If the financial review establishes that at any time the non-certified 501(c)(3) crime stoppers organization was certified by the Council and received court fees under Articles 37.073 and 42.152 and Chapter 42A, Texas Code of Criminal Procedure, and failed to return all court fees to the state comptroller within 60 days following the loss of certification, as required by §414.010(c), Texas Government Code, a copy of the check for the outstanding court fees, made payable to the Office of the Comptroller, or other satisfactory proof, must be submitted with the application for certification;

(G) Copy of board of directors membership list of the merged organization, to include contact information for board members, the law enforcement coordinator, and executive director (if applicable);

(H) The dates and locations that at least one board member (if applicable), the law enforcement coordinator, and an executive director (if applicable) received training as authorized by the Council within the 24-month period preceding the merger;

(I) Copies of the minutes of the boards of directors meetings of the certified crime stoppers organization and the non-certified 501(c)(3) crime stoppers organization in which the boards voted to merge their organizations;

(J) Copy of a cooperative agreement or memorandum of understanding (MOU) between the merged organizations regarding the merger and a copy of each organization's minutes of the board of directors for the meeting where the agreement or MOU is approved; and

(K) Additional information specified by a vote of the Council for inclusion in the application for continuing certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(4) If the director of the Council determines that the merged organization meets all requirements of this section, the merged organization will be presented to the Council for determination as to whether the merged organization meets the requirements for certification at the Council's next regularly scheduled meeting.

(5) Once the Council grants certification, the merged organization may merge or consolidate the separate rewards accounts of the merged organizations. The merged organization also will be eligible to apply to the relevant CSCDs to receive court fees under the provisions of Articles 37.073 and 42.152 and Chapter 42A, Texas Code of Criminal Procedure.

(6) The merged organization's "Excess Funds Accounts," as described in §414.010(d) of the Texas Government Code, may only be comprised of those funds that were previously in each individual organization's "Excess Funds Accounts."

(7) The certification is valid for a period of two years.

**History**
- *Source Note: The provisions of this §3.9019 adopted to be effective June 21, 2009, 34 TexReg 3929; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective July 1, 2012, 37 TexReg 4851; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9021** Addition of Geographic Territories or Jurisdictions to Certified Organizations {#sec-3.9021 omnilex-key=us-tx-regs-official--title-1--3.9021}

(a) If a geographic territory or jurisdiction wants to join an existing certified crime stoppers organization, the organization must apply for continuing certification, and the following procedures must be followed:

(1) The geographic territory or jurisdiction seeking to join the organization must share contiguous borders with the certified crime stoppers organization;

(2) The certified crime stoppers organization and the geographical entity that is requesting to join the crime stoppers organization must choose a new name for the organization unless both parties agree to operate under the name of the existing organization;

(3) The certified crime stoppers organization must file the following documents with the director of the Council requesting certification under a new name (if applicable) and with an expanded geographic territory or jurisdiction:

(A) United States Internal Revenue Service (IRS) letter for a 501(c)(3) corporation authorizing the organization to operate under a new name, if applicable;

(B) Texas Secretary of State letter for a 501(c)(3) corporation authorizing the organization to operate under a new name (if applicable);

(C) Application for Continuing Certification under the new name (if applicable) and with an expanded geographic territory or jurisdiction;

(D) Copy of board of directors membership list for the organization, to include contact information for board members, the law enforcement coordinator, and executive director (if applicable);

(E) The dates and locations that at least one board member (if applicable), the law enforcement coordinator, and an executive director (if applicable) received training as authorized by the Council within the 24-month period preceding the new Application for Continuing Certification;

(F) Copy of the minutes of the board of directors meeting of the certified crime stoppers organization in which the board voted to add the new geographical entity to the territory or jurisdiction served by the crime stoppers organization;

(G) Written documentation from a law enforcement agency serving the geographic territory or jurisdiction showing an interest in joining an existing crime stoppers organization; and

(H) Additional information specified by a vote of the Council for inclusion in the application for continued certification that is necessary for the Council to make the determination for certification required by §414.011(a) of the Texas Government Code or to fulfill its duties under §414.005 of the Texas Government Code. The director of the Council may request further information needed to clarify a question raised in the examination of the materials submitted as part of the application.

(4) If the director of the Council determines that the newly expanded organization meets all requirements listed in paragraphs (1) - (3) of this subsection, the expanded organization will be presented to the Council for determination as to whether the expanded organization meets the requirements for certification at the Council's next regularly scheduled meeting.

(5) Once the Council grants certification, the organization will be eligible to apply to the CSCDs in the newly acquired geographic territory or jurisdiction to receive court fees under the provisions of Articles 37.073 and 42.152 and Chapter 42A, Texas Code of Criminal Procedure.

(6) The certification is valid for a period of two years.

(b) If a certified or non-certified organization serves the geographic area to which a certified organization is attempting to expand, the expanding organization must send written notice to the Council and to the organization serving the geographic area to which it intends to expand of its intent to serve that area.

**History**
- *Source Note: The provisions of this §3.9021 adopted to be effective June 21, 2009, 34 TexReg 3929; amended to be effective July 11, 2010, 35 TexReg 5803; amended to be effective June 12, 2011, 36 TexReg 3407; amended to be effective March 26, 2020, 45 TexReg 1975.*

##### **1 Tex. Admin. Code § 3.9023** Transfer of Assets of Funds {#sec-3.9023 omnilex-key=us-tx-regs-official--title-1--3.9023}

A certified crime stoppers organization is not permitted to receive separate rewards accounts from a certified or non-certified organization. These separate rewards accounts may be transferred only in cases where the two organizations merge as described in §3.9017 or §3.9019 of this chapter. This section does not apply to individual reward payments made by one certified organization on behalf of another certified organization.

**History**
- *Source Note: The provisions of this §3.9023 adopted to be effective June 12, 2011, 36 TexReg 3407.*

##### **1 Tex. Admin. Code § 3.9025** Excess Funds {#sec-3.9025 omnilex-key=us-tx-regs-official--title-1--3.9025}

(a) A certified crime stoppers organization may establish Excess Funds Accounts in accordance with §414.010(d) of the Texas Government Code. At the conclusion of each fiscal year, if the total amount of funds in the organization's rewards accounts exceeds three times the average annual amount of funds used by the organization to pay rewards during each of the three preceding fiscal years, the organization may deposit such excess amount into its Excess Funds Accounts.

(b) The Excess Funds Accounts may only be used for expenditures for law enforcement or public safety purposes directly related to crime stoppers or juvenile justice, which means:

(1) Costs incurred in providing training to crime stoppers volunteers, staff, or law enforcement coordinators and travel costs necessary to complete that training;

(2) Costs associated with supporting volunteers, staff, or law enforcement coordinators in performing crime stoppers operations;

(3) Juvenile delinquency prevention or intervention programs;

(4) Promotional or marketing costs encouraging utilization of crime stoppers tip lines or recruiting volunteers for crime stoppers organizations; and

(5) Transfers to the crime stoppers assistance account in the general revenue fund or to other certified crime stoppers organizations, provided that the transferring certified crime stoppers organization ensures the receiving certified crime stoppers organization uses such funds for law enforcement or public safety purposes as described in this subsection.

(c) Pursuant to §414.010(d) of the Texas Government Code, a certified crime stoppers organization that deposits funds in an Excess Funds Account may use any interest earned on the funds in such account to pay costs incurred in administering the organization.

(d) Among other uses, a certified crime stoppers organization is not considered to be using its excess funds for a law enforcement or public safety purpose related to crime stoppers or juvenile justice if:

(1) It uses such excess funds to pay the salary or compensation of any public employee;

(2) It uses such excess funds for law enforcement equipment not directly related to crime stoppers or juvenile delinquency prevention or intervention purposes;

(3) It pays or reimburses for travel or per diem costs that exceed those allowed for state officials or employees with its excess funds; or

(4) It uses such excess funds for a purpose or in a manner prohibited by federal or state law.

**History**
- *Source Note: The provisions of this §3.9025 adopted to be effective March 26, 2020, 45 TexReg 1975.*

#### **Subchapter I** MEMORANDUM OF UNDERSTANDING

##### **1 Tex. Admin. Code § 3.9300** Texas Department of Public Safety {#sec-3.9300 omnilex-key=us-tx-regs-official--title-1--3.9300}

Pursuant to §411.0096 of the Texas Government Code, CJD and the Texas Department of Public Safety have entered into a memorandum of understanding pertaining to the coordination of drug law enforcement efforts. This memorandum of understanding may be amended, as necessary, by subsequent written agreement adopted by rule. The current memorandum of understanding is listed in the following:

Attached Graphic

**History**
- *Source Note: The provisions of this §3.9300 adopted to be effective December 16, 2002, 27 TexReg 11729; amended to be effective June 9, 2004, 29 TexReg 5575; amended to be effective June 3, 2007, 32 TexReg 2835.*

#### **Subchapter J** DETERMINATION OF DEFUNDING MUNICIPALITIES

##### **1 Tex. Admin. Code § 3.9401** Applicability {#sec-3.9401 omnilex-key=us-tx-regs-official--title-1--3.9401}

Subchapter J of this chapter applies only to a municipality with a population of more than 250,000.

**History**
- *Source Note: The provisions of this §3.9401 adopted to be effective March 23, 2022, 47 TexReg 1451.*

##### **1 Tex. Admin. Code § 3.9402** Definitions {#sec-3.9402 omnilex-key=us-tx-regs-official--title-1--3.9402}

(a) budget: an annual municipal budget required under Sec. 102.002, Local Government Code, that is prepared by a municipality's budget officer to cover the proposed expenditures of the municipal government for the succeeding year;

(b) municipality: a unit of local government that is established under Title 2, Subtitle A, Local Government Code, or that operates under a municipal charter that has been adopted or amended as authorized by Article XI, Section 5, Texas Constitution;

(c) police department: a municipal law enforcement agency established as a regular police force under Chapter 341, Subchapter A, Local Government Code; and

(d) PSO: the Public Safety Office, which includes the Criminal Justice Division of the Office of the Governor.

**History**
- *Source Note: The provisions of this §3.9402 adopted to be effective March 23, 2022, 47 TexReg 1451.*

##### **1 Tex. Admin. Code § 3.9403** Review Process for Municipal Budgets {#sec-3.9403 omnilex-key=us-tx-regs-official--title-1--3.9403}

(a) The PSO shall conduct an annual budget review of all municipalities with a population of more than 250,000 following each fiscal year beginning on or after September 1, 2021 to determine whether the municipality potentially qualifies as a defunding municipality because it reduced its appropriation to the municipality's police department in comparison to its preceding fiscal year.

(b) The PSO shall derive the population of municipalities of this state from the most recent census provided by the United States Census Bureau.

(c) The PSO shall base each annual review on data collected from the municipality's publicly available budget, including:

(1) data published and provided by the municipality under Chapter 102, Texas Local Government Code; and

(2) law enforcement agency budget office data.

**History**
- *Source Note: The provisions of this §3.9403 adopted to be effective March 23, 2022, 47 TexReg 1452.*

##### **1 Tex. Admin. Code § 3.9404** Application for Exception for Certain Reductions to Budget {#sec-3.9404 omnilex-key=us-tx-regs-official--title-1--3.9404}

(a) A municipality must submit an application provided under subsection (d) of this section to the PSO to request an exception from being considered a defunding municipality due to a reduction to the appropriation to the municipality's police department as set forth in Section 109.004(a)(2), Local Government Code.

(b) An application submitted under this section must be submitted by either the mayor or city manager of the applying municipality.

(c) The application and all necessary documentation must be submitted via certified mail to: Public Safety Office, Office of the Governor, PO Box 12428, Austin, Texas 78711.

(d) Applications must be postmarked no later than 45 calendar days prior to the formal adoption of the proposed budget. The PSO shall make a determination on granting the exception within 30 calendar days after it receives the application. PSO shall not grant an exception under this section after a municipality has adopted a budget for the fiscal year for which it seeks an exception.

(e) Application forms shall be made available at https://gov.texas.gov/organization/cjd.

**History**
- *Source Note: The provisions of this §3.9404 adopted to be effective March 23, 2022, 47 TexReg 1452.*

##### **1 Tex. Admin. Code § 3.9405** Criteria for Approval of Certain Reductions to Budget {#sec-3.9405 omnilex-key=us-tx-regs-official--title-1--3.9405}

The PSO's decision whether to grant approval for a reduction to the appropriation to a municipality's police department shall be based upon the following factors:

(1) the municipality's capital expenditures related to law enforcement during the preceding fiscal year;

(2) the municipality's response to a state of disaster declared under Section 418.014, Government Code; and

(3) any additional factors relevant to the application, including, but not limited to:

(A) effect on public safety;

(B) change in peace officer response times; and

(C) change in peace officer to population ratios.

**History**
- *Source Note: The provisions of this §3.9405 adopted to be effective March 23, 2022, 47 TexReg 1451.*

##### **1 Tex. Admin. Code § 3.9406** Written Determination That A Municipality is a Defunding Municipality {#sec-3.9406 omnilex-key=us-tx-regs-official--title-1--3.9406}

(a) If the PSO determines a municipality has defunded its police department as specified by Chapter 109, Local Government Code, the PSO shall issue a written determination to the municipality.

(b) The PSO shall send the written determination made under this Section to the Texas Comptroller of Public Accounts and, to the extent applicable, to the following office-holders or executive staff of the designated municipality:

(1) mayor;

(2) city manager; and

(3) all city council members.

**History**
- *Source Note: The provisions of this §3.9406 adopted to be effective March 23, 2022, 47 TexReg 1451.*

##### **1 Tex. Admin. Code § 3.9407** Termination of Defunding Determination {#sec-3.9407 omnilex-key=us-tx-regs-official--title-1--3.9407}

(a) A defunding determination issued by the PSO may be terminated by the PSO if the defunding municipality has reversed the reduction in appropriation to the municipality's police department, as described by Section 109.005, Local Government Code.

(b) A termination of a defunding determination shall be issued in writing to the parties listed in §3.9406(b) of this chapter.

(c) Decisions concerning a termination of a defunding determination shall be made at the time of the annual review conducted by PSO, unless a municipality submits to the PSO a separate request and supporting documentation earlier.

**History**
- *Source Note: The provisions of this §3.9407 adopted to be effective March 23, 2022, 47 TexReg 1451.*

### **Chapter 4** TEXAS MILITARY PREPAREDNESS COMMISSION

#### **Subchapter A** TEXAS MILITARY VALUE REVOLVING LOAN FUND PROGRAM

##### **1 Tex. Admin. Code § 4.1** Introduction and Purpose {#sec-4.1 omnilex-key=us-tx-regs-official--title-1--4.1}

(a) The Texas Military Value Revolving Loan Fund provides a low cost source of revenue to eligible communities who meet the application criteria. The minimum amount of a loan is $1,000,000, while the maximum amount of a loan is determined by the availability of funds and the creditworthiness of the applicant. State funding will be obtained through the sale of general obligation bonds. The State may provide up to 100 percent of the cost of the described project, dependent upon the creditworthiness of the applicant.

(b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless otherwise indicated.

(1) Applicant--A Defense Community, as defined in paragraph (5) of this subsection, applying for a loan from the Fund.

(2) Awardee--The Defense Community whose loan application is approved by the Commission.

(3) Chief of Staff--The Chief of Staff of the Office of the Governor.

(4) Commission--The Texas Military Preparedness Commission. The Commission is attached for administrative purposes to the Office of the Governor.

(5) Defense Community--A "Defense community" as defined in §397.001 of the Local Government Code.

(6) Defense Facility--A "Defense facility" as defined in §397.001 of the Local Government Code.

(7) Director of the Commission--Director of the Texas Military Preparedness Commission.

(8) Economic Redevelopment Value Statement--A statement that illustrates specific ways funds are to be used to promote economic development in the community to include that information as provided for in §397.0021 of the Local Government Code.

(9) Financial Partners--Federal and state agencies, private and public nonprofit foundations, local taxing authorities, and private investors who agree to provide money for projects eligible for funding under this program.

(10) Fund or TMVRLF--The Texas Military Value Revolving Loan Fund or account established under §436.156 of the Government Code.

(11) Military Installation--An activity under the jurisdiction of the Department of Defense, including leased space, that is controlled by, or primarily supports, Department of Defense activities.

(12) Military Value Enhancement Statement--A military base or defense facility value enhancement statement that illustrates specific ways funds are to be used to enhance the military or defense value of the military base or defense facility to include that information as provided for in §397.002 of the Local Government Code.

(13) Project--The construction, renovation, or acquisition for which a TMVRLF loan is requested.

(14) Project Costs--The Defense Community's total costs for completing the project, including any and all costs of financing and administration assessed by the Commission.

(15) Redevelopment Value--The extent to which an economic development project will minimize the negative effects of a defense base reduction, or an infrastructure project will assist the defense community in accommodating the new or expanded military missions that are assigned to the military facility.

**History**
- *Source Note: The provisions of this §4.1 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.2** Military Value/Redevelopment Value Review and Pre-Application Assessment for Funds {#sec-4.2 omnilex-key=us-tx-regs-official--title-1--4.2}

(a) The Defense Community shall submit the following information, as applicable, to the Director of the Commission:

(1) with respect to a Defense Community applying for a loan under §436.153 of the Government Code, a Military Value Enhancement Statement;

(2) with respect to a Defense Community applying for a loan under §436.1531 or §436.1532 of the Government Code, an Economic Redevelopment Value Statement; and

(3) with respect to any Defense Community applying for a TMVRLF loan, a pre-application assessment.

(b) The Commission shall review the Military Value Enhancement Statement or Economic Redevelopment Value Statement, as applicable, and perform:

(1) an analysis of the project feasibility; and

(2) an analysis of alternative funding for each project listed.

(c) The Commission shall review the applicant's pre-application assessment.

(d) The Commission shall take into consideration the Military or Defense Value or Redevelopment Value, as applicable, and, by a majority vote, make its recommendation to approve or disapprove the Military Value Enhancement Statement or Economic Redevelopment Value Statement, as applicable.

**History**
- *Source Note: The provisions of this §4.2 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.3** Processing and Review of Applications {#sec-4.3 omnilex-key=us-tx-regs-official--title-1--4.3}

(a) The Commission shall conduct its review of the applicant's creditworthiness based on standard due diligence practices and procedures that are consistent with other Office of the Governor programs including, but not limited to:

(1) review of project description to assess whether it satisfies program criteria requirements;

(2) quick assessment project considerations;

(3) economic/financial analysis;

(4) revenue analysis;

(5) credit rating review; and

(6) financial analysis summary - strengths, weaknesses, exceptions.

(b) In addition, the Commission, in consultation with the Texas Public Finance Authority, shall also be responsible for developing the loan and security structure including:

(1) the loan term sheet;

(2) the loan agreement; and

(3) the bond sale activities.

**History**
- *Source Note: The provisions of this §4.3 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.4** Application for Funds {#sec-4.4 omnilex-key=us-tx-regs-official--title-1--4.4}

(a) The Commission, in consultation with the Texas Public Finance Authority, shall develop and adopt a formal loan application form to be included in the formal application process to assist in the evaluation of a loan submission. The application may require certain attachments and certifications.

(b) Successful applicants may be required to pay, upon financing, all closing costs.

**History**
- *Source Note: The provisions of this §4.4 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.5** Availability of Funds {#sec-4.5 omnilex-key=us-tx-regs-official--title-1--4.5}

(a) Funds Commitment. If the project is approved by the Commission, funds become committed to the awardee subject to the sale of the general obligation bonds by the state.

(b) Letter of Commitment. The applicant will be required to submit a letter of commitment after the final approval of the project by the Commission.

(c) Upon sale of state-issued bonds, funds are disbursed to the awardee by the Comptroller of Public Accounts.

**History**
- *Source Note: The provisions of this §4.5 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681.*

##### **1 Tex. Admin. Code § 4.6** Awardee Responsibilities {#sec-4.6 omnilex-key=us-tx-regs-official--title-1--4.6}

In order to receive disbursement of loan funds that have been committed to them, awardees will be required by contract with the Commission to:

(1) have a system established in writing to ensure that appropriate officials provide necessary internal reviews and approvals for the expenditure of funds and for monitoring project performance and adherence to state terms and conditions;

(2) have financial management systems that meet the requirements of the Commission;

(3) retain financial management records, supporting documents, statistical records, and other materials pertinent to the award until the debt is retired and make these records available to the Commission upon request;

(4) be responsible for performing the duties and tasks described under all project loan agreements;

(5) provide the Commission with copies of all project documentation required by federal or other financial partners;

(6) provide project demonstrations, site inspections, photo or other documentation, including written materials to substantiate benefit to the community's economy and enhancement of the military value of the facility as may be requested by the Commission;

(7) agree that the loan may be suspended or terminated if the awardee fails to comply with the terms and conditions of the loan, or if the financial partnership is suspended or terminated;

(8) agree that when two or more entities are participating together as an awardee, if one or more of the entities does not fulfill its loan repayment obligation, then the remaining entity or entities are still liable for repayment of the entire loan amount;

(9) agree that neither the Commission nor the Office of the Governor shall be held liable in the event of damages to persons or property which may occur in the course of activities conducted as a result of the award or its cancellation or withdrawal; and

(10) agree to such other terms and conditions as the Commission may require.

**History**
- *Source Note: The provisions of this §4.6 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681.*

##### **1 Tex. Admin. Code § 4.7** Office and Commission Responsibilities {#sec-4.7 omnilex-key=us-tx-regs-official--title-1--4.7}

(a) In carrying out its duties and responsibilities under this subchapter, the Commission shall:

(1) publicize the loan program to potential applicants;

(2) work closely with loan applicants to ensure the application is complete and all relevant material is provided;

(3) establish and conduct the evaluation process in a responsive manner to maximize the opportunity to acquire federal and other funding;

(4) develop contracts with awardees that include sufficient performance measures, audit requirements, and reporting requirements to ensure prudence and due diligence in the expenditure of state funds; and

(5) minimize reporting requirements that may be repetitive of reporting required by federal grant agencies or that may be unnecessary for the effective monitoring of the program.

(b) The Director on behalf of the Commission, in consultation with the Chief of Staff or his designee, may waive any provision of this chapter upon a finding that the public interest would be furthered by granting the waiver.

**History**
- *Source Note: The provisions of this §4.7 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.8** Reporting Responsibilities {#sec-4.8 omnilex-key=us-tx-regs-official--title-1--4.8}

(a) After completion of the project, the awardee will provide milestones and updates as required by the contract.

(b) Throughout the project period, the awardee must provide copies of all reports required by federal agencies pursuant to the terms of individual federal grants received, within 30 days of their submission to the granting agencies.

(c) Failure to submit reports in a timely and satisfactory manner may result in the withholding of funds due or requested by the awardee. Failure to document post-completion requirements may result in the return of funds to Commission as set forth in the contract.

**History**
- *Source Note: The provisions of this §4.8 adopted to be effective October 10, 2010, 35 TexReg 9077; amended to be effective January 28, 2016, 41 TexReg 681.*

#### **Subchapter B** DEFENSE ECONOMIC ADJUSTMENT ASSISTANCE GRANT PROGRAM

##### **1 Tex. Admin. Code § 4.30** Introduction and Purpose {#sec-4.30 omnilex-key=us-tx-regs-official--title-1--4.30}

(a) Background. The Texas Defense Economic Adjustment Assistance Grant Program (DEAAG) provides state funds to assist eligible local governmental entities that may be adversely or positively impacted by an anticipated, planned, announced, or implemented action of the United States Department of Defense to close, reduce, increase, or otherwise realign defense worker jobs or facilities.

(b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless indicated otherwise.

(1) Application Deadline--Not later than 5:00 P.M. Central Time on the closing date indicated in the grant solicitation.

(2) Commission--The Texas Military Preparedness Commission. The Commission is attached to the Office of the Governor for administrative purposes.

(3) Defense Community--A "Defense community" as defined in §397.001 of the Local Government Code.

(4) Defense worker--A "Defense worker" as defined in §436.001 of the Government Code.

(5) Defense worker job--A "Defense worker job" as defined in §436.001 of the Government Code.

(6) Director--The Director of the Texas Military Preparedness Commission or his designee.

(7) Financial partners--Federal and state agencies, private and public non-profit foundations, local taxing authorities, and private investors who agree to provide money for a project eligible for funding under this grant.

(8) Review Panel--The Defense Economic Adjustment Assistance Panel established pursuant to §436.205(a) of the Government Code to evaluate grant applications and make grant award recommendations to the Commission.

**History**
- *Source Note: The provisions of this §4.30 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.32** Eligibility for Funds {#sec-4.32 omnilex-key=us-tx-regs-official--title-1--4.32}

The local governmental entity making application for the grant must provide adequate documentation of actual, anticipated, planned, or announced defense worker job loss or defense worker job gain.

**History**
- *Source Note: The provisions of this §4.32 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective November 17, 2019, 44 TexReg 6853; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.33** Documentation {#sec-4.33 omnilex-key=us-tx-regs-official--title-1--4.33}

Appropriate documentation required under §4.32 of this title (relating to Eligibility of Funds) verifying actual, anticipated, planned, or announced defense worker job loss or defense worker job gain must be submitted with the application, including documentation from, but not limited to:

(1) Information from Department of Defense manpower or personnel records, socio-economic impact studies and Environmental Impact Statements; or

(2) United States Census Bureau, Department of Labor, or Texas Workforce Commission reports or statistics

**History**
- *Source Note: The provisions of this §4.33 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.34** Certification {#sec-4.34 omnilex-key=us-tx-regs-official--title-1--4.34}

(a) Local governmental entities are encouraged to acquire financial assistance for eligible development projects from a variety of sources including federal, state, local and private/public foundations. The local governmental entity or the local governing body submitting the application will provide a certification that reasonable local community efforts have been made to acquire funding from other sources when the state is the only other financial partner.

(b) In submitting an application to request a grant amount under §436.202(c) of the Government Code, the local governing body will certify that the local community budget and resources are not adequate or available and shall provide specific information on local efforts to secure adequate funding.

**History**
- *Source Note: The provisions of this §4.34 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective April 29, 2010, 35 TexReg 3249; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.35** Application for Funds {#sec-4.35 omnilex-key=us-tx-regs-official--title-1--4.35}

(a) The Commission shall develop a formal application form to be included in the formal application process to assist in the evaluation of the grant submission. The application may require certain attachments and certifications.

(b) At a minimum, the application for grant funds will include:

(1) A detailed overview of the project and the use of the funds;

(2) An overview of the Department of Defense action that qualifies the local governmental entity to apply for the grant program;

(3) An impact statement detailing the adverse, positive, or proposed effect of the relevant Department of Defense action on the local governmental entity;

(4) Information on the community's efforts to secure other funding sources; and

(5) A detailed financial plan for the project.

**History**
- *Source Note: The provisions of this §4.35 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective November 17, 2019, 44 TexReg 6853; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.36** Processing and Review of Application {#sec-4.36 omnilex-key=us-tx-regs-official--title-1--4.36}

(a) The applicant will submit a grant application to the Commission.

(b) Applications or additional information received after the application deadline will not be considered.

(c) The Commission will:

(1) Publicize the DEAAG program to potential applicants and provide grant solicitation information; and

(2) Evaluate each application for completeness.

(d) The Commission may assist a local government entity in applying for a grant.

(e) The Review Panel will:

(1) Review applications, score, and make recommendations to the Commission;

(2) Provide evaluations and recommendations for grant awards for all grant applications received based on, but not limited to, the following criteria:

(A) If the effect on the local governmental entity is adverse or positive;

(B) The significance of the number of jobs lost, gained or retained in relation to the workforce in the local governmental entity's jurisdiction;

(C) The added military value of the project; and

(D) Any other criteria established by the Commission as set forth in a grant solicitation.

(f) The Commission will:

(1) Review and score applications using the same criteria as the Review Panel;

(2) Ensure that the Review Panel does not show bias in scoring applications;

(3) Review and take into consideration those recommendations of the Review Panel and the Commission's own score;

(4) Review and approve or disapprove the award of the grant by a majority vote; and

(5) Provide a statement of explanation for the funding round of the approved applications that are not in agreement with the Review Panel recommendations.

**History**
- *Source Note: The provisions of this §4.36 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective November 17, 2019, 44 TexReg 6853; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.37** Availability of Funds {#sec-4.37 omnilex-key=us-tx-regs-official--title-1--4.37}

(a) Funds commitment. Once approved by the Commission for an award, program money becomes encumbered, subject to the availability of funds.

(b) If the Commission determines that a qualified Defense Economic Adjustment Assistance Grant Program awardee has a deviation from the project scope or other financial commitments set out in the awardee's grant application, the commitment of funding previously committed may be withdrawn and the funding amount re-allocated to other applicants.

(c) The Commission may offer less funding than is requested by the applicant.

**History**
- *Source Note: The provisions of this §4.37 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.38** Awardee Responsibilities {#sec-4.38 omnilex-key=us-tx-regs-official--title-1--4.38}

In order to receive reimbursement of grant program funds that have been committed to them, awardees will be required to enter into a grant contract with the Office of the Governor.

**History**
- *Source Note: The provisions of this §4.38 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.39** Commission and Office Responsibilities {#sec-4.39 omnilex-key=us-tx-regs-official--title-1--4.39}

(a) In carrying out its duties and responsibilities under this subchapter, the Commission shall:

(1) Solicit grant applications and publicize application deadlines;

(2) Establish and conduct the evaluation and award process in a responsive manner to maximize the opportunity to acquire federal and other funding;

(3) Develop contracts with awardees that include sufficient performance measures, audit requirements, and reporting requirements to ensure prudence and due diligence in the expenditure of state funds; and

(4) Minimize reporting requirements that may be repetitive of reporting required by federal grant agencies or that may be unnecessary for the effective monitoring of the program.

(b) The Director on behalf of the Commission, in consultation with the Chief of Staff or his designee, may waive any provision of this subchapter upon a finding that the public interest would be furthered by granting the waiver.

**History**
- *Source Note: The provisions of this §4.39 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

##### **1 Tex. Admin. Code § 4.40** Reporting Responsibilities {#sec-4.40 omnilex-key=us-tx-regs-official--title-1--4.40}

(a) Reimbursement of funds will be made in accordance with the terms of the contract.

(b) After completion of the project, the awardee will provide the following milestones and updates as required by the contract.

(c) Throughout the project period, the awardee must provide copies of all reports required by federal agencies pursuant to the terms of individual federal grants received, within 30 days of their submission to the granting agencies.

(d) The awardee must provide all reports to the Commission as required by the terms of the grant contract, including, but not limited to, reports on any performance measures, milestone reports, and project completion reports.

(e) Failure to submit reports in a timely and satisfactory manner may result in the withholding of funds due or requested by the awardee. Failure to document post-completion requirements may result in the return of funds to the Commission as set forth in the contract.

**History**
- *Source Note: The provisions of this §4.40 adopted to be effective November 25, 2009, 34 TexReg 8311; amended to be effective January 28, 2016, 41 TexReg 681; amended to be effective April 22, 2020, 45 TexReg 2539.*

### **Chapter 5** GENERAL ADMINISTRATION

#### **Subchapter B** ADMINISTRATIVE POLICIES

##### **1 Tex. Admin. Code § 5.101** Identification and Escalation of Procurement Contracts that Require Enhanced Contract or Performance Monitoring {#sec-5.101 omnilex-key=us-tx-regs-official--title-1--5.101}

(a) The Office of the Governor (OOG) shall complete a risk assessment for contracts with a private vendor for goods or services with a value greater than $100,000 to evaluate whether the OOG must exercise enhanced contract or performance monitoring on such contracts. For contracts with a private vendor for goods or services with a value of $100,000 or less, the OOG may complete a risk assessment to evaluate whether enhanced contract or performance monitoring is necessary for such contracts.

(b) The risk assessment may consider the following factors:

(1) total cost of the contract, including contract renewals;

(2) risk of loss to the OOG under the contract;

(3) risk of fraud, waste or abuse;

(4) scope of the goods or services provided;

(5) availability of OOG resources;

(6) complexity of the contract;

(7) business process impact of failure or delay;

(8) vendor past performance; and

(9) whether the vendor is a foreign or domestic person or entity.

(c) The director of the OOG's Financial Services Division shall provide information on contracts for which it is determined the OOG must exercise enhanced contract or performance monitoring to the OOG's Chief of Staff at least quarterly. The Chief of Staff shall be notified immediately of any serious issue or risk that is identified with respect to contracts identified requiring enhanced contract or performance monitoring.

(d) This section does not apply to a memorandum of understanding, interagency contract, interlocal agreement, or contract for which there is not a cost.

**History**
- *Source Note: The provisions of this §5.101 adopted to be effective November 10, 2016, 41 TexReg 8813; amended to be effective April 27, 2021, 46 TexReg 2716.*

#### **Subchapter C** REGULATORY COMPLIANCE DIVISION

##### **1 Tex. Admin. Code § 5.201** Applicability {#sec-5.201 omnilex-key=us-tx-regs-official--title-1--5.201}

(a) The rule review process established in Subchapter C, Chapter 57 of the Texas Occupations Code, and implemented by this subchapter, applies only to the following state agencies:

(1) the Texas State Board of Public Accountancy;

(2) the Texas State Board of Acupuncture Examiners;

(3) the Texas Appraiser Licensing and Certification Board;

(4) the Texas Board of Architectural Examiners;

(5) the Texas Behavioral Heath Executive Council;

(6) the Texas Board of Chiropractic Examiners;

(7) the State Board of Dental Examiners;

(8) the Texas Board of Professional Engineers and Land Surveyors;

(9) the Finance Commission of Texas;

(10) the Texas Commission on Fire Protection;

(11) the Texas Funeral Service Commission;

(12) the Texas Board of Professional Geoscientists;

(13) the Texas Commission on Law Enforcement;

(14) the Texas Medical Board;

(15) the Texas Board of Medical Radiologic Technology;

(16) the Texas Department of Motor Vehicles;

(17) the Texas Board of Nursing;

(18) the Texas Board of Occupational Therapy Examiners;

(19) the Texas Optometry Board;

(20) the Texas State Board of Pharmacy;

(21) the Texas Board of Physical Therapy Examiners;

(22) the Texas Physician Assistant Board;

(23) the Texas State Board of Plumbing Examiners;

(24) the Texas Real Estate Commission;

(25) the Texas Board of Respiratory Care;

(26) the Council on Sex Offender Treatment; and

(27) the State Board of Veterinary Medical Examiners.

(b) The inclusion or exclusion of a state agency in subsection (a) of this section does not represent a determination by the Regulatory Compliance Division of the Office of the Governor that the state agency does or does not require active supervision by the state in order to invoke state-action antitrust immunity under federal antitrust law.

(c) The rule review process established in Subchapter C, Chapter 57 of the Texas Occupations Code, and implemented by this subchapter, does not apply to emergency rulemaking.

**History**
- *Source Note: The provisions of this §5.201 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.202** Definitions {#sec-5.202 omnilex-key=us-tx-regs-official--title-1--5.202}

In this subchapter:

(1) "Administrative records regarding a proposed rule" means any nonprivileged and nonconfidential documents, communications, or other information created, received, or consulted by a state agency that are material to the development of the proposed rule. The term includes all information and comments that the state agency received from the public regarding the proposed rule.

(2) "Affects market competition" means:

(A) creates a barrier to market participation in this state; or

(B) results in higher prices or reduced competition for a product or service provided by or to a license holder in this state.

(3) "Division" means the Regulatory Compliance Division of the Office of the Governor established in Subchapter C, Chapter 57 of the Texas Occupations Code.

(4) "State agency" means a state agency listed in §5.201(a) of this subchapter.

**History**
- *Source Note: The provisions of this §5.202 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.203** Computation of Time {#sec-5.203 omnilex-key=us-tx-regs-official--title-1--5.203}

In computing a period of days in this subchapter, if the last day of any period is a Saturday, Sunday, or a national or state holiday included in Section 662.003(a) or (b) of the Texas Government Code, the period is extended to include the next day that is not a Saturday, Sunday, or national or state holiday.

**History**
- *Source Note: The provisions of this §5.203 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.204** Submission of Proposed Rule to Division {#sec-5.204 omnilex-key=us-tx-regs-official--title-1--5.204}

(a) A state agency must submit to the division, before final adoption or implementation, any proposed rule that has been published in the *Texas Register,* including a new rule, a rule change, a rule repeal, or a rule readoption, if:

(1) the state agency determines that the proposed rule would affect market competition in this state relating to a business, occupation, or profession for which a license is issued; or

(2) the division identifies the proposed rule as one that it has reason to believe may affect market competition in this state relating to a business, occupation, or profession for which a license is issued.

(b) A state agency acting under subsection (a)(1) of this section may submit the proposed rule to the division no earlier than the date that the proposed rule is published in the *Texas Register.* If the division identifies a proposed rule for submission to the division under subsection (a)(2) of this section, the division shall notify in writing the state agency head, the presiding officer of the governing body of the state agency, and, if different from the state agency head or presiding officer, the certifying official, as defined in 1 Texas Administrative Code §91.2(4), who certified the proposed rule for filing with the *Texas Register* not later than the last day of the public comment period provided for the proposed rule in the *Texas Register.* There is no deadline by which a state agency must submit a proposed rule to the division.

(c) A state agency submitting a proposed rule to the division must use the rule submission memorandum template prescribed by the division and available on the division's website. The state agency must include with the rule submission memorandum:

(1) a copy of the proposed rule as it appeared in the *Texas Register* in its entirety;

(2) the language of any amendments to the proposed rule that the state agency intends to adopt;

(3) copies of all of the state agency's administrative records regarding the proposed rule, including any information or comments that the state agency received from the public; and

(4) any other nonprivileged and nonconfidential information that the state agency considers relevant to the division's review of the proposed rule.

(d) A state agency submitting a proposed rule to the division must submit it by:

(1) hand delivery to "Office of the Governor, Attn: Regulatory Compliance Division, State Insurance Building, 1100 San Jacinto, Austin, Texas 78701";

(2) mail to "Office of the Governor, Attn: Regulatory Compliance Division, P.O. Box 12428, Austin, Texas 78711"; or

(3) email to "RegulatoryCompliance@gov.texas.gov".

(e) Not later than the 10th business day after the date that the division receives a proposed rule submission from a state agency, the division shall notify in writing the state agency head, the presiding officer of the governing body of the state agency, and, if different from the state agency head or presiding officer, the agency staff or governing body member who submitted the proposed rule to the division of the division's receipt of the proposed rule and the period during which the division will accept public comments on the proposed rule.

**History**
- *Source Note: The provisions of this §5.204 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.205** Public Notice of Proposed Rule Submission {#sec-5.205 omnilex-key=us-tx-regs-official--title-1--5.205}

Not later than the 10th business day after the date that the division receives a proposed rule submission from a state agency, the division shall:

(1) make available to the public on the division's website the rule submission memorandum submitted by the state agency;

(2) provide notice on the division's website that the division is accepting public comments on the proposed rule and the deadline and instructions for submitting public comments; and

(3) notify by email all persons who have requested notification of proposed rule submissions received by the division.

**History**
- *Source Note: The provisions of this §5.205 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.206** Supplementation of Proposed Rule Submission {#sec-5.206 omnilex-key=us-tx-regs-official--title-1--5.206}

(a) While a proposed rule is being reviewed by the division, the state agency must provide to the division:

(1) copies of any administrative records regarding the proposed rule created, received, or consulted by the state agency after submission of the proposed rule to the division, including any information or comments received from the public after the submission; and

(2) any amendments to the proposed rule that the state agency intends to adopt and that were not included in the proposed rule submission.

(b) If a state agency supplements a proposed rule submission under subsection (a) of this section with a substantial amount of administrative records or with an amendment that significantly changes the proposed rule in nature or scope, the division may:

(1) require the submission of an updated rule submission memorandum;

(2) reopen or extend the public comment period on the proposed rule; and

(3) deem the supplemented submission a new submission, including restarting the 90-day period for the division to issue a determination letter approving or rejecting the proposed rule.

(c) After the division has issued a determination letter approving a proposed rule or disapproving a proposed rule with precise instructions, the state agency may provide to the division an amendment to the proposed rule that the state agency intends to adopt but did not previously provide to the division, if the amendment does not include a change to the proposed rule that would require the rule to be re-proposed in the *Texas Register.*

(d) If a state agency supplements a proposed rule submission under subsection (c) of this section, the division may, at its discretion, issue an addendum to the determination letter addressing the amendment to the proposed rule, as provided in §5.209(e) of this subchapter, or require the state agency to re-submit the proposed rule and amendment as a new submission under §5.204 of this subchapter.

**History**
- *Source Note: The provisions of this §5.206 adopted to be effective October 14, 2020, 45 TexReg 7237; amended to be effective October 28, 2021, 46 TexReg 7205.*

##### **1 Tex. Admin. Code § 5.207** Review of Proposed Rule by Division {#sec-5.207 omnilex-key=us-tx-regs-official--title-1--5.207}

(a) The division shall conduct a thorough, independent review of each proposed rule submitted to the division under §5.204 of this subchapter to determine:

(1) if the effect of the proposed rule on market competition is consistent with state policy as established by the state agency's governing statute; and

(2) whether the proposed rule promotes a clearly articulated and affirmatively expressed policy as established by the legislature to displace competition with government action.

(b) In conducting a review of a proposed rule, the division may request information from the state agency that submitted the proposed rule or require the state agency to conduct an analysis of possible implications of the proposed rule. The division may also hold public hearings.

**History**
- *Source Note: The provisions of this §5.207 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.208** Public Comments on Proposed Rule {#sec-5.208 omnilex-key=us-tx-regs-official--title-1--5.208}

(a) In conducting a review of a proposed rule, the division shall solicit and consider written public comments from identified persons submitted to the division before the deadline provided on the division's website.

(b) Except as provided in subsection (c) of this section, the division shall accept and consider public comments submitted to the division on or before the 30th day after the date that the rule submission memorandum for the proposed rule is made available to the public on the division's website.

(c) At the request of a state agency in a rule submission memorandum, and upon the state agency's showing of an extraordinary circumstance or a need for the state agency to meet a statutory or administrative deadline, the division may provide for a shorter public comment period of not less than 10 days on a proposed rule in order for the division to conduct an expedited review of the proposed rule.

(d) The division may, but is not required to, consider public comments regarding a proposed rule received by the division outside of the public comment period provided by the division under subsection (b) or (c) of this section.

**History**
- *Source Note: The provisions of this §5.208 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.209** Determination by Division on Proposed Rule {#sec-5.209 omnilex-key=us-tx-regs-official--title-1--5.209}

(a) Not later than the 90th day after the postmark date of a state agency's mailed proposed rule submission or the date on which the division receives a state agency's hand delivered or emailed proposed rule submission, the division shall issue a determination letter approving or rejecting the proposed rule.

(b) The division shall include in the determination letter an explanation of the division's reasons for approving or rejecting the proposed rule, including a discussion of the division's determination regarding the consistency of the proposed rule with applicable state policy. If the division rejects a proposed rule, the division shall include in the determination letter instructions for revising the proposed rule to be consistent with applicable state policy. At its discretion, the division may provide either precise or general instructions for revising the proposed rule and must identify its instructions as such.

(c) The division shall send the determination letter to the state agency head, the presiding officer of the governing body of the state agency, and, if different from the state agency head or presiding officer, the agency staff or governing body member who submitted the proposed rule to the division, and shall make the determination letter available to the public on the division's website.

(d) A determination letter issued by the division is not subject to appeal.

(e) The division may issue an addendum to a determination letter approving or rejecting an amendment to the proposed rule provided to the division under §5.206(c) of this subchapter. In issuing an addendum, the division shall follow the procedures in subsections (b) and (c) of this section and must issue the addendum not later than the 30th day after the division's receipt of the amendment.

**History**
- *Source Note: The provisions of this §5.209 adopted to be effective October 14, 2020, 45 TexReg 7237; amended to be effective October 28, 2021, 46 TexReg 7205.*

##### **1 Tex. Admin. Code § 5.210** Final Adoption and Implementation of Proposed Rule {#sec-5.210 omnilex-key=us-tx-regs-official--title-1--5.210}

(a) A state agency may finally adopt and implement a proposed rule required to be submitted to the division under §5.204 of this subchapter only if:

(1) the division issues a determination letter approving the proposed rule under §5.209 of this subchapter; or

(2) the division issues a determination letter rejecting the proposed rule under §5.209 of this subchapter with precise instructions for the revision of the proposed rule and the state agency revises the proposed rule according to the division's instructions.

(b) If an addendum to a determination letter is issued under §5.209(e) of this subchapter, the state agency may finally adopt and implement the proposed rule, as amended, if:

(1) the division issues an addendum approving the amendment; or

(2) the division issues an addendum rejecting the amendment with precise instructions for revision and the state agency revises the proposed rule, as amended, according to the division's instructions.

(c) In adopting a proposed rule pursuant to this section, a state agency may make technical and nonsubstantive changes to the language of the proposed rule and any amendments to the proposed rule reviewed by the division. For purposes of subsections (a)(2) and (b)(2) of this section, a state agency may also make technical and nonsubstantive changes to the proposed rule when incorporating the division's precise instructions.

(d) A rule finally adopted and implemented in accordance with subsection (a)(2) or (b)(2) of this section is deemed to have been approved by the division for purposes of Section 57.106(e) of the Texas Occupations Code.

**History**
- *Source Note: The provisions of this §5.210 adopted to be effective October 14, 2020, 45 TexReg 7237; amended to be effective October 28, 2021, 46 TexReg 7205.*

##### **1 Tex. Admin. Code § 5.211** Division Information Requests {#sec-5.211 omnilex-key=us-tx-regs-official--title-1--5.211}

When deciding whether to direct a state agency to submit a proposed rule to the division under §5.204(a)(2) of this subchapter, the division may request information from the state agency relating to the proposed rule. Any information provided in response to such a request must be submitted in writing from an identified agency staff or governing body member and will be made available to the public by the division.

**History**
- *Source Note: The provisions of this §5.211 adopted to be effective October 28, 2021, 46 TexReg 7205.*

##### **1 Tex. Admin. Code § 5.212** Limitation of Division Consideration to Public Information {#sec-5.212 omnilex-key=us-tx-regs-official--title-1--5.212}

When conducting a review of a proposed rule under §5.207 of this subchapter or deciding whether to direct a state agency to submit a proposed rule to the division under §5.204(a)(2) of this subchapter, the division may only consider information or communications that are:

(1) submitted to the division in writing from an identified person and made available to the public;

(2) submitted in a public hearing; or

(3) generally known to the public.

**History**
- *Source Note: The provisions of this §5.212 adopted to be effective October 14, 2020, 45 TexReg 7237.*

##### **1 Tex. Admin. Code § 5.213** Division Website {#sec-5.213 omnilex-key=us-tx-regs-official--title-1--5.213}

The division shall maintain a website on which the division makes available to the public:

(1) the rule submission memorandum for each proposed rule that is currently under review by the division;

(2) the deadline and instructions for submitting public comments on each proposed rule that is currently under review by the division;

(3) all determination letters issued by the division, including any addenda to determination letters issued by the division;

(4) a means through which any person may sign up to be notified when the division receives a proposed rule submission or issues a determination letter on any proposed rule; and

(5) a means through which any person may request publicly available documents not maintained on the division's website.

**History**
- *Source Note: The provisions of this §5.213 adopted to be effective October 14, 2020, 45 TexReg 7237; amended to be effective October 28, 2021, 46 TexReg 7205.*

## **Part 2** TEXAS ETHICS COMMISSION

### **Chapter 6** ORGANIZATION AND ADMINISTRATION

#### **Subchapter A** GENERAL RULES

##### **1 Tex. Admin. Code § 6.1** Definitions {#sec-6.1 omnilex-key=us-tx-regs-official--title-1--6.1}

The following words and terms, when used in this Part, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Act--The Government Code, Chapter 571 (concerning Texas Ethics Commission).

(2) Administrative Procedure Act--The Government Code, Chapter 2001 (concerning Administrative Procedure).

(3) Agency--The state agency governed by the commission, as it functions and operates through the administrative staff hired by the commission and its executive director.

(4) Commission--The Texas Ethics Commission, as constituted and described in the Texas Constitution, Article 3, §24a and in the Government Code, Chapter 571.

(5) Document--A report, complaint, response, letter, or any other written material.

(6) Executive director--The person employed by the commission to serve as the agency's chief administrative officer, or any other employee of the commission acting as the designee of the executive director.

(7) Filer--A person required to file a report with the commission or a local filing authority in accordance with a law enforced by the commission.

(8) Individual--A human being who has been born and is alive.

(9) Local filing authority--A public servant other than the Texas Ethics Commission with whom a filer must file a report in accordance with a law enforced by the commission.

(10) Open Meetings Law--The Government Code, Chapter 551 (concerning Open Meetings).

(11) Open Records Law--The Government Code, Chapter 552 (concerning Open Records).

(12) Person--An individual, representative, corporation, association, or other entity, including any nonprofit corporation, or any agency or instrumentality of federal, state, or local government.

(13) Postmark--A postal cancellation by the United States Postal Service that contains the post office name, state, and zip code and the month, day, and year the canceling post office accepted custody of the material.

(14) Report--Any document or other information required to be filed under this title.

(15) Staff--Employees of the commission, hired by the commission or the executive director.

(16) Title 15--The Election Code, Title 15 (concerning Regulating Political Funds and Campaigns).

**History**
- *Source Note: The provisions of this §6.1 adopted to be effective December 31, 1993, 18 TexReg 9707; amended to be effective September 19, 2001, 26 TexReg 7115; amended to be effective March 10, 2015, 40 TexReg 1059; amended to be effective May 3, 2018, 43 TexReg 2539; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.3** Purpose and Construction of Rules {#sec-6.3 omnilex-key=us-tx-regs-official--title-1--6.3}

(a) This title is adopted for the following purposes:

(1) to establish and explain the practice and procedures followed by the commission and its employees performing its duties under the law; and

(2) to provide specific guidance necessary to encourage and ensure full compliance with all laws administered and enforced by the commission.

(b) A person's obligation to comply with a requirement or prohibition established by statute exists even if this title is silent concerning a statutory requirement.

(c) This title shall always be construed in a manner consistent with all applicable constitutional and statutory requirements.

**History**
- *Source Note: The provisions of this §6.3 adopted to be effective December 31, 1993, 18 TexReg 9707.*

##### **1 Tex. Admin. Code § 6.9** Computation of Time {#sec-6.9 omnilex-key=us-tx-regs-official--title-1--6.9}

(a) This section states how to compute a period of time prescribed or allowed by this Part, by any order of the agency, or by any applicable statute. The day of the act, event, or default after which the designated period of time begins to run is not included. The last day of the period is included. However, if the last day of the time period would not be a business day as defined by Section 552.0031 of the Texas Government Code, the period is extended until the next day that is a business day.

(b) A time period described by statute or this Part to be a certain number of business days is calculated under subsection (a) of this section without including any day within that time period that is not a business day as defined by Section 552.0031 of the Texas Government Code.

(c) A document required to be filed or served by a deadline established by statute or this part is filed or served when it is actually received. A document may be deemed to be filed or served when it is deposited with the United States Postal Service, properly addressed to the recipient, with all postage prepaid. The date of the postmark on the envelope for the document is presumed to be the date the document was deposited with the United States Postal Service.

(d) A document filed or served by delivery to the United States Postal Service is presumed to have been filed before 5:00 p.m. on the date indicated by the postmark.

**History**
- *Source Note: The provisions of this §6.9 adopted to be effective December 31, 1993, 18 TexReg 9707; amended to be effective October 27, 2024, 49 TexReg 8573.*

#### **Subchapter B** OFFICERS AND EMPLOYEES OF THE COMMISSION

##### **1 Tex. Admin. Code § 6.21** Officers of the Commission {#sec-6.21 omnilex-key=us-tx-regs-official--title-1--6.21}

(a) The commission's chair and vice chair shall be elected annually by majority vote of the commission. The election shall take place at the first commission meeting held after June 1 of each year. Each officer shall serve until his or her successor is selected.

(b) The chair and vice chair shall be members of different political parties.

(c) The chair and vice chair may be re-elected; however, if a new chair is elected he or she should be a member of a different political party than the former chair.

(d) The person elected to serve as the commission's chair shall also serve as the commission's presiding officer. The presiding officer shall preside at all meetings of the commission. While presiding, the presiding officer shall direct the order of the meeting, appoint committees and persons to chair committees, recognize persons to be heard at hearings, set reasonable and necessary time limits for speakers, and take other actions to clarify issues and preserve order. Unless the chair appoints a presiding officer pro tem pursuant to subsection (f) of this section, the vice chair shall perform all duties of the presiding officer when the chair is absent.

(e) In addition to other powers identified elsewhere in this Part, the presiding officer may perform the following actions of the commission:

(1) Sign previously approved subpoenas and orders;

(2) Schedule hearings and meetings; and

(3) Timely respond to matters on behalf of the commission, including litigation matters, when action is required before the next scheduled meeting.

(f) The chair may appoint a commissioner as presiding officer pro tem to preside over a hearing held by the commission.

(g) If the chair or vice chair is unable to participate in a matter pending before the commission, either may select a replacement from among the other commissioners to exercise their authority and fulfill their duties under this Part and any other applicable law.

**History**
- *Source Note: The provisions of this §6.21 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective June 12, 2017, 42 TexReg 3001; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.23** Commission Staff {#sec-6.23 omnilex-key=us-tx-regs-official--title-1--6.23}

(a) The executive director is the chief administrative officer of the agency. The executive director shall attend commission meetings at the pleasure of the commission and serve as liaison between the commission and the public.

(b) The commission delegates to the executive director all powers conferred on the commission by the Act or other law, except for any power that requires a vote of the commission or approval of the chair. Any action taken by the executive director shall conform with all applicable law, including this Part and other policies that may be adopted from time to time by the commission.

(c) The executive director shall attend commission meetings unless specifically excused by the commission and shall perform any duties or assignments established by the commission.

(d) The general counsel shall attend commission meetings unless specifically excused by the commission, shall provide legal advice to the commission and executive director, and shall perform any duties delegated by the executive director.

**History**
- *Source Note: The provisions of this §6.23 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.25** Appointment and Operation of Advisory Committees {#sec-6.25 omnilex-key=us-tx-regs-official--title-1--6.25}

(a) The commission by resolution may establish one or more committees to obtain the viewpoints and advice of interested persons with respect to any contemplated rulemaking. The membership or method of appointment of members to a committee established under this section shall be specified in the resolution that creates the committee. A committee created under this section is advisory only.

(b) In addition to committees established under subsection (a) of this section, with the consent of other members of the commission the presiding officer may from time to time establish and appoint commission members and others to a special committee to exercise advisory duties specified by the presiding officer.

**History**
- *Source Note: The provisions of this §6.25 adopted to be effective December 31, 1993, 18 TexReg 9708.*

#### **Subchapter C** COMMISSION MEETINGS

##### **1 Tex. Admin. Code § 6.35** Called Meetings {#sec-6.35 omnilex-key=us-tx-regs-official--title-1--6.35}

The executive director shall give notice to each commissioner of the date and time of each meeting. Notice under this section shall be provided a reasonable amount of time in advance of the meeting.

**History**
- *Source Note: The provisions of this §6.35 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.37** Open Meetings {#sec-6.37 omnilex-key=us-tx-regs-official--title-1--6.37}

(a) Except as provided by subsection (b) of this section, each meeting of the commission shall be conducted in accordance with the Open Meetings Law.

(b) A commission meeting limited to consideration and action on matters relating to sworn complaints is not subject to the Open Meetings Law.

**History**
- *Source Note: The provisions of this §6.37 adopted to be effective December 31, 1993, 18 TexReg 9708.*

##### **1 Tex. Admin. Code § 6.39** Meeting Agenda {#sec-6.39 omnilex-key=us-tx-regs-official--title-1--6.39}

(a) The agenda shall consist of agenda items adopted by the executive director prior to the meetings for which the agenda is specified. At a reasonable time before filing a copy of the agenda as required by the Open Meetings Law, the executive director shall provide a copy of the adopted agenda to the presiding officer. If the presiding officer is not reasonably available, the executive director shall provide a copy of the adopted agenda to any two commissioners.

(b) The presiding officer, a commission member with the consent of the presiding officer, or any two commissioners may direct the executive director to include an item on the agenda if it complies with the posting requirements specified by law. The presiding officer may direct the executive director to remove an item included on an adopted agenda unless that item is requested by two commission members other than the presiding officer.

(c) A member of the public may ask the executive director to place an item on an adopted agenda. The executive director shall advise the commission of the request and may include the item on an adopted agenda.

**History**
- *Source Note: The provisions of this §6.39 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.41** Public Hearing and Participation {#sec-6.41 omnilex-key=us-tx-regs-official--title-1--6.41}

(a) A public hearing on an agenda item shall be conducted when required by law or requested by a commissioner.

(b) The executive director shall prepare and maintain a plan for providing special assistance (including without limitation translation of the English language) to persons who request such assistance for the purpose of attending, observing, or participating in a commission meeting.

**History**
- *Source Note: The provisions of this §6.41 adopted to be effective December 31, 1993, 18 TexReg 9708.*

##### **1 Tex. Admin. Code § 6.43** Speakers Addressing the Commission {#sec-6.43 omnilex-key=us-tx-regs-official--title-1--6.43}

(a) The executive director shall prescribe a speaker registration form. Each person who wishes to speak at a commission meeting shall provide the following information:

(1) the speaker's name;

(2) the person or entity the speaker represents, if any;

(3) the agenda item the speaker wishes to address; and

(4) his or her mailing address and telephone number.

(b) Any person who addresses the commission shall state his or her name and the name of the person or entity the speaker represents, if any, for purposes of the recording under §6.47 of this title (relating to Recording of Meeting; Minutes).

**History**
- *Source Note: The provisions of this §6.43 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.45** Order and Conduct of Commission Meeting {#sec-6.45 omnilex-key=us-tx-regs-official--title-1--6.45}

(a) The presiding officer shall preside at all meetings of the commission. The presiding officer shall direct the order of the meeting in accordance with its agenda, recognize persons to be heard, set reasonable and necessary time limits for speakers, maintain and enforce appropriate standards of conduct, and take any other action necessary in his or her discretion to clarify issues and preserve order.

(b) Commission meetings shall be conducted in accordance with rules and procedures set forth in the most recently published edition of Robert's Rules of Order.

(c) With unanimous consent of all commissioners present, any provision or requirement of this section may be waived.

(d) No action of the commission that otherwise complies with law shall be void or invalid because the action was taken in violation of a rule or procedure established by this section.

**History**
- *Source Note: The provisions of this §6.45 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

##### **1 Tex. Admin. Code § 6.47** Recording of Meeting; Minutes {#sec-6.47 omnilex-key=us-tx-regs-official--title-1--6.47}

(a) All meetings of the commission shall be recorded. The recording shall be the official record of actions taken at the meeting.

(b) The presiding officer shall announce the names of each commissioner who makes or seconds a motion to be voted upon by the commission. After the vote has been taken, the presiding officer shall announce the vote in a manner that identifies how each commissioner voted, if a commissioner abstained, or if a commissioner was not present for the vote.

(c) The executive director shall prepare minutes after each meeting that reflect all commission votes and other actions taken during the meeting. The minutes shall be approved by vote of the commission at a subsequent commission meeting.

**History**
- *Source Note: The provisions of this §6.47 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective October 27, 2024, 49 TexReg 8573.*

#### **Subchapter D** RULEMAKING PROCEDURES

##### **1 Tex. Admin. Code § 6.61** Comments on Proposed Rules {#sec-6.61 omnilex-key=us-tx-regs-official--title-1--6.61}

(a) Written comments on a proposed rule received at the agency office shall be reviewed by the executive director and made available to each member of the commission before final action to adopt the rule.

(b) Oral or written comments on a proposed rule may also be offered at the public hearing required by §6.63 of this title (relating to Public Hearings on Proposed Rules).

**History**
- *Source Note: The provisions of this §6.61 adopted to be effective December 31, 1993, 18 TexReg 9708.*

##### **1 Tex. Admin. Code § 6.63** Public Hearings on Proposed Rules {#sec-6.63 omnilex-key=us-tx-regs-official--title-1--6.63}

The commission will hold a public hearing on each proposed rule before it takes final action to adopt the rule. Unless otherwise scheduled, the public hearing will be held immediately before the commission votes on the proposed rule.

**History**
- *Source Note: The provisions of this §6.63 adopted to be effective December 31, 1993, 18 TexReg 9708.*

#### **Subchapter E** AGENCY FEES AND CHARGES

##### **1 Tex. Admin. Code § 6.81** Charges; Payment of Money; Refunds {#sec-6.81 omnilex-key=us-tx-regs-official--title-1--6.81}

(a) Any fee or charge payable to the agency shall be paid in advance, unless satisfactory arrangements for subsequent payment are approved by the executive director.

(b) Money paid by actual mistake or in excess, such as a payment not required by law, may be refunded. A mere change of purpose after the payment of money, as when a party desires to withdraw a filing, will not entitle a party to a refund.

**History**
- *Source Note: The provisions of this §6.81 adopted to be effective December 31, 1993, 18 TexReg 9708; amended to be effective September 19, 2001, 26 TexReg 7115.*

##### **1 Tex. Admin. Code § 6.83** Copying Charges {#sec-6.83 omnilex-key=us-tx-regs-official--title-1--6.83}

The charge for providing copies of documents shall be in accordance with rules established by the General Services Commission or other applicable law.

**History**
- *Source Note: The provisions of this §6.83 adopted to be effective December 31, 1993, 18 TexReg 9708.*

##### **1 Tex. Admin. Code § 6.87** Waiver of Fees for Copies or Publications {#sec-6.87 omnilex-key=us-tx-regs-official--title-1--6.87}

The executive director may waive or reduce a charge established by this subchapter when, in his or her discretion, a waiver or reduction of the fee is in the public interest because furnishing the information primarily benefits the general public.

**History**
- *Source Note: The provisions of this §6.87 adopted to be effective December 31, 1993, 18 TexReg 9708.*

### **Chapter 7** CONTRACTS

##### **1 Tex. Admin. Code § 7.1** Application {#sec-7.1 omnilex-key=us-tx-regs-official--title-1--7.1}

This chapter applies to §2155.076, §2261.202 and §2262.253 of the Government Code.

**History**
- *Source Note: The provisions of this §7.1 adopted to be effective
June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.3** Definitions {#sec-7.3 omnilex-key=us-tx-regs-official--title-1--7.3}

(a) Agency--The state agency governed by the Commission, as it functions and operates through the administrative staff hired by the Commission and its executive director.

(b) Commission--The Texas Ethics Commission, as constituted and described in the Texas Constitution, Article 3, §24a and in the Government Code, Chapter 571.

(c) Contract--A written contract between the agency and a contractor, under the terms of which the contractor agrees to provide goods or services to or for the agency.

(d) Executive director--The person employed by the Commission to serve as the agency's chief administrative officer, or any other employee of the Commission acting as the designee of the executive director.

(e) Vendor--A person that offers goods and services in the state.

**History**
- *Source Note: The provisions of this §7.3 adopted to be effective
June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.5** Vendor Protest Procedures {#sec-7.5 omnilex-key=us-tx-regs-official--title-1--7.5}

(a) Per Tex. Gov't Code §2155.076, a state agency must adopt procedures for resolving vendor protests related to purchasing issues.

(b) A vendor who submitted a written response to a solicitation and did not receive the award may file a written protest.

(c) A valid protest must be:

(1) In writing and contain:

(A) the specific rule, statute or regulation the protesting vendor alleges the solicitation, contract award or tentative award violated;

(B) a specific description of each action by the agency that the protesting vendor alleges is a violation of the statutory or regulatory provision the protesting vendor identified in subparagraph (A) of this paragraph;

(C) a precise statement of the relevant facts including:

(i) sufficient documentation to establish that the protest has been timely filed;

(ii) a description of the adverse impact to the agency and the state; and

(iii) a description of the resulting adverse impact to the protesting vendor;

(D) a statement of the argument and authorities that the protesting vendor offers in support of the protest;

(E) an explanation of the subsequent action the vendor is requesting.

(2) signed by an authorized representative with the signature notarized; and

(3) filed in the time period specified in this section.

(d) To be considered by the Commission, a protest must be filed:

(1) by the end of the posted solicitation period, if the protest concerns the solicitation documents or actions associated with the publication of solicitation documents;

(2) by the day of the award of a contract resulting from the solicitation, if the protest concerns the evaluation or method of evaluation for a solicitation; or

(3) no later than 10 days after the notice of award, if the protest concerns the award.

(e) In the event of a timely protest or appeal under this section, the Commission shall not proceed further with the solicitation or with the award of the contract unless the Executive Director makes a written determination that the award of the contract without delay is necessary to protect the best interest of the Commission.

(f) Policies and procedures related to this section can be found in the Commission policy on the Commission website.

**History**
- *Source Note: The provisions of this §7.5 adopted to be effective
June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.7** Contract Monitoring {#sec-7.7 omnilex-key=us-tx-regs-official--title-1--7.7}

(a) Per Tex. Gov't Code §2261.202, a state agency must adopt a policy that clearly defines the contract monitoring roles and responsibilities.

(b) The contract monitoring roles and responsibilities of the Commission's internal audit staff and other inspection, investigative, or compliance staff are as follows:

(1) The Commission does not have an Internal Auditor. The Executive Director, or Designee, will perform internal audit activities which will include performing audits of the contract management function and systems when they are warranted by the results of risk assessment or included in the audit plan approved by the Commission.

(2) The Administration Division will seek to improve contract compliance by serving as a central repository for agency contracts so the agency can perform contract compliance reviews.

(3) The Administration Division will assist the Requesting Division in monitoring agency contracts in connection with applicable historically underutilized and minority business contract requirements.

(4) The General Counsel Division will seek to improve contract compliance by reviewing and approving each contract.

(5) The Requesting Division will oversee the contract, monitor and report to other appropriate agency divisions regarding contract compliance.

(6) Upon contract close-out the Administration Division will file vendor performance reports, as required by the rules of the Comptroller of Public Accounts in 34 TAC Part 1, Chapter 20, Subchapter C (relating to Procurement), and §20.108 (relating to Vendor Performance Tracking System).

(7) The Commission does not have a criminal enforcement unit. Criminal activity related to agency contracts will be reported to the appropriate authorities as set out in statute.

**History**
- *Source Note: The provisions of this §7.7 adopted to
be effective June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.9** Enhanced Contract Monitoring {#sec-7.9 omnilex-key=us-tx-regs-official--title-1--7.9}

(a) Per Tex. Gov't Code 2261.253, a state agency must establish a procedure to identify each contract that requires enhanced or performance monitoring, and submit information on those contracts to the agency's governing body.

(b) Contracts that are subject to enhanced contract monitoring include:

(1) Contracts for the purchase of goods or services that have a value in excess of $1 million for the life of the contract.

(2) Contracts that are identified based on an internal risk analysis.

(3) Any contracts identified by the Commission, Executive Director, or General Counsel.

(4) Contracts subject to enhanced contract or performance monitoring will be included in reports provided to the Commission.

(5) Contracts will be monitored in accordance with policies and procedures in the Commission's contract management handbook.

(6) The Commission will be notified, as appropriate, of any serious issue or risk that is identified with report to a contract monitored under this rule.

**History**
- *Source Note: The provisions of this §7.9 adopted to
be effective June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.11** Veteran Heroes United in Businesses (VetHUB) {#sec-7.11 omnilex-key=us-tx-regs-official--title-1--7.11}

In accordance with Tex. Gov't Code §2161.003, the Commission adopts by reference the Texas Comptroller of Public Accounts' rules in Texas Administrative Code, Title 34, Chapter 20, Subchapter D, Division 1 (relating to Historically Underutilized Businesses).

**History**
- *Source Note: The provisions of this §7.11 adopted to be
effective June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 7.55** Vendor Protest Procedures for Vendor Performance Reports {#sec-7.55 omnilex-key=us-tx-regs-official--title-1--7.55}

(a) The Commission is required by §2155.089 and §2262.055 of the Texas Government Code to review a vendor's performance under a contract after the contract is completed or otherwise terminated. Vendor performance must be reported to the Comptroller using the Comptroller's tracking system to rate vendors on an A through F scale, with A being the highest grade.

(b) A vendor who receives a grade lower than a C in the vendor performance tracking system may file a protest regarding the lower grade assigned to the vendor in the system.

(c) Policies and procedures related to this section can be found in the Commission policy on the Commission website.

**History**
- *Source Note: The provisions of this §7.55 adopted to be
effective June 7, 2026, 51 TexReg 3699.*

### **Chapter 8** ADVISORY OPINIONS

##### **1 Tex. Admin. Code § 8.1** Definitions {#sec-8.1 omnilex-key=us-tx-regs-official--title-1--8.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise: AOR number--An advisory opinion request file number assigned by the executive director to a pending advisory opinion request in accordance with this chapter.

**History**
- *Source Note: The provisions of this §8.1 adopted to be effective December 31, 1993, 18 TexReg 9709; amended to be effective July 13, 2020, 45 TexReg 4735.*

##### **1 Tex. Admin. Code § 8.3** Subject of an Advisory Opinion {#sec-8.3 omnilex-key=us-tx-regs-official--title-1--8.3}

(a) The commission may not issue an advisory opinion that concerns the same or substantially similar facts of pending litigation known to the commission.

(b) For purposes of this section, the term litigation includes a sworn complaint proceeding before the commission if the request is made by a respondent or complainant or the agent of a respondent or complainant of pending sworn complaint relating to the same issue of law as the advisory opinion request.

(c) An advisory opinion cannot resolve a disputed question of fact.

**History**
- *Source Note: The provisions of this §8.3 adopted to be effective
December 31, 1993, 18 TexReg 9709; amended to be effective September
19, 2001, 26 TexReg 7116; amended to be effective April 30, 2008,
33 TexReg 3387; amended to be effective July 1, 2009, 34 TexReg 4291;
amended to be effective July 13, 2020, 45 TexReg 4735; amended to
be effective April 30, 2025, 50 TexReg 2577.*

##### **1 Tex. Admin. Code § 8.5** Persons Eligible to Receive an Advisory Opinion {#sec-8.5 omnilex-key=us-tx-regs-official--title-1--8.5}

A person who is subject to one of the laws described in §571.091, Gov't Code may request an opinion that advises how the law applies to that person in a specific real or hypothetical factual situation. Opinions may only address how the law applies to the requestor, not any other real or hypothetical person.

**History**
- *Source Note: The provisions of this §8.5 adopted to be effective
December 31, 1993, 18 TexReg 9709; amended to be effective July 13,
2020 45 TexReg 4735; amended to be effective April 30, 2025, 50 TexReg
2577.*

##### **1 Tex. Admin. Code § 8.7** Request for an Advisory Opinion {#sec-8.7 omnilex-key=us-tx-regs-official--title-1--8.7}

(a) A request for an advisory opinion shall describe a specified factual situation. The facts specified may be real or hypothetical. The request must provide sufficient detail to permit the commission to provide a response to the request, including the name of the person making the request and, if applicable, the name of the person on whose behalf the request is made.

(b) A request for an advisory opinion shall be:

(1) in writing; and

(2) mailed or hand-delivered to the commission at the agency office or emailed to the commission's email address designated for receiving requests.

**History**
- *Source Note: The provisions of this §8.7 adopted to be effective December 31, 1993, 18 TexReg 9709; amended to be effective June 22, 2016, 41 TexReg 4429; amended to be effective July 13, 2020, 45 TexReg 4735.*

##### **1 Tex. Admin. Code § 8.9** Commission Initiated Opinion {#sec-8.9 omnilex-key=us-tx-regs-official--title-1--8.9}

When a majority of the commission determines that an opinion would be in the public interest or in the interest of any person or persons within the jurisdiction of the commission, the commission may on its own motion issue an advisory opinion.

**History**
- *Source Note: The provisions of this §8.9 adopted to be effective December 31, 1993, 18 TexReg 9709.*

##### **1 Tex. Admin. Code § 8.11** Review and Processing of a Request {#sec-8.11 omnilex-key=us-tx-regs-official--title-1--8.11}

(a) Upon receipt of a written request for an advisory opinion, the executive director shall determine whether the request:

(1) pertains to the application of a law specified under §571.091, Gov't Code;

(2) meets the standing requirements of §8.5 of this chapter; and

(3) meets the form requirements of §8.7 of this chapter.

(b) If the executive director determines that a request for an opinion meets the requirements of this chapter as set forth in subsections (a)(1)-(3) of this section, the executive director shall assign an AOR number to the request. The executive director shall notify the person making the request of the AOR number and of the proposed wording of the question to be answered by the commission.

(c) If the executive director determines that a request for an opinion does not meet the requirements of this chapter as set forth in subsections (a)(1)-(3) of this section, the executive director shall notify the person making the request of the reason the person making the request is not entitled to an advisory opinion in response to the request.

(d) A person who requests an opinion may withdraw the request prior to its inclusion on a meeting agenda filed by the Commission pursuant to the Open Meetings Law. Once a request is included on such an agenda, it may not be withdrawn by the requestor.

(e) The executive director may submit written questions to the requestor to clarify the real or hypothetical facts submitted with the request.

(f) The executive director may invite comments regarding an advisory opinion request from individuals or entities that may have expertise or an interest in the subject of the request.

**History**
- *Source Note: The provisions of this §8.11 adopted to be
effective December 31, 1993, 18 TexReg 9709; amended to be effective
July 13, 2020, 45 TexReg 4735; amended to be effective October 20,
2022, 47 TexReg 6821; amended to be effective April 30, 2025, 50 TexReg
2577.*

##### **1 Tex. Admin. Code § 8.13** Time Period {#sec-8.13 omnilex-key=us-tx-regs-official--title-1--8.13}

(a) The commission shall issue an advisory opinion in response to a request that meets the requirements of this chapter not later than the 60th day after the date the commission receives the request.

(b) The time available to issue an advisory opinion in response to a written request is automatically extended for 60 days pursuant to §571.092(b), Government Code.

**History**
- *Source Note: The provisions of this §8.13 adopted to be effective December 31, 1993, 18 TexReg 9709; amended to be effective July 13, 2020, 45 TexReg 4735.*

##### **1 Tex. Admin. Code § 8.15** Publication in Texas Register; Comments {#sec-8.15 omnilex-key=us-tx-regs-official--title-1--8.15}

(a) Each request assigned an AOR number under this chapter shall be published in summary form in the *Texas Register.*

(b) Any person may submit written comments to the commission concerning an advisory opinion request. Comments submitted should reference the AOR number.

**History**
- *Source Note: The provisions of this §8.15 adopted to be effective December 31, 1993, 18 TexReg 9709; amended to be effective July 13, 2020, 45 TexReg 4735.*

##### **1 Tex. Admin. Code § 8.18** No Defense to Prosecution or Civil Penalty {#sec-8.18 omnilex-key=us-tx-regs-official--title-1--8.18}

A person who requests an advisory opinion does not obtain a defense to prosecution or to imposition of a civil penalty by requesting the opinion if any of the following apply:

(1) the commission is not authorized to answer the request because it does not pertain to the application of a law specified under §571.091, Gov't Code;

(2) the request does not meet the standing requirements of §8.5 of this chapter; or

(3) the request does not meet the form requirements of §8.7 of this chapter.

**History**
- *Source Note: The provisions of this §8.18 adopted to
be effective July 13, 2020, 45 TexReg 4735; amended to be effective
April 30, 2025, 50 TexReg 2577.*

##### **1 Tex. Admin. Code § 8.19** Confidentiality {#sec-8.19 omnilex-key=us-tx-regs-official--title-1--8.19}

(a) The name of a person who requests an advisory opinion is confidential.

(b) The original request for an advisory opinion shall be placed in a confidential file.

(c) Confidentiality under subsection (a) of this section may be waived only if the person making the request for an advisory opinion provides a verified, written waiver of confidentiality to the executive director.

(d) If a request for a copy of an advisory opinion request is received, the executive director shall prepare a redacted version of the advisory opinion request by deleting any information that is likely to identify the person making the request. The redacted version of the request shall be provided to the person who requested a copy of the advisory opinion request.

**History**
- *Source Note: The provisions of this §8.19 adopted to be effective December 31, 1993, 18 TexReg 9709; amended to be effective July 13, 2020, 45 TexReg 4735.*

##### **1 Tex. Admin. Code § 8.21** Compilation of Advisory Opinions {#sec-8.21 omnilex-key=us-tx-regs-official--title-1--8.21}

The executive director shall number and categorize each advisory opinion issued and publish the opinion on the commission's website. The executive director may publish and provide copies of advisory opinions in other formats as may be in the public interest.

**History**
- *Source Note: The provisions of this §8.21 adopted to be
effective December 31, 1993, 18 TexReg 9709; amended to be effective
April 30, 2025, 50 TexReg 2577.*

### **Chapter 10** ETHICS TRAINING PROGRAMS

##### **1 Tex. Admin. Code § 10.1** Training Programs {#sec-10.1 omnilex-key=us-tx-regs-official--title-1--10.1}

The executive director shall establish a program to provide training relating to the laws administered and enforced by the commission and related laws for:

(1) members and members-elect of the legislature, to be held by January of each odd-numbered year;

(2) state employees, in cooperation with state agencies; and

(3) other persons and officials whose conduct is regulated by laws administered and enforced by the commission and related laws.

**History**
- *Source Note: The provisions of this §10.1 adopted to
be effective December 31, 1993, 18 TexReg 9710; amended to be effective
July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 10.3** Tuition Charges to Attendees of Training Programs {#sec-10.3 omnilex-key=us-tx-regs-official--title-1--10.3}

Upon approval of the commission, the executive director may establish tuition charges for persons who attend training programs under §10.1(3) of this title (relating to Training Programs) to recover costs of the training.

**History**
- *Source Note: The provisions of this §10.3 adopted to be effective December 31, 1993, 18 TexReg 9710.*

### **Chapter 12** SWORN COMPLAINTS

#### **Subchapter A** RESPONDENT'S RIGHTS

##### **1 Tex. Admin. Code § 12.1** Notice {#sec-12.1 omnilex-key=us-tx-regs-official--title-1--12.1}

(a) A notice required to be sent to a complainant under chapter 571 of the Government Code shall be sent to the address most recently provided to the commission by the complainant.

(b) A notice required to be sent to a respondent under chapter 571 of the Government Code shall be sent to the address provided to the commission by the complainant or, if the respondent has provided a different address, to the address most recently provided to the commission by the respondent.

(c) A person entitled to receive notice may waive that right by filing a written waiver with the executive director.

(d) A respondent or complainant in a complaint may waive the right under section 571.032 of the Government Code to receive written notices related to the complaint by registered or certified mail, restricted delivery, return receipt requested, and may agree to receive written notices related to the complaint by first class mail, electronic mail, or other means.

**History**
- *Source Note: The provisions of this §12.1 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.2** Representation by Counsel {#sec-12.2 omnilex-key=us-tx-regs-official--title-1--12.2}

(a) A respondent has the right to be represented by counsel retained by the respondent in any proceeding of a complaint.

(b) Counsel representing a respondent shall enter an appearance with the commission that contains the counsel's mailing address, email address, telephone number, and state bar number. If the respondent's counsel is not licensed to practice law in Texas, the representative must show authority to appear as the respondent's counsel.

(c) The commission may, through the approval of its executive director, admit an attorney who is a resident of and licensed to practice law in another state, and who is not an active member of the State Bar of Texas, to represent a respondent before the commission if the nonresident attorney complies with the requirements of Tex. Gov't Code §82.0361 and Rule XIX of the Rules Governing Admission to the Bar of Texas and files a motion, accompanied by proof of compliance with those provisions, with the commission requesting to be admitted to represent a respondent.

(d) This rule does not allow a person to engage in the unauthorized practice of law.

**History**
- *Source Note: The provisions of this §12.2 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.3** Ex Parte Communications {#sec-12.3 omnilex-key=us-tx-regs-official--title-1--12.3}

Neither commission enforcement staff nor respondents may communicate with commissioners or the general counsel outside the presence of the other party for the purpose of influencing a decision on a pending sworn complaint after the commission accepts jurisdiction over an allegation.

**History**
- *Source Note: The provisions of this §12.3 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.4** Agreements to be in Writing {#sec-12.4 omnilex-key=us-tx-regs-official--title-1--12.4}

No stipulation or agreement with respect to any matter in a complaint shall be effective unless it has been:

(1) reduced to writing and signed by each person making the stipulation or agreement, or by that person's authorized representative, and filed with the commission; or

(2) entered into the record during the course of a hearing.

**History**
- *Source Note: The provisions of this §12.4 adopted to be effective October 27, 2024, 49 TexReg 8574.*

#### **Subchapter B** FILING AND INITIAL PROCESSING OF COMPLAINT

##### **1 Tex. Admin. Code § 12.11** Deadline for Filing a Complaint {#sec-12.11 omnilex-key=us-tx-regs-official--title-1--12.11}

(a) The commission has no jurisdiction over an alleged violation:

(1) if the alleged violation is also a criminal offense, and if, at the time the complaint is filed or at the time the commission would vote to initiate a preliminary review of a matter, the allegation would be barred from criminal prosecution by operation of the applicable statute of limitations; or

(2) if the alleged violation is not also a criminal offense and if the allegation is based on facts that occurred more than three years before the date the complaint is filed or the date the commission would vote to initiate a preliminary review of a matter.

(b) For purposes of this section, a complaint is not filed unless it complies with the requirements of section 571.122 of the Government Code.

**History**
- *Source Note: The provisions of this §12.11 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.12** File Date for a Complaint {#sec-12.12 omnilex-key=us-tx-regs-official--title-1--12.12}

The file date for a complaint is the date the complaint is received by the commission.

**History**
- *Source Note: The provisions of this §12.12 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.13** Description of Violation {#sec-12.13 omnilex-key=us-tx-regs-official--title-1--12.13}

(a) If a complaint does not include the specific rule or provision of law alleged to have been violated, the complaint must clearly and concisely describe facts that, if true, would constitute a violation of a law administered and enforced by the commission.

(b) A complaint that erroneously cites a specific rule or provision of law is nonetheless sufficient if the correct citation can reasonably be ascertained by the commission. When a complaint erroneously cites a specific rule or provision of law, the commission shall cite the correct rule or provision of law in the notice provided to the respondent.

**History**
- *Source Note: The provisions of this §12.13 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.14** Statement of Facts {#sec-12.14 omnilex-key=us-tx-regs-official--title-1--12.14}

(a) The alleged facts must provide sufficient detail to reasonably place the respondent on notice of the law violated and of the manner and means by which the violation allegedly occurred and to afford the respondent a basis on which to prepare a response.

(b) The facts alleged may adopt by reference the content of documents submitted with the complaint. However, the allegations must reasonably identify those portions of the document that are relevant to the alleged violation.

**History**
- *Source Note: The provisions of this §12.14 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.15** Commission Initiated Complaint {#sec-12.15 omnilex-key=us-tx-regs-official--title-1--12.15}

(a) Commission staff may gather or present documents or evidence, make recommendations, and otherwise communicate with commissioners in contemplation of, or in preparation for, a commission initiated preliminary review. Commissioners may request documents, evidence, or recommendations, and otherwise communicate with commission staff in contemplation of, or in preparation for, a commission initiated preliminary review.

(b) A preliminary review initiated by the commission under section 571.124(b) of the Government Code is deemed to be a complaint for purposes of all further proceedings under chapter 571 of the Government Code and of this chapter.

(c) Documents or evidence gathered by the commission and commission staff in contemplation of, or in preparation for, a commission initiated preliminary review are related to the processing of a preliminary review or motion for the purposes of sections 571.139 and 571.140 of the Government Code.

(d) Discussions between the commission and commission staff regarding gathering documents or evidence in contemplation of, or in preparation for, a commission initiated preliminary review are related to the processing of a preliminary review or motion for the purposes of sections 571.139 and 571.140 of the Government Code.

**History**
- *Source Note: The provisions of this §12.15 adopted to be effective October 27, 2024, 49 TexReg 8574.*

#### **Subchapter C** INVESTIGATION AND DISCOVERY

##### **1 Tex. Admin. Code § 12.21** Response to Notice of Complaint {#sec-12.21 omnilex-key=us-tx-regs-official--title-1--12.21}

The response required by section 571.1242 of the Government Code must:

(1) be in writing;

(2) admit or deny the allegations set forth in the complaint; and

(3) be signed by the respondent.

**History**
- *Source Note: The provisions of this §12.21 adopted
to be effective October 27, 2024, 49 TexReg 8574; amended to be effective
July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.22** Written Questions {#sec-12.22 omnilex-key=us-tx-regs-official--title-1--12.22}

A complainant or respondent must respond to written questions not later than 15 business days after receiving the written questions.

**History**
- *Source Note: The provisions of this §12.22 adopted to be
effective October 27, 2024, 49 TexReg 8574; amended to be effective
July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.23** Production of Documents During Preliminary Review {#sec-12.23 omnilex-key=us-tx-regs-official--title-1--12.23}

(a) Before applying for the commission to issue a subpoena under §571.137(a-1) of the Government Code, commission staff must send to the person from whom records are sought a written request for the production or inspection of documents or other tangible things that:

(1) specifies the items to be produced or inspected, either by individual item or by category, and describes with reasonable particularity each item and category; and

(2) provides a reasonable amount of time, but not less than 30 days, to comply with the request.

(b) The person from whom records are sought must produce or allow the inspection of documents or other tangible things within the person's possession, custody or control within the time provided in the request, or submit in writing, as appropriate:

(1) objections to those records that are unreasonable, improper, or unnecessary to investigate the complaint; or

(2) that, after a diligent search, no items have been identified that are responsive to the request.

(c) Commission staff shall provide to the commission any response it receives to its request for production or inspection when applying for a subpoena under §571.137(a-1) of the Government Code.

**History**
- *Source Note: The provisions of this §12.23 adopted to be
effective October 27, 2024, 49 TexReg 8574; amended to be effective
July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.24** Proposed Settlement Before Preliminary Review Hearing {#sec-12.24 omnilex-key=us-tx-regs-official--title-1--12.24}

If commission staff proposes to a respondent an agreement to settle a complaint that would be effective upon approval by the commission and the respondent, the 120-day deadline for the commission to propose an agreement to the respondent or dismiss the complaint (provided in section 571.1242(g) of the Government Code) is met. If a respondent approves a proposed agreement, commission staff must submit the proposed agreement to the commission to seek final approval at the next scheduled commission meeting. If a respondent rejects a proposed agreement, the matter shall be set for a preliminary review hearing at the next commission meeting for which notice has not yet been posted. If a respondent rejects a proposed agreement within 45 days before the date of a commission meeting, the matter shall be set for a preliminary review hearing at the next commission meeting thereafter.

**History**
- *Source Note: The provisions of this §12.24 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.25** Subpoenas Issued by Commission {#sec-12.25 omnilex-key=us-tx-regs-official--title-1--12.25}

(a) A subpoena issued under §571.137 of the Government Code shall specify the date, time, place, and manner for execution of the subpoena.

(b) A subpoena issued under section 571.137 of the Government Code that requires a person to provide testimony shall be served on that person at least 10 business days before the date the subpoena is to be executed.

(c) A subpoena sought by commission staff under section 571.137(a) of the Government Code must be requested in writing and may be approved and issued by the unanimous agreement of the chair and vice chair. If either the chair or vice chair does not approve the request, then staff may seek approval through a vote of the commission, in which case the subpoena will be issued upon the affirmative vote of five commissioners.

**History**
- *Source Note: The provisions of this §12.25 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.26** Subpoenas Issued by Counsel for the Respondent {#sec-12.26 omnilex-key=us-tx-regs-official--title-1--12.26}

(a) This section applies only to subpoenas issued by a respondent's counsel under section 571.125(f) (concerning the issuance of a subpoena for a witness in a preliminary review hearing) or 571.130(f) (concerning the issuance of a subpoena for a witness in a formal hearing) of the Government Code.

(b) A subpoena must be issued in the name of "The State of Texas" and must:

(1) state the sworn complaint numbers for the sworn complaints at issue in the hearing at which the witness is summoned to appear;

(2) state that the subpoena pertains to a sworn complaint proceeding before the Texas Ethics Commission;

(3) state the date on which the subpoena is issued;

(4) identify the person to whom the subpoena is directed;

(5) state the time and place of the preliminary review hearing or formal hearing at which the subpoena directs the person to appear;

(6) identify the respondent at whose instance the subpoena is issued and the respondent's attorney of record;

(7) specify with reasonable particularity any documents with which the person to whom the subpoena is directed shall appear;

(8) state the text of §12.31(i) of this chapter (relating to Purpose and Effect of Motions); and

(9) be signed by the attorney issuing the subpoena.

(c) A subpoena must command the person to whom it is directed to appear and give testimony at:

(1) a preliminary review hearing; or

(2) a formal hearing.

(d) A subpoena may only direct a person to appear, with or without documents, and give testimony at a preliminary review hearing or formal hearing before the commission.

(e) A subpoena may be issued only by the counsel of record for a respondent in a sworn complaint proceeding before the commission against that respondent.

(f) Service.

(1) Manner of service. A subpoena may be served at any place within the State of Texas by any sheriff or constable of the State of Texas, or any person who is not a party and is 18 years of age or older. A subpoena must be served by delivering a copy to the witness and tendering to that person any fees required by law. If the witness is a party and is represented by an attorney of record in the sworn complaint proceeding, the subpoena may be served on the witness's attorney of record.

(2) Deadline for service. A subpoena must be served upon the person required to appear at least 21 days before the preliminary review hearing or formal hearing at which the person is required to appear. The subpoena and proof of service must be filed with the commission within three days of its service on the person required to appear.

(3) Proof of service. Proof of service must be made by filing either:

(A) the witness's signed written memorandum attached to the subpoena showing that the witness accepted the subpoena; or

(B) a statement by the person who made the service stating the date, time, and manner of service, and the name of the person served.

(g) Response.

(1) Except as provided in this subsection, a person served with a subpoena must comply with the command stated therein unless discharged by the commission or by the party summoning such witness. A person commanded to appear and give testimony must remain at the place of hearing from day to day until discharged by the commission or the party summoning the witness.

(2) If a subpoena commanding testimony is directed to a corporation, partnership, association, governmental agency, or other organization, and the matters on which examination is requested are described with reasonable particularity, the organization must designate one or more persons to testify on its behalf as to matters known or reasonably available to the organization.

(3) A person commanded to appear with documents must produce the documents as they are kept in the usual course of business or must organize and label them to correspond with the categories in the demand.

(4) A person commanded to appear at a hearing must file any motion to quash the subpoena or objection to a requirement to appear with certain documents with the commission no later than the 14th day before the hearing at which the person is directed to appear. Commission staff may move to quash a subpoena or object to appearance with certain documents in the same manner as the person commanded to appear by the subpoena. The filer of a motion to quash or objection to a requirement to appear with certain documents must serve the motion or objection on the proponent of the subpoena in person, by mail, by commercial delivery service, by fax, by email, or by other such manner as the presiding officer of the commission may direct, no later than the deadline for filing the motion to quash or objection to appearance with documents with the commission. After affording commission staff and the person commanded to appear an opportunity to move to quash the subpoena or object to appearance with certain documents, and affording the proponent of the subpoena an opportunity to respond to the motion to quash or objection to appearance with documents, the commission's presiding officer shall rule on a motion to quash or objection to appearance with documents.

(5) A person commanded to attend and give testimony, or to produce documents or things, at a preliminary review hearing or formal hearing may object to giving testimony or producing documents at the time and place specified for the hearing, rather than under paragraph (4) of this subsection.

(6) A party's appearance with a document in response to a subpoena directing the party to appear with the document authenticates the document for use against that party in any proceeding before the commission unless the party appearing with the document objects to the authenticity of the document, or any part of it, at the time of the party's appearance, stating the specific basis for objection. An objection must have a good faith factual and legal basis. An objection made to the authenticity of only part of a document does not affect the authenticity of the remainder. If objection is made, the party attempting to use the document should be given a reasonable opportunity to establish its authenticity. The requirement that the commission provide a reasonable opportunity to establish the document's authenticity may be satisfied by the opportunity to present a witness to authenticate the document at a subsequent hearing before the commission.

(h) A counsel for a respondent issuing a subpoena must take reasonable steps to avoid imposing undue burden or expense on the person served. In ruling on a motion to quash or objection to appearance with documents, the presiding officer must provide a person served with a subpoena an adequate time for compliance, protection from disclosure of privileged material or information, and protection from undue burden or expense. The presiding officer may impose reasonable conditions on compliance with a subpoena, including compensating the witness for undue hardship.

**History**
- *Source Note: The provisions of this §12.26 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.27** Discovery Control Plans, Application {#sec-12.27 omnilex-key=us-tx-regs-official--title-1--12.27}

(a) As determined by the Executive Director from available information, a sworn complaint that appears to allege only technical or de minimis violations, as defined by §12.92 of this chapter (related to Resolution of Technical or De Minimis Allegation), is governed by a Level 1 discovery control plan. All other sworn complaints are governed by a Level 2 discover control plan.

(b) Commission staff shall indicate in the written notice of a complaint provided to the respondent under Section 571.123, Government Code, whether the complaint is governed by a Level 1 or Level 2 discovery control plan.

(c) The respondent or commission staff may file a motion requesting that the Executive Director modify a discovery control plan from Level 1 to Level 2, or vice versa, if the facts discovered after the initial determination of the Executive Director warrant the modification.

(d) The Presiding Officer may issue an order modifying the discovery period or scope of discovery for a sworn complaint.

(e) The terms "interrogatory," "request for admission," "deposition," and "request for production" have the same meaning as applied in the Texas Rules of Civil Procedure, except that an interrogatory and a request for admission is also considered a written question for purposes of Section 571.1242(f) of the Government Code and §12.22(a) of this Chapter (relating to Written Questions).

**History**
- *Source Note: The provisions of this §12.27 adopted to be
effective July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.28** Level 1 Discovery Control Plan {#sec-12.28 omnilex-key=us-tx-regs-official--title-1--12.28}

Discovery in a preliminary review under a Level 1 Discovery Control Plan is subject to the limitation provided elsewhere in this Chapter and to the following additional limitations:

(1) All discovery during a preliminary review must be conducted during the discovery period which begins when the initial response to the complaint is due and continues for 90 days.

(2) The discovery period reopens on the date the commission sets the matter for a formal hearing and continues for an additional 90 days.

(3) During a preliminary review, the respondent and commission staff may serve on any other party no more than 5 written interrogatories, excluding interrogatories asking a party only to identify or authenticate specific documents. If set for a formal hearing, each party may serve 10 more interrogatories. Each discrete subpart of an interrogatory is considered a separate interrogatory.

(4) During a preliminary review, the respondent and commission staff may serve on any other party no more than 5 written requests for production. If set for a formal hearing, each party may serve 10 more written requests for production. Each discrete subpart of a request for production is considered a separate request for production.

(5) During a preliminary review, the respondent and commission staff may serve on any other party no more than 5 written requests for admissions. If set for a formal hearing, each party may serve 10 more requests for admissions. Each discrete subpart of a request for admission is considered a separate request for admission.

**History**
- *Source Note: The provisions of this §12.28 adopted
to be effective July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.29** Level 2 Discovery Control Plan {#sec-12.29 omnilex-key=us-tx-regs-official--title-1--12.29}

Discovery in a preliminary review under a Level 2 Discovery Control Plan is subject to the limitation provided elsewhere in this Chapter and to the following additional limitations:

(1) All discovery during a preliminary review must be conducted during the discovery period which begins when the initial response to the complaint is due and continues for 120 days.

(2) The discovery period reopens on the date the commission sets the matter for a formal hearing and continues until the earlier of 30 days before a formal hearing or six months after the conclusion the preliminary review hearing.

(3) During a preliminary review, the respondent and commission staff may serve on any other party no more than 10 written interrogatories, excluding interrogatories asking a party only to identify or authenticate specific documents. If set for a formal hearing, each party may serve 15 more interrogatories. Each discrete subpart of an interrogatory is considered a separate interrogatory.

(4) During a preliminary review, the respondent and commission staff may serve on any other party no more than 10 written requests for production. If set for a formal hearing, each party may serve 15 more written requests for production. Each discrete subpart of a request for production is considered a separate request for production.

(5) During a preliminary review, the respondent and commission staff may serve on any other party no more than 10 written requests for admissions. If set for a formal hearing, each party may serve 15 more written requests for production. Each discrete subpart of a request for admission is considered a separate request for admission.

(6) If set for a formal hearing, the respondent or commission staff may request that the discovery control plan allow for the taking of depositions, consistent with and subject to the limits provided by Chapter 2001 of the Government Code.

**History**
- *Source Note: The provisions of this §12.29 adopted
to be effective July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.30** Requests for Disclosure {#sec-12.30 omnilex-key=us-tx-regs-official--title-1--12.30}

(a) The discovery rules of the Texas Rules of Civil Procedure requiring initial disclosures without awaiting a discovery request do not apply to sworn complaint proceedings, except as may be ordered or allowed by the judge.

(b) A party may request disclosure of documents or information that the opposing party has in its possession, custody, or control, including, but not limited to, the following:

(1) the correct names of the parties to the contested case; the name, address, and telephone number of any potential parties;

(2) a general description of the legal theories and the factual bases of the responding party's claims or defenses, if not already set forth in the notice of complaint, response to a complaint, or document filed in the record of the proceeding.

(3) the name, address, and telephone number of persons having knowledge of relevant facts, and a brief statement of each identified person's connection with the case; the statement of any person with knowledge of relevant facts (witness statement) regardless of when the statement was made; and

(4) a copy, or description by category and location, of all documents, electronic information, and tangible items that the disclosing party has in its possession, custody or control and may use to support its claims or defenses, unless the use would be solely for impeachment. A request for disclosure made pursuant to this subsection is not considered a request for production.

**History**
- *Source Note: The provisions of this §12.30 adopted
to be effective July 3, 2025, 50 TexReg 3733.*

#### **Subchapter F** RESOLUTIONS

##### **1 Tex. Admin. Code § 12.91** Agreed Resolutions {#sec-12.91 omnilex-key=us-tx-regs-official--title-1--12.91}

(a) Upon the affirmative vote of six commissioners, the commission may enter into an agreed resolution with a respondent to settle a complaint filed against the respondent, including an assurance of voluntary compliance, a notice of reporting error, or an agreed order.

(b) An assurance of voluntary compliance:

(1) resolves a sworn complaint:

(A) with no determination that a violation within the jurisdiction of the commission has occurred, if entered into before a preliminary review hearing is completed; or

(B) with a determination that all violations within the jurisdiction of the commission, when viewed as a whole in consideration of any mitigating action taken by the respondent, are technical or de minimis; and

(2) may include a civil penalty.

(c) A notice of reporting error resolves a complaint with a determination that all violations within the jurisdiction of the commission are reporting errors that do not materially defeat the purpose of disclosure and may include a civil penalty in the form of an assessment fee.

(d) An agreed order resolves a sworn complaint with a determination that one or more violations within the jurisdiction of the commission occurred and may include a civil penalty.

**History**
- *Source Note: The provisions of this §12.91 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.92** Resolution of Technical or De Minimis Allegations {#sec-12.92 omnilex-key=us-tx-regs-official--title-1--12.92}

(a) Technical, clerical, or de minimis violations for purposes of §§571.0631 and 571.140 of the Government Code means any violation of law under the TEC's jurisdiction that neither materially affects disclosure nor undermines public trust in government.

(b) Examples of technical, clerical, or de minimis violations include:

(1) Typographical or incomplete information on a campaign finance report that is not misleading and does not materially affect disclosure;

(2) Failure to include a disclosure statement or a highway right-of-way notice on political advertising;

(3) Failure of a non-incumbent to use the word "for" in a campaign communication that is not otherwise misleading;

(4) Failure to file a timely campaign finance report or campaign treasurer appointment if the alleged violations do not materially affect disclosure;

(5) Failure to timely respond to a sworn complaint if the respondent shows good cause for the late response.

(c) During the review of a sworn complaint under Chapter 571, Subchapter E of the Government Code, if the executive director determines that all of the alleged violations in the sworn complaint are technical or de minimis, the executive director may enter into an assurance of voluntary compliance with the respondent. Before entering into an assurance of voluntary compliance, the executive director may require a respondent to correct the violations.

**History**
- *Source Note: The provisions of this §12.92 adopted to be effective October 27, 2024, 49 TexReg 8574.*

##### **1 Tex. Admin. Code § 12.93** Default Proceedings {#sec-12.93 omnilex-key=us-tx-regs-official--title-1--12.93}

(a) If a respondent fails to respond to a complaint by the deadline set by Section 571.1242 or fails to appear for a formal hearing, the commission may, upon notice and hearing, proceed on a default basis.

(b) A default proceeding under this section requires adequate proof of the following:

(1) the notice of hearing to the respondent stated that the allegations listed in the notice could be deemed admitted and that the relief sought in the notice of hearing might be granted by default against the party that fails to appear at the hearing;

(2) the notice of hearing satisfies the requirements of sections 2001.051 and 2001.052 of the Government Code; and

(3) the notice of hearing was:

(A) received by the defaulting party; or

(B) sent by regular mail or by certified mail, restricted delivery, return receipt requested, to the party's last known address as shown by the commission's records.

(c) In the absence of adequate proof to support a default, the presiding officer shall continue the hearing and direct commission staff to provide adequate notice of hearing. If adequate notice is unable to be provided, the commission may dismiss the complaint.

(d) Upon receiving the required showing of proof to support a default, the commission may by vote deem admitted the allegations in the notice of hearing and issue a default decision.

(e) A respondent may file a motion to set aside a default decision under this section.

(1) A motion to set aside a default decision under this section shall set forth the grounds for reinstatement or rehearing and must be supported by affidavit of the movant or their attorney that:

(A) the respondent had no notice of the hearing;

(B) the respondent had no notice of the consequences for failure to appear; or

(C) although the respondent had notice, its failure to appear was not intentional or the result of conscious indifference, but due to reasonable mistake or accident that can be supported by adequate proof; and

(D) a statement of whether the motion is opposed.

(2) Whether or not the motion is opposed, the presiding officer may rule on the motion without setting a hearing or may set a hearing to consider the motion. If the presiding officer finds good cause for the respondent's failure to appear or file a response to a complaint, the presiding officer shall vacate the default and reset the case for a hearing. The presiding officer may also present the motion to set aside the default decision for a vote of the commission at the next meeting of the commission after the motion was filed. A motion to set aside a default decision is denied by operation of law if not ruled on by the presiding officer or by vote of the commission at the next regular meeting of the commission after the motion was filed.

(3) A motion to set aside a default decision must be filed not later than the 14th day after the respondent received the default decision.

(4) A default decision is final:

(A) if a motion to set aside the default decision is not filed on time, on the expiration of the period for filing a motion to set aside the default decision;

(B) if a motion to set aside the default decision is timely filed, on the date the commission denies the motion.

**History**
- *Source Note: The provisions of this §12.93 adopted
to be effective October 27, 2024, 49 TexReg 8574; amended to be effective
July 3, 2025, 50 TexReg 3733.*

##### **1 Tex. Admin. Code § 12.94** Final Orders after Formal Hearings {#sec-12.94 omnilex-key=us-tx-regs-official--title-1--12.94}

(a) The commission should issue a final order within 60 days after the conclusion of a formal hearing.

(b) The executive director shall dismiss a complaint if the commission fails to adopt a motion under section 571.132 of the Government Code. The dismissal shall state the complaint was dismissed because there were insufficient commission votes to find that there was or was not a violation of law.

**History**
- *Source Note: The provisions of this §12.94 adopted to be effective October 27, 2024, 49 TexReg 8574.*

### **Chapter 13** REFERRALS TO PROSECUTORS

##### **1 Tex. Admin. Code § 13.1** Referral to Prosecuting Attorney {#sec-13.1 omnilex-key=us-tx-regs-official--title-1--13.1}

(a) Under section 571.171 of the Government Code, the commission may vote to refer a matter related to a sworn complaint to the appropriate prosecuting attorney for criminal prosecution upon the commission accepting jurisdiction over the sworn complaint.

(b) A referral under subsection (a) of this section shall be delayed in accordance with section 571.134 of the Government Code.

**History**
- *Source Note: The provisions of this §13.1 adopted to be
effective April 30, 2025, 50 TexReg 2578.*

### **Chapter 16** FACIAL COMPLIANCE REVIEWS AND AUDITS

##### **1 Tex. Admin. Code § 16.1** Definitions {#sec-16.1 omnilex-key=us-tx-regs-official--title-1--16.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Deficiency--An error, omission, inaccuracy, or violation of a law or rule administered and enforced by the commission that is apparent on the face of a statement or report filed with the commission.

(2) Compliance review report--A report sent to a filer detailing deficiencies in a report that is the subject of a facial compliance review.

(3) Facial compliance review--A review conducted under section 571.069 of the Government Code of the information disclosed on a report, randomly selected in accordance with §16.2 of this title, filed with the commission for facial completeness, accuracy, reliability, and compliance with the law.

(4) Report--A personal financial statement, lobby registration, lobby activities report, or campaign finance report filed with the commission.

**History**
- *Source Note: The provisions of this §16.1 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.2** Random Selection {#sec-16.2 omnilex-key=us-tx-regs-official--title-1--16.2}

The report subject to a facial compliance review must be randomly selected from a list of all reports filed by a particular filer type for a specific filing deadline.

**History**
- *Source Note: The provisions of this §16.2 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.3** Corrected or Amended Report Filed During a Facial Compliance Review; Late Fines {#sec-16.3 omnilex-key=us-tx-regs-official--title-1--16.3}

(a) A correction filed for the report that is subject to the facial compliance review will not be subject to a late fine if:

(1) The correction is filed not later than the 30th day after the date the filer receives the compliance review report;

(2) The corrected information complies with the law; and

(3) The original report was filed in good faith and without an intent to mislead or misrepresent the information contained in the report.

(b) A late fine will not be assessed for corrections filed to correct reporting errors made in any report filed prior to the report that is subject to the facial compliance review if:

(1) The filer learned of the errors through the facial compliance review;

(2) The correction is filed not later than the 30th day after the date the filer receives the compliance review report;

(3) The corrections comply with the law; and

(4) The original report was filed in good faith and without an intent to mislead or misrepresent the information contained in the report.

(c) A correction filed in accordance with this section will not be considered a prior late offense for purposes of determining the waiver or reduction of a fine under chapter 18 of this title.

**History**
- *Source Note: The provisions of this §16.3 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.4** Additional Documents and Information Submitted in Response to a Facial Compliance Review; Timeliness {#sec-16.4 omnilex-key=us-tx-regs-official--title-1--16.4}

(a) The commission may request from a filer documentation and other information used by the filer to compile a report that is subject to a facial compliance review.

(b) Documentation and other information requested by the commission is timely submitted if received by the commission not later than the 30th day after the date the filer receives the request for additional documentation.

**History**
- *Source Note: The provisions of this §16.4 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.5** Commission Initiated Preliminary Review or Audit Resulting from a Facial Compliance Review {#sec-16.5 omnilex-key=us-tx-regs-official--title-1--16.5}

(a) The commission may initiate a preliminary review as authorized by §571.124 of the Government Code or perform a complete audit of a report that is subject to a facial compliance review under §571.069 of the Government Code if:

(1) a correction is not resubmitted to the commission in accordance with §16.3 of this title;

(2) documentation or other information requested by the commission during a facial compliance review is not submitted to the commission in accordance with §16.4 of this title; or

(3) the commission has determined by a vote of at least six commission members that the correction filed in response to a compliance review report, does not comply with the law.

**History**
- *Source Note: The provisions of this §16.5 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.6** Notice of Audit of Report {#sec-16.6 omnilex-key=us-tx-regs-official--title-1--16.6}

The commission shall notify a filer that the commission will perform a complete audit of a report that is the subject of a facial compliance review not later than the seventh day after the date the commission votes to initiate the audit.

**History**
- *Source Note: The provisions of this §16.6 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.7** Supporting Documentation in Response to Audit; Timeliness {#sec-16.7 omnilex-key=us-tx-regs-official--title-1--16.7}

(a) A filer must submit to the commission, upon request and where applicable, supporting documentation in the possession, custody, or control of the filer or filer's agents that contains information necessary for filing the report that is subject to the audit, such as:

(1) bank statements;

(2) cancelled checks;

(3) receipts;

(4) credit card statements;

(5) invoices;

(6) loan documents;

(7) books or ledgers;

(8) employee timesheets and payroll records;

(9) certificates of formation or other business documents; and

(10) real property records.

(b) A filer must submit to the commission the supporting documentation in response to an audit not later than the 30th business day from the date the filer receives notice of the audit.

**History**
- *Source Note: The provisions of this §16.7 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.8** Complete Audit Report {#sec-16.8 omnilex-key=us-tx-regs-official--title-1--16.8}

(a) Commission staff must complete a draft audit report not later than the 30th day after the commission receives from the filer the documentation requested under §16.7 of this title.

(b) The filer must have an opportunity to confer and object in writing to any findings in the draft audit report before it is submitted to the commission for approval.

(c) Commission staff must consider the filer's objections before submitting the draft audit report to the commission for approval.

(d) Upon approval of an audit, the commission shall send to the filer a final audit report that includes:

(1) a notification that the commission has determined the report that was subject to the audit complies with the law; or

(2) required corrective actions that the filer must take to cure any deficiency found in the report that is subject to the audit.

(e) A filer must correct or amend a report to correct all deficiencies identified in a complete audit report not later than the 30th day from the date the filer receives the complete audit report.

**History**
- *Source Note: The provisions of this §16.8 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.9** Representation by Attorney {#sec-16.9 omnilex-key=us-tx-regs-official--title-1--16.9}

(a) A filer has the right to be represented by an attorney retained by the filer during a facial compliance review or an audit initiated by the commission as a result of a facial compliance review.

(b) A letter of representation must be submitted to the commission if the filer is represented by an attorney.

**History**
- *Source Note: The provisions of this §16.9 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.10** Extension of Deadlines {#sec-16.10 omnilex-key=us-tx-regs-official--title-1--16.10}

The executive director may extend all deadlines related to this chapter except as provided by §571.069(a) of the Government Code (relating to when a corrected or amended report is considered filed as of the date the report was originally filed).

**History**
- *Source Note: The provisions of this §16.10 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.11** Waiver of Delivery by Certified Mail {#sec-16.11 omnilex-key=us-tx-regs-official--title-1--16.11}

A filer may waive the right under §571.032 of the Government Code to receive written notices related to a facial compliance review or audit by registered or certified mail, restricted delivery, return receipt requested, and may agree to receive written notices by first class mail, electronic mail, or other means.

**History**
- *Source Note: The provisions of this §16.11 adopted to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 16.12** Facial Review of Total Amount of Political Contributions Maintained {#sec-16.12 omnilex-key=us-tx-regs-official--title-1--16.12}

(a) In this section "expected total political contributions maintained" for a report subject to review is the total amount of political contributions maintained disclosed on the previous report and all monetary political contributions, loans, and credits, less all expenditures from political contributions disclosed on the report that is subject to review, excluding the purchase of investments that can be readily converted to cash.

(b) When there is a difference greater than the threshold set by §20.50(c) of this title (relating to Total Political Contributions Maintained) between the total amount of political contributions maintained disclosed in a report and the expected total political contributions maintained, the commission may request from the filer the bank statement showing the balance as of the last day of the reporting period for each account in which political contributions are maintained.

(c) Producing the requested bank statements that show the total amount of political contributions was accurately reported in the report that is subject to review is sufficient to end the review of the total amount of political contributions maintained as disclosed in the report.

**History**
- *Source Note: The provisions of this §16.12 adopted to be effective April 25, 2019, 44 TexReg 1979.*

### **Chapter 18** GENERAL RULES CONCERNING REPORTS

##### **1 Tex. Admin. Code § 18.1** Forms {#sec-18.1 omnilex-key=us-tx-regs-official--title-1--18.1}

(a) The executive director shall prescribe forms for statements and reports required to be filed with the commission.

(b) The executive director may issue a certificate approving a form submitted to the commission for approval if the form:

(1) provides for the reporting of all information required on the prescribed form;

(2) is substantially similar in paper size and format to the prescribed form; and

(3) will not be confusing to those who use the form.

(c) A filer whose form has been approved by the executive director under Subsection (b) must submit a new form for approval if information required to be reported has changed since the original form was approved.

(d) A filer who files a report using computer software provided by the commission or using computer software that meets commission specifications for a standard file format must enter data for the report in accordance with the instructions provided for the software.

(e) A filer who files a report using computer software provided by the commission must use the most current version of the software.

**History**
- *Source Note: The provisions of this §18.1 adopted to be effective January 6, 2002, 27 TexReg 130.*

##### **1 Tex. Admin. Code § 18.3** Provision of Forms by Local Filing Authority {#sec-18.3 omnilex-key=us-tx-regs-official--title-1--18.3}

A local filing authority shall make the appropriate form available for use by persons required to file a report with that filing authority.

**History**
- *Source Note: The provisions of this §18.3 adopted to be effective January 6, 2002, 27 TexReg 130.*

##### **1 Tex. Admin. Code § 18.5** Specification of Office {#sec-18.5 omnilex-key=us-tx-regs-official--title-1--18.5}

When a filer is required to identify the office sought by a candidate or held by an officeholder, the filer shall list the title of the public office, including the district and, if the office is an office of a political subdivision, the name of the political subdivision.

**History**
- *Source Note: The provisions of this §18.5 adopted to be effective January 6, 2002, 27 TexReg 130.*

##### **1 Tex. Admin. Code § 18.7** Timely Reports and Complete Reports {#sec-18.7 omnilex-key=us-tx-regs-official--title-1--18.7}

(a) A report is timely if it is complete and is filed by the applicable deadline using the reporting method required by law.

(b) The deadline for any report filed electronically with the commission is midnight Central Time Zone on the last day for filing the report under the law requiring the filing of the report.

(c) A report is late if it is:

(1) incomplete;

(2) not filed by the applicable deadline; or

(3) not filed by computer diskette, modem, or other means of electronic transfer and the filer is required by law to file using one of these methods.

(d) A report filed electronically is not late if:

(1) the commission's office is closed on the deadline and the report is filed by midnight, Central Time Zone, on the next regular business day, excluding a legal holiday, when the commission's office is open; or

(2) the commission cannot accept reports on the deadline because the agency filing system is not accessible or the agency network is inoperable, and the report is filed by midnight, Central Time Zone, on the next regular business day, excluding a legal holiday, that the commission is able to accept reports.

**History**
- *Source Note: The provisions of this §18.7 adopted to be effective January 6, 2002, 27 TexReg 130; amended to be effective November 18, 2007, 32 TexReg 8305; amended to be effective September 14, 2014, 39 TexReg 7081; amended to be effective November 11, 2018, 43 TexReg 7337.*

##### **1 Tex. Admin. Code § 18.9** Corrected/Amended Reports {#sec-18.9 omnilex-key=us-tx-regs-official--title-1--18.9}

(a) A filer may correct/amend a report filed with the commission or a local filing authority at any time.

(b) A corrected/amended report must clearly identify how the corrected/amended report is different from the report being corrected/amended.

(c) A filer who files a corrected/amended report must submit an affidavit identifying the information that was corrected/amended.

(d) A corrected/amended report filed with the commission after the original report is due is subject to a late fine as provided by §18.13 of this title (relating to Fine for a Late Report).

(e) Subsection (d) of this section does not apply to:

(1) a lobby registration or report, other than an activities report, that is corrected/amended not later than the 14th business day after the date the filer became aware of the errors or omissions in the original registration or report;

(2) a semiannual report that is corrected/amended before the eighth day after the original report was filed;

(3) a semiannual report that is corrected/amended on or after the eighth day after the original report was filed if:

(A) the correction/amendment is made before a sworn complaint is filed with regard to the subject of the correction/amendment; and

(B) the original report was made in good faith and without an intent to mislead or misrepresent the information contained in the report;

(4) an 8-day pre-election report that is corrected/amended in accordance with §18.10 of this title (relating to Guidelines for Substantial Compliance for a Corrected/Amended 8-day Pre-election Report);

(5) a report other than an 8-day pre-election report that is corrected/amended not later than the 14th business day after the date the filer learns the report as originally filed is inaccurate or incomplete if:

(A) the errors or omissions were made in good faith; and

(B) the filer files an affidavit stating that the errors or omissions in the original report were made in good faith.

(f) In this section, "8-day pre-election report" has the same meaning assigned by §18.10(c) of this title.

(g) Except as provided by subsections (b) and (c) of this section, this section does not apply to a civil penalty assessed through the sworn complaint or facial compliance review process.

**History**
- *Source Note: The provisions of this §18.9 adopted to be effective January 6, 2002, 27 TexReg 130; amended to be effective December 10, 2003, 28 TexReg 10903; amended to be effective August 6, 2006, 31 TexReg 5909; amended to be effective January 8, 2012, 36 TexReg 9281; amended to be effective March 30, 2020, 45 TexReg 2154.*

##### **1 Tex. Admin. Code § 18.10** Guidelines for Substantial Compliance for a Corrected/Amended 8-day Pre-election Report {#sec-18.10 omnilex-key=us-tx-regs-official--title-1--18.10}

(a) A corrected/amended 8-day pre-election report substantially complies with the applicable law and will not be assessed a late fine under §18.9 of this title (relating to Corrected/Amended Reports) if:

(1) The original report was filed in good faith and the corrected/amended report was filed not later than the 14th business day after the date the filer learned of the errors or omissions; and

(2) The only corrections/amendments needed were to correct the following types of errors or omissions:

(A) a technical, clerical, or de minimis error, including a typographical error, that is not misleading and does not substantially affect disclosure;

(B) an error in or omission of information that is solely required for the commission's administrative purposes, including a report type or filer identification number;

(C) an error that is minor in context and that, upon correction/amendment, does not result in changed monetary amounts or activity disclosed, including a descriptive change or a change to the period covered by the report;

(D) one or more errors in disclosing contributions that, in total:

(i) do not exceed $7,500; or

(ii) do not exceed the lesser of 10% of the total contributions on the corrected/amended report or $20,000;

(E) one or more errors in disclosing expenditures that, in total:

(i) do not exceed $7,500; or

(ii) do not exceed the lesser of 10% of the total expenditures on the corrected/amended report or $20,000;

(F) one or more errors in disclosing loans that, in total:

(i) do not exceed $7,500; or

(ii) do not exceed the lesser of 10% of the amount originally disclosed or $20,000; or

(G) an error in the amount of total contributions maintained that:

(i) does not exceed $7,500; or

(ii) does not exceed the lesser of 10% of the amount originally disclosed or $20,000.

(H) The only correction/amendment by a candidate or officeholder was to add to or delete from the outstanding loans total an amount of loans made from personal funds;

(I) The only correction/amendment by a political committee was to add the name of each candidate supported or opposed by the committee, when each name was originally disclosed on the appropriate schedule for disclosing political expenditures;

(J) The only correction/amendment was to disclose the actual amount of a contribution or expenditure, when:

(i) the amount originally disclosed was an overestimation;

(ii) the difference between the originally disclosed amount and the actual amount did not vary by more than the greater of $7,500 or 10%; and

(iii) the original report clearly included an explanation of the estimated amount disclosed and the filer's intention to file a correction/amendment as soon as the actual amount was known; or

(K) The only correction/amendment was to delete a duplicate entry.

(b) If a corrected/amended 8-day pre-election report does not meet the substantial complies criteria under subsection (a) the executive director shall determine whether there is reason to believe the report was originally filed in bad-faith, with the purpose of evading disclosure, or otherwise substantially defeated the purpose of disclosure and therefore was filed as of the date of correction.

(c) A filer may seek a waiver or reduction of a civil penalty assessed under this subsection as provided for by this chapter.

(d) In this section, "8-day pre-election report" means a report due eight days before an election filed in accordance with the requirements of §254.064(c), 254.124(c), or 254.154(c) of the Election Code (relating to a candidate, a specific-purpose committee, or a general-purpose committee, respectively).

**History**
- *Source Note: The provisions of this §18.10 adopted to be
effective March 30, 2020, 45 TexReg 2154; amended to be effective
January 7, 2024, 49 TexReg 37; amended to be effective July 3, 2025,
50 TexReg 3735; amended to be effective March 4, 2026, 51 TexReg 1289.*

##### **1 Tex. Admin. Code § 18.13** Fine for a Late Report {#sec-18.13 omnilex-key=us-tx-regs-official--title-1--18.13}

(a) Except as provided by subsection (b) or (c) of this section, the fine is $500 for:

(1) a late report required to be filed with the commission under Election Code chapter 254 or 257, Government Code chapter 305, or Government Code chapter 572; or

(2) a late report filed with the commission under Local Government Code chapter 159, subchapter C.

(b) The fine for a report due eight days before an election is $500 for the first day the report is late and $100 for each day thereafter that the report is late, up to a maximum fine of $10,000.

(c) The fine for the first semiannual report under Section 254.063, 254.123, or 254.153, Election Code, that is required to be filed by a candidate or political committee following the primary or general election is $500 for the first day the report is late and $100 for each day thereafter that the report is late, up to a maximum fine of $10,000.

(d) A fine assessed under this chapter is in addition to any other sanction assessed under other law.

**History**
- *Source Note: The provisions of this §18.13 adopted to be effective January 6, 2002, 27 TexReg 130; amended to be effective December 10, 2003, 28 TexReg 10903; amended to be effective August 23, 2023, 48 TexReg 4481.*

##### **1 Tex. Admin. Code § 18.15** Additional Fine {#sec-18.15 omnilex-key=us-tx-regs-official--title-1--18.15}

In addition to any other fine assessed under this chapter, the commission may vote to impose a fine of $2,500 against a filer whose report is more than 30 days late and who has not paid the penalty related to that report within 10 days after receiving the commission notice of lateness.

**History**
- *Source Note: The provisions of this §18.15 adopted to be effective January 6, 2002, 27 TexReg 130; amended to be effective April 20, 2021, 45 TexReg 2579.*

##### **1 Tex. Admin. Code § 18.17** Report Must be Filed {#sec-18.17 omnilex-key=us-tx-regs-official--title-1--18.17}

(a) The payment of a civil or criminal fine for failure to file a report, or for filing a report late, does not satisfy a filer's obligation to file the report. Late fines continue to accrue until the report is filed.

(b) A filer, other than the treasurer of a political committee, who dies or becomes incapacitated is considered to have filed the report on the date of the filer's death or the date the filer is determined to be incapacitated, as applicable, for purposes of this chapter. In this subsection, "incapacitated" means determined by a judgment of a court exercising probate jurisdiction to be either partially mentally incapacitated without the right to vote or totally mentally incapacitated.

**History**
- *Source Note: The provisions of this §18.17 adopted to be effective January 6, 2002, 27 TexReg 130; amended to be effective September 22, 2021, 46 TexReg 6237.*

##### **1 Tex. Admin. Code § 18.19** Affidavit of Timely Filing {#sec-18.19 omnilex-key=us-tx-regs-official--title-1--18.19}

A filer who has been notified by the commission that a report is late but who filed the report on or before the deadline may submit an affidavit to the executive director swearing that the report was timely filed.

**History**
- *Source Note: The provisions of this §18.19 adopted to be effective January 6, 2002, 27 TexReg 130.*

##### **1 Tex. Admin. Code § 18.21** Jurisdiction to Consider Waiver Request {#sec-18.21 omnilex-key=us-tx-regs-official--title-1--18.21}

(a) A filer may ask the commission to waive or reduce a civil penalty determined by §§ 305.033(b) or 572.033(b) of the Government Code, or §254.042(b) of the Election Code by submitting a written request to the Commission.

(b) The commission will not consider a request under subsection (a) of this section unless the filer, not later than 210 days after the report or statement was due:

(1) submits the request in the manner prescribed by subsection (a) of this section;

(2) files all reports owed to the commission; and

(3) pays all outstanding civil penalties owed to the commission that are not subject to a pending request for waiver or appeal.

(c) Upon a showing of good cause, the executive director may extend the deadline in subsection (b) of this section.

**History**
- *Source Note: The provisions of this §18.21 adopted to be
effective January 1, 2024, 48 TexReg 6461; amended to be effective
July 3, 2025, 50 TexReg 3735.*

##### **1 Tex. Admin. Code § 18.24** General Guidelines for Administrative Waiver or Reduction of Statutory Civil Penalties {#sec-18.24 omnilex-key=us-tx-regs-official--title-1--18.24}

(a) For purposes of determining whether a filer is eligible for a waiver or reduction of a civil penalty under §18.25 or §18.26 of this title (relating to Administrative Waiver or Reduction of Certain Statutory Civil Penalties and Administrative Waiver or Reduction of Statutory Civil Penalties in Excess of $500 respectively), a "prior late offense" is any report for which a civil penalty for late filing was assessed, regardless of whether the civil penalty was waived or reduced. The term does not include:

(1) reports for which no late notices were sent and the filer did not file a request that the civil penalty be waived or reduced for the prior late report; and

(2) reports determined by the executive director to be not required.

(b) A filer may appeal a determination made under §18.25 or §18.26 of this title by submitting a request for appeal in writing to the commission within thirty (30) calendar days from the date of the letter informing the filer of the decision.

(1) The request for appeal should state the filer's reasons for requesting an appeal, provide any additional information needed to support the request, and state whether the filer would like the opportunity to appear before the commission and offer testimony regarding the appeal.

(2) The Executive Director may review the appeal and reconsider the determination made under §18.25 or §18.26 of this title or set the appeal for a hearing before the commission.

(3) After hearing a request for appeal, the commission may affirm the determination made under §18.25 or §18.26 of this title or make a new determination based on facts presented in the appeal.

**History**
- *Source Note: The provisions of this §18.24 adopted
to be effective January 1, 2024, 48 TexReg 6461; amended to be effective
July 3, 2025, 50 TexReg 3735.*

##### **1 Tex. Admin. Code § 18.25** Administrative Waiver or Reduction of Certain Statutory Civil Penalties {#sec-18.25 omnilex-key=us-tx-regs-official--title-1--18.25}

(a) The executive director shall apply this section to a late report subject to a statutory civil penalty of not more than $500.

(b) The executive director shall use the following chart to determine the level of waiver or reduction of a civil penalty under this section:

Attached Graphic

**History**
- *Source Note: The provisions of this §18.25 adopted to be effective January 1, 2024, 48 TexReg 6461.*

##### **1 Tex. Admin. Code § 18.26** Administrative Waiver or Reduction of Statutory Civil Penalties in Excess of $500 {#sec-18.26 omnilex-key=us-tx-regs-official--title-1--18.26}

(a) The executive director shall apply this section to a late report subject to a statutory civil penalty in excess of $500.

(b) The executive director shall use the following chart to determine the level of waiver or reduction of a civil penalty under this section:

Attached Graphic

(c) For purposes of using the chart in subsection (b) of this section:

(1) where the chart identifies a dollar amount, that is the amount of the reduced or waived penalty; and

(2) where the chart identifies a percentage, that is the percentage by which the penalty is reduced.

**History**
- *Source Note: The provisions of this §18.26 adopted to be effective January 1, 2024, 48 TexReg 6461.*

##### **1 Tex. Admin. Code § 18.31** Adjustments to Reporting Thresholds {#sec-18.31 omnilex-key=us-tx-regs-official--title-1--18.31}

(a) Pursuant to section 571.064 of the Government Code, the reporting thresholds are adjusted as follows:

Attached Graphic

Attached Graphic

Attached Graphic

Attached Graphic

Attached Graphic

(b) The changes made by this rule apply only to conduct occurring on or after the effective date of this rule.

(c) The effective date of this rule is January 1, 2026.

(d) In this section:

(1) "CEC" means county executive committee;

(2) "DCE" means direct campaign expenditure-only filer;

(3) "GPAC" means general-purpose political committee;

(4) "MPAC" means monthly-filing general-purpose political committee;

(5) "PAC" means political committee;

(6) "PFS" means personal financial statement;

(7) "SPAC" means specific-purpose political committee; and

(8) "TA" means treasurer appointment.

**History**
- *Source Note: The provisions of this §18.31 adopted
to be effective April 25, 2019, 44 TexReg 1979; amended to be effective
January 1, 2020, 44 TexReg 7879; amended to be effective January 1,
2021, 45 TexReg 8511; amended to be effective January 3, 2022, 46
TexReg 9233; amended to be effective January 1, 2023, 47 TexReg 6821;
amended to be effective January 1, 2024, 48 TexReg 6462; amended to
be effective January 1, 2025, 49 TexReg 8581; amended to be effective
January 1, 2026, 50 TexReg 7233.*

### **Chapter 20** REPORTING CONTRIBUTIONS AND EXPENDITURES

#### **Subchapter A** GENERAL RULES

##### **1 Tex. Admin. Code § 20.1** Definitions {#sec-20.1 omnilex-key=us-tx-regs-official--title-1--20.1}

The following words and terms, when used in Title 15 of the Election Code, in this chapter, Chapter 22 of this title (relating to Restrictions on Contributions and Expenditures), and Chapter 24 of this title (relating to Restrictions on Contributions and Expenditures Applicable to Corporations and Labor Organizations), shall have the following meanings, unless the context clearly indicates otherwise.

(1) Campaign communication--The term does not include a communication made by e-mail.

(2) Campaign treasurer--Either the individual appointed by a candidate to be the campaign treasurer, or the individual responsible for filing campaign finance reports of a political committee under Texas law or the law of any other state.

(3) Contribution--The term does not include a transfer for consideration of anything of value pursuant to a contract that reflects the usual and normal business practice of the vendor.

(4) Corporation--The term does not include professional corporations or professional associations.

(5) Election cycle--A single election and any related primary or runoff election.

(6) Identified measure--A question or proposal submitted in an election for an expression of the voters' will and includes the circulation and submission of a petition to determine whether a question or proposal is required to be submitted in an election for an expression of the voters' will.

(7) Non-political expenditure--An expenditure from political contributions that is not an officeholder expenditure or a campaign expenditure.

(8) Opposed candidate--A candidate who has an opponent whose name is to appear on the ballot. The name of a write-in candidate does not appear on the ballot.

(9) Pledge--A contribution in the form of an unfulfilled promise or unfulfilled agreement, whether enforceable or not, to provide a specified amount of money or specific goods or services. The term does not include a contribution made in the form of a check.

(10) Political advertising:

(A) A communication that supports or opposes a political party, a public officer, a measure, or a candidate for nomination or election to a public office or office of a political party, and:

(i) is published in a newspaper, magazine, or other periodical in return for consideration;

(ii) is broadcast by radio or television in return for consideration;

(iii) appears in a pamphlet, circular, flyer, billboard, or other sign, bumper sticker, or similar form of written communication; or

(iv) appears on an Internet website.

(B) The term does not include an individual communication made by e-mail but does include mass e-mails involving an expenditure of funds beyond the basic cost of hardware messaging software and bandwidth.

(11) Political subdivision--A county, city, or school district or any other governmental entity that:

(A) embraces a geographic area with a defined boundary;

(B) exists for the purpose of discharging functions of government; and

(C) possesses authority for subordinate self-government through officers selected by it.

(12) Report--Any document required to be filed by this title, including an appointment of campaign treasurer, any type of report of contributions and expenditures, and any notice.

(13) Special pre-election report--A shorthand term for a report filed in accordance with the requirements of §20.221 and §20.333 of this chapter (relating to Special Pre-Election Report by Certain Candidates; and Special Pre-Election Report by Certain Specific-Purpose Committees) and §254.038 and §254.039 of the Election Code.

(14) Unidentified measure--A question or proposal that is intended to be submitted in an election for an expression of the voters' will and that is not yet legally required to be submitted in an election, except that the term does not include the circulation or submission of a petition to determine whether a question or proposal is required to be submitted in an election for an expression of the voters' will. The circulation or submission of a petition to determine whether a question or proposal is required to be submitted in an election for an expression of the voters' will is considered to be an identified measure.

(15) Principal purpose--A group has as a principal purpose of accepting political contributions or making political expenditures, including direct campaign expenditures, when that activity is an important or a main function of the group.

(A) A group may have more than one principal purpose. When determining whether a group has a principal purpose of accepting political contributions or making political expenditures, the Commission may consider any available evidence regarding the activities by the group and its members, including, but not limited to:

(i) public statements,

(ii) fundraising appeals,

(iii) government filings,

(iv) organizational documents; and

(v) the amount of political expenditures made and political contributions accepted by the group and its members.

(B) A group does not have a principal purpose of making political expenditures if it can demonstrate that not more than 49% of its overall expenditures are political expenditures.

(C) The following shall be included for purposes of calculating the proportion of the group's political expenditures to all other spending:

(i) the amount of money paid in compensation and benefits to the group's employees for work related to making political expenditures;

(ii) the amount of money spent on political expenditures; and

(iii) the amount of money attributable to the proportional share of administrative expenses related to political expenditures. The proportional share of administrative expenses is calculated by comparing the political expenditures in clause (ii) of this subparagraph with non-political expenditures. (For example, if the group sends three mailings a year and each costs $10,000, if the first two are issue-based newsletters and the third is a direct advocacy sample ballot, and there were no other expenditures, then the proportion of the administrative expenses attributable to political expenditures would be 33%.) Administrative expenses include:

(I) fees for services to non-employees;

(II) advertising and promotion;

(III) office expenses;

(IV) information technology;

(V) occupancy;

(VI) travel expenses;

(VII) interest; and

(VIII) insurance.

(D) The group may maintain specific evidence of administrative expenses related only to political expenditures or only to non-political expenditures. Specifically identified administrative expenses shall not be included in the proportion established by subparagraph (C)(iii) but allocated by the actual amount of the expense.

(E) In this section, the term "political expenditures" includes direct campaign expenditures.

(16) In connection with a campaign:

(A) An expenditure is made in connection with a campaign for an elective office if it is:

(i) made for a communication that expressly advocates the election or defeat of a clearly identified candidate by:

(I) using such words as "vote for," "elect," "support," "vote against," "defeat," "reject," "cast your ballot for," or "Smith for city council;" or

(II) using such phrases as "elect the incumbent" or "reject the challenger," or such phrases as "vote pro-life" or "vote pro-choice" accompanied by a listing of candidates described as "pro-life" or "pro-choice;"

(ii) made for a communication broadcast by radio, television, cable, or satellite or distributed by print or electronic media, including any print publication, mailing, Internet website, electronic mail, or automated phone bank, that:

(I) refers to a clearly identified candidate;

(II) is distributed within 30 days before a contested election for the office sought by the candidate;

(III) targets a mass audience or group in the geographical area the candidate seeks to represent; and

(IV) includes words, whether displayed, written, or spoken; images of the candidate or candidate's opponent; or sounds of the voice of the candidate or candidate's opponent that, without consideration of the intent of the person making the communication, are susceptible of no other reasonable interpretation than to urge the election or defeat of the candidate;

(iii) made by a candidate or political committee to support or oppose a candidate; or

(iv) a campaign contribution to:

(I) a candidate; or

(II) a group that, at the time of the contribution, already qualifies as a political committee.

(B) An expenditure is made in connection with a campaign on a measure if it is:

(i) made for a communication that expressly advocates the passage or defeat of a clearly identified measure by using such words as "vote for," "support," "vote against," "defeat," "reject," or "cast your ballot for;"

(ii) made for a communication broadcast by radio, television, cable, or satellite or distributed by print or electronic media, including any print publication, mailing, Internet website, electronic mail, or automated phone bank, that:

(I) refers to a clearly identified measure;

(II) is distributed within 30 days before the election in which the measure is to appear on the ballot;

(III) targets a mass audience or group in the geographical area in which the measure is to appear on the ballot; and

(IV) includes words, whether displayed, written, or spoken, that, without consideration of the intent of the person making the communication, are susceptible of no other reasonable interpretation than to urge the passage or defeat of the measure;

(iii) made by a political committee to support or oppose a measure; or

(iv) a campaign contribution to a group that, at the time of the contribution, already qualifies as a political committee.

(C) Any cost incurred for covering or carrying a news story, commentary, or editorial by a broadcasting station or cable television operator, Internet website, or newspaper, magazine, or other periodical publication, including an Internet or other electronic publication, is not a campaign expenditure if the cost for the news story, commentary, or editorial is not paid for by, and the medium is not owned or controlled by, a candidate or political committee.

(D) For purposes of this section:

(i) a candidate is clearly identified by a communication that includes the candidate's name, office sought, office held, likeness, photograph, or other apparent and unambiguous reference; and

(ii) a measure is clearly identified by a communication that includes the measure's name or ballot designation (such as "Proposition 1"), purposes, election date, or other apparent and unambiguous reference.

(17) Discount--The provision of any goods or services without charge or at a charge which is less than fair market value. A discount is an in-kind political contribution unless the terms of the transaction reflect the usual and normal practice of the industry and are typical of the terms that are offered to political and non-political persons alike, or unless the discount is given solely to comply with §253.041 of the Election Code. The value of an in-kind contribution in the form of a discount is the difference between the fair market value of the goods or services at the time of the contribution and the amount charged.

(18) School district--For purposes of §254.130 of the Election Code and §20.7 of this chapter (relating to Reports Filed with Other Local Filing Authority), the term includes a junior college district or community college district.

(19) Vendor--Any person providing goods or services to a candidate, officeholder, political committee, or other filer under this chapter. The term does not include an employee of the candidate, officeholder, political committee, or other filer.

(20) Hybrid committee--A political committee that, as provided by §252.003(a)(4) or §252.0031(a)(2) of the Election Code, as applicable, has filed a campaign treasurer appointment that includes an affidavit stating that:

(A) the committee is not established or controlled by a candidate or an officeholder; and

(B) the committee will not use any political contribution from a corporation or a labor organization to make a political contribution to:

(i) a candidate for elective office;

(ii) an officeholder; or

(iii) a political committee that has not filed an affidavit in accordance with this section.

(21) Direct campaign expenditure-only committee--A political committee, as authorized by §253.105 of the Election Code to accept political contributions from corporations and/or labor organizations, that:

(A) is not established or controlled by a candidate or an officeholder;

(B) makes or intends to make direct campaign expenditures;

(C) does not make or intend to make political contributions to:

(i) a candidate;

(ii) an officeholder;

(iii) a specific-purpose committee established or controlled by a candidate or an officeholder; or

(iv) a political committee that makes or intends to make political contributions to a candidate, an officeholder, or a specific-purpose committee established or controlled by a candidate or an officeholder; and

(D) has filed an affidavit with the Commission stating the committee's intention to operate as described by subparagraphs (B) and (C).

(22) Reportable Activity--For the purposes of filing a final report, this term includes an expenditure to pay a campaign debt.

(23) Statewide Measure--A measure to be voted on by all eligible voters in the state.

(24) District Measure--A measure to be voted on by the voters of a district.

**History**
- *Source Note: The provisions of this §20.1 adopted to
be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.7** Reports Filed with Other Local Filing Authority {#sec-20.7 omnilex-key=us-tx-regs-official--title-1--20.7}

Except as provided by Chapter 252 of the Election Code, the secretary of a political subdivision (or the presiding officer if the political subdivision has no secretary) is the appropriate filing authority for reports filed by:

(1) a candidate for an office of a political subdivision other than a county;

(2) a person holding an office of a political subdivision other than a county.

**History**
- *Source Note: The provisions of this §20.7 adopted to
be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.13** Out-of-State Committees {#sec-20.13 omnilex-key=us-tx-regs-official--title-1--20.13}

(a) An out-of-state political committee is required to file reports for each reporting period under Subchapter F, Chapter 254, Election Code, in which the out-of-state political committee accepts political contributions or makes political expenditures in connection with a state or local election in Texas. Section 254.1581 of the Election Code applies to a report required to be filed under this section. An out-of-state political committee that files reports electronically in another jurisdiction may comply with §254.1581 of the Election Code by sending a letter to the Commission within the time prescribed by that section specifying in detail where the electronic report may be found on the website of the agency with which the out-of-state political committee is required to file its reports. An out-of-state political committee that does not file reports electronically in another jurisdiction may comply with §254.1581 of the Election Code by sending to the Commission a copy of the cover sheets of the report and a copy of each page on which the committee reports a contribution or expenditure accepted or made in connection with a state or local election in Texas.

(b) A political committee must determine if it is an "out-of-state political committee" each time the political committee makes a political expenditure in Texas (other than an expenditure in connection with a campaign for a federal office or an expenditure for a federal officeholder). The determination is made as follows.

(1) When making the expenditure (other than an expenditure in connection with a campaign for a federal office or an expenditure for a federal officeholder), the committee must calculate its total political expenditures made during the 12 months immediately preceding the date of the expenditure. This total does not include the political expenditure triggering the calculation requirement.

(2) If 80% or more of the total political expenditures are in connection with elections not voted on in Texas, the committee is an out-of-state committee.

(3) If less than 80% of the total political expenditures are in connection with elections not voted on in Texas, the committee is no longer an out-of-state committee.

(c) An out-of-state political committee planning an expenditure in connection with a campaign for federal office voted on in Texas is not required to make the determination required by §20.14 of this chapter (relating to Information About Out-of-State Committees). However, an expenditure in connection with a campaign for federal office voted on in Texas must be included in the calculation for an out-of-state committee making an expenditure in connection with a non-federal campaign voted on in Texas.

**History**
- *Source Note: The provisions of this §20.13 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.14** Information About Out-of-State Committees {#sec-20.14 omnilex-key=us-tx-regs-official--title-1--20.14}

(a) A person who files a report with the Commission by electronic transfer and who accepts political contributions from an out-of-state political committee required to file its statement of organization with the Federal Election Commission shall either:

(1) enter the out-of-state committee's federal PAC identification number in the appropriate place on the report; or

(2) timely file a certified copy of the out-of-state committee's statement of organization that is filed with the Federal Election Commission.

(b) A person who files a report with the Commission by electronic transfer and who accepts political contributions from an out-of-state political committee that is not required to file its statement of organization with the Federal Elections Commission shall either:

(1) enter the information required by §253.032(a)(1) or (e)(1), Election Code, as applicable, on the report filed by electronic transfer; or

(2) timely file a paper copy of the information required by §253.032(a)(1) or (e)(1), Election Code, as applicable.

(c) Except as provided by subsection (d) of this section, §251.007, Election Code, applies to a document filed under subsection (a)(2) or (b)(2) of this section.

(d) A document filed under subsection (a)(2) or (b)(2) of this section for a pre-election report is timely filed if it is received by the Commission no later than the report due date. A pre-election report includes reports due 30-days and 8-days before an election, reports due before a runoff election, and special reports due before an election.

**History**
- *Source Note: The provisions of this §20.14 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.16** Notices by Electronic Mail {#sec-20.16 omnilex-key=us-tx-regs-official--title-1--20.16}

(a) A person required to file reports electronically with the Commission shall provide to the Commission an electronic mail address to which notices regarding filing requirements under Title 15 of the Election Code may be sent.

(b) A person required to file reports with the Commission and who qualifies for an exemption from electronic filing may provide to the Commission an electronic mail address to which notices regarding filing requirements under Title 15 of the Election Code may be sent.

**History**
- *Source Note: The provisions of this §20.16 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.21** Due Dates on Holidays and Weekends {#sec-20.21 omnilex-key=us-tx-regs-official--title-1--20.21}

If the deadline for a report falls on a Saturday, Sunday, or a legal state or national holiday, the report is due on the next regular business day.

**History**
- *Source Note: The provisions of this §20.21 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.33** Termination of Campaign Treasurer Appointment by Commission {#sec-20.33 omnilex-key=us-tx-regs-official--title-1--20.33}

(a) The Commission may terminate the campaign treasurer appointment of an inactive candidate or an inactive political committee.

(b) For purposes of subsection (a) of this section and §252.0131, Election Code, a candidate becomes "inactive" if the candidate files a campaign treasurer appointment with the Commission and more than one year has lapsed since the candidate has filed any required campaign finance reports with the Commission.

(c) For purposes of subsection (a) of this section and §252.0131, Election Code, a political committee becomes "inactive" if the political committee files a campaign treasurer appointment with the Commission and more than one year has lapsed since the campaign treasurer of the political committee has filed any required campaign finance reports with the Commission.

(d) This section does not apply to a candidate who holds an office specified by §§252.005(1) or (5), Election Code.

**History**
- *Source Note: The provisions of this §20.33 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.35** Notice of Proposed Termination of Campaign Treasurer Appointment {#sec-20.35 omnilex-key=us-tx-regs-official--title-1--20.35}

(a) Before the Commission may consider termination of a campaign treasurer appointment under §20.33 of this chapter (relating to Termination of Campaign Treasurer Appointment by Commission) and §252.0131, Election Code, the Commission shall send written notice to the affected candidate or political committee.

(b) The written notice must be given at least 30 days before the date of the meeting at which the Commission will consider the termination of campaign treasurer appointment and must include:

(1) The date, time, and place of the meeting;

(2) A statement of the Commission's intention to consider termination of the campaign treasurer;

(3) A reference to the particular sections of the statutes and rules that give the Commission the authority to consider the termination of the campaign treasurer; and

(4) The effect of termination of the campaign treasurer appointment.

**History**
- *Source Note: The provisions of this §20.35 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter B** GENERAL REPORTING RULES

##### **1 Tex. Admin. Code § 20.50** Total Political Contributions Maintained {#sec-20.50 omnilex-key=us-tx-regs-official--title-1--20.50}

(a) For purposes of Election Code §254.031(a)(8) and §254.0611(a)(1), the total amount of political contributions maintained in one or more accounts includes the following:

(1) The balance on deposit in banks, savings and loan institutions and other depository institutions;

(2) The present value of any investments that can be readily converted to cash, such as certificates of deposit, money market accounts, stocks, bonds, treasury bills, etc.; and

(3) The balance of political contributions accepted and held in any online fundraising account over which the filer can exercise control by making a withdrawal, expenditure, or transfer.

(b) For purposes of Election Code §254.031(a)(8) and §254.0611(a)(1), the total amount of political contributions maintained includes personal funds that the filer intends to use for political expenditures only if the funds have been deposited in an account in which political contributions are held as permitted by Election Code §253.0351(c).

(c) For purposes of Election Code §254.031(a-1), the difference between the total amount of political contributions maintained that is disclosed in a report and the correct amount is a de minimis error if the difference does not exceed:

(1) $7,500; or

(2) the lesser of 10% of the amount disclosed or $20,000.

**History**
- *Source Note: The provisions of this §20.50 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.51** Value of In-Kind Contribution {#sec-20.51 omnilex-key=us-tx-regs-official--title-1--20.51}

(a) For reporting purposes, the value of an in-kind contribution is the fair market value.

(b) If an in-kind contribution is sold at a political fundraiser, the total amount received for the item at the fundraiser must be reported. This reporting requirement is in addition to the requirement that the fair market value of the in-kind contribution be reported.

(c) If political advertising supporting or opposing two or more candidates is an in-kind contribution, each person benefiting from the contribution shall report the amount determined by dividing the full value of the political advertising by the number of persons benefited by the political advertising.

**History**
- *Source Note: The provisions of this §20.51 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.52** Description of In-Kind Contribution for Travel {#sec-20.52 omnilex-key=us-tx-regs-official--title-1--20.52}

The description of an in-kind contribution for travel outside of the state of Texas must provide the following:

(1) The name of the person or persons traveling on whose behalf the travel was accepted;

(2) The means of transportation;

(3) The name of the departure city or the name of each departure location;

(4) The name of the destination city or the name of each destination location;

(5) The dates on which the travel occurred;

(6) The campaign or officeholder purpose of the travel, including the name of a conference, seminar, or other event.

**History**
- *Source Note: The provisions of this §20.52 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.54** Reporting a Pledge of a Contribution {#sec-20.54 omnilex-key=us-tx-regs-official--title-1--20.54}

(a) The date of a pledge of a contribution is the date the pledge was accepted, regardless of when the pledge is received.

(b) Except as provided by subsection (c) of this section, a pledge of a contribution shall be reported on the appropriate pledge schedule for the reporting period in which the pledge was accepted and shall be reported on the appropriate receipts schedule for the reporting period in which the pledge is received.

(c) A pledge of a contribution that is received in the reporting period in which the pledge was accepted, shall be reported on the contribution schedule or the loan schedule, as applicable, and in accordance with subsection (a) of this section.

**History**
- *Source Note: The provisions of this §20.54 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.55** Time of Accepting Contribution {#sec-20.55 omnilex-key=us-tx-regs-official--title-1--20.55}

For the purposes of §254.034 of the Election Code, a determination to refuse a political contribution is a distinct act from returning a political contribution and may occur at a different time.

**History**
- *Source Note: The provisions of this §20.55 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.56** Expenditures to Vendors {#sec-20.56 omnilex-key=us-tx-regs-official--title-1--20.56}

(a) A political expenditure made by a vendor for a candidate, officeholder, political committee, or other filer, with the intent to seek reimbursement from the filer, shall be reported by the filer in accordance with this chapter as though the filer made the expenditure directly.

(b) A vendor of a candidate, officeholder, or specific-purpose committee may not, in providing goods or services for the candidate, officeholder, or committee, make an expenditure that, if made by the candidate, officeholder, or committee, would be prohibited by §§253.035, 253.038, or 253.041, Election Code.

(c) A candidate, officeholder, or specific-purpose committee may not use political contributions to pay or reimburse a vendor for an expenditure that, if made by the candidate, officeholder, or committee, would be prohibited by §§253.035, 253.038, or 253.041, Election Code.

**History**
- *Source Note: The provisions of this §20.56 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.58** Disclosure of Political Expenditure {#sec-20.58 omnilex-key=us-tx-regs-official--title-1--20.58}

(a) An expenditure that is not paid during the reporting period in which the obligation to pay the expenditure is incurred shall be reported on the Unpaid Incurred Obligations Schedule for the reporting period in which the obligation to pay is incurred.

(b) The use of political contributions to pay an expenditure previously disclosed on an Unpaid Incurred Obligations Schedule shall be reported on the appropriate disbursements schedule for the reporting period in which the payment is made.

(c) The use of personal funds to pay an expenditure previously disclosed on an Unpaid Incurred Obligations Schedule shall be reported on the Political Expenditure Made from Personal Funds Schedule for the reporting period in which the payment is made.

**History**
- *Source Note: The provisions of this §20.58 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.59** Reporting Expenditure by Credit Card {#sec-20.59 omnilex-key=us-tx-regs-official--title-1--20.59}

(a) A report of an expenditure charged to a credit card must be disclosed on the Expenditures Made to Credit Card Schedule and identify the vendor who receives payment from the credit card company.

(b) A report of a payment to a credit card company must be disclosed on the appropriate disbursements schedule and identify the credit card company receiving the payment.

(c) A political expenditure by credit card made during the period covered by a report required to be filed under §§254.064(b) or (c), 254.124(b) or (c), or 254.154(b) or (c) of the Election Code, must be included in the report for the period during which the charge was made, not in the report for the period during which the statement from the credit card company was received.

(d) A political expenditure by credit card made during a period not covered by a report listed under subsection (c) of this section, must be included in the report for the period during which:

(1) the charge was made; or

(2) the person receives the credit card statement that includes the expenditure.

**History**
- *Source Note: The provisions of this §20.59 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.60** Reporting Political Expenditures for Processing Fees {#sec-20.60 omnilex-key=us-tx-regs-official--title-1--20.60}

(a) Multiple political expenditures made to a single payee during a reporting period for fees to process political contributions may be itemized as a single expenditure, in an amount equal to the combined total amount of the expenditures, if all the expenditures are made to a single payee for the same purpose.

(b) The purpose of an expenditure reported under subsection (a) of this section must include the dates of the first and last of the multiple expenditures made to a single payee during the reporting period.

(c) For reporting purposes, the date of an expenditure reported under subsection (a) of this section is the date of the first expenditure made to the payee during the reporting period.

**History**
- *Source Note: The provisions of this §20.60 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.61** Purpose of Expenditure {#sec-20.61 omnilex-key=us-tx-regs-official--title-1--20.61}

(a) For reporting required under §254.031 of the Election Code, the purpose of an expenditure means:

(1) A description of the category of goods, services, or other thing of value for which an expenditure is made. Examples of acceptable categories include:

(A) advertising expense;

(B) accounting/banking;

(C) consulting expense;

(D) contributions/donations made by candidate/officeholder/political committee;

(E) event expense;

(F) fees;

(G) food/beverage expense;

(H) gifts/awards/memorials expense;

(I) legal services;

(J) loan repayment/reimbursement;

(K) office overhead/rental expense;

(L) polling expense;

(M) printing expense;

(N) salaries/wages/contract labor;

(O) solicitation/fundraising expense;

(P) transportation equipment and related expense;

(Q) travel in district;

(R) travel out of district;

(S) other political expenditures; and

(2) A brief statement or description of the candidate, officeholder, or political committee activity that is conducted by making the expenditure and an additional indication if the expenditure is an officeholder expenditure for living in Austin, Texas. The brief statement or description must include the item or service purchased and must be sufficiently specific, when considered within the context of the description of the category, to make the reason for the expenditure clear. Merely disclosing the category of goods, services, or other thing of value for which the expenditure is made does not adequately describe the purpose of an expenditure.

(3) For purposes of this section, "consulting" means advice and strategy. "Consulting" does not include providing other goods or services, including without limitation media production, voter contact, or political advertising.

(b) An expenditure other than a reimbursement to a person, including a vendor, for more than one type of good or service must be reported by the filer as separate expenditures for each type of good or service provided by the person in accordance with this rule.

(c) The description of a political expenditure for travel outside of the state of Texas must provide the following:

(1) The name of the person or persons traveling on whose behalf the expenditure was made;

(2) The means of transportation;

(3) The name of the departure city or the name of each departure location;

(4) The name of the destination city or the name of each destination location;

(5) The dates on which the travel occurred; and

(6) The campaign or officeholder purpose of the travel, including the name of a conference, seminar, or other event.

**History**
- *Source Note: The provisions of this §20.61 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.62** Reporting Staff Reimbursement {#sec-20.62 omnilex-key=us-tx-regs-official--title-1--20.62}

(a) Political expenditures made out of personal funds by a staff member of an officeholder, a candidate, or a political committee with the intent to seek reimbursement from the officeholder, candidate, or political committee that in the aggregate do not exceed the threshold amount as specified in §18.31 of this title (regarding adjustments to reporting thresholds) during the reporting period may be reported as follows IF the reimbursement occurs during the same reporting period that the initial expenditure was made:

(1) the amount of political expenditures that in the aggregate exceed the threshold amount and that are made during the reporting period, the full name and address of the persons to whom the expenditures are made and the dates and purposes of the expenditures; and

(2) included with the total amount or a specific listing of the political expenditures of the threshold amount or less made during the reporting period.

(b) Except as provided by subsection (a) of this section, a political expenditure made from personal funds by a staff member of an officeholder, a candidate, or a political committee with the intent to seek reimbursement from the officeholder, candidate, or political committee must be reported as follows:

(1) the aggregate amount of the expenditures made by the staff member as of the last day of the reporting period is reported as a loan to the officeholder, candidate, or political committee;

(2) the expenditure made by the staff member is reported as a political expenditure by the officeholder, candidate, or political committee; and

(3) the reimbursement to the staff member to repay the loan is reported as a political expenditure by the officeholder, candidate, or political committee.

**History**
- *Source Note: The provisions of this §20.62 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.63** Reporting the Use and Reimbursement of Personal Funds {#sec-20.63 omnilex-key=us-tx-regs-official--title-1--20.63}

(a) A candidate is required to report a campaign expenditure from his or her personal funds.

(b) An officeholder is not required to report an officeholder expenditure from his or her personal funds unless he or she intends to be reimbursed from political contributions.

(c) A candidate or officeholder must report a political expenditure from his or her personal funds using one of the following methods:

(1) As a political expenditure made from personal funds reported on the political expenditure made from personal funds schedule;

(2) As a loan without depositing the personal funds in an account in which political contributions are held. The amount reported as a loan may not exceed the total amount spent in the reporting period. A political expenditure made from these funds must also be reported as a political expenditure made from political funds, not as made from personal funds; or

(3) If the candidate or officeholder deposits personal funds in an account in which political contributions are held, he or she must report that amount as a loan with an indication that personal funds were deposited in that account. A political expenditure made from an account in which political contributions are maintained must be reported as a political expenditure made from political funds, not as made from personal funds.

(d) A candidate or officeholder who makes political expenditures from his or her personal funds may reimburse those personal funds from political contributions only if:

(1) the expenditures were fully reported using one of the methods in subsection (c) of this section on the report covering the period during which the expenditures were made; and

(2) if the method in subsection (c)(1) of this section was used, the report disclosing the expenditures indicates that the expenditures are subject to reimbursement.

(e) A candidate's or officeholder's failure to comply with subsection (d) of this section may not be cured by filing a corrected report after the report deadline has passed.

(f) A candidate or officeholder who has complied with subsection (d) of this section and whose personal funds have been reimbursed from political contributions must report the amount of the reimbursement as a political expenditure in the report covering the period during which the reimbursement was made.

(g) Section 253.042 of the Election Code sets limits on the amount of political expenditures from personal funds that a statewide officeholder may reimburse from political contributions.

**History**
- *Source Note: The provisions of this §20.63 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.64** Reporting the Forgiveness of a Loan or Settlement of a Debt {#sec-20.64 omnilex-key=us-tx-regs-official--title-1--20.64}

(a) The forgiveness of a loan to a candidate, officeholder, or political committee is a reportable in-kind political contribution unless the loan does not constitute a contribution under §251.001(2) of the Election Code, and the forgiveness of the loan was made in the due course of business.

(b) The settlement of a debt owed by a candidate, officeholder, or political committee is a reportable in-kind political contribution unless the creditor is a commercial vendor that has treated the settlement in a commercially reasonable manner that reflects the usual and normal practice of the industry, and is typical of the terms the commercial vendor offers to political and non-political persons alike.

**History**
- *Source Note: The provisions of this §20.64 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.65** Reporting No Activity {#sec-20.65 omnilex-key=us-tx-regs-official--title-1--20.65}

(a) As a general rule, a candidate or officeholder must file a report required by Subchapter C of this chapter (relating to Reporting Requirements) or Subchapter D of this chapter (relating to Reporting Requirements for an Officeholder Who Does Not Have a Campaign Treasurer Appointment on File) even if there has been no reportable activity during the period covered by the report.

(b) This general rule does not apply to:

(1) special pre-election reports;

(2) special session reports; or

(3) a local officeholder who does not have a campaign treasurer appointment on file and who does not accept more than the threshold amount in political contributions or make more than the threshold amount in political expenditures during the reporting period.

(c) If a required report will disclose that there has been no reportable activity during the reporting period, the filer shall submit only those pages of the report necessary to identify the filer and to swear to the lack of reportable activity.

**History**
- *Source Note: The provisions of this §20.65 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.66** Discounts {#sec-20.66 omnilex-key=us-tx-regs-official--title-1--20.66}

(a) A discount to a candidate, officeholder, or political committee is an in-kind political contribution unless the terms of the transaction reflect the usual and normal practice of the industry and are typical of the terms that are offered to political and non-political persons alike, or unless the discount is given solely in order to comply with §253.041 of the Election Code.

(b) The value of an in-kind contribution in the form of a discount is the difference between the fair market value of the goods or services at the time of the contribution and the amount charged.

**History**
- *Source Note: The provisions of this §20.66 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.67** Reporting after the Death or Incapacity of a Filer {#sec-20.67 omnilex-key=us-tx-regs-official--title-1--20.67}

(a) The responsibility to file reports required by this title survives the death or incapacity of a candidate or officeholder.

(b) The legal representative or the estate of a candidate or officeholder who has died, or the legal representative of a candidate who is incapacitated, shall file any reports due under Subchapter C of this chapter (relating to Reporting Requirements) or Subchapter D of this chapter (relating to Reporting Requirements for an Officeholder Who Does Not Have a Campaign Treasurer Appointment on File).

**History**
- *Source Note: The provisions of this §20.67 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter C** REPORTING REQUIREMENTS

##### **1 Tex. Admin. Code § 20.201** Definitions {#sec-20.201 omnilex-key=us-tx-regs-official--title-1--20.201}

In this subchapter "filer" means a candidate, an officeholder with an active campaign treasurer appointment, a general-purpose committee, or a specific-purpose committee.

**History**
- *Source Note: The provisions of this §20.201 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.203** Required Appointment of Campaign Treasurer {#sec-20.203 omnilex-key=us-tx-regs-official--title-1--20.203}

A candidate must file a campaign treasurer appointment before accepting any campaign contributions or making or authorizing any campaign expenditures, including campaign expenditures from personal funds.

**History**
- *Source Note: The provisions of this §20.203 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.205** Modified Reporting {#sec-20.205 omnilex-key=us-tx-regs-official--title-1--20.205}

To file under the modified schedule, a candidate must file the declaration required under §254.182 of the Election Code no later than the 30th day before the first election to which the declaration applies. A declaration is valid for one election cycle only.

**History**
- *Source Note: The provisions of this §20.205 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.207** Reporting Political Contributions to a Business in Which the Candidate or Officeholder Has a Participating Interest {#sec-20.207 omnilex-key=us-tx-regs-official--title-1--20.207}

Reports must include the following information for each expenditure from political contributions made to a business in which the candidate or officeholder has a participating interest of more than 10%, holds a position on the governing body of the business, or serves as an officer of the business:

(1) the full name of the business to which the expenditure was made;

(2) the address of the person to whom the expenditure was made;

(3) the date of the expenditure;

(4) the purpose of the expenditure; and

(5) the amount of the expenditure.

**History**
- *Source Note: The provisions of this §20.207 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.209** Reporting Contributions {#sec-20.209 omnilex-key=us-tx-regs-official--title-1--20.209}

Reports must include for each person from whom the candidate accepted a political contribution (other than a pledge, loan, or a guarantee of a loan) of more than the threshold amount in value or political contributions (other than pledges, loans, or guarantees of loans) that total more than the threshold amount in value during the reporting period:

(1) the full name of the person making the contribution;

(2) the address of the person making the contribution;

(3) the total amount of contributions;

(4) the date each contribution was accepted; and

(5) a description of any in-kind contribution.

**History**
- *Source Note: The provisions of this §20.209 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.211** Reporting Pledges {#sec-20.211 omnilex-key=us-tx-regs-official--title-1--20.211}

Each report must include for each person from whom the candidate accepted a pledge or pledges to provide more than the threshold amount in money or goods or services worth more than the threshold amount:

(1) the full name of the person making the pledge;

(2) the address of the person making the pledge;

(3) the amount of each pledge;

(4) the date each pledge was accepted; and

(5) a description of any goods or services pledged; and

(6) the total of all pledges accepted during the period for the threshold amount and less from a person.

**History**
- *Source Note: The provisions of this §20.211 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.213** Reporting Loans {#sec-20.213 omnilex-key=us-tx-regs-official--title-1--20.213}

(a) Each report must include for each person making a loan or loans to the candidate for campaign purposes if the total amount loaned by the person during the reporting period is more than the threshold amount:

(1) the full name of the person or financial institution making the loan;

(2) the address of the person or financial institution making the loan;

(3) the amount of the loan;

(4) the date of the loan;

(5) the interest rate;

(6) the maturity date;

(7) the collateral for the loan, if any; and

(8) if the loan has guarantors:

(A) the full name of each guarantor;

(B) the address of each guarantor;

(C) the principal occupation of each guarantor;

(D) the name of the employer of each guarantor; and

(E) the amount guaranteed by each guarantor.

(b) the total amount of loans accepted during the period for the threshold amount and less from persons other than financial institutions engaged in the business of making loans for more than one year, except for a loan reported under subsection (a) of this section.

**History**
- *Source Note: The provisions of this §20.213 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.215** Reporting Expenditures of Personal Funds {#sec-20.215 omnilex-key=us-tx-regs-official--title-1--20.215}

Each report must include for each political expenditure of any amount made out of personal funds for which reimbursement from political contributions is intended:

(1) the full name of the person to whom each expenditure was made;

(2) the address of the person to whom the expenditure was made;

(3) the date of the expenditure;

(4) the purpose of the expenditure;

(5) a declaration that the expenditure was made out of personal funds;

(6) a declaration that reimbursement from political contributions is intended; and

(7) the amount of the expenditure.

**History**
- *Source Note: The provisions of this §20.215 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.220** Additional Disclosure for the Texas Comptroller of Public Accounts {#sec-20.220 omnilex-key=us-tx-regs-official--title-1--20.220}

(a) For purposes of this section and §2155.003(e) of the Government Code, the term "vendor" means:

(1) a person who, during the comptroller's term of office, bids on or receives a contract under the comptroller's purchasing authority that was transferred to the comptroller by §2151.004 of the Government Code; and

(2) an employee or agent of a person described by paragraph (1) of this subsection who communicates directly with the chief clerk, or an employee of the Texas Comptroller of Public Accounts who exercises discretion in connection with the vendor's bid or contract, about a bid or contract.

(b) Each report filed by the comptroller or a specific-purpose committee created to support the comptroller, shall include:

(1) for each vendor whose aggregate campaign contributions equal or exceed the threshold amount during the reporting period, a notation that:

(A) the contributor was a vendor during the reporting period or during the 12-month period preceding the last day covered by the report; and

(B) if the vendor is an individual, includes the name of the entity that employs or that is represented by the individual; and

(2) for each political committee directly established, administered, or controlled by a vendor whose aggregate campaign contributions equal or exceed $610 during the reporting period, a notation that the contributor was a political committee directly established, administered, or controlled by a vendor during the reporting period or during the 12-month period preceding the last day covered by the report.

(c) The comptroller, or a specific-purpose committee created to support the comptroller, is in compliance with this section if:

(1) each written solicitation for a campaign contribution includes a request for the information required by subsection (b) of this section; and

(2) for each contribution that is accepted for which the information required by this section is not provided, at least one oral or written request is made for the missing information. A request under this subsection:

(A) must be made not later than the 30th day after the date the contribution is received;

(B) must include a clear and conspicuous statement requesting the information required by subsection (b) of this section;

(C) if made orally, must be documented in writing; and

(D) may not be made in conjunction with a solicitation for an additional campaign contribution.

(d) The comptroller, or a specific-purpose committee created to support the comptroller, must report the information required by subsection (b) of this section that is not provided by the person making the political contribution and that is in the comptroller's or committee's records of political contributions or previous campaign finance reports required to be filed under Title 15 of the Election Code filed by the comptroller or committee.

(e) If the comptroller, or a specific-purpose committee created to support the comptroller, receives the information required by this section after the filing deadline for the report on which the contribution is reported, the comptroller or committee must include the missing information on the next required campaign finance report.

**History**
- *Source Note: The provisions of this §20.220 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.221** Special Pre-Election Report by Certain Candidates {#sec-20.221 omnilex-key=us-tx-regs-official--title-1--20.221}

(a) If, during the reporting period for special pre-election contributions, a candidate receives additional contributions from a person whose previous contribution or contributions have triggered the requirement to file a special pre-election report during that period, the candidate must file an additional special pre-election report for each such contribution. Except as provided in subsection (b) of this section, each such special pre-election report must be filed so that it is received by the Commission no later than the first business day after the candidate accepts the contribution.

(b) A candidate must file a special pre-election report that is exempt from electronic filing under §254.036(c), Election Code, so that the report is received by the Commission no later than 5 p.m. of the first business day after the candidate accepts a contribution from a person that triggers the requirement to file the special pre-election report.

(c) A candidate must file a special pre-election report for each person whose contribution or contributions made during the reporting period for special pre-election reports exceeds the threshold for special pre-election reports.

(d) A candidate must also report contributions reported on a special pre-election report on the next semiannual, pre-election, or runoff report filed, as applicable.

**History**
- *Source Note: The provisions of this §20.221 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.223** Form and Contents of Special Pre-Election Report {#sec-20.223 omnilex-key=us-tx-regs-official--title-1--20.223}

(a) A special pre-election report shall be filed electronically as required by §254.036, Election Code, unless the report is exempt from electronic filing. A special pre-election report that is exempt from electronic filing under §254.036(c), Election Code, is not required to be on a form prescribed by the Commission.

(b) In this subsection "filer" means the candidate, general-purpose committee, or specific-purpose committee filing the report.

(c) A special pre-election report shall include the following information:

(1) the name of the filer;

(2) either:

(A) the office sought by the filer; or

(B) the full name of the campaign treasurer;

(3) the name of the person making the contribution or contributions that triggered the requirement to file a special pre-election report;

(4) the address of the person making the contribution or contributions;

(5) the amount of each contribution;

(6) the date each contribution was accepted; and

(7) a description of any in-kind contribution.

(d) A general-purpose committee making direct campaign expenditures must also include:

(1) the full name and address of the person or persons to whom each direct campaign expenditure is made;

(2) the date of each direct campaign expenditure;

(3) a description of the goods or services for which each direct campaign expenditure was made; and

(4) the identification of the candidates or group of candidates benefiting from the direct campaign expenditure.

**History**
- *Source Note: The provisions of this §20.223 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.225** Special Session Reports for Candidates and Certain Officeholders {#sec-20.225 omnilex-key=us-tx-regs-official--title-1--20.225}

(a) A special session report is a report of contributions only, not expenditures. Expenditures made during the period covered by a special session report are required to be reported in the next applicable sworn report of contributions and expenditures.

(b) Contributions reported in a special session report are required to be reported in the next applicable sworn report of contributions and expenditures.

(c) A contribution that is refused under §254.0391(b) of the Election Code must be returned no later than the 30th day after the date of final adjournment. A contribution not returned by that date will be deemed accepted.

**History**
- *Source Note: The provisions of this §20.225 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.227** Contents of Special Session Report {#sec-20.227 omnilex-key=us-tx-regs-official--title-1--20.227}

A special session report shall include the following information:

(1) the filer's name;

(2) the filer's address;

(3) either:

(A) the office sought by the filer; or

(B) the full name of the campaign treasurer

(4) if the filer is a specific-purpose committee:

(A) for each candidate supported or opposed by the specific-purpose committee:

(i) the full name of the candidate;

(ii) the office sought by the candidate; and

(iii) an indication of whether the committee supports or opposes the candidate;

(B) for each officeholder supported or opposed by the committee:

(i) the full name of the officeholder;

(ii) the office held by the officeholder; and

(ii) an indication of whether the committee supports or opposes the officeholder;

(5) the date each contribution was accepted;

(6) the full name of each person making a contribution;

(7) the address of each person making a contribution;

(8) the amount of each contribution accepted during the reporting period;

(9) a description of any in-kind contribution accepted during the reporting period; and

(10) an affidavit, executed by the candidate, stating: "I swear, or affirm, that the accompanying report is true and correct and includes all information required to be reported by me under Title 15, Election Code."

**History**
- *Source Note: The provisions of this §20.227 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.235** Contents of Annual Report {#sec-20.235 omnilex-key=us-tx-regs-official--title-1--20.235}

In addition to the information required by §254.202 of the Election Code, an annual report of unexpended contributions shall include the following information:

(1) for each payment made by the candidate from unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions during the previous year:

(A) the full name of each person to whom a payment was made;

(B) the address of each person to whom a payment was made;

(C) the date of each payment;

(D) the nature of the goods or services for which the payment was made; and

(E) the amount of each payment;

(2) the full name of each person to whom a payment from unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions was made.

**History**
- *Source Note: The provisions of this §20.235 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.243** Contribution of Unexpended Political Contributions to Candidate or Political Committee {#sec-20.243 omnilex-key=us-tx-regs-official--title-1--20.243}

(a) A former candidate who has filed a final report and who contributes unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions to a candidate or political committee must report the contribution on an annual report of unexpended contributions or on a report of final disposition of unexpended contributions, as applicable. The former candidate must also report the contribution under subsection (b) of this section.

(b) A former candidate who has filed a final report and who contributes unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions to a candidate or political committee must report each contribution to the filing authority with whom the candidate or political committee receiving the contribution files reports.

(1) The contribution must be reported on the form used for reports of contributions and expenditures by a specific-purpose committees.

(2) The report should be filed by the due date for the report in which the candidate or political committee receiving the contribution must report the receipt of the contribution.

**History**
- *Source Note: The provisions of this §20.243 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter D** REPORTING REQUIREMENTS FOR AN OFFICEHOLDER WHO DOES NOT HAVE A CAMPAIGN TREASURER APPOINTMENT ON FILE

##### **1 Tex. Admin. Code § 20.271** Officeholders Covered {#sec-20.271 omnilex-key=us-tx-regs-official--title-1--20.271}

An officeholder who has a campaign treasurer appointment on file is a candidate for filing purposes and shall file under Subchapter C of this chapter (relating to Reporting Requirements) rather than under this subchapter.

**History**
- *Source Note: The provisions of this §20.271 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.295** Contribution of Unexpended Political Contributions to Candidate or Political Committee {#sec-20.295 omnilex-key=us-tx-regs-official--title-1--20.295}

(a) A former officeholder who contributes unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions to a candidate or political committee must report the contribution on an annual report of unexpended contributions or on a report of final disposition of unexpended contributions, as applicable. The former officeholder must also report the contribution under subsection (b) of this section.

(b) A former officeholder who contributes unexpended political contributions, unexpended interest or other income earned from political contributions, or assets purchased with political contributions or interest or other income earned from political contributions to a candidate or political committee must report each contribution to the filing authority with whom the candidate or political committee receiving the contribution files reports.

(1) The former officeholder must report such contributions on the form used for reports of contributions and expenditures by a specific-purpose committee.

(2) The former officeholder must file the report by the due date for the report in which the candidate or political committee receiving the contribution must report the receipt of the contribution.

**History**
- *Source Note: The provisions of this §20.295 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter E** REPORTS BY A GENERAL-PURPOSE OR SPECIFIC-PURPOSE COMMITTEE

##### **1 Tex. Admin. Code § 20.303** Appointment of Campaign Treasurer {#sec-20.303 omnilex-key=us-tx-regs-official--title-1--20.303}

(a) A committee may appoint a campaign treasurer at any time before exceeding the thresholds described in §253.031(b) of the Election Code.

(b) After a committee appoints a campaign treasurer, the campaign treasurer must comply with all the requirements of this subchapter, even if the committee has not yet exceeded the threshold in political contributions or expenditures.

(c) With the exception of the campaign treasurer appointment, the individual named as a committee's campaign treasurer is legally responsible for filing all reports of the committee, including a report following the termination of his or her appointment as campaign treasurer.

**History**
- *Source Note: The provisions of this §20.303 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.305** Appointing an Assistant Campaign Treasurer {#sec-20.305 omnilex-key=us-tx-regs-official--title-1--20.305}

(a) The assistant campaign treasurer has the same authority as the campaign treasurer. However, if the campaign treasurer appointment is terminated the assistant campaign treasurer no longer has authority to act as the campaign treasurer.

(b) The campaign treasurer, not the assistant campaign treasurer, is liable for any penalties assessed by the Commission for late reports or incomplete reports or for failure to file a report.

**History**
- *Source Note: The provisions of this §20.305 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.307** Name of Specific-Purpose Committee {#sec-20.307 omnilex-key=us-tx-regs-official--title-1--20.307}

The name of a specific-purpose committee that supports a candidate for or an officeholder of an office specified by §252.005(1), Election Code, must include the full name of that candidate or officeholder.

**History**
- *Source Note: The provisions of this §20.307 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.308** Name of General-Purpose Committee {#sec-20.308 omnilex-key=us-tx-regs-official--title-1--20.308}

For the purposes of §252.003(d) of the Election Code, a corporation, labor organization, or other association or legal entity that "directly establishes, administers, or controls" a general-purpose committee is one that has:

(1) the authority to actively participate in determining to whom the general-purpose committee makes political contributions or for what purposes the general-purpose committee makes political expenditures; or

(2) the authority to designate a person to a position of authority with the general-purpose committee, including that of an officer or director of the general-purpose committee.

**History**
- *Source Note: The provisions of this §20.308 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.311** Updating Certain Information on the Campaign Treasurer Appointment {#sec-20.311 omnilex-key=us-tx-regs-official--title-1--20.311}

(a) Except as provided by subsection (b) of this section, if any of the information required to be included in the committee's treasurer appointment changes, excluding changes in the campaign treasurer's address, the campaign treasurer shall file a corrected appointment with the Commission no later than the 30th day after the date the change occurs.

(b) If a candidate supported or opposed by a specific-purpose committee changes their office sought, or the committee changes the candidates that they support or oppose, the campaign treasurer must report that change within 24 hours of the change occurring.

**History**
- *Source Note: The provisions of this §20.311 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.313** Converting to a Different Committee Type {#sec-20.313 omnilex-key=us-tx-regs-official--title-1--20.313}

(a) A specific-purpose committee that changes its operation and becomes a general-purpose committee is subject to the requirements applicable to a general-purpose committee as of the date it files its campaign treasurer appointment as a general-purpose committee with the Commission.

(b) The notice required under §254.129 of the Election Code is in addition to the requirement that the new general-purpose committee file a campaign treasurer appointment with the Commission before it exceeds the threshold for registration as a general-purpose committee.

(c) A general-purpose committee that changes its operation and becomes a specific-purpose committee is subject to the requirements applicable to a specific-purpose committee as of the date it files its campaign treasurer appointment as a specific-purpose committee.

(d) As provided by §253.031(b)-(c) of the Election Code, a new specific-purpose committee involved in an election supporting or opposing a candidate for a statewide office, the state legislature, the State Board of Education, or a multi-county district office in a primary or general election may not accept political contributions exceeding the threshold and may not make or authorize political expenditures exceeding the threshold unless the committee's campaign treasurer appointment as a specific-purpose committee has been on file at least 30 days before the applicable election day.

**History**
- *Source Note: The provisions of this §20.313 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.319** Notice to Candidate or Officeholder {#sec-20.319 omnilex-key=us-tx-regs-official--title-1--20.319}

(a) This section does not apply to a committee that has not appointed a campaign treasurer in accordance with §20.303(b) of this chapter (relating to Appointment of Campaign Treasurer).

(b) The notice required by §254.128 of the Election Code shall be in writing and shall include:

(1) the full name of the committee;

(2) the address of the committee;

(3) the full name of the committee's campaign treasurer;

(4) the address of the committee's campaign treasurer;

(5) a statement that indicates that the committee is a political action committee; and

(6) a statement that the committee has accepted political contributions or has made political expenditures on behalf of the candidate or officeholder.

**History**
- *Source Note: The provisions of this §20.319 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.333** Special Pre-Election Report by Certain Specific-Purpose Committees {#sec-20.333 omnilex-key=us-tx-regs-official--title-1--20.333}

(a) If, during the reporting period for special pre-election contributions, a committee receives additional contributions from a person whose previous contribution or contributions have triggered the requirement to file a special pre-election report, the campaign treasurer for the committee must file an additional special pre-election report for each such contribution. Each such special pre-election report must be filed so that it is received by the Commission no later than the first business day after the committee accepts the contribution.

(b) The campaign treasurer of a specific-purpose committee must file a special pre-election report for each person whose contribution or contributions made during the period for special pre-election reports exceeds the threshold for special pre-election reports.

(c) A campaign treasurer of a specific-purpose committee must also report contributions reported on a special pre-election report on the next semiannual, pre-election, or runoff report filed, as applicable.

**History**
- *Source Note: The provisions of this §20.333 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.343** Contents of Dissolution Report {#sec-20.343 omnilex-key=us-tx-regs-official--title-1--20.343}

A dissolution report must contain:

(1) the information described in §254.121 of the Election Code; and

(2) the following sworn statement, signed by the specific-purpose committee's campaign treasurer, and properly notarized: "I, the undersigned campaign treasurer, do not expect the occurrence of any further reportable activity by this specific-purpose committee for this or any other campaign or election for which reporting under the Election Code is required. I declare that all of the information required to be reported by me has been reported. I understand that designating a report as a dissolution report terminates the appointment of campaign treasurer. I further understand that a specific-purpose committee may not make or authorize political expenditures or accept political contributions without having an appointment of campaign treasurer on file."

**History**
- *Source Note: The provisions of this §20.343 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.403** Reporting Requirements for Certain General-Purpose Committees {#sec-20.403 omnilex-key=us-tx-regs-official--title-1--20.403}

(a) A general-purpose committee that is the principal political committee of a political party is subject to Subchapter F of this chapter (relating to Rules Applicable to a Principal Political Committee of a Political Party). Subchapter F of this chapter prevails over this subchapter in the case of conflict.

(b) A general-purpose committee that is established by a political party's county executive committee is subject to Subchapter H of this chapter (relating to Rules Applicable to a Political Party's County Executive Committee). Subchapter H of this chapter prevails over this subchapter in the case of conflict.

(c) A general-purpose committee that supports or opposes a candidate for state chair of a political party is subject to Subchapter I of this chapter (relating to Reports by a Candidate or a Committee Supporting or Opposing a Candidate for State or County Party Chair). Subchapter I of this chapter prevails over this subchapter in the case of conflict.

**History**
- *Source Note: The provisions of this §20.403 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter F** RULES APPLICABLE TO A PRINCIPAL POLITICAL COMMITTEE OF A POLITICAL PARTY

##### **1 Tex. Admin. Code § 20.503** Exceptions from Certain Notice Requirements {#sec-20.503 omnilex-key=us-tx-regs-official--title-1--20.503}

(a) The principal political committee for a political party in the state or in a county is exempted from complying with §20.319 of this chapter (relating to Notice to Candidate or Officeholder).

(b) The principal political committee for a political party in the state or in a county is not required to report a direct campaign expenditure that it makes on behalf of a slate of two or more nominees of the party.

**History**
- *Source Note: The provisions of this §20.503 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter G** RULES APPLICABLE TO A POLITICAL PARTY ACCEPTING CONTRIBUTIONS FROM CORPORATIONS AND/OR LABOR ORGANIZATIONS

##### **1 Tex. Admin. Code § 20.523** Separate Account Required {#sec-20.523 omnilex-key=us-tx-regs-official--title-1--20.523}

(a) Interest and other income earned from contributions authorized by Chapter 253, Subchapter D of the Election Code must be maintained in an account separate from other contributions accepted by a political party.

(b) Proceeds from the sale or rent of assets purchased either with contributions authorized by Chapter 253, Subchapter D of the Election Code or with interest or other income earned from such contributions must be maintained in an account separate from other contributions accepted by a political party.

**History**
- *Source Note: The provisions of this §20.523 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.527** Form of Report {#sec-20.527 omnilex-key=us-tx-regs-official--title-1--20.527}

(a) The report required by this subchapter is separate from any other report a political party is required to file under this title.

(b) The report is filed by the chair of the state party or county executive committee, as applicable, and not by the treasurer of a general-purpose committee. Contributions and expenditures required to be reported under this subchapter should not be included on a report filed in accordance with Subchapter E of this chapter (relating to Reports by a General-Purpose or Specific-Purpose Committee).

(c) Except as provided by §254.036(c) of the Election Code, each report filed with the Commission under this subchapter and Chapter 257 of the Election Code must be filed by electronic transfer, using computer software provided by the Commission or computer software that meets Commission specifications for a standard file format.

**History**
- *Source Note: The provisions of this §20.527 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.529** Reporting Schedule for Political Party Accepting Corporate and/or Labor Organization Contributions {#sec-20.529 omnilex-key=us-tx-regs-official--title-1--20.529}

A political party that has accepted a contribution from a corporation and/or labor organization shall file the following reports until the political party is no longer accepting corporate and/or labor organization contributions and the acceptance and expenditure of all such funds has been reported.

(1) A report shall be filed not earlier than July 1 and not later than July 15, covering the period that begins on either January 1 or the day after the last day included in a primary election report filed under paragraph (3) of this section, as applicable, and ends on June 30.

(2) A report shall be filed not earlier than January 1 and not later than January 15, covering the period that begins on either July 1 or the day after the last day included in a general election report filed under paragraph (4) of this section, as applicable, and ends on December 31.

(3) A report shall be filed for each primary election held by the political party. The report shall be filed not later than the eighth day before the primary election, covering the period that begins on January 1 and ends on the 10th day before the primary election.

(4) A report shall be filed for the general election for state and county officers. The report shall be filed not later than the 50th day before the general election, covering the period that begins on July 1 and ends on the 61st day before the general election for state and county officers.

**History**
- *Source Note: The provisions of this §20.529 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter H** RULES APPLICABLE TO A POLITICAL PARTYS COUNTY EXECUTIVE COMMITTEE

##### **1 Tex. Admin. Code § 20.555** County Executive Committee Accepting Contributions or Making Expenditures That Exceed Certain Amount {#sec-20.555 omnilex-key=us-tx-regs-official--title-1--20.555}

(a) A county executive committee described by subsection (b) of this section is subject to the requirements of Subchapter E of this chapter (relating to Reports by a General-Purpose or Specific-Purpose Committee), except where those rules conflict with this subchapter. In the case of conflict, this subchapter prevails over Subchapter E of this chapter.

(b) A county executive committee that accepts political contributions or that makes political expenditures that, in the aggregate, exceeds the threshold in a calendar year shall file:

(1) a campaign treasurer appointment with the Commission no later than the 15th day after the date that amount is exceeded; and

(2) the reports required by Subchapter E of this chapter. The first report filed must include all political contributions accepted and all political expenditures made before the county executive committee filed its campaign treasurer appointment.

(c) Contributions accepted from corporations and/or labor organizations under §253.104 of the Election Code and reported under Subchapter G of this chapter (relating to Rules Applicable to a Political Party Accepting Contributions From Corporations and/or Labor Organizations) do not count against the thresholds described in subsection (b) of this section.

(d) A county executive committee that filed a campaign treasurer appointment may file a final report, which will notify the Commission that the county executive committee does not intend to file future reports unless it exceeds one of the thresholds. The final report may be filed:

(1) beginning on January 1 and by the January 15 filing deadline if the committee has exceeded one of the thresholds in the previous calendar year; or

(2) at any time if the committee has not exceeded one of the thresholds in the calendar year.

**History**
- *Source Note: The provisions of this §20.555 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.557** Exceptions from Certain Restrictions {#sec-20.557 omnilex-key=us-tx-regs-official--title-1--20.557}

A county executive committee is excepted from complying with §253.031(b)-(c) of the Election Code.

**History**
- *Source Note: The provisions of this §20.557 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.559** Exception from Notice Requirement {#sec-20.559 omnilex-key=us-tx-regs-official--title-1--20.559}

A county executive committee that accepts political contributions for or makes political expenditures on behalf of a candidate or officeholder is exempted from complying with §20.319 of this chapter (relating to Notice to Candidate or Officeholder).

**History**
- *Source Note: The provisions of this §20.559 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.561** County Executive Committee Accepting Contributions from Corporations and/or Labor Organizations {#sec-20.561 omnilex-key=us-tx-regs-official--title-1--20.561}

(a) A county executive committee that accepts contributions from corporations and/or labor organizations authorized by §253.104 of the Election Code is subject to the provisions set out in Subchapter G of this chapter (relating to Rules Applicable to a Political Party Accepting Contributions from Corporations and/or Labor Organizations).

(b) The chair of a county executive committee that accepts contributions from a corporation and/or labor organization must file the report required by §257.003 of the Election Code (regarding a county executive committee reporting contributions from corporations and/or labor organizations).

**History**
- *Source Note: The provisions of this §20.561 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter I** REPORTS BY A CANDIDATE OR A COMMITTEE SUPPORTING OR OPPOSING A CANDIDATE FOR STATE OR COUNTY PARTY CHAIR

##### **1 Tex. Admin. Code § 20.571** Definitions {#sec-20.571 omnilex-key=us-tx-regs-official--title-1--20.571}

The following terms, when used in this subchapter, shall have the following meaning, unless the context clearly indicates otherwise:

(1) Candidate for state chair of a political party--A person who seeks election to serve as the chair of the state executive committee of a political party with a nominee on the ballot in the most recent gubernatorial general election. Candidacy may be evidenced by any one or more of the following actions:

(A) declaring candidacy;

(B) soliciting or accepting a campaign contribution or making or authorizing a campaign expenditure; or

(C) appointing a campaign treasurer as a candidate for state chair.

(2) Filer--Candidate for state or county chair, or a committee supporting or opposing a candidate for state or county chair.

**History**
- *Source Note: The provisions of this §20.571 adopted
to be effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.577** Reporting Schedule for a Candidate for State Chair {#sec-20.577 omnilex-key=us-tx-regs-official--title-1--20.577}

(a) A filer is required to file only the reports listed in this section and is not required to file any other reports required by candidates for public office under Subchapter C of this chapter (relating to Reporting Requirements).

(b) A filer is required to file semiannual reports as provided by this subsection.

(1) One semiannual report is due no earlier than July 1 and no later than July 15.

(A) The period covered by a report under this paragraph begins on the later of the following dates, as applicable:

(i) January 1;

(ii) the first day after the period covered by the last report required by this subchapter; or

(iii) the day the state chair's campaign treasurer appointment was filed, if this is the first report filed under this subchapter.

(B) The period covered by the report under this paragraph ends on June 30.

(2) One semiannual report is due no earlier than January 1 and no later than January 15.

(A) The period covered by a report under this paragraph begins on the later of the following dates, as applicable:

(i) July 1;

(ii) the first day after the period covered by the last report required by this subchapter; or

(iii) the day the state chair's campaign treasurer appointment was filed, if this is the first report filed under this subchapter.

(B) The period covered by the report under this paragraph ends on December 31.

(3) One pre-election report not earlier than the 39th day before the convening of the state convention and not later than the 30th day before the convening of the state convention. The report shall cover the period that begins on either the day the filer filed a campaign treasurer appointment with the Commission or the first day after the period covered by the last report required to be filed, as applicable, and ends on the 40th day before the convening.

(4) One pre-election report not earlier than the ninth day before the convening of the state convention and not later than the eighth day before the convening of the state convention. The report must cover the period that begins on either the day after the filer filed a campaign treasurer appointment with the Commission or the first day after the period covered by the last report required to be filed, as applicable, and ends on the 10th day before the convening.

(c) A candidate for state chair of a political party who expects no further reportable activity in connection with his or her candidacy may file a final report at any time in accordance with §254.125 of the Election Code.

(d) A former candidate for state chair of a political party who retains unexpended political contributions, unexpended interest or other income from political contributions, or assets purchased with political contributions at the time of filing a final report is subject to the requirements of §254.065 of the Election Code.

(e) Except as provided by §254.036(c), Election Code, each report filed with the Commission under this section must be filed by electronic transfer, using computer software provided by the Commission or computer software that meets Commission specifications for a standard file format.

**History**
- *Source Note: The provisions of this §20.577 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.579** Candidates and Committees Supporting or Opposing Candidates for County Chair in Certain Counties {#sec-20.579 omnilex-key=us-tx-regs-official--title-1--20.579}

(a) In addition to the semiannual reports due to be filed with the Commission by January 15 and July 15 under §20.577(b) of this chapter (relating to Reporting Schedule for a Candidate for State Chair), a candidate for county chair covered by this section who has an opponent on the ballot in an election, or a committee supporting or opposing a candidate for county chair, shall file the following two reports with the Commission for each primary election except as provided by subsection (d) of this section.

(1) The first report shall be filed not later than the 30th day before primary election day. The report covers the period beginning the day the candidate's campaign treasurer appointment is filed or the first day after the period covered by the last report required to be filed under this subchapter, as applicable, and continuing through the 40th day before primary election day.

(2) The second report shall be filed not later than the eighth day before election day. The report covers the period beginning the 39th day before primary election day and continuing through the 10th day before primary election day.

(b) A candidate who has declared the intention to file reports in accordance with §20.205 of this chapter (relating to Modified Reporting) and who remains eligible to file under the modified schedule is not required to file special pre-election reports.

(c) In addition to other required reports, a filer covered by this section who is in a runoff election shall file one report with the Commission for the runoff election. The runoff election report shall be filed not later than the eighth day before runoff election day. The report covers the period beginning the ninth day before primary election day and continuing through the tenth day before runoff election day.

(d) Except as provided by §254.036(c) of the Election Code, each report filed with the Commission under this section must be filed by electronic transfer, using computer software provided by the Commission or computer software that meets Commission specifications for a standard file format.

**History**
- *Source Note: The provisions of this §20.579 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

#### **Subchapter J** REPORTS BY A LEGISLATIVE CAUCUS

##### **1 Tex. Admin. Code § 20.601** Reporting Obligations Imposed on Caucus Chair {#sec-20.601 omnilex-key=us-tx-regs-official--title-1--20.601}

The caucus chair may designate a party responsible for filing reports required under §254.0311 of the Election Code.

**History**
- *Source Note: The provisions of this §20.601 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

##### **1 Tex. Admin. Code § 20.602** Reporting Schedule for a Legislative Caucus {#sec-20.602 omnilex-key=us-tx-regs-official--title-1--20.602}

(a) A legislative caucus is required to file only the reports listed in this section.

(b) A caucus is required to file semiannual reports as provided by this subsection.

(1) One semiannual report is due no earlier than July 1 and no later than July 15.

(A) The period covered by a report under this paragraph begins on the later of the following dates, as applicable:

(i) January 1;

(ii) the first day after the period covered by the last report required by this subchapter; or

(iii) the day the state chair's campaign treasurer appointment was filed, if this is the first report filed under this subchapter.

(B) The period covered by the report under this paragraph ends on June 30.

(2) One semiannual report is due no earlier than January 1 and no later than January 15.

(A) The period covered by a report under this paragraph begins on the later of the following dates, as applicable:

(i) July 1;

(ii) the first day after the period covered by the last report required by this subchapter; or

(iii) the day the state chair's campaign treasurer appointment was filed, if this is the first report filed under this subchapter.

(B) The period covered by the report under this paragraph ends on December 31.

(c) A caucus chair for a legislative caucus who expects no further reportable activity, may terminate the caucus at any time by:

(1) sending written notice to the Commission that the caucus is terminating; and

(2) filing a final report in accordance with §254.125 of the Election Code.

(d) Except as provided by §254.036(c), Election Code, each report filed with the Commission under this section must be filed by electronic transfer, using computer software provided by the Commission or computer software that meets Commission specifications for a standard file format.

**History**
- *Source Note: The provisions of this §20.602 adopted to be
effective March 16, 2026, 51 TexReg 1603.*

### **Chapter 22** RESTRICTIONS ON CONTRIBUTIONS AND EXPENDITURES

##### **1 Tex. Admin. Code § 22.1** Certain Campaign Treasurer Appointments Required before Political Activity Begins {#sec-22.1 omnilex-key=us-tx-regs-official--title-1--22.1}

A candidate or officeholder must file a campaign treasurer appointment with the proper authority upon becoming a candidate before accepting a campaign contribution or making or authorizing a campaign expenditure.

**History**
- *Source Note: The provisions of this §22.1 adopted to be
effective December 31, 1993, 18 TexReg 9744; amended to be effective
September 19, 2001, 26 TexReg 7118; amended to be effective January
1, 2020, 44 TexReg 7883; amended to be effective January 1, 2021,
45 TexReg 8513; amended to be effective January 3, 2022, 46 TexReg
9235; amended to be effective January 1, 2023, 47 TexReg 6823; amended
to be effective January 1, 2024, 48 TexReg 6464; amended to be effective
December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.7** Contribution from Out-of-State Committee {#sec-22.7 omnilex-key=us-tx-regs-official--title-1--22.7}

(a) A candidate, officeholder, or political committee that:

(1) receives contributions covered by §253.032(a) of the Election Code from the same out-of-state committee in successive reporting periods; and

(2) complies with §253.032(a)(2) of the Election Code before accepting the first contribution, triggering §253.032(a) may comply with §253.032(e) in successive reporting periods by submitting a copy of the certified document obtained before accepting the first contribution triggering §253.032(a), rather than by obtaining and submitting an original certified document for each reporting period, provided the document has not been amended since the last submission.

(b) A candidate, officeholder, or political committee that accepts a contribution or contributions totaling the amount specified in Tex. Elec. Code §253.032(e), as amended by Figure 1 in 1 TAC §18.31 or less from an out-of-state political committee shall include as part of the report covering the reporting period in which the contribution or contributions are accepted either:

(1) a copy of the out-of-state committee's statement of organization filed as required by law with the Federal Election Commission and certified by an officer of the out-of-state committee; or

(2) the following information:

(A) the full name of the committee, and, if the name is an acronym, the words the acronym represents;

(B) the address of the committee;

(C) the telephone number of the committee;

(D) the name of the person appointing the campaign treasurer; and

(E) the following information for the individual appointed campaign treasurer and assistant campaign treasurer:

(i) the individual's full name;

(ii) the individual's residence or business street address; and

(iii) the individual's telephone number.

**History**
- *Source Note: The provisions of this §22.7
adopted to be effective December 31, 1993, 18 TexReg 9744; amended
to be effective May 17, 2009, 34 TexReg 2765; amended to be effective
January 1, 2020, 44 TexReg 7883; amended to be effective January 1,
2021, 45 TexReg 8513; amended to be effective January 3, 2022, 46
TexReg 9235; amended to be effective January 1, 2023, 47 TexReg 6823;
amended to be effective January 1, 2024, 48 TexReg 6464; amended to
be effective December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.9** Cash Contributions Exceeding $100 Prohibited {#sec-22.9 omnilex-key=us-tx-regs-official--title-1--22.9}

For the purposes of §253.033 of the Election Code, "cash" is defined as paper currency and coinage.

**History**
- *Source Note: The provisions of this §22.9 adopted to be
effective December 31, 1993, 18 TexReg 9744; amended to be effective
December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.13** Contributions in the Capitol Prohibited {#sec-22.13 omnilex-key=us-tx-regs-official--title-1--22.13}

In §253.039 of the Election Code, the term "Capitol" includes the Capitol Building and the Capitol Extension, and any office that is being used as the official capitol office for a member of the legislature, the governor, the lieutenant governor, or the secretary of state.

**History**
- *Source Note: The provisions of this §22.13 adopted to be effective December 31, 1993, 18 TexReg 9744; amended to be effective March 4, 2012, 37 TexReg 1482.*

##### **1 Tex. Admin. Code § 22.17** Prohibition on Personal Use of Political Contributions {#sec-22.17 omnilex-key=us-tx-regs-official--title-1--22.17}

An asset purchased with political contributions is not converted to personal use if the political contributions are fully reimbursed during the reporting period in which the use occurred in an amount that reasonably reflects the fair market value of the use.

**History**
- *Source Note: The provisions of this §22.17 adopted to be
effective December 31, 1993, 18 TexReg 9744; amended to be effective
December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.19** General Restrictions on Reimbursement of Personal Funds {#sec-22.19 omnilex-key=us-tx-regs-official--title-1--22.19}

(a) If a candidate makes political expenditures from the candidate's personal funds, he or she may reimburse those personal funds from political contributions only if the expenditure is reported and the candidate states his or her intent to reimburse personal funds consistent with title 15 and this chapter.

(b) If an officeholder who does not have a campaign treasurer appointment on file makes political expenditures from the officeholder's personal funds, he or she may reimburse those personal funds from political contributions only if the expenditure is reported and the officeholder states his or her intent to reimburse personal funds consistent with title 15 and this chapter.

(c) A candidate or officeholder may reimburse personal funds from political contributions for the use of personal assets for political purposes provided that the reimbursement is reported as a political expenditure.

(d) A candidate or officeholder who makes political expenditures from his or her personal funds may reimburse those personal funds from political contributions only if:

(1) the expenditures were fully reported as political expenditures on the report covering the period during which the expenditures were made; and

(2) the report disclosing the expenditures indicates that the expenditures were made from the candidate's or officeholder's personal funds and are subject to reimbursement.

(e) A candidate's or officeholder's failure to comply with subsection (d) of this section may not be cured by filing a corrected report after the report deadline has passed.

(f) A candidate or officeholder who has complied with subsection (d) of this section and whose personal funds have been reimbursed from political contributions must report the amount of the reimbursement as a political expenditure in the report covering the period during which the reimbursement was made.

**History**
- *Source Note: The provisions of this §22.19 adopted to be
effective December 31, 1993, 18 TexReg 9744; amended to be effective
September 19, 2001, 26 TexReg 7118; amended to be effective December
31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.23** Restrictions on Certain Payments {#sec-22.23 omnilex-key=us-tx-regs-official--title-1--22.23}

(a) A payment made from a political contribution to a business described by §253.038 of the Election Code that is not prohibited by that section may not exceed the amount necessary to reimburse the business for actual expenditures made by the business.

(b) A discount given by a corporation to conform with subsection (a) of this section does not constitute a political contribution from the corporation.

**History**
- *Source Note: The provisions of this §22.23 adopted to be
effective December 31, 1993, 18 TexReg 9744; amended to be effective
December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.29** Activity after Death or Incapacity of Candidate or Officeholder {#sec-22.29 omnilex-key=us-tx-regs-official--title-1--22.29}

The legal representative of a candidate or officeholder who has died or become incapacitated may accept political contributions and make or authorize expenditures only for the following purposes:

(1) payment of debts or expenses in connection with a campaign or in connection with officeholder duties and activities;

(2) payments to the political party with which the person was affiliated when the person's name last appeared on a ballot;

(3) political contributions to a candidate or political committee;

(4) donations to the Comptroller of Public Accounts for deposit in the state treasury;

(5) refunds of contributions to one or more persons from whom political contributions were received, not to exceed the total amount contributed by each person within the last two years;

(6) donations to a charity recognized by the Internal Revenue Service as tax-exempt;

(7) donations to a public or private post-secondary educational institution or an institution of higher education as defined by the Education Code, §61.003(8) (concerning Definitions), solely for the purpose of assisting or creating a scholarship program; or

(8) payment of federal income taxes due on interest and other income earned on political contributions.

**History**
- *Source Note: The provisions of this §22.29 adopted
to be effective December 31, 1993, 18 TexReg 9744; amended to be effective
December 31, 2025, 50 TexReg 8539.*

##### **1 Tex. Admin. Code § 22.31** Restrictions on Foreign Nationals {#sec-22.31 omnilex-key=us-tx-regs-official--title-1--22.31}

Federal law prohibits contributions from foreign nationals who have not been granted permanent residence in the United States. See United States Code, Title 2, §441(e).

**History**
- *Source Note: The provisions of this §22.31 adopted to be effective December 31, 1993, 18 TexReg 9744.*

##### **1 Tex. Admin. Code § 22.35** Corporate Contributions to Certain Political Committees {#sec-22.35 omnilex-key=us-tx-regs-official--title-1--22.35}

(a) A political committee that accepts a monetary political contribution from a corporation or labor organization shall maintain the contribution in a separate account for political contributions from corporations and labor organizations.

(b) A political committee that accepts a political contribution from a corporation or labor organization shall not use the contribution to make a political contribution to:

(1) a candidate for elective office;

(2) an officeholder; or

(3) a political committee other than a hybrid committee, a direct campaign expenditure-only committee, or a political committee that supports or opposes measures exclusively.

**History**
- *Source Note: The provisions of this §22.35 adopted to be effective July 13, 2020, 45 TexReg 4737.*

##### **1 Tex. Admin. Code § 22.37** Virtual Currency Contributions {#sec-22.37 omnilex-key=us-tx-regs-official--title-1--22.37}

(a) Virtual currency contributions are considered "in-kind" contributions.

(b) A candidate, officeholder, or political committee must report a gain from the sale of virtual currency contributions on the appropriate schedule if the gain exceeds the reporting threshold set by §254.031(9) of the Election Code and amended by §18.31 of this title (relating to Adjustments to Reporting Thresholds).

(c) The value of a virtual currency contribution shall be reported as the fair market value of the virtual currency upon receipt.

**History**
- *Source Note: The provisions of this §22.37 adopted to be
effective August 23, 2023, 48 TexReg 4481; amended to be effective
December 31, 2025, 50 TexReg 8539.*

### **Chapter 24** RESTRICTIONS ON CONTRIBUTIONS AND EXPENDITURES APPLICABLE TO CORPORATIONS AND LABOR ORGANIZATIONS

##### **1 Tex. Admin. Code § 24.1** Corporations and Certain Associations Covered {#sec-24.1 omnilex-key=us-tx-regs-official--title-1--24.1}

(a) For purposes of this chapter, members of a corporation that does not have stockholders are considered to be stockholders.

(b) A political committee may incorporate to limit its liability by providing in its official incorporation documents that it is a political committee that is incorporating for liability purposes only, and that its only principal purpose is to accept political contributions and make political expenditures.

**History**
- *Source Note: The provisions of this §24.1 adopted to be
effective December 31, 1993, 18 TexReg 9745; amended to be effective
February 25, 2007, 32 TexReg 614; amended to be effective May 15,
2012, 37 TexReg 3577; amended to be effective December 31, 2025, 50
TexReg 8540.*

##### **1 Tex. Admin. Code § 24.15** Payments to a Corporation of the Candidate or Officeholder {#sec-24.15 omnilex-key=us-tx-regs-official--title-1--24.15}

(a) If a corporation charges a candidate, officeholder, or specific-purpose committee for supporting or assisting a candidate or officeholder less than fair market value for goods or services in order to comply with §253.041(b) of the Election Code, the discount is not a prohibited corporate contribution.

(b) If the discount is greater than is necessary to comply with §253.041(b) of the Election Code, the discount is a prohibited corporate contribution if the discount is not otherwise authorized by this chapter.

**History**
- *Source Note: The provisions of this §24.15 adopted to be effective December 31, 1993, 18 TexReg 9745; amended to be effective May 15, 2012, 37 TexReg 3577.*

##### **1 Tex. Admin. Code § 24.17** Corporate Expenditures for Get-Out-the-Vote Campaigns Permitted {#sec-24.17 omnilex-key=us-tx-regs-official--title-1--24.17}

(a) An expenditure to finance a voter registration or get-out-the-vote drive is not a political expenditure if the drive encourages voting in general but does not encourage voting for or against a measure, candidate, officeholder, or political party.

(b) A corporate or labor organization expenditure described by subsection (a) of this section is not reportable.

**History**
- *Source Note: The provisions of this §24.17 adopted to be
effective December 31, 1993, 18 TexReg 9745; amended to be effective
December 31, 2025, 50 TexReg 8540.*

##### **1 Tex. Admin. Code § 24.18** Designation of Contribution for Administrative Purposes {#sec-24.18 omnilex-key=us-tx-regs-official--title-1--24.18}

(a) Any of the following will serve to designate a political expenditure in the form of a political contribution made by a corporation or labor organization as restricted to the establishment, administration, maintenance, or operation of a general-purpose committee:

(1) A contemporaneous written instruction that the contribution is restricted to the administration, maintenance, or operation of the committee accepting the contribution;

(2) The negotiable instrument conveying the contribution contains language indicating that the entity is a corporation, including but not limited to "Inc.," "Incorporated," "Corp.," or "Corporation;"

(3) The general-purpose committee accepting the contribution reports the contribution as monetary contribution or monetary support from a corporation or labor organization on the committee's campaign finance report; or

(4) The general-purpose committee accepting the contribution deposits the contribution into a separate segregated account for political contributions from corporations and labor organizations.

(b) Subsection (a) of this section shall not be read to restrict a hybrid committee, a direct campaign expenditure-only committee, or a political committee that supports or opposes measures exclusively from using a contribution from a corporation or labor organization to make a direct campaign expenditure.

**History**
- *Source Note: The provisions of this §24.18 adopted to be effective April 25, 2019, 44 TexReg 1980; amended to be effective July 13, 2020, 45 TexReg 4738.*

##### **1 Tex. Admin. Code § 24.19** Affidavit Required by a Political Committee Making a Direct Campaign Expenditure from a Political Contribution Accepted from a Corporation or Labor Organization {#sec-24.19 omnilex-key=us-tx-regs-official--title-1--24.19}

A political committee, including a direct campaign expenditure-only committee, must include in its campaign treasurer appointment the affidavit described by section 252.003(a)(4) (relating to contents of a general-purpose committee's campaign treasurer appointment) or 252.0031(a)(2) (relating to contents of a specific-purpose committee's campaign treasurer appointment) of the Election Code, as applicable, before using a political contribution from a corporation or labor organization to make a direct campaign expenditure in connection with a campaign for an elective office.

**History**
- *Source Note: The provisions of this §24.19 adopted to be effective July 13, 2020, 45 TexReg 4738.*

### **Chapter 26** POLITICAL AND LEGISLATIVE ADVERTISING

##### **1 Tex. Admin. Code § 26.1** Disclosure Statement {#sec-26.1 omnilex-key=us-tx-regs-official--title-1--26.1}

(a) A disclosure statement that is required by §255.001, Election Code must:

(1) appear on one line of text or on successive lines of text on the face of the political advertising; or

(2) be clearly spoken in the political advertising if the political advertising does not include written text.

(b) A disclosure statement is not required on political advertising printed on letterhead stationery if the letterhead contains the full name of one of the following:

(1) the person who paid for the political advertising;

(2) the political committee authorizing the political advertising; or

(3) the candidate authorizing the political advertising.

(c) A disclosure statement is not required on:

(1) campaign buttons, pins, or hats, or on objects whose size makes printing the disclosure impractical;

(2) political advertising posted or re-posted on an Internet website, as long as the person posting or re-posting the political advertising:

(A) is not an officeholder, candidate, or political committee;

(B) did not make an expenditure exceeding $100 in a reporting period for political advertising beyond the basic cost of hardware messaging software and bandwidth; and

(C) did not post or re-post the political advertising in return for consideration.

(3) the Internet social media profile webpage of a candidate or officeholder, provided the webpage clearly and conspicuously displays the full name of the candidate or officeholder; or

(4) political advertising posted or re-posted by a person on an Internet website, provided the advertising is posted with a link to a publicly viewable Internet webpage that:

(A) contains the disclosure statement; or

(B) is exempt from containing the disclosure statement under subsection (c)(3) of this section.

(d) For the purposes of subsection (c) of this section, an "Internet social media profile webpage" is an Internet webpage on a website where members of the public may, for no charge, connect electronically with other members of the public and share text, images, videos, and similar forms of communications.

**History**
- *Source Note: The provisions of this §26.1 adopted to be
effective December 31, 1993, 18 TexReg 9746; amended to be effective
December 10, 2003, 28 TexReg 10906; amended to be effective January
1, 2017, 41 TexReg 10541; amended to be effective January 6, 2019,
44 TexReg 93; amended to be effective August 8, 2024, 49 TexReg 5757;
amended to be effective June 7, 2026, 51 TexReg 3699.*

##### **1 Tex. Admin. Code § 26.2** Newsletter of Public Officer of a Political Subdivision {#sec-26.2 omnilex-key=us-tx-regs-official--title-1--26.2}

For purposes of §255.003 of the Election Code, a newsletter of a public officer of a political subdivision is not political advertising if:

(1) It includes no more than two pictures of a public officer per page and if the total amount of area covered by the pictures is no more than 20 percent of the page on which the pictures appear;

(2) It includes no more than eight personally phrased references (such as the public officer's name, "I", "me", "the city council member") on a page that is 8 ½" x 11" or larger, with a reasonable reduction in the number of such personally phrased references in pages smaller than 8 ½" x 11";

(3) When viewed as a whole and in the proper context:

(A) is informational rather than self-promotional;

(B) does not advocate passage or defeat of a measure; and

(C) does not support or oppose a candidate for nomination or election to a public office or office of political party, a political party, or a public officer; and

(4) Is published more than 62 days before the election.

**History**
- *Source Note: The provisions of this §26.2 adopted to
be effective January 3, 2008, 32 TexReg 9937; amended to be effective
June 7, 2026, 51 TexReg 3700.*

##### **1 Tex. Admin. Code § 26.3** Legislative Advertising {#sec-26.3 omnilex-key=us-tx-regs-official--title-1--26.3}

Political advertising as defined by the Election Code, §251.001(16) (concerning Definitions), does not constitute legislative advertising under the Government Code, §305.027 (concerning Required Disclosure on Legislative Advertising).

**History**
- *Source Note: The provisions of this §26.3 adopted to be
effective December 10, 2003, 28 TexReg 10906; amended to be effective
June 7, 2026, 51 TexReg 3700.*

##### **1 Tex. Admin. Code § 26.5** Code of Fair Campaign Practices {#sec-26.5 omnilex-key=us-tx-regs-official--title-1--26.5}

A candidate or political committee that has filed a copy of the Code of Fair Campaign Practices as provided by the Election Code, Chapter 258, may indicate that fact on political advertising by including the following or a substantially similar statement: (Name of the candidate or political committee, as appropriate) subscribes to the Code of Fair Campaign Practices.

**History**
- *Source Note: The provisions of this §26.5 adopted to be effective December 10, 2003, 28 TexReg 10906.*

##### **1 Tex. Admin. Code § 26.7** Use of the Term "Reelect" in Political Advertising {#sec-26.7 omnilex-key=us-tx-regs-official--title-1--26.7}

A person or candidate may, in the event of redistricting, use the term "reelect" in a campaign for elective office only if the candidate is the elected incumbent of an office that represented any part of the new or renumbered district prior to the redistricting.

**History**
- *Source Note: The provisions of this §26.7 adopted to be effective September 1, 2013, 38 TexReg 5698.*

### **Chapter 28** REPORTS BY A CANDIDATE FOR SPEAKER OF THE HOUSE OF REPRESENTATIVES

##### **1 Tex. Admin. Code § 28.1** Definitions {#sec-28.1 omnilex-key=us-tx-regs-official--title-1--28.1}

The following words and terms, when used in this Chapter 28, shall have the following meanings, unless the context clearly indicates otherwise: Campaign funds--For purposes of the Government Code, Chapter 302 (concerning Speaker of the House of Representatives), "campaign funds" as defined in §302.011 (concerning Definitions) shall include "interest earned" and shall include "interest paid."

**History**
- *Source Note: The provisions of this §28.1 adopted to be effective December 31, 1993, 18 TexReg 9747.*

##### **1 Tex. Admin. Code § 28.5** Information To Report {#sec-28.5 omnilex-key=us-tx-regs-official--title-1--28.5}

Each report required to be filed with the commission pursuant to the Government Code, §302.013 (concerning Filing of Statement of Contributions, Loans, and Expenditures), shall set forth the total amount of interest earned during the reporting period.

**History**
- *Source Note: The provisions of this §28.5 adopted to be effective December 31, 1993, 18 TexReg 9747.*

##### **1 Tex. Admin. Code § 28.7** Permitted Expenditures {#sec-28.7 omnilex-key=us-tx-regs-official--title-1--28.7}

As required by the Government Code, §302.020 (concerning Permitted Expenditures), a speaker candidate shall not expend campaign funds for any purpose other than those permitted by §302.020 (concerning Permitted Expenditures), and then only if those expenditures are directly related to the speaker candidacy; provided, that this section is not intended to prohibit the payment from campaign funds of federal income taxes due on campaign funds.

**History**
- *Source Note: The provisions of this §28.7 adopted to be effective December 31, 1993, 18 TexReg 9747.*

##### **1 Tex. Admin. Code § 28.9** Segregation of Campaign Funds {#sec-28.9 omnilex-key=us-tx-regs-official--title-1--28.9}

All contributed campaign funds shall be maintained in accounts separate and apart from any other accounts.

**History**
- *Source Note: The provisions of this §28.9 adopted to be effective December 31, 1993, 18 TexReg 9747.*

### **Chapter 34** REGULATION OF LOBBYISTS

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 34.1** Definitions {#sec-34.1 omnilex-key=us-tx-regs-official--title-1--34.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Expenditure--In Government Code, Chapter 305, and in this chapter does not include a payment of less than $200 that is fully reimbursed by the member of the legislative or executive branch who benefits from the expenditure if the member of the legislative or executive branch fully reimburses the person making the payment before the date the person would otherwise be required to report the payment.

(2) Lobby activity--Direct communication with and preparation for direct communication with a member of the legislative or executive branch to influence legislation or administrative action.

(3) Registrant--In Government Code, Chapter 305, and in this chapter means a person who is required to register as well as a person who has registered regardless of whether that person's registration was required.

**History**
- *Source Note: The provisions of this §34.1 adopted to
be effective December 18, 1996, 21 TexReg 11819; amended to be effective
December 23, 2009, 34 TexReg 9168; amended to be effective May 3,
2016, 41 TexReg 3093; amended to be effective June 7, 2026, 51 TexReg
3701.*

##### **1 Tex. Admin. Code § 34.3** Compensation for Preparation Time {#sec-34.3 omnilex-key=us-tx-regs-official--title-1--34.3}

Compensation a person receives for preparing to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action is included in calculating compensation for purposes of the registration and reporting requirements in Government Code, Chapter 305, and this chapter. Examples of preparation for lobby communications include participation in strategy sessions, review and analysis of legislation or administrative matters, research and communication with the employer/client. A person who does not directly communicate with a member of the legislative or executive branch to influence legislation or administrative action is not required to register because of compensation received for preparing to do so.

**History**
- *Source Note: The provisions of this §34.3 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.5** Certain Compensation Excluded {#sec-34.5 omnilex-key=us-tx-regs-official--title-1--34.5}

(a) Compensation received for the following activities is not included for purposes of calculating the registration threshold under Government Code §305.003(a)(2) and this chapter:

(1) requesting a written opinion that interprets a law, regulation, rule, policy, practice, or procedure administered by a state office or agency;

(2) preparation or submission of an application or other written document that merely provides information required by law, statute, rule, regulation, order, or subpoena, or that responds to a document prepared by a state agency;

(3) communicating merely for the purpose of demonstrating compliance with an audit, inspection, examination of a financial institution, or government investigation to interpret and determine compliance with existing laws, rules, policies, and procedures;

(4) communicating for the purpose of achieving compliance with existing laws, rules, policies, and procedures, including communications to show qualification for an exception of general applicability that is available under existing laws, rules, policies, and procedures;

(5) providing to a member of the legislative or executive branch information consisting of facts or data that the member requested in writing regarding legislation or administrative action, when the request was not solicited by or on behalf of the person providing the information;

(6) communicating to an agency's legal counsel, an administrative law judge, or a hearings examiner concerning litigation or adjudicative proceedings to which the agency is a party, or concerning adjudicative proceedings of that agency;

(7) providing testimony, making an appearance, or any other type of communication documented as part of a public record in a proceeding of an adjudicative nature of the type authorized by or subject to the Administrative Procedure Act, Government Code, Chapter 2001, whether or not that proceeding is subject to the Open Meetings Law;

(8) providing oral or written comments, making an appearance, or any other type of communication, if documented as part of a public record in an agency's rule-making proceeding under the Administrative Procedure Act, Government Code, Chapter 2001, or in public records kept in connection with a legislative hearing; or

(9) providing only clerical assistance to another in connection with the other person's lobbying (for example, a person who merely types or delivers another person's letter to a member).

(b) Subsection (a) of this section does not apply to a registrant. A registrant's activity described by subsection (a) is subject to disclosure under Chapter 305 of the Government Code and this title.

**History**
- *Source Note: The provisions of this §34.5 adopted to be effective December 18, 1996, 21 TexReg 11819; amended to be effective December 23, 2009, 34 TexReg 9168; amended to be effective October 29, 2015, 40 TexReg 7394; amended to be effective June 22, 2016, 41 TexReg 4430.*

##### **1 Tex. Admin. Code § 34.7** Reimbursement for Office Expenses {#sec-34.7 omnilex-key=us-tx-regs-official--title-1--34.7}

Reimbursement received for the following office expenses is not included in calculating reimbursement for purposes of the registration and reporting requirements in Government Code, Chapter 305, and this chapter:

(1) long distance telephone charges;

(2) delivery charges;

(3) photocopy expenses;

(4) facsimile expenses;

(5) office supplies;

(6) postage; and

(7) dues and subscriptions.

**History**
- *Source Note: The provisions of this §34.7 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.9** Taxes and Tips {#sec-34.9 omnilex-key=us-tx-regs-official--title-1--34.9}

Taxes and tips are not included in determining the amount of an expenditure for purposes of Government Code, Chapter 305, and this chapter.

**History**
- *Source Note: The provisions of this §34.9 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.11** Attribution of Expenditure to More Than One Person; Reimbursement of Lobby Expenditure {#sec-34.11 omnilex-key=us-tx-regs-official--title-1--34.11}

(a) Except as provided by Government Code, §305.0021, a lobby expenditure made on a person's behalf and with the person's consent or ratification is an expenditure by that person for purposes of registration and reporting under Government Code, Chapter 305, and this chapter.

(b) Payment of reimbursement to a registrant is not included for purposes of calculation of the registration threshold under Government Code, §305.003(a)(1), and is not required to be reported if the registrant receiving the reimbursement reports the expenditure on a lobby activity report.

(c) A registrant is not required to report a lobby expenditure attributable to more than one person if another registrant has reported the expenditure.

**History**
- *Source Note: The provisions of this §34.11 adopted to be effective December 18, 1996, 21 TexReg 11819; amended to be effective April 30, 2008, 33 TexReg 3387.*

##### **1 Tex. Admin. Code § 34.13** Incidental Expenditures for Transportation {#sec-34.13 omnilex-key=us-tx-regs-official--title-1--34.13}

Government Code, §305.024(a)(3), does not prohibit an expenditure for transportation of incidental value such as transportation in the form of a ride of short duration in a personal car or taxi.

**History**
- *Source Note: The provisions of this §34.13 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.14** Expenditures for Fact-Finding Trips {#sec-34.14 omnilex-key=us-tx-regs-official--title-1--34.14}

(a) For purposes of §305.025(3), Government Code, an expenditure for transportation or lodging provided to a member of the legislative or executive branch is for a fact-finding trip only if:

(1) the expenditure is necessary for the member to obtain information that directly relates to the member's official duties;

(2) the member cannot reasonably obtain the information without the expenditure; and

(3) the expenditure is not for the member's attendance at a merely ceremonial event or pleasure trip.

(b) If an expenditure made for transportation or lodging for a fact-finding trip is required to be disclosed on a lobby activities report by §305.0061(a), Government Code, the purpose of the transportation or lodging must include a description of the information that the expenditure was necessary to obtain under subsection (a) of this section.

**History**
- *Source Note: The provisions of this §34.14 adopted to be effective June 22, 2016, 41 TexReg 4430.*

##### **1 Tex. Admin. Code § 34.15** Reporting Subject Matter {#sec-34.15 omnilex-key=us-tx-regs-official--title-1--34.15}

(a) A registrant reporting subject matter under Government Code, §305.005(f)(4), (f)(5)(B), or §305.006(d), of this chapter, shall report subject matter by marking the appropriate subject matter categories.

(b) A registrant reporting the subject matter of communications to influence administrative action shall also report, if known or reasonably available to the registrant, the docket number or other administrative designation of any administrative action that is the subject of the registrant's direct communication with a member of the executive branch, and the name of the agency or department at which the administrative action is pending.

**History**
- *Source Note: The provisions of this §34.15 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.17** Satisfaction of Presence Requirement by Entity {#sec-34.17 omnilex-key=us-tx-regs-official--title-1--34.17}

An entity may satisfy the presence requirement in Government Code, §305.006(f) and §305.024(a)(7), by the presence of:

(1) an individual registrant who represents the entity; or

(2) a person whose position, authority, or conduct on behalf of the entity could support an award of exemplary damages against the entity.

**History**
- *Source Note: The provisions of this §34.17 adopted to be effective December 18, 1996, 21 TexReg 11819.*

##### **1 Tex. Admin. Code § 34.19** Courtesy Notices by Electronic Mail {#sec-34.19 omnilex-key=us-tx-regs-official--title-1--34.19}

(a) A person required to register as a lobbyist may provide to the commission an electronic mail address to which courtesy notices regarding filing requirements under Chapter 305 of the Government Code may be sent.

(b) The commission is not obligated to send notices regarding filing requirements to a person required to register as a lobbyist who does not provide to the commission an electronic mail address.

(c) Failure to receive a notice regarding filing requirements does not constitute an excuse for failing to comply with any filing deadline.

**History**
- *Source Note: The provisions of this §34.19 adopted to be effective September 26, 2012, 37 TexReg 7474.*

#### **Subchapter B** REGISTRATION REQUIRED

##### **1 Tex. Admin. Code § 34.41** Expenditure Threshold {#sec-34.41 omnilex-key=us-tx-regs-official--title-1--34.41}

(a) A person must register as a lobbyist under chapter 305 of the Texas Government Code, if the person makes total expenditures of more than $650 in a calendar quarter, not including expenditures for the person's own travel, food, lodging, or membership dues, on activities described in Government Code §305.006(b) to communicate directly with one or more members of the legislative or executive branch to influence legislation or administrative action.

(b) An expenditure made by a member of the judicial, legislative, or executive branch of state government or an officer or employee of a political subdivision of the state acting in his or her official capacity is not included for purposes of determining whether a person is required to register under Government Code, §305.003(a)(1).

(c) An expenditure made in connection with an event to promote the interests of a designated geographic area or political subdivision is not included for purposes of determining whether a person has crossed the registration threshold in Government Code, §305.003(a)(1), if the expenditure is made by a group that exists for the limited purpose of sponsoring the event or by a person acting on behalf of such a group.

**History**
- *Source Note: The provisions of this §34.41 adopted to be
effective December 18, 1996, 21 TexReg 11820; amended to be effective
January 1, 2020, 44 TexReg 7884; amended to be effective January 1,
2021, 45 TexReg 8514; amended to be effective January 3, 2022, 46
TexReg 9236; amended to be effective January 1, 2023, 47 TexReg 6824;
amended to be effective January 1, 2024, 48 TexReg 6465; amended to
be effective June 7, 2026, 51 TexReg 3701.*

##### **1 Tex. Admin. Code § 34.43** Compensation and Reimbursement Threshold {#sec-34.43 omnilex-key=us-tx-regs-official--title-1--34.43}

(a) A person must register as a lobbyist under chapter 305 of the Texas Government Code if the person receives, or is entitled to receive under an agreement under which the person is retained or employed, more than $1,200 in a calendar quarter in compensation and reimbursement, not including reimbursement for the person's own travel, food, lodging, or membership dues, from one or more other persons to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.

(b) For purposes of Government Code, §305.003(a)(2), and this chapter, a person is not required to register if the person spends not more than 40 hours for which the person is compensated or reimbursed during a calendar quarter engaging in lobby activity, including preparatory activity as described by §34.3 of this title.

(c) For purposes of Government Code, §305.003(a)(2), and this chapter, a person shall make a reasonable allocation of compensation between compensation for lobby activity and compensation for other activities.

**History**
- *Source Note: The provisions of this §34.43 adopted to be
effective December 18, 1996, 21 TexReg 11820; amended to be effective
January 3, 2008, 32 TexReg 9937; amended to be effective January 1,
2017, 41 TexReg 10542; amended to be effective January 1, 2020, 44
TexReg 7884; amended to be effective January 1, 2021, 45 TexReg 8514;
amended to be effective January 3, 2022, 46 TexReg 9236; amended to
be effective January 1, 2023, 47 TexReg 6824; amended to be effective
January 1, 2024, 48 TexReg 6465; amended to be effective June 7, 2026, 51
TexReg 3701.*

##### **1 Tex. Admin. Code § 34.45** Entity Registration {#sec-34.45 omnilex-key=us-tx-regs-official--title-1--34.45}

(a) An entity that is required to register under Government Code, §305.003, and this chapter may nonetheless avoid registration if all activity otherwise reportable by the entity is reported by one or more individual registrants in accordance with §34.65 and §34.85 of this title (relating to Compensation Reported by Lobby Firm Employee and Individual Reporting Expenditure by Entity).

(b) An entity that avoids registration under subsection (a) of this section becomes subject to Government Code, §305.024 on the earlier of the date the entity makes the expenditure that would have required the entity to register as a lobbyist or the date the entity receives, or is entitled to receive compensation or reimbursement that would have required the entity to register as a lobbyist.

(c) Registration by an entity does not relieve any individual of the requirement to register if that individual meets one of the registration thresholds in Government Code, §305.003.

**History**
- *Source Note: The provisions of this §34.45 adopted to be effective December 18, 1996, 21 TexReg 11820; amended to be effective September 8, 2008, 33 TexReg 7509.*

#### **Subchapter C** COMPLETING THE REGISTRATION FORM

##### **1 Tex. Admin. Code § 34.63** Assistants {#sec-34.63 omnilex-key=us-tx-regs-official--title-1--34.63}

(a) For purposes of Government Code, §305.005(f)(5), a person "employed or retained by the registrant for the purpose of assisting in direct communication" includes any person who provides administrative or research assistance to the registrant but does not include a person who provides only clerical or secretarial help.

(b) An individual employed by the same employer as the registrant and who assists the registrant at the direction of the registrant is "employed or retained" by the registrant for purposes of Government Code, §305.005(f)(5).

(c) A person listed by a registrant as an assistant under Government Code, §305.005(f)(5), is required to register if the assistant meets one of the registration thresholds under Government Code, §305.003, and this chapter.

**History**
- *Source Note: The provisions of this §34.63 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.65** Compensation Reported by Lobby Firm Employee {#sec-34.65 omnilex-key=us-tx-regs-official--title-1--34.65}

(a) An individual registrant employed, reimbursed, or retained by a business entity that receives compensation and/or reimbursement for lobby activity is required to report all compensation and/or reimbursement paid to the entity for lobby activity by that individual.

(b) An individual registrant employed, reimbursed, or retained by a business entity that receives compensation and/or reimbursement for lobby activity may also report compensation and/or reimbursement paid to the entity for lobby activity by one or more other persons if the entity requests that the individual do so in order for the entity to avoid registration.

(c) The individual registrant shall report the compensation by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a registration or amended registration, as applicable, that he has reported compensation and/or reimbursement paid to an entity for lobby activity by one or more persons other than the registrant.

**History**
- *Source Note: The provisions of this §34.65 adopted to be effective December 18, 1996, 21 TexReg 11821; amended to be effective September 8, 2008, 33 TexReg 7509.*

##### **1 Tex. Admin. Code § 34.67** Paid, Earned, and Prospective Compensation {#sec-34.67 omnilex-key=us-tx-regs-official--title-1--34.67}

(a) For purposes of Government Code, §305.005, and this chapter, compensation may be reported in any one of the following three ways:

(1) compensation actually paid for lobby activity during the year of registration as of the date the registration form or amended registration form is filed;

(2) compensation earned for lobby activity during the year of registration as of the date the registration form or amended registration form is filed, regardless of whether paid; or

(3) promised compensation for lobby activity during the year of registration, regardless of whether earned or paid on the date the registration form or amended registration form is filed.

(b) A registrant shall indicate on a registration form or amended registration form whether compensation is reported under subsection (a)(1), (2), or (3) of this section.

**History**
- *Source Note: The provisions of this §34.67 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.69** Subject Matter {#sec-34.69 omnilex-key=us-tx-regs-official--title-1--34.69}

A registrant shall report the subject matter of lobby activity, in accordance with Government Code, §305.005(f)(4), with respect to each person who reimburses, retains, or employs the registrant to engage in lobby activity.

**History**
- *Source Note: The provisions of this §34.69 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.71** Amending a Registration Form {#sec-34.71 omnilex-key=us-tx-regs-official--title-1--34.71}

(a) A change with respect to a docket number or other administrative designation is not required to be reported on an amended registration unless the docket number or other administrative designation is related to a subject matter category not previously reported by the registrant.

(b) Except as necessary to report changed information, a registrant shall not report information about subject matter on an amended registration form that the registrant reported on the registration form or on a previous amended registration form.

(c) A registrant is not required to report on an amended registration form reimbursement received for a lobby expenditure that the registrant will report on a lobby activity report.

**History**
- *Source Note: The provisions of this §34.71 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.75** Reporting of Commission or Fee Paid by State Agency {#sec-34.75 omnilex-key=us-tx-regs-official--title-1--34.75}

(a) In addition to the contents required by §305.005 of the Government Code and this chapter, a registration filed by a person who is paid a sales commission or such fee by a state agency must:

(1) disclose the state agency as a client;

(2) indicate that the client is a state agency;

(3) provide a description of the subject matter for which the person is paid a sales commission or such fee; and

(4) disclose the amount of the sales commission or such fee.

(b) If the amount of the sales commission or such fee is not known at the time of the reporting, the registration must disclose a reasonable estimate of the maximum amount of the sales commission or such fee and the method under which that amount will be computed.

**History**
- *Source Note: The provisions of this §34.75 adopted to be effective December 23, 2009, 34 TexReg 9168.*

##### **1 Tex. Admin. Code § 34.77** Disclosure of Registration under Foreign Agents Registration Act {#sec-34.77 omnilex-key=us-tx-regs-official--title-1--34.77}

The registration of any person who has also filed an active registration statement under the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. §611 et seq.), must include the registration number assigned to the registration statement by the United States Attorney General until the registration statement is terminated.

**History**
- *Source Note: The provisions of this §34.77 adopted to be effective January 1, 2020, 44 TexReg 2265.*

#### **Subchapter D** LOBBY ACTIVITY REPORTS

##### **1 Tex. Admin. Code § 34.81** Election To File Annually {#sec-34.81 omnilex-key=us-tx-regs-official--title-1--34.81}

A registrant who is eligible to file an annual lobby activity report under Government Code, §305.0063, may elect to do so at any time during the registration year.

**History**
- *Source Note: The provisions of this §34.81 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.82** Modified Reporting Threshold {#sec-34.82 omnilex-key=us-tx-regs-official--title-1--34.82}

For purposes of section 305.0063(d) of the Texas Government Code, expenditures shall include all expenditures reportable under section 305.006, including all expenditures that are required to be reported under subsections 305.006(b) and 305.006(c).

**History**
- *Source Note: The provisions of this §34.82 adopted to be effective September 22, 2021, 46 TexReg 6237.*

##### **1 Tex. Admin. Code § 34.83** Time of Expenditure {#sec-34.83 omnilex-key=us-tx-regs-official--title-1--34.83}

For reporting purposes, an expenditure is not made until the amount of the expenditure is readily determinable by the person making the expenditure. If the normal business practice of a vendor or service provider is to make the amount charged known by sending a bill after expenses are incurred, the date of the expenditure, for reporting purposes, is the date the person billed receives the bill.

**History**
- *Source Note: The provisions of this §34.83 adopted to be effective December 18, 1996, 21 TexReg 11821.*

##### **1 Tex. Admin. Code § 34.85** Individual Reporting Expenditure by Entity {#sec-34.85 omnilex-key=us-tx-regs-official--title-1--34.85}

(a) An individual registrant may report an expenditure made by a lobby entity if the entity requests that the individual do so in order for the entity to avoid registration; and

(1) the entity makes the expenditure in order for the individual to act on the entity's behalf to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action; or

(2) the entity compensates or reimburses the individual to act on behalf of the entity or on behalf of the entity's clients to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.

(b) The individual registrant shall report the expenditure by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a lobby activity report that he or she has reported expenditures made by an entity and indicate the specific amount reported on behalf of the entity.

(c) For purposes of Government Code, §305.0021(b), an expenditure made by an entity under subsection (a) of this section, is not a joint expenditure for purposes of Government Code, §305.0021(b) if the entity makes the entirety of the expenditure at issue.

(d) In this provision "lobby entity" means a corporation, association, firm, partnership, committee, club, organization, or other group of persons voluntarily acting in concert that meets one of the registration thresholds in Government Code, §305.003.

**History**
- *Source Note: The provisions of this §34.85 adopted to be effective December 18, 1996, 21 TexReg 11821; amended to be effective September 8, 2008, 33 TexReg 7509.*

#### **Subchapter E** ELECTRONIC FILING

##### **1 Tex. Admin. Code § 34.91** Exemptions from Electronic Filing {#sec-34.91 omnilex-key=us-tx-regs-official--title-1--34.91}

(a) A registrant is required to file each report electronically by using the Internet to transmit the report, by using the web-based filing application provided by the commission, unless the registrant files with the commission an affidavit stating that:

(1) the registrant does not use a computer or mobile device, including a tablet or smartphone with access to the Internet;

(2) no person acting as an agent or consultant of the registrant and no person with whom the registrant contracts uses a computer or mobile device, including a tablet or smartphone with access to the Internet;

(3) the registrant does not intend to be compensated or reimbursed for lobby activity in the calendar year covered by the registration;

(4) the registrant was not compensated for lobby activity in either of the previous two calendar years;

(5) the registrant does not intend to make lobby expenditures during the calendar year covered by the registration; and

(6) the registrant did not make lobby expenditures in either of the previous two calendar years.

(b) The commission has the discretion to exempt from the electronic filing requirement a registrant who is not eligible to file under subsection (a) of this section if a registrant submits an affidavit to the commission stating the basis for the inability to filing electronically.

(c) A registrant who is eligible to file under subsection (a) of this section must file an affidavit under subsection (a) of this section with each report filed under Chapter 305 of the Government Code and this chapter.

(d) A registrant who during a calendar year becomes ineligible to file on paper based on the criteria listed in subsection (a) of this section must file electronically beginning on the date on which the next report is due under §305.007 of the Government Code.

(e) For purposes of this section, "lobby expenditure" means expenditures required to be reported under Chapter 305 of the Government Code and this chapter.

(f) For purposes of this section, a "report" includes any document required to be filed by a registrant under Chapter 305 of the Government Code and this chapter except that it does not include notices and statements required to be filed under §305.028 of the Government Code.

(g) For purposes of this section, a "report" includes the confidential social security information required to be filed by a lobbyist in compliance with §231.302(c)(1) of the Family Code.

**History**
- *Source Note: The provisions of this §34.91 adopted to be effective February 7, 2005, 30 TexReg 539; amended to be effective December 24, 2015, 40 TexReg 9112.*

### **Chapter 40** FINANCIAL DISCLOSURE FOR PUBLIC OFFICERS

##### **1 Tex. Admin. Code § 40.1** Financial Statement {#sec-40.1 omnilex-key=us-tx-regs-official--title-1--40.1}

(a) The Texas Ethics Commission adopts by reference the financial statement form prescribed by the commission on January 13, 1992. This form is available from the Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070.

(b) The form adopted under subsection (a) of this section may be revised by the executive director under §18.1 of this title (relating to Adoption and Revision of Forms), and if so revised shall be deemed to have been adopted by the commission under this section.

**History**
- *Source Note: The provisions of this §40.1 adopted to be effective December 31, 1993, 18 TexReg 9753.*

##### **1 Tex. Admin. Code § 40.2** Disclosure of Financial Activity {#sec-40.2 omnilex-key=us-tx-regs-official--title-1--40.2}

For purposes of §572.023 of the Government Code, a filer's personal financial statement must include:

(1) the filer's financial activity in which the filer held an ownership interest, including but not limited to community property; and

(2) the financial activity of the filer's spouse and dependent children if the filer exercised any degree of factual control over the activity, notwithstanding a partition agreement.

**History**
- *Source Note: The provisions of this §40.2 adopted to be effective June 19, 2014, 39 TexReg 4643; amended to be effective January 12, 2025, 50 TexReg 313.*

##### **1 Tex. Admin. Code § 40.3** PFS Required for Each Year of Service {#sec-40.3 omnilex-key=us-tx-regs-official--title-1--40.3}

(a) A state officer who serves for any portion of a calendar year must file a PFS the following year covering financial activity that occurred during the portion of the year the state officer held office.

(b) A member of the legislature who retires at the end of the member's term in January is not required to file a PFS covering the calendar year of service in which member retires.

(c) Comments:

(1) For example, under subsection 40.3(a) of this section, if a state officer ceases to be a state officer in October 2024, the state officer is required to file a PFS in by the deadline provided by §572.026(a) of the Government Code in calendar year 2025, covering financial activity that occurred through October 2024, provided the state officer does not holdover.

(2) Under subsection 40.3(b) of this section, a member of the legislature who retires at the end of the member's term in January 2025 is required to file a PFS in 2025 covering calendar year 2024. The member is not required to file a PFS in calendar year 2026 covering calendar year 2025 by virtue of service from January 1 to January 6 of 2025, before the member's successor is sworn into office.

**History**
- *Source Note: The provisions of this §40.3 adopted to be effective January 12, 2025, 50 TexReg 313.*

##### **1 Tex. Admin. Code § 40.9** Exchange Traded Funds and Real Estate Investment Trusts {#sec-40.9 omnilex-key=us-tx-regs-official--title-1--40.9}

Ownership interests in exchange-traded funds and real estate investment trusts shall be reported under §572.023(b)(2) of the Government Code as though they were shares of stock.

**History**
- *Source Note: The provisions of this §40.9 adopted to be effective January 12, 2025, 50 TexReg 313.*

##### **1 Tex. Admin. Code § 40.11** Publicly Traded Corporation as Source of Income {#sec-40.11 omnilex-key=us-tx-regs-official--title-1--40.11}

For purposes of §572.023(b)(4), Government Code, a publicly traded corporation is identified as a source of income by disclosing its full name in addition to the category of the amount of income.

**History**
- *Source Note: The provisions of this §40.11 adopted to be effective September 7, 2016, 41 TexReg 6667; amended to be effective January 12, 2025, 50 TexReg 313.*

##### **1 Tex. Admin. Code § 40.13** Beneficial Interest in Real Property Includes Real Property Held in a Trust {#sec-40.13 omnilex-key=us-tx-regs-official--title-1--40.13}

(a) Except as provided in subsection (b), a filer must disclose real property held in a trust for the benefit of the filer as a beneficial interest in real property under §572.023(b)(6) of the Government Code.

(b) A filer is not required to disclose real property held in a blind trust that complies with §572.023(c) of the Government Code only if the filer does not have actual knowledge of the property held in a trust for the filer's benefit.

**History**
- *Source Note: The provisions of this §40.13 adopted to be effective January 12, 2025, 50 TexReg 313.*

##### **1 Tex. Admin. Code § 40.15** Identification of the Source of Rents Derived from Rental Property {#sec-40.15 omnilex-key=us-tx-regs-official--title-1--40.15}

An identification of the source of rents derived from a rental property must include the name of the lessee and the address of the rental property.

**History**
- *Source Note: The provisions of this §40.15 adopted to be effective January 12, 2025, 50 TexReg 313.*

### **Chapter 45** CONFLICTS OF INTEREST

##### **1 Tex. Admin. Code § 45.1** Application {#sec-45.1 omnilex-key=us-tx-regs-official--title-1--45.1}

This chapter applies to §2152.064 and §2155.003 of the Government Code.

**History**
- *Source Note: The provisions of this §45.1 adopted to be effective April 30, 2008, 33 TexReg 3387.*

##### **1 Tex. Admin. Code § 45.3** Definitions {#sec-45.3 omnilex-key=us-tx-regs-official--title-1--45.3}

(a) Section 2155.003 of the Government Code applies to:

(1) the chief clerk,

(2) an employee who exercises discretion in connection with a contract, payment, claim, or other pecuniary transaction under the comptroller's purchasing authority, and

(3) the Comptroller.

(b) Under §2155.003 of the Government Code the following words and terms shall have the following meanings:

(1) "Chief clerk" and "employee" includes the spouse or dependent child of the chief clerk or employee.

(2) "Have an interest in" or "in any manner be connected with," is limited to the purchasing authority that was transferred to the comptroller by §2151.004 of the Government Code, and means a right, share, equitable or legal claim to, or pecuniary interest in, a contract or bid.

(3) "Value," "reward," and "compensation" includes anything with a monetary value of $5 or more.

(c) Section 2155.003 of the Government Code does not apply to the ownership of stock the value of which does not exceed the lesser of $25,000 or 5% in any one company, or ownership of shares in a publicly traded mutual fund or similar investment vehicle in which the person does not exercise any discretion regarding the investment of the assets of the fund or other investment vehicle.

**History**
- *Source Note: The provisions of this §45.3 adopted to be
effective April 30, 2008, 33 TexReg 3387; amended to be effective
June 7, 2026, 51 TexReg 3701.*

##### **1 Tex. Admin. Code § 45.5** Definitions {#sec-45.5 omnilex-key=us-tx-regs-official--title-1--45.5}

(a) Section 2152.064 of the Government Code applies to:

(1) a commission member and appointee; and

(2) to an employee who exercises discretion in connection with a contract, payment, claim, or other pecuniary transaction under §2152.064 of the Government Code, or in connection with state surplus or salvage property.

(b) Under §2152.064 of the Government Code the following words and terms shall have the following meanings:

(1) "Commission member," "appointee," and "employee" includes the spouse or dependent child of a commission member, appointee, or employee.

(2) "Have an interest in" or "in any manner be connected with," means a right, share, equitable or legal claim to, or pecuniary interest in, a contract or bid, or a recipient of state surplus or salvage property under control of the commission.

(3) "Value," "reward," and "compensation" includes anything with a monetary value of $5 or more.

(c) Section 2152.064 of the Government Code does not apply to the ownership of stock the value of which does not exceed the lesser of $25,000 or 5% in any one company, or ownership of shares in a publicly traded mutual fund or similar investment vehicle in which the person does not exercise any discretion regarding the investment of the assets of the fund or other investment vehicle.

**History**
- *Source Note: The provisions of this §45.5 adopted to be effective April 30, 2008, 33 TexReg 3387.*

##### **1 Tex. Admin. Code § 45.7** Rebates {#sec-45.7 omnilex-key=us-tx-regs-official--title-1--45.7}

(a) The term "rebate" includes a discount, return, or refund of money.

(b) The chief clerk or an employee of the comptroller is not prohibited from accepting a rebate that is offered or given on the same terms to all state employees or to the general public.

**History**
- *Source Note: The provisions of this §45.7 adopted to be effective April 30, 2008, 33 TexReg 3387.*

##### **1 Tex. Admin. Code § 45.8** Additional Disclosures for Texas Comptroller of Public Accounts {#sec-45.8 omnilex-key=us-tx-regs-official--title-1--45.8}

For purposes of this section and §2155.003(e) of the Government Code, the procedure for the required additional disclosure can be found at 1 Tex. Admin. Code §20.220.

**History**
- *Source Note: The provisions of this §45.8 adopted to be
effective June 7, 2026, 51 TexReg 3701.*

##### **1 Tex. Admin. Code § 45.9** Rebates {#sec-45.9 omnilex-key=us-tx-regs-official--title-1--45.9}

(a) The term "rebate" includes a discount, return, or refund of money.

(b) An employee, appointee, or commission member of the Texas Facilities Commission is not prohibited from accepting a rebate that is offered or given on the same terms to all state employees or to the general public.

**History**
- *Source Note: The provisions of this §45.9 adopted to be effective April 30, 2008, 33 TexReg 3387.*

### **Chapter 46** DISCLOSURE OF INTERESTED PARTIES

##### **1 Tex. Admin. Code § 46.1** Application {#sec-46.1 omnilex-key=us-tx-regs-official--title-1--46.1}

(a) This chapter applies to §2252.908 of the Government Code.

(b) Section 2252.908 of the Government Code applies only to a contract of a governmental entity or state agency entered into after December 31, 2015, that meets either of the following conditions:

(1) The contract requires an action or vote by the governing body of the entity or agency; or

(2) The value of the contract is at least $1 million.

(c) A contract does not require an action or vote by the governing body of a governmental entity or state agency if:

(1) The governing body has legal authority to delegate to its staff the authority to execute the contract;

(2) The governing body has delegated to its staff the authority to execute the contract; and

(3) The governing body does not participate in the selection of the business entity with which the contract is entered into.

**History**
- *Source Note: The provisions of this §46.1 adopted to be effective December 24, 2015, 40 TexReg 9113.*

##### **1 Tex. Admin. Code § 46.3** Definitions {#sec-46.3 omnilex-key=us-tx-regs-official--title-1--46.3}

(a) "Contract" means a contract between a governmental entity or state agency and a business entity at the time it is voted on by the governing body or at the time it binds the governmental entity or state agency, whichever is earlier, and includes an amended, extended, or renewed contract.

(b) "Business entity" includes an entity through which business is conducted with a governmental entity or state agency, regardless of whether the entity is a for-profit or nonprofit entity. The term does not include a governmental entity or state agency.

(c) "Controlling interest" means:

(1) an ownership interest or participating interest in a business entity by virtue of units, percentage, shares, stock, or otherwise that exceeds 10 percent;

(2) membership on the board of directors or other governing body of a business entity of which the board or other governing body is composed of not more than 10 members; or

(3) service as an officer of a business entity that has four or fewer officers, or service as one of the four officers most highly compensated by a business entity that has more than four officers. This paragraph does not apply to an officer of a publicly held business entity or its wholly owned subsidiaries.

(d) "Interested party" means:

(1) a person who has a controlling interest in a business entity with whom a governmental entity or state agency contracts; or

(2) an intermediary.

(e) "Intermediary," for purposes of this rule, means, a person who actively participates in the facilitation of the contract or negotiating the contract, including a broker, adviser, attorney, or representative of or agent for the business entity who:

(1) receives compensation from the business entity for the person's participation;

(2) communicates directly with the governmental entity or state agency on behalf of the business entity regarding the contract; and

(3) is not an employee of the business entity or of an entity with a controlling interest in the business entity.

(f) "Signed" includes any symbol executed or adopted by a person with present intention to authenticate a writing, including an electronic signature.

(g) "Value" of a contract is based on the amount of consideration received or to be received by the business entity from the governmental entity or state agency under the contract.

**History**
- *Source Note: The provisions of this §46.3 adopted to be effective December 24, 2015, 40 TexReg 9113; amended to be effective May 2, 2016, 41 TexReg 3094; amended to be effective June 22, 2016, 41 TexReg 4431.*

##### **1 Tex. Admin. Code § 46.4** Changes to Contracts {#sec-46.4 omnilex-key=us-tx-regs-official--title-1--46.4}

(a) Section 2252.908 of the Government Code does not apply to a change made to an existing contract, including an amendment, change order, or extension of a contract, except as provided by subsections (b) or (c) of this section.

(b) Section 2252.908 of the Government Code applies to a change made to an existing contract, including an amendment, change order, or extension of a contract, if a disclosure of interested parties form was not filed for the existing contract; and either:

(1) the changed contract requires an action or vote by the governing body of the entity or agency; or

(2) the value of the changed contract is at least $1 million.

(c) Section 2252.908 of the Government Code applies to a change made to an existing contract, including an amendment, change order, or extension of a contract, if the business entity submitted a disclosure of interested parties form to the governmental entity or state agency that is a party to the existing contract; and either:

(1) there is a change to the disclosure of interested parties; or

(2) the changed contract requires an action or vote by the governing body of the entity or agency; or

(3) the value of the changed contract is at least $1 million greater than the value of the existing contract.

**History**
- *Source Note: The provisions of this §46.4 adopted to be effective January 1, 2017, 41 TexReg 10542.*

##### **1 Tex. Admin. Code § 46.5** Disclosure of Interested Parties Form {#sec-46.5 omnilex-key=us-tx-regs-official--title-1--46.5}

(a) A disclosure of interested parties form required by §2252.908 of the Government Code must be filed on an electronic form prescribed by the commission that contains the following:

(1) The name of the business entity filing the form and the city, state, and country of the business entity's place of business;

(2) The name of the governmental entity or state agency that is a party to the contract for which the form is being filed;

(3) The name of each interested party and the city, state, and country of the place of business of each interested party;

(4) The identification number used by the governmental entity or state agency to track or identify the contract for which the form is being filed and a short description of the services, goods, or other property used by the governmental entity or state agency provided under the contract; and

(5) An indication of whether each interested party has a controlling interest in the business entity, is an intermediary in the contract for which the disclosure is being filed, or both.

(b) The certification of filing and the completed disclosure of interested parties form generated by the commission's electronic filing application must be printed, signed by an authorized agent of the contracting business entity, and submitted to the governmental entity or state agency that is the party to the contract for which the form is being filed.

(c) A governmental entity or state agency that receives a completed disclosure of interested parties form and certification of filing shall notify the commission, in an electronic format prescribed by the commission, of the receipt of those documents not later than the 30th day after the date the governmental entity or state agency receives the disclosure.

(d) The commission shall make each disclosure of interested parties form filed with the commission under §2252.908(f) of the Government Code available to the public on the commission's Internet website not later than the seventh business day after the date the commission receives the notice required under subsection (c) of this section.

**History**
- *Source Note: The provisions of this §46.5 adopted to be effective December 24, 2015, 40 TexReg 9113; amended to be effective June 22, 2016, 41 TexReg 4431.*

### **Chapter 50** LEGISLATIVE SALARIES, PER DIEM AND EQUITABLE PENSION ADJUSTMENTS

##### **1 Tex. Admin. Code § 50.1** Legislative Per Diem {#sec-50.1 omnilex-key=us-tx-regs-official--title-1--50.1}

(a) The legislative per diem is $221. The per diem is intended to be paid to each member of the legislature and the lieutenant governor for each day during the regular session and for each day during any special session.

(b) If necessary, this rule shall be applied retroactively to ensure payment of the $221 per diem for 2019.

**History**
- *Source Note: The provisions of this §50.1 adopted to be effective December 31, 1993, 18 TexReg 9753; amended to be effective December 18, 1996, 21 TexReg 11822; amended to be effective December 31, 1998, 23 TexReg 13029; amended to be effective February 1, 2001, 26 TexReg 1131; amended to be effective January 2, 2003, 27 TexReg 12180; amended to be effective February 3, 2005, 30 TexReg 539; amended to be effective April 18, 2006, 31 TexReg 3251; amended to be effective February 22, 2007, 32 TexReg 614; amended to be effective January 1, 2008, 32 TexReg 9938; amended to be effective December 28, 2008, 33 TexReg 10311; amended to be effective March 17, 2011, 36 TexReg 1657; amended to be effective May 6, 2013, 38 TexReg 2757; amended to be effective March 5, 2015, 40 TexReg 1060; amended to be effective January 6, 2019, 44 TexReg 94.*

##### **1 Tex. Admin. Code § 50.3** Equitable Adjustments to Pensions {#sec-50.3 omnilex-key=us-tx-regs-official--title-1--50.3}

(a) This section applies to equitable adjustments to the dollar amount on which standard service annuity is based under §814.103(a) of the Government Code.

(b) The commission shall consider an equitable increase in the dollar amount on which the standard annuity is based beginning August 31, 2030, and every fifth anniversary of that date and increase the dollar amount as the commission considers appropriate.

(c) When making an equitable adjustment, the commission shall consider any increase in compensation for elected officials and officers for salaries included in the General Appropriations Act.

**History**
- *Source Note: The provisions of this §50.3 adopted to be
effective March 4, 2026, 51 TexReg 1289.*

## **Part 3** OFFICE OF THE ATTORNEY GENERAL

### **Chapter 52** ADMINISTRATION

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 52.1** Sick Leave Pool {#sec-52.1 omnilex-key=us-tx-regs-official--title-1--52.1}

A sick leave pool is established to alleviate hardship caused to an employee and the employee's immediate family if a catastrophic injury or illness forces the employee to exhaust all eligible leave time earned by that employee and to lose compensation time from the state.

(1) The Office of the Attorney General's Human Resources Director is designated as the pool administrator.

(2) The pool administrator will recommend a policy, operating procedures, and forms for the administration of this section for approval by the First Assistant Attorney General.

(3) Operation of the pool shall be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §52.1 adopted to be effective September 17, 2009, 34 TexReg 6315.*

##### **1 Tex. Admin. Code § 52.2** Family Leave Pool {#sec-52.2 omnilex-key=us-tx-regs-official--title-1--52.2}

A family leave pool is established to allow eligible employees to apply for leave time to bond with and care for children during a child's first year following birth, adoption, or foster placement; and caring for a seriously ill family member or the employee, including pandemic-related illnesses or complications caused by a pandemic.

(1) The Office of the Attorney General's Human Resources Director is designated as the pool administrator.

(2) The pool administrator will recommend a policy, operating procedures, and forms for the administration of this section for approval by the First Assistant Attorney General.

(3) Operation of the pool shall be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §52.2 adopted to be effective October 12, 2022, 47 TexReg 6577.*

##### **1 Tex. Admin. Code § 52.3** Employee Education and Training {#sec-52.3 omnilex-key=us-tx-regs-official--title-1--52.3}

(a) The agency may use state funds to provide education and training for its employees in accordance with the State Employees Training Act (Texas Government Code, §§656.041-656.104).

(b) The education or training shall be related to the employee's current position or prospective job duties within the agency.

(c) When an employee seeks reimbursement for a training or education program offered by an institution of higher education or private or independent institution of higher education, the agency shall only reimburse the tuition expenses for a program course successfully completed by an employee at an accredited institution of higher education.

(d) The agency's education and training program benefits both the agency and the employees participating by:

(1) preparing for technological and legal developments;

(2) increasing work capabilities;

(3) increasing the number of qualified employees in areas for which the agency has difficulty in recruiting and retaining employees; and (4) increasing the competence of agency employees.

(e) Agency employees may be required to complete an education or training program related to the employee's duties or prospective duties as a condition of employment.

(f) Participation in an education or training program requires the appropriate level of approval prior to participation and is subject to the availability of funds within the agency's budget.

(g) Reimbursement for completing program courses offered by institutions of higher education, such as those credited towards a degree, requires the approval of the First Assistant Attorney General.

(h) The employee education and training program for the agency may include:

(1) mandatory agency-sponsored training required for all employees;

(2) education relating to technical or professional certifications and licenses;

(3) education and training relating to the promotion of employee development;

(4) employee-funded external education;

(5) agency-funded external education, including continuing legal education, online courses, and courses not credited towards a degree; and

(6) other agency-sponsored education and training determined by the agency to fulfill the purposes of the State Employees Training Act.

(i) The Office of the Attorney General's Human Resources Director is designated as the administrator of the agency's education and training program.

(j) The administrator or administrator's designee shall develop policies for administering each of the components of the employee education and training program. These policies shall provide clear and objective guidelines and shall include, at a minimum, the following:

(1) eligibility requirements for participation;

(2) approval procedures for participation; and

(3) obligations of program participants.

(k) Approval to participate in any portion of the agency's education and training program shall not in any way affect an employee's at-will status or constitute a guarantee or indication of continued employment, nor shall it constitute a guarantee or indication of future employment in a current or prospective position.

(l) Permission to participate in any education and training program may be withdrawn if the agency determines, in its sole discretion, that participation would negatively impact the employee's job duties or performance.

**History**
- *Source Note: The provisions of this §52.3 adopted to be effective October 12, 2022, 47 TexReg 6577.*

### **Chapter 53** MUNICIPAL SECURITIES

#### **Subchapter A** APPROVAL OF MUNICIPAL SECURITIES BY ATTORNEY GENERAL

##### **1 Tex. Admin. Code § 53.1** Application {#sec-53.1 omnilex-key=us-tx-regs-official--title-1--53.1}

(a) General Application. This subchapter applies to all proposed public securities and records of proceedings submitted by issuers, other than nonprofit corporations and other conduit issuers, to the Office of the Attorney General for review, as required by Chapter 1202 of the Government Code or other applicable state law.

(b) Application to Nonprofit Corporations and Other Conduit Issuers. Sections 53.2, 53.9, 53.16 - 53.19, 53.21, and 53.22 of this subchapter shall apply to proposed public securities and records of proceedings submitted by nonprofit corporations and other conduit issuers to the Office of the Attorney General for review. Additional requirements for proposed public securities to be issued by nonprofit corporations and other conduit issuers are contained in subchapters L through P of this chapter.

(c) Additional Requirements. Additional subchapters may apply to transcripts submitted to the Office of the Attorney General depending on the type of public securities and the type of issuer.

(d) Definition of Public Securities. For the purposes of this subchapter, the term "public securities" means public securities as defined under §1202.001 of the Government Code and other obligations subject to review by the Office of the Attorney General under state law.

(e) Other Definitions: Except as otherwise provided by this subchapter, all terms used in this subchapter shall have the meaning ascribed to them in §1202.001 of the Government Code.

**History**
- *Source Note: The provisions of this §53.1 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.2** Form of Records {#sec-53.2 omnilex-key=us-tx-regs-official--title-1--53.2}

Records of proceedings or transcripts must be submitted to the Public Finance Division (Division) of the Office of the Attorney General in an electronic format and accompanied by an electronic signature via the Texas Transcript Repository system maintained by the Texas Comptroller of Public Accounts. All transcripts must conform to the following requirements:

(1) each transcript must be submitted as a series of files in Portable Document Format (PDF), and each file name must begin with a unique sequential number, followed by the title or a description of the document;

(2) each transcript must contain a table of contents that lists, for each document, the title or description and the unique number from the file name assigned to that document;

(3) each transcript must be arranged in chronological order or in some other consistent, logical arrangement that will permit an efficient review;

(4) each line of each document must be entirely legible;

(5) the text of each document must be searchable; and

(6) each transcript must be accompanied, via email to the Division, by:

(A) proof of payment of the required fee in the form of a wire transfer receipt; and

(B) if voted authorization is being used, a table in Excel format showing, for each proposition, the amount authorized, the amount used for each issuance, and the remaining authorized amount.

**History**
- *Source Note: The provisions of this §53.2 adopted
to be effective January 5, 2017, 41 TexReg 10543; amended to be effective
May 24, 2026, 51 TexReg 3371.*

##### **1 Tex. Admin. Code § 53.3** Content of Transcripts {#sec-53.3 omnilex-key=us-tx-regs-official--title-1--53.3}

(a) Transcript Requirements. Each transcript shall include the following, as applicable:

(1) Initial Public Securities. The initial public securities executed in accordance with applicable law;

(2) Authorizing Document. The authorizing ordinance, order or resolution and, as applicable, indenture of trust for the proposed public securities, including the following:

(A) citation to the legal authority for the issuance of the proposed public securities;

(B) the terms of the proposed public securities, including the title, numbering, denominations, date, persons authorized to sign, method of signing, principal and interest payment dates, redemption terms, if any, place of payment and registration and form of paying agent and registrar agreement, and substantially final form of the public securities; provided, however, that to the extent specific terms of the public securities have been lawfully delegated to a representative or committee for determination, those terms shall be set forth in the pricing certificate;

(C) citation to the legal authority for the issuer to construct or acquire the proposed improvements or services, to pledge the specified payment source, and, as applicable, to contract with other parties for payment of principal and interest and other payments relating to the proposed public securities;

(D) identification of a specified revenue source and/or a levy of a tax, which shall be pledged in amounts sufficient, within any applicable limitation, to pay the annual debt service requirements of the proposed public securities for the current year and each succeeding year during which the proposed public securities are outstanding. Cities and counties issuing public securities supported in whole or in part by ad valorem taxes constitutionally must provide for an annual levy sufficient to collect a sinking fund of not less than 2% of the principal amount of the proposed public securities regardless of the year in which the first principal payment is due;

(E) a reasonably complete and detailed description of the improvements, services, or projects being financed and the intended use of the proceeds, including whether any of the proceeds are being used to pay capitalized interest or fund a reserve fund;

(F) a recitation of the following:

(i) the manner of the sale, whether negotiated or competitively bid,

(ii) the identification of the purchaser,

(iii) the purchase price, including any discount or premium, and

(iv) the finding that the terms of the sale were in the issuer's best interest, and additionally, if competitively bid, that the sale was awarded based on the lowest net effective interest rate, or other applicable standard as permitted by law;

(G) for proposed public securities with a floating, variable, or adjustable interest rate, a provision limiting the maximum rate of interest to:

(i) a net effective interest rate not to exceed the maximum interest rate provided for and calculated in accordance with Chapter 1204 of the Government Code; or

(ii) such other limit applicable to the securities and/or the issuer;

(H) incorporation of the provisions of Title 6 of the Property Code (Unclaimed Property) regarding the disposition and reporting of unclaimed principal and interest payments, specifically requiring compliance with the reporting requirements of Chapter 74 of the Property Code;

(I) provisions to account for the use of surplus public securities proceeds, premiums, and interest earnings on public securities proceeds;

(J) if issuing public securities under voted authorization, recitation of amounts previously issued under such voted authorization and the amount of voted authorization remaining after the issuance of the proposed public securities; provided, however, that if a determination of the amount of the public securities to be issued has been lawfully delegated, the amount of remaining voted authorization shall be stated in the pricing certificate; and

(K) approval of the form of contracts included in the transaction, as applicable;

(3) Pricing Certificate. A pricing certificate, when appropriate to facilitate a lawful delegation of specific terms of proposed public securities to an identified representative of the issuer. The certificate shall be signed by the representative(s) identified in the authorizing ordinance, order, or resolution, and shall reflect compliance with any parameters established therein;

(4) General Certificate. A general certificate, signed by a senior executive officer or an elected or appointed official of the issuer, and the official custodian of records of the issuer, and, if appropriate, any other officers or authorized representatives of the issuer, which certificate includes the following:

(A) for all public securities, a debt retirement schedule that:

(i) is current as of the date of the sale of the proposed public securities;

(ii) includes the combined debt service requirements of the proposed public securities and all other outstanding indebtedness payable in whole or in part from the same source regardless of lien priority, including any additional series of public securities being issued at the same time as the proposed public securities,

(iii) calculates interest as follows:

(I) at the actual interest rates sold, if known;

(II) in the case of future interest for variable rate debt, at the lesser of the maximum interest rate permissible under the ordinance, order, resolution or trust indenture authorizing the debt, or the maximum rate under applicable state law; or

(III) in the case of commercial paper, in accordance with §1371.057(c) of the Government Code;

(iv) for outstanding indebtedness or proposed public securities payable from a combination of ad valorem taxes and another pledged source, includes the debt service requirements as though such indebtedness were payable solely from ad valorem taxes, unless it is shown that such indebtedness can be and is paid, or with respect to proposed public securities, is intended to be paid, from the other pledged sources;

(v) for cities and counties constitutionally required to levy taxes sufficient to collect an annual 2% sinking fund for principal, reflects the annual 2% sinking fund amount in the debt service requirements even if no principal is due in a given year; and

(vi) for indebtedness with a related interest rate management agreement, as that term is defined in Chapter 1371 of the Government Code, taking into account the effect of the agreement on the interest rate(s) of the indebtedness in calculating the debt service requirements;

(B) for all proposed revenue and combination limited tax and revenue public securities:

(i) a history of the pledged revenue collections during the most recent three year period or, if revenues are being relied upon to show coverage, a revenue projection in the event a revenue history is unavailable or insufficient to provide debt service coverage. A revenue projection must include an explanation of the circumstances, such as a recent increase in the applicable rates, fees, or charges, that support a projected increase in revenues;

(ii) for a revenue projection based on an expanded system, a certificate of a licensed engineer or qualified consultant, as appropriate;

(iii) a copy of the current rate order or ordinance or adopted rate schedule of the issuer; and

(iv) a statement of the annual operating and maintenance expenses for the most recent year;

(C) for ad valorem tax public securities, certified statements of taxable values, and, if an issuer intends to rely on a collection rate greater than 90%, a certificate of the issuer's collection rates for the most recent three years;

(D) for general law city ad valorem tax public securities, certification of the type of general law city and the city's population;

(E) for home rule cities, certification of the date of the most recent amendment to the city charter and a certified copy of any charter amendment not previously submitted with a transcript;

(F) for issuers other than municipalities, citation to the statutory and, if applicable, constitutional provisions authorizing the issuer's creation and, if applicable, its taxing power;

(G) certification of incumbency, including the following:

(i) certification of the incumbency of each issuer's executive or administrative officer subscribing any document in the transcript; and

(ii) certifications of incumbency for city secretaries, county clerks, and other officers customarily certifying incumbencies, which certifications may be made by the presiding officer of the governing body of the issuer or, in his or her absence, any other member of the governing body; and

(H) at the discretion of the issuer, any other certifications required by this chapter;

(5) Purchase Agreement. For negotiated sales, executed original of any purchase agreement relating to the sale of the proposed public securities;

(6) Bid Form. For competitive sales, evidence of the winning bid form;

(7) Insurance. For financings for which insurance is obtained:

(A) a copy of the insurance commitment letter, executed by the insurer, if applicable;

(B) certified proceedings authorizing the insurance, which may be in the ordinance, order or resolution authorizing the public securities;

(C) if a statement of insurance is to be printed on the public securities, express authorization by the issuer in the ordinance, order or resolution authorizing the public securities or pricing certificate; and

(D) in the case of any agreement entered into with the insurer, if the agreement constitutes an authorized credit agreement pursuant to Chapter 1371 of the Government Code, submission of the proceedings authorizing the agreement;

(8) Offering Document. An official statement or other offering document; if a preliminary official statement is initially provided, a final official statement is to be provided prior to approval by the Office of the Attorney General;

(9) Affidavit of Publication. An affidavit of publication, executed by a representative of the newspaper, establishing that the newspaper meets the requirements under state law with a copy of a clipping of the published material attached;

(10) Paying Agent/Registrar Agreement. The paying agent/registrar agreement in substantially final form;

(11) Acknowledgment of Special Meeting. Acknowledgment of timely receipt of notice of a special meeting signed by each member of the issuer's governing body who failed to attend the meeting of the governing body at which a transcript document was approved;

(12) Certification of Official Actions. A certificate for each action taken by the governing body relating to the issuance of the proposed public securities, executed by the custodian of records of the governmental body, indicating presence of appropriate quorum, type of meeting (special, regular, or emergency), introduction and adoption of the action and the number of votes for, against, and abstaining. Such actions must be certified as true and correct copies of originals on file in the body's official minutes and all meetings at which such actions have been taken must be certified as having been held in full compliance with Chapter 551 of the Government Code;

(13) Signature Identification and No-Litigation Certificate. An undated signature identification and no-litigation certificate signed by the officers who executed the proposed public securities that complies with the following requirements:

(A) signatures shown on the certificate must substantially conform to the signatures on the proposed public securities;

(B) signatures must be certified as genuine by a bank or acknowledged by a notary public;

(C) certificate must include certification confirming that no litigation is pending or to the best of the knowledge of the issuer, threatened, against the issuer seeking to restrain or enjoin the issuance of the public securities, questioning the issuance or sale of the public securities or the authority or action of the governing body relating to the issuance or sale of the public securities, or the levy of taxes or collection of revenues or the pledge of taxes or revenues to the principal of and interest on the securities, as appropriate, or materially affecting the assessment or collection of taxes to pay the principal of and interest on the public securities, when appropriate; and that neither the corporate existence or boundaries of the issuer nor the right to hold office of any member of the governing body of the issuer or any other elected or appointed official of the issuer is being contested or otherwise questioned; and

(D) authorization for the Office of the Attorney General to insert the date of the approving opinion on the certificate must be provided, along with a representation that the issuer will notify the Office of the Attorney General by phone if it becomes aware of any changes with respect to any representation in the certificate or any transcript document to which the issuer is a party that occur between the date of the approving opinion and the date of closing;

(14) Reimbursement of Expenditures. If applicable, documentation evidencing intent to use the public security proceeds to reimburse the issuer for its prior expenditures;

(15) Bond Review Board Information. Bond Review Board information required by §1202.008 of the Government Code along with an additional copy of the official statement; and

(16) Election Proceedings. Certified election proceedings as provided in §53.14 of this subchapter.

(b) Execution of Documents. All certificates must be originally signed and, if required, sealed. All issuer contracts providing security or otherwise affecting the marketing or terms of public securities and governmental orders must either be originally signed and, if required, sealed, or legible copies certified to be true and correct copies.

**History**
- *Source Note: The provisions of this §53.3 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.4** Financial Publications {#sec-53.4 omnilex-key=us-tx-regs-official--title-1--53.4}

The following financial publications circulated within the State of Texas are approved for publication of notices of public security sales:

(1) The Texas Bond Reporter;

(2) The Bond Buyer; and

(3) The Wall Street Journal.

**History**
- *Source Note: The provisions of this §53.4 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.5** Determination of Bond Allowable Rate {#sec-53.5 omnilex-key=us-tx-regs-official--title-1--53.5}

The following apply to determinations of the ad valorem tax bond allowable rate:

(1) "bond allowable rate" means the portion of the maximum authorized tax rate available for debt service;

(2) except as provided below, and except for good cause shown, all political subdivisions have a bond allowable rate equal to 2/3 of the maximum tax rate authorized by law;

(3) home rule cities and general law cities authorized by §5 of Article XI of the Texas Constitution to levy a tax of up to $2.50 per $100 valuation have a bond allowable rate of $1.50 per $100 valuation, unless the tax rate is further limited by the city's charter;

(4) counties have a bond allowable rate of $.40 per $100 valuation, plus an additional bond allowable rate of 1/2 of the tax rate voted for "further maintenance of public roads" authorized by §9 of Article VIII of the Texas Constitution up to a maximum additional tax of $.075 per $100 for public securities payable from that tax;

(5) annual tax funds available for debt service shall be calculated assuming a collection rate of 90% or a higher rate based on the average collection rate for the most recent three years, as certified by the issuer. In calculating the average collection rate, the annual collection rate used for any year may not exceed 100%; and

(6) the bond allowable rate may be further restricted by state law.

**History**
- *Source Note: The provisions of this §53.5 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.6** Satisfaction of Coverage {#sec-53.6 omnilex-key=us-tx-regs-official--title-1--53.6}

The maximum annual debt service reflected in the debt retirement schedule may not exceed:

(1) for proposed public securities supported in whole or in part by ad valorem taxes, the product of the bond allowable rate, the applicable collection rate, and the issuer's most recent certified taxable assessed valuation; and/or

(2) for proposed public securities supported by revenues, the issuer's certified historical or projected revenue collection amount, as applicable.

**History**
- *Source Note: The provisions of this §53.6 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.7** Transcripts of Combination Tax and Revenue Public Securities {#sec-53.7 omnilex-key=us-tx-regs-official--title-1--53.7}

Generally, transcripts for proposed public securities supported by a combination of ad valorem taxes and other revenues shall meet the transcript requirements for both ad valorem tax public securities and revenue public securities as provided by this chapter.

**History**
- *Source Note: The provisions of this §53.7 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.8** Appropriated Funds and Capitalized Interest {#sec-53.8 omnilex-key=us-tx-regs-official--title-1--53.8}

When an issuer must pay debt service on a proposed ad valorem tax public security or combination ad valorem tax and revenue public security before the initial tax levy can be collected, the issuer must provide certification that the issuer has appropriated lawfully available funds for such payment.

**History**
- *Source Note: The provisions of this §53.8 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.9** Securities in Litigation {#sec-53.9 omnilex-key=us-tx-regs-official--title-1--53.9}

Pending litigation will generally disqualify proposed public securities from approval when the pending litigation concerns the public securities, the majority of the titles to office, the issuer's creation, the boundaries of a traditional governmental issuer if a final judgment may reduce the tax base or revenue of the issuer such that the payment source for the public securities is materially impaired, or when pending litigation in any other way challenges the authority of the issuer to issue the public securities or undertake the project being financed.

**History**
- *Source Note: The provisions of this §53.9 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.10** Estimates in Statements of Taxable Values {#sec-53.10 omnilex-key=us-tx-regs-official--title-1--53.10}

Except where otherwise permitted by law, estimates in statements of taxable values are not permissible unless the issuer has been in operation for a period of less than 18 calendar months.

**History**
- *Source Note: The provisions of this §53.10 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.11** Seals {#sec-53.11 omnilex-key=us-tx-regs-official--title-1--53.11}

Seals should be the official seal as adopted by the governing body. Seals on certificates must exactly correspond to seals on securities.

**History**
- *Source Note: The provisions of this §53.11 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.12** Refunding Bonds {#sec-53.12 omnilex-key=us-tx-regs-official--title-1--53.12}

(a) Definitions. For purposes of this section, the term "bonds" includes commercial paper used for refunding purposes, and the term "public securities" includes other obligations authorized to be refunded by law that do not constitute public securities under §1202.001 of the Government Code.

(b) Types of Refundings. Refundings may be accomplished by the issuance of advance or current refunding bonds sold for cash or exchange refunding bonds issued in exchange for the refunded obligations. For state law purposes, all refundings in which the public securities being refunded are not paid and discharged the same day as the refunding bonds are issued are considered to be "advance refundings."

(c) Advance Refundings. Transcripts for net defeasance advance refunding must include documentation from an accounting firm or other qualified entity, other than the issuer, verifying the sufficiency of the investments of the escrowed proceeds to redeem on the redemption date or pay at maturity, as applicable, the refunded public securities. For a gross defeasance, a certificate of sufficiency from the paying agent for the refunded obligations or other qualified entity, other than the issuer, is required. For purposes of this section, "net defeasance" means a deposit of refunding proceeds and any issuer contribution upon closing in escrow, which requires the accrual of investment earnings in order to provide sufficient funds to pay the refunded public securities on the redemption date or at maturity, as applicable; and "gross defeasance" means a deposit of refunding proceeds and any issuer contribution upon closing, which is sufficient to pay the refunded public securities on the redemption date or at maturity, as applicable, without further investment. For an advance refunding pursuant to Subchapter C of Chapter 1207 of the Government Code:

(1) the financial institution with whom the refunding bond proceeds are to be deposited must enter into an escrow or similar agreement if required by §1207.062 of the Government Code, or otherwise execute an agreement or certificate confirming its agreement to hold the refunding proceeds and any issuer contribution in trust for the owners of the refunded public securities; each agreement shall collateralize uninvested funds until their payment at redemption or maturity to the extent not insured by the Federal Deposit Insurance Corporation; and

(2) a certification of incumbency, including specimen signatures, and corporate authority of the financial institution executing the agreement required by subsection (d)(1) must be included in the transcript.

(d) Paying Agent for Refunded Public Securities. All paying agents for public securities to be redeemed must acknowledge:

(1) receipt of a notice of redemption and, in cases in which a notice of redemption is required to be published or mailed to the registered owners prior to the delivery of the refunding bonds, evidence of such publication or a certification by the paying agent/registrar as to provision of notice to registered owners must be included in the transcript; and

(2) satisfaction of paying agent fees; if fees will not be paid at closing, the paying agent must certify that it will not look to the bond proceeds as payment for its fees but its sole remedy will be an action for payment under the paying agent agreement.

(e) Exchange Refundings. Exchange refunding bonds issued pursuant to the authority of §1207.081 of the Government Code may be sent to the Comptroller for registration after approval if the transcript includes instructions from the issuer to the paying agent for the refunding bonds to hold the bonds and deliver them only upon surrender of the public securities being refunded, and a representation that the refunding bonds will be delivered to the paying agent for further delivery as instructed and not to any other party, or provides a similar mechanism for ensuring delivery only in exchange for the public securities being refunded.

(f) Combination New Money and Refunding Public Securities. For combination new money/refunding bonds issued pursuant to Chapter 1207 of the Government Code, the issuer must provide documentation in accordance with these rules evidencing compliance with any election, notice, or publication requirements for the new money portion.

(g) Public Purpose and Required Findings. A refunding pursuant to Chapter 1207 of the Government Code for which the aggregate amount of payments to be made on the refunding bonds will or may exceed the aggregate amount of payments to be made on the public securities being refunded must include the finding required by §1207.008(a)(1) and must include the finding required by §1207.008(a)(2), unless, as provided by subsection (b) of that section, the governing body of the issuer determines and states in the order, ordinance, or resolution authorizing the refunding that the manner in which the refunding is being executed does not make it practicable to make the determination required by subsection (a)(2) of that section. Refunding transcripts must include a debt service savings or loss schedule showing the amount of debt service savings or loss, reflecting the calculation of any issuer contribution and showing the methodology used. If there is no gross savings or the issuer has made a finding of impracticability under §1207.008(b), a statement must be included in the bond order, ordinance, or resolution explaining the public purpose of the refunding.

(h) Submission of Refunded Public Securities Documents. All refunding transcripts must contain a copy of the order, ordinance or resolution authorizing, or a copy of the trust indenture securing, the public securities being refunded. The documentation submitted should include the pricing certificate for public securities sold pursuant to delegated authority.

(i) Refunding Assumed Public Securities. For refunding bonds being issued to refund public securities for which the obligation to pay has been assumed through annexation of another political subdivision or special district, the following must be included in the transcript:

(1) if applicable, a certified copy of the action taken by the governing body that conducted the annexation calling the public hearing and authorizing publication of the notice of the hearing;

(2) if applicable, an original or certified copy of the affidavit of publication of the notice of the hearing with the newspaper clipping attached; and

(3) a certified copy of the action taken by the governing body annexing the land and assuming the debt.

**History**
- *Source Note: The provisions of this §53.12 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.13** Refunding Issues by Consent {#sec-53.13 omnilex-key=us-tx-regs-official--title-1--53.13}

When refunded public securities are being redeemed by consent of the holders thereof, written evidence of such consent must be included in the transcript.

**History**
- *Source Note: The provisions of this §53.13 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.14** Elections {#sec-53.14 omnilex-key=us-tx-regs-official--title-1--53.14}

(a) Types of Elections. Proceedings of the following elections must be submitted with the first transcript of proposed public securities utilizing the authority acquired through the election:

(1) an election authorizing the issuance of public securities;

(2) an election authorizing the levy or imposition of a tax or other security pledged to the payment of public securities;

(3) an election creating or incorporating, or confirming the creation of, an issuer;

(4) an election approving a home rule charter for a municipality; and

(5) elections discussed in other subchapters of this chapter. Proceedings of state elections, including amendments to the Constitution, are not required.

(b) Election Contest Period. When the proceedings of an election held pursuant to the Election Code are submitted as part of the record of proceedings, the proposed public securities will not be approved until the time for filing a petition for an election contest has expired in accordance with §233.006 of the Election Code or, if an election contest has been filed, a final, nonappealable judicial order that does not overturn the election has been obtained.

(c) Election Proceedings. Election proceedings must include the following:

(1) Official Action Calling the Election. A certified copy of the action taken by the governing body calling the election; the official action must include the elements required by all applicable law;

(2) Election Notice. Affidavits of publication, and/or certificates of posting or mailing, as required by law, of notice of an election, in English and other languages as required by law with a copy of the election notice; the election notice must contain the elements required by applicable law;

(3) Official Action Canvassing the Election. A certified copy of the action taken by the governing body canvassing the results of the election, including the total number of votes for and against a proposition;

(4) Compliance with the Election Code. Certification as to compliance with the Election Code, including particularly the giving of notice of an election to the county clerk pursuant to §4.008 of the Election Code and the bilingual requirements of Chapter 272 of the Election Code, or explaining why these requirements are not applicable to the election; and

(5) Home Rule Charter Election. For an election approving a home rule charter for a municipality, certification as to compliance with §9.003(b) and §9.007 of the Local Government Code.

**History**
- *Source Note: The provisions of this §53.14 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.15** Compliance with State and Federal Election Laws {#sec-53.15 omnilex-key=us-tx-regs-official--title-1--53.15}

When election proceedings are submitted as part of a record of proceedings, the general certificate shall include a certification confirming that the election was conducted in accordance with all applicable state and federal laws.

**History**
- *Source Note: The provisions of this §53.15 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.16** Submission and Approval of Transcripts {#sec-53.16 omnilex-key=us-tx-regs-official--title-1--53.16}

(a) Submitting Attorney. A record of proceedings or transcript must be submitted by an attorney licensed in Texas.

(b) Submission Deadlines. An issuer must submit its record of proceedings at least 10 working days prior to closing for traditional financings, and at least 12 working days prior to closing for nonprofit corporation or other conduit issuer financings. In the cover letter for the transcript submission, bond counsel must advise the Division if an approving opinion is required earlier than the standard timeframe and must submit the record of proceedings a corresponding amount of additional time prior to the proposed closing date. These time periods may be increased with advance notice from the Division in an All Bond Counsel Letter. Record of proceedings must be submitted in substantially final form. Preliminary or pro-forma proceedings will not be accepted for review without prior approval for good cause shown when the current Division workload allows. Black-lined pages identifying changes must accompany any changed pages to the record of proceedings. An issuer's failure to submit a substantially complete record of proceedings prior to the expected release date of a preliminary approval letter under subsection (d) of this section may prevent the release of approved public securities by the proposed closing date.

(c) Initial Public Securities. Initial public securities must be submitted no later than five working days prior to closing.

(d) Preliminary Approval Letters. No preliminary approval letter from the Division should be expected until the end of the fifth working day preceding the date set for closing, or an earlier date as requested by bond counsel in writing, if the time requirements for an earlier approval date have been met. If the issuer fails to submit a substantially complete record of proceedings, the Division may delay the release of the preliminary approval letter until such time as a substantially complete record of proceedings is received. After receipt by bond counsel of a preliminary approval letter relative to a given issue, bond counsel must supply a written response to any questions, enclosing, when requested, missing or substituted documentation. Intervening telephone discussion is welcome, and confirmation of any verbal waivers or modifications to the preliminary approval requirements should be included in the reply letter.

(e) Submission of Final Documents. Any outstanding requirements for final approval as well as the final versions of documents originally submitted in unexecuted or uncertified form, which must be executed as required by law, must be submitted in an electronic format and accompanied by an electronic signature via the Texas Transcript Repository system no later than three working days prior to closing. Exceptions to this requirement may be granted by the Division for good cause, if the current workload allows.

(f) Registration of Public Securities. If all requirements have been satisfied, the Division will notify the Texas Comptroller of Public Accounts of approved public securities for registration two days prior to the proposed closing date.

(g) Approval of Certain Contracts. For a record of proceedings in which specific approval by the Office of the Attorney General of a contract providing revenue or security to pay the public security is required, the proceedings, including the contract, must be supplied in final and executed or certified form by the time of approval.

(h) No Guarantee of Final Approval. Receipt of a preliminary approval letter does not constitute a guarantee of final approval of the public securities and should not be relied upon as such. Closings may be delayed if required documents are not timely filed or if there are unresolved legal issues. Furthermore, the Office of the Attorney General does not represent, assure or guarantee completion of transcript examination or the issuance of transcript approval by any specific date or time.

(i) Calculation of Deadlines. For calculations under this section, the day of submission is counted if the record of proceedings is received by 3:00 p.m., but the day of closing is not counted. If bond counsel states that it is satisfactory for the public securities to be registered by the Texas Comptroller of Public Accounts the day before closing, then one day may be subtracted from the time requirements. If approval is requested a certain number of days prior to closing, then the time requirements are counted back from the requested approval day, not from closing.

(j) Review of Forward Deliveries. An opinion for forward delivery public securities will not be delivered until shortly before the delivery date of the public securities. A preliminary approval letter will be provided, and subsequently, if requested, the reviewing attorney will confirm that all outstanding requirements have been satisfied, to the extent this has occurred. An extensive "settlement certificate" generally setting forth information of the nature required to be in general and no-litigation certificates and confirming that there have been no material changes made to the transcript previously reviewed by this office will be required before the opinion is given.

(k) Cancellation of Submission. A record of proceedings on file with the Division for six (6) months with no action will be canceled. Should any such proceedings be resubmitted, a new fee will be required.

**History**
- *Source Note: The provisions of this §53.16 adopted to be
effective January 5, 2017, 41 TexReg 10543; amended to be effective
May 24, 2026, 51 TexReg 3371.*

##### **1 Tex. Admin. Code § 53.17** Examination Fees {#sec-53.17 omnilex-key=us-tx-regs-official--title-1--53.17}

Section 1202.004 of the Government Code sets out the fee amounts for submitting a public security and/or a record of proceedings to the Office of the Attorney General for examination and approval.

**History**
- *Source Note: The provisions of this §53.17 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.18** Additional Showings {#sec-53.18 omnilex-key=us-tx-regs-official--title-1--53.18}

If independent investigation or extrinsic evidence relating to any public securities proceedings indicates the need for other or additional showings by the issuer to satisfy any legal requirements precedent to the approval of such proceeding, approval of such proceedings and the issue subject thereof may be withheld pending such showings being furnished to the Public Finance Division.

**History**
- *Source Note: The provisions of this §53.18 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.19** Novel or Uncommon Characteristics or Transactions {#sec-53.19 omnilex-key=us-tx-regs-official--title-1--53.19}

Issuers contemplating authorization, issue, and sale of public securities not specifically addressed in these rules or which contain novel or uncommon characteristics are encouraged to present preliminary plans to the Public Finance Division for review and comment before taking official action for issuance. The Public Finance Division is also willing to pre-review transcripts for unusual or particularly complex transactions, provided the transcripts are accompanied by the appropriate fee.

**History**
- *Source Note: The provisions of this §53.19 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.21** Waiver of Rules {#sec-53.21 omnilex-key=us-tx-regs-official--title-1--53.21}

Subject to specific requirements set out in the Constitution of the State of Texas, applicable statutes, or applicable city charter, the rules for public securities promulgated herein may be waived by the Public Finance Division upon a showing of good cause.

**History**
- *Source Note: The provisions of this §53.21 adopted to be effective January 5, 2017, 41 TexReg 10543.*

##### **1 Tex. Admin. Code § 53.22** Interpretation {#sec-53.22 omnilex-key=us-tx-regs-official--title-1--53.22}

These rules and the applicable laws may be interpreted from time to time by the issuance of All Bond Counsel Letters by the Public Finance Division pursuant to §402.044 of the Government Code. All substantive All Bond Counsel Letters from November 1987, and selected letters from before that date, are on the Attorney General's website.

**History**
- *Source Note: The provisions of this §53.22 adopted to be January 5, 2017, 41 TexReg 10543.*

#### **Subchapter B** APPROVAL OF CITY AND COUNTY GENERAL OBLIGATION BONDS

##### **1 Tex. Admin. Code § 53.41** General Obligation Bond Elections {#sec-53.41 omnilex-key=us-tx-regs-official--title-1--53.41}

The following are the minimum requirements for statutory compliance and documentary composition of transcripts prerequisite to approval of city, town, or county general obligation bond issues

(1) Resolution, order, or ordinance calling bond election.

(A) Minutes excerpt relative to call of election.

(B) Findings: advisable to call bond election, etc.

(C) Recitals and directions.

(i) Election date: not less than 15 nor more than 30 days from resolution date, and polling hours.

(ii) Propositions text in full (must contain purpose, amount, interest rate, maximum tax levy, and maturity date on serial maturity within but not exceeding 40 years, creation of sinking fund).

(iii) Places of election, election officers and number of clerks, absentee voting provision with days and hours of polling.

(iv) Election to be held in accordance with Texas Election Code, applicable general laws and laws regarding municipal elections.

(v) Ballot proposition, form and method of voting (paper ballots, etc.).

(vi) Notice to be posted and published per Article 704.

(2) Notice of election: substantial copy of election resolution, ordinance, or order (addressed to all qualified electors).

(A) Affidavit (or certificate) of posting notice.

(i) Posted in each election precinct and at city hall or courthouse.

(ii) At least 14 days prior to election or, if a lesser period, designation of such period and statement of reasons longer notice period cannot be afforded.

(iii) Copy of notice attached.

(B) Affidavit of publication of notice.

(i) Published the same day in two successive weeks, first publication not less than 14 days prior to election date.

(ii) Named newspaper of general circulation published in the city or, if no newspaper published there, circulated in the city.

(iii) Copy of notice as published attached.

(iv) Executed by officer or employee of the newspaper, with job title indicated.

(3) Canvass resolution, ordinance, or order.

(A) Minutes excerpt relative to canvassing.

(B) Recitations.

(i) All circumstances surrounding calling of election, giving of notice, holding of election and return of ballots, finding all having been legally had and done.

(ii) Tabulation of votes.

(C) Resolution, ordinance, or order.

(i) Election duly and lawfully held.

(ii) Result declared and statement that city council, board of aldermen, or commission authorized to issue the described bonds and levy and pledge taxes.

(4) Bond ordinance or order.

(A) Minutes excerpt relative to bond ordinance or order passage.

(B) Recitations.

(i) Election authority and circumstances.

(ii) Amount to be issued and recital identification of all prior issues, including amount of each such issue, made under authority of the election ordered in paragraph (1) of this section.

(C) Ordinance or order.

(i) Designation of issue, aggregate amount, purposes.

(ii) Numbers, denominations, bond date (numbers corresponding to listed years and maturity amounts must be set out).

(iii) Maturity schedule.

(iv) Interest rates and payment dates.

(v) Redemption option, if any.

(vi) Places of payment, names of paying agents, manner of payment.

(vii) Description of manner of execution of security and coupons.

(viii) Bond form, coupon form (must refer to option for redemption, if any), form for comptroller's registration certificate.

(ix) Creation of sinking fund, levy of tax (for current year and to be levied each year during life of bonds) and appropriation if first maturity occurs prior to next tax levy date.

(x) Facts of sale of bonds, mayor or county judge to have charge of bonds pending attorney general approval.

(xi) Declaration as to mode of sale.

(5) Statement of taxable values.

(6) Copy of official notice of sale, if any.

(7) Certificate of indebtedness: all outstanding debt payable from taxes.

(8) Incumbency certificate.

(9) Incorporation certificate.

(10) Certificate regarding adoption of Texas Civil Statutes, Title 28, if first issue for general law city.

(11) Debt retirement schedule, covering all tax debt to be outstanding.

(12) Appropriation certificate by chief financial officer of city, town or county when first coupon due or first principal maturity comes before tax can be levied to pay same.

(13) Certification, as to home rule cities, of no charter amendment since approval of last preceding bond issue, or, if amended, certified copies of all amendments adopted since such approval.

**History**
- *Source Note: The provisions of this §53.41 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.42** Appropriate Certifications {#sec-53.42 omnilex-key=us-tx-regs-official--title-1--53.42}

Transcripts for refunding city general obligation bonds should include the appropriate certifications stated in §53.51 (17) and (18) of this title (relating to Minimum Requirements for Statutory Compliance).

**History**
- *Source Note: The provisions of this §53.42 adopted to be effective January 1, 1976.*

#### **Subchapter C** APPROVAL OF CITY REVENUE BONDS, NOTES, AND WARRANTS

##### **1 Tex. Admin. Code § 53.51** Municipal Revenue Bond Elections {#sec-53.51 omnilex-key=us-tx-regs-official--title-1--53.51}

The following are the minimum requirements for statutory compliance and documentary composition of transcripts prerequisite to approval of municipal revenue bonds.

(1) Where a Texas Civil Statutes, Article 1112, election is applicable.

(A) Minutes excerpt relative to call of election.

(B) Findings; advisability of calling the bond election, etc.

(C) Resolution or ordinance recitals and directions.

(i) Election date: not less than 15 nor more than 30 days from date of passage, and designation of polling hours.

(ii) Text of propositions in full, stating purpose, amount, interest rate maximum, sources of revenue for payment of principal and interest, maximum maturity.

(iii) Places of election, election officers, and number of clerks, absentee voting provision with days and hours of polling.

(iv) Election to be held in accordance with Texas Election Code, applicable general laws and laws applicable to the issuance of municipal bonds by such city or town.

(v) Ballot proposition, form and method of voting (paper ballots, etc.).

(vi) Directions for posting and publication of notice.

(D) Notice of election: substantial copy of election order addressed to qualified electors.

(i) Affidavit (or certificate) of posting notice.

(I) Posted in each election precinct and at city hall.

(II) At least 14 days prior to election or, if a lesser period, designation of such period and statement of reasons longer notice period cannot be afforded.

(III) Copy of notice attached.

(ii) Affidavit of publication of notice.

(I) Published the same day in two successive weeks, indicating dates published, first publication not less than 14 days prior to election date.

(II) Newspaper of general circulation published in the city or, if no newspaper published there, circulated in the city.

(III) Copy of notice as published attached.

(IV) Executed by officer of employee of the newspaper, with job title indicated.

(E) Canvass resolution or ordinance.

(i) Meeting minutes excerpt relative to canvassing.

(ii) Recitation.

(I) All circumstances surrounding calling of election, giving of notice, holding of election and return of ballots, finding all have been legally had and done.

(II) Tabulations of votes.

(iii) Operative provisions.

(I) Election duly and lawfully held.

(II) Result declared and declaration that council, board of aldermen, or commission authorized to issue the described bonds and pledge revenues.

(III) In non-Article 1112 election issues, notice of intention to issue revenue bonds must be furnished in accordance with Texas Civil Statutes, Article 2368a.

(2) Bond ordinance.

(A) Minutes excerpt relative to bond ordinance passage.

(B) Recitation.

(i) Election circumstances, if Article 1112 election involved; if non-Article 1112 issue, recital of publication of notice of intention to issue revenue bonds.

(ii) Amount to be issued and recital of identification of all prior issues, including amount of each such issue, made under authority of the election, if any, ordered in paragraph (1) of this section, or under prior ordinance, as well as a description of any system mortgages incurred pursuant to Texas Civil Statutes, Article 1118a, and constitutional, statutory, and charter, if any, authority for issue.

(C) Operative provisions.

(i) Designation of issue, aggregate amount, purposes.

(ii) Numbers, denominations, bond date (numbers corresponding to listed years and maturity amounts must be set out).

(iii) Maturity schedule.

(iv) Interest rates and payment dates.

(v) Redemption option, if any.

(vi) Places of payment, names of paying agents, manner of payment.

(vii) Manner of execution.

(viii) Bond form, coupon form, if any, (must refer to redemption option, if any), form of comptroller's registration certificate.

(ix) Creation of sinking fund, declaration or sources of payments of defined revenues and pledge thereof, with specification of source of payment of maintenance and operating expenses.

(x) Pledge to render no free service.

(xi) Sale of bonds; mayor to have charge of bonds pending attorney general approval.

(xii) Declaration of mode of sale.

(xiii) Bond statement: "The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation."

(3) Copy of official notice of sale, if any.

(4) If contract for sale of water by issuer is involved requiring Texas Water Rights Commission approval, a certified copy of the approval of such contract by the Texas Water Rights Commission must be inserted in the transcript.

(5) Incumbency certificate.

(6) Certificate of incorporation.

(7) Certificate regarding adoption of Texas Civil Statutes, Title 28, if first issue for a general law city.

(8) Appropriation certificate by chief financial officer of city or town is required when the first coupon due or the first principal maturity comes before any pledged monies from system operation will be available and no other sources of payment are provided.

(9) Certification, as to home rule cities, of no charter amendment since approval of last preceding bond issue, or, if amended, certified copies of all amendments adopted since such approval.

(10) Certified copy of current ordinance regulating and fixing rates, charges, and fees for consumption or use of the self-liquidating project or its products, including affirmation that, where required by law, public rate hearing has been held prior to adoption of the ordinance, all findings required by cited applicable law have been made by the council or board upon which to base such rates, charges, and fees, and a finding that the same are reasonable and necessary, or certification of continuing effect of rate ordinance previously submitted to this office in connection with issue pledging such revenues.

(11) If other than a first revenue bond issue, certificate of no-default on any prior revenue bond issue payable from all or part of the same sources as the subject issue.

(12) Nonencumbrance certificate.

(13) Transcripts of additional parity bond issues must include certified copies of every document or certificate required to be executed by any relevant, prior revenue issue as conditional to power to delivery the additional issue.

(14) Revenue bond ordinances providing for a deed of trust, a trust indenture, or both, must be accompanied by a certified copy of each such instrument.

(15) If the management and control of the system or systems is confided to a board of trustees, the first encumbrance providing funding subject to such trustees' control should describe the composition of the board, its compensation, and the powers and duties conferred.

(16) Engineer's certified projection of income combined with debt service requirements over life of bonds.

(17) Refunding bonds which do not bear the same or a lower rate of interest than borne by the bonds being refunded must have incorporated in the transcript a dated and signed worksheet executed by the city or town chief financial officer or financial advisor mathematically demonstrating that a saving in total amount of interest to be paid by the issuer will result and, if applicable, that the increase in debt service will not impair covenanted payments or security on either prior superior or parity bonds. If interest saving will not result, such officer or advisor must furnish affidavit showing actual consideration moving to issuer for such refunding and demonstrating the adequacy thereof.

(18) Refunding bond transcripts shall be accompanied by a sinking fund certificate of the following tenor and effect.

Attached Graphic

**History**
- *Source Note: The provisions of this §53.51 adopted
to be effective January 1, 1976.*

#### **Subchapter D** APPROVAL OF SCHOOL DISTRICT BONDS

##### **1 Tex. Admin. Code § 53.61** School District Tax Bond Elections {#sec-53.61 omnilex-key=us-tx-regs-official--title-1--53.61}

The following are the minimum requirements for statutory compliance and documentary composition of transcripts prerequisite to approval of school district tax bond issues.

(1) Order calling bond election.

(A) Minutes excerpt relative to call of election.

(B) Order.

(i) Date of election and polling hours, including absentee voting provisions.

(ii) Full text of propositions to be voted upon.

(iii) Voting places.

(iv) Election officers.

(v) Form of ballot and how it is to be marked.

(vi) Copy of election order to be published one time at least 10 days prior to election date.

(vii) Holding of election to be in compliance with the Election Code (or general election laws) of Texas, except as modified by applicable school laws.

(viii) Election officers to make returns of election to the board and ballot boxes delivered to custody of the board.

(2) Notice of election.

(A) Addressed to all qualified electors.

(B) A verbatim copy of the order calling the election.

(3) Affidavit of publication of notice of election.

(A) Date of publication: at least 10 days prior to date set for election.

(B) Must have attached a clipping of the notice as published.

(C) Recite that newspaper is one of general circulation in the district.

(D) Subscribed and sworn to by titled officer or employee of publishing newspaper before notary public no earlier than the date of the published notice.

(4) Order canvassing returns and declaring results of the election, and minutes relating thereto, with minutes excerpt relative to canvass.

(5) Bond order.

(A) Minutes excerpt relative to bond order passage.

(B) Recitations: facts regarding calling and holding of the election, including amount to be issued and recital of identification of all prior issues, including amount of each such issue, made under authority of the election ordered in paragraph (1) of this section.

(C) Order proper.

(i) Name of the bond issue and aggregate amount issued.

(ii) Purpose for which the bonds are issued.

(iii) Issued in conformity with Constitution and laws of the State of Texas.

(iv) Bond numbers, keyed to years and maturities.

(v) Denominations.

(vi) Bond date.

(vii) Interest rates.

(viii) Date of interest payments.

(ix) Method and places of payment.

(x) Maturity schedule.

(xi) Option for redemption, if any.

(xii) Bond form.

(xiii) Coupon form (must refer to option for redemption, if any).

(xiv) Form for comptroller's registration, to appear on the reverse of each bond.

(xv) Signature and seal (facsimile, manual, or combination described).

(xvi) Levy of tax and creation of interest and sinking fund.

(xvii) President of the board or appropriate presiding county officer to have charge of the bonds until approved by the attorney general and registered by the comptroller.

(xviii) Name of purchaser, and declaration as to mode of sale.

(xix) Purchase price.

(xx) Recitation that bonds sold to the highest bidder.

(xxi) President of the board or appropriate presiding county officer to deliver the bonds to the purchaser upon receipt of the agreed purchase price.

(6) Statement of taxable values.

(7) Copy of official notice of sale, if any.

(8) Statement of indebtedness.

(9) Incumbency certificate.

(10) Boundary certificate.

(A) No boundary change.

(i) No change in district's boundaries since last bond issue.

(ii) No litigation concerning the district's boundaries is pending at the time of the last validating act and none now pending.

(iii) Certified by district's secretary (or part of general certificate), but may be prepared and signed by county superintendent of schools.

(B) Boundary changes (must be set out in detail by metes and bounds or lot, block and survey reference, or combination).

(i) Redefining order.

(ii) Certified map of the district's boundaries as redefined unless a cited validating act has been passed since the change.

(iii) Certified by county or district superintendent of schools.

(11) Appropriation certificate when first coupon, first maturity, or both due before next tax levy date.

(12) Certificate of board secretary attesting to date of establishment of district and mode by which established, to the giving of all notices as required by law for meetings (unless recited in attested minutes excerpt for each meeting separately), and to currency of accreditation by the Texas Education Agency.

**History**
- *Source Note: The provisions of this §53.61 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.62** Certification {#sec-53.62 omnilex-key=us-tx-regs-official--title-1--53.62}

Every school district transcript must include certification as to whether the Texas Education Code, Chapter 20, local maintenance tax has been adopted by the district electorate.

**History**
- *Source Note: The provisions of this §53.62 adopted to be effective January 1, 1976.*

#### **Subchapter E** APPROVAL OF ISSUES OF CERTIFICATES OF OBLIGATION

##### **1 Tex. Admin. Code § 53.71** Change Orders {#sec-53.71 omnilex-key=us-tx-regs-official--title-1--53.71}

Certificates may not be authorized or issued to provide for change orders in excess of 25% of any original contract price.

**History**
- *Source Note: The provisions of this §53.71 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.72** Increases in Original Contract Price {#sec-53.72 omnilex-key=us-tx-regs-official--title-1--53.72}

No original contract price may be increased by more than 25% (regardless of the intended source of funds to provide for such increase), nor shall any original contract be decreased by more than 25% without the consent of the contractor to such decrease.

**History**
- *Source Note: The provisions of this §53.72 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.73** No Cash Sale Notice {#sec-53.73 omnilex-key=us-tx-regs-official--title-1--53.73}

No notice to bidders pursuant to section 5 is required when certificates are sold for cash.

**History**
- *Source Note: The provisions of this §53.73 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.74** Approval and Registration of Cash Sales {#sec-53.74 omnilex-key=us-tx-regs-official--title-1--53.74}

Only certificates sold for cash will be subject to approval by the attorney general and registration by the Comptroller of Public Accounts.

**History**
- *Source Note: The provisions of this §53.74 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.75** Certificates in Exchange for Services or Property {#sec-53.75 omnilex-key=us-tx-regs-official--title-1--53.75}

Certificates delivered in exchange for services or property that are being refunded pursuant to any law requiring approval of the attorney general and registration by the Comptroller of Public Accounts of said refunding obligations shall be documented and submitted for review in the manner set forth herein.

**History**
- *Source Note: The provisions of this §53.75 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.76** Refunding of Certificates in Exchange for Services or Property {#sec-53.76 omnilex-key=us-tx-regs-official--title-1--53.76}

No refunding of certificates delivered in exchange for services or property will be approved unless said certificates are authorized and issued in substantial compliance with statutory authority and full compliance with any applicable constitutional provisions.

**History**
- *Source Note: The provisions of this §53.76 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.77** Emergency Approval {#sec-53.77 omnilex-key=us-tx-regs-official--title-1--53.77}

Certificates will be approved under Texas Civil Statutes, Article 2368a.1, §7(1), (2), and (3), in cases of true emergency only. An emergency must involve a public calamity, a present danger, or unforeseen damage.

**History**
- *Source Note: The provisions of this §53.77 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.78** Approval of Certificates {#sec-53.78 omnilex-key=us-tx-regs-official--title-1--53.78}

Certificates will be approved under Texas Civil Statutes, Article 2368a.1, §7(8), where their amount is not in excess of 25% of those current funds or bond funds committed to the project, and such certificates are necessary in order to provide for deficiency to enable contract award to be made.

**History**
- *Source Note: The provisions of this §53.78 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.79** Certificates Payable from Revenues Other Than Taxes {#sec-53.79 omnilex-key=us-tx-regs-official--title-1--53.79}

Certificates payable solely from revenues other than taxes shall not be considered debt with the meaning of Article XI, §5 and §7, of the Constitution of Texas.

**History**
- *Source Note: The provisions of this §53.79 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.80** Limitation of Payment for Certificates Payable from Revenues Other Than Taxes {#sec-53.80 omnilex-key=us-tx-regs-official--title-1--53.80}

Certificates, and any interest coupons attached thereto, payable solely from revenues other than taxes shall have printed on their faces a statement to the effect that the holder of said obligation shall never have the right to demand payment of said obligation out of any funds raised or to be raised by taxation.

**History**
- *Source Note: The provisions of this §53.80 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.81** Applicable Statute {#sec-53.81 omnilex-key=us-tx-regs-official--title-1--53.81}

The provisions of Texas Civil Statutes, Article 709-716, shall be fully applicable to certificates reviewed by the attorney general.

**History**
- *Source Note: The provisions of this §53.81 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.82** Other Applicable Rules {#sec-53.82 omnilex-key=us-tx-regs-official--title-1--53.82}

Generally, all documentation, rules of procedure, and policy regarding approval of general obligation securities, revenue securities or combinations thereof are fully applicable to the approval of certificates.

**History**
- *Source Note: The provisions of this §53.82 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.83** Publication of Notice {#sec-53.83 omnilex-key=us-tx-regs-official--title-1--53.83}

A resolution, ordinance, or order directing publication of notice of intention to issue certificates, when such is required, must be submitted.

**History**
- *Source Note: The provisions of this §53.83 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.84** Affidavits of Publication {#sec-53.84 omnilex-key=us-tx-regs-official--title-1--53.84}

Affidavits of publication stating dates published and newspaper of publication with newspaper clipping attached are required for all published notices regarding certificates.

**History**
- *Source Note: The provisions of this §53.84 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.85** Certificate of No Elector Protest {#sec-53.85 omnilex-key=us-tx-regs-official--title-1--53.85}

Certificates requiring notice of intention to issue pursuant to Texas Civil Statutes must be supported by a certificate from the issuer to the effect that no petition signed by 5.0% of the qualified electors protesting the issuance of the certificates has been presented.

**History**
- *Source Note: The provisions of this §53.85 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.86** Authorization for Issuance: Compliance with Specific Provisions {#sec-53.86 omnilex-key=us-tx-regs-official--title-1--53.86}

Each ordinance or order authorizing the issuance of certificates secured by revenues in lieu of or in combination with taxes shall set out and comply with the specific provisions of the authority for said pledge of revenues.

**History**
- *Source Note: The provisions of this §53.86 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.87** Authorization for Issuance: Other Matters {#sec-53.87 omnilex-key=us-tx-regs-official--title-1--53.87}

Each ordinance or order authorizing the issuance of certificates shall, in addition to matters mentioned in section 9, Article 2368a.1, include the matters required generally in connection with the issuance of a general obligation security, revenue security, or combination thereof, as well as any appropriate findings, declarations, or documentation required by section 7.

**History**
- *Source Note: The provisions of this §53.87 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.88** Transcripts of Proceedings: Certificates in Exchange for Services or Property {#sec-53.88 omnilex-key=us-tx-regs-official--title-1--53.88}

Regarding certificates delivered in exchange for service, or property, the following rules will apply to transcripts of proceedings.

(1) Executed claims and accounts pursuant to section 4 of Article 2368a.1, must be furnished, along with proper documentation of the chain of possession of same, whenever same are funded or exchanged.

(2) A resolution, ordinance, or order directing publication of notice to bidders must be submitted.

(3) An ordinance or order awarding contracts to the lowest responsible bidder, stating the contract amount, naming the contractor, and authorizing execution of the contracts must be submitted.

(4) Executed copies of contracts and payment and performance bonds with supporting power of attorney for each bond, for each contractor, must be submitted.

(5) Each change order must be documented by executed change order and ordinance or order authorizing same, setting out amount of increase or decrease, authorization to execute change order, and method of payment for increases.

(6) An appropriation certificate is required for all amounts to be paid with current funds pursuant to original contract or change order.

(7) Each resolution, ordinance, or order directing delivery of certificates must set out the number of the claim or estimate being paid, the amount owing pursuant to claim or estimate, the amount and specific numbers of certificates to be delivered, the excess, if any, to be carried over or paid with current funds, and supported by executed claim or estimate duly approved by engineer for issuer.

(8) Each delivery of certificates must document the receipt of same and any current funds used in payment of a claim or estimate, as well as all subsequent assignments of certificates.

(9) Each delivery of certificates must be supported by an executed signature identification and no-litigation certificate.

**History**
- *Source Note: The provisions of this §53.88 adopted to be effective January 1, 1976.*

#### **Subchapter F** APPROVAL OF MUNICIPAL UTILITY DISTRICT BONDS

##### **1 Tex. Admin. Code § 53.101** On-the-Ground Inspection {#sec-53.101 omnilex-key=us-tx-regs-official--title-1--53.101}

Prior to approval of a transcript for the first bond issue of a district, there must be an on the ground inspection by an assistant attorney general accompanied by bond counsel of the district with an opportunity to interview the majority of all voters in those instances where 10 or less resident electors participated in any election confirming the creation of a district, including the initial directors' election, or in any election involving passage of a bond issue. It is the responsibility of bond counsel to insure such an inspection is conducted prior to transcript submission.

**History**
- *Source Note: The provisions of this §53.101 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.102** Evidence of Voter Qualifications {#sec-53.102 omnilex-key=us-tx-regs-official--title-1--53.102}

Evidence must be furnished that the voters meet the qualifications required by state law prior to the dates of the election in which they participated.

**History**
- *Source Note: The provisions of this §53.102 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.103** Contents of Utility District Transcripts {#sec-53.103 omnilex-key=us-tx-regs-official--title-1--53.103}

A municipal utility district transcript shall contain the following with respect to its organization.

(1) Consent agreements.

(A) Consent of city to creation of district (certified copy of ordinance or order).

(B) Consent of county, if applicable (certified copy of order).

(i) Petitions for consent and certification as to district location must state whether all or any part of the proposed district is located outside the extraterritorial jurisdiction of a city, identifying by metes and bounds, or by survey name, lot and block number, or by both, such located area and, if so, state the date and file reference of the county wherein such petition was presented to the county commissioners court for its review.

(ii) If no review is made by county commissioners court, or if the court's written opinion on review relative to the district's creation is not submitted to the Texas Water Rights Commission (TWRC) at least 10 days prior to the commission's ordered hearing day on the petition, a certificate of no-filing of such opinion by the secretary of the Texas Water Rights Commission shall be incorporated in transcript.

(iii) If the county has local drainage and flooding standards the Board order or resolution guaranteeing compliance with Texas Water Rights Commission construction requirements shall also assure conformity to such county standards. If the county has not adopted such standards a certification by the board secretary shall so declare.

(2) Petition to Texas Water Rights Commission requesting creation of district certified by secretary of TWRC.

(3) Evidence of compliance with the Texas Water Code, §50.331--copies of petitions to cities and counties--for districts filed with commission after May 28, 1973.

(4) Evidence of authority for persons who signed petition in representative capacities to do so in such capacities. Representative's affidavit is not acceptable.

(5) County tax assessor-collector's certificate evidencing that signers of petition constituted a majority in value of holders of title to the land in the proposed district as indicated by county tax rolls or that at least 50 were holders of title. Assessment slips should be attached for verification of values if more than one tract or parcel are involved.

(6) Order of TWRC fixing date, time, and place for hearing on petition.

(7) Affidavit of publication of notice of hearing on petition, with copy of clipping attached.

(8) Order of TWRC granting petition for creation.

(9) Certificate of district clerk of Travis County, dated at least 30 days after effective date of TWRC creation, that no appeal has been taken from order granting petition for creation.

(10) Minutes of organizational meeting of board of directors (including at least approval of directors' bonds and oaths, election of officers, adoption of seal, designation of offices and meeting places).

(11) Affidavit of publication of notice of location of meeting place outside district, if applicable, copy of clipping to be attached.

(12) Certificate of secretary of TWRC that copy of order establishing meeting place outside the district is on file with TWRC, if applicable.

(13) Order calling confirmation and directors' election.

(14) Affidavit of publication of notice of confirmation and directors election, copy of clipping to be attached.

(15) Order canvassing returns and declaring results of confirmation and directors' election, containing boundary description of district.

(16) Affidavit of each voter regarding his or her qualifications as voter and participation in the election, with copy of voters registration certificates attached or other written evidence from election registration officer. A majority of voters participating in the election is sufficient.

(17) Certificate of secretary of TWRC that copy of canvass order is on file with TWRC.

(18) Evidence that copy of canvass order has been filed in county deed records. A complete copy of the order bearing all county clerk file numbers, marks, and references is sufficient.

**History**
- *Source Note: The provisions of this §53.103 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.104** Contents of Bond Issue Transcripts {#sec-53.104 omnilex-key=us-tx-regs-official--title-1--53.104}

The following transcript requirements apply concerning the issuance of bonds.

(1) Order calling bond election.

(2) Affidavit of publication of notice of bond election, clipping attached.

(3) Order canvassing returns and declaring results of bond election.

(4) Affidavit of each voter, as for confirmation and directors' election (supra).

(5) Order or resolution authorizing application to Texas Water Rights Commission for approval of bonds.

(6) Application to TWRC for approval of bonds, properly certified as having been filed with TWRC.

(7) TWRC order approving issuance of bonds.

(8) Evidence of current compliance with specific requirements of TWRC.

(9) Affidavit of publication of notice of bond sale in local newspaper and in publication approved by attorney general, clippings attached.

(10) Copy of official notice of sale and statement.

(11) Orders or resolutions authorizing issuance, sale, and delivery of bonds, which must include name of bond purchasers, sale price, and statement of net effective interest rate.

**History**
- *Source Note: The provisions of this §53.104 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.105** Contents of Exclusions of Land Transcripts {#sec-53.105 omnilex-key=us-tx-regs-official--title-1--53.105}

The following transcript requirements apply with respect to exclusions of land, if any, involved in a proposed issue.

(1) Order calling hearing on question of exclusion, or certified copy of petition requesting hearing.

(2) Order setting time and place for exclusion hearing.

(3) Affidavit of publication of notice of exclusion hearing, clipping attached.

(4) Order excluding land and redefining boundaries, or order denying petition to exclude land.

(5) Certificate of district clerk of county having venue that no suit has been filed to review an order described in subsection (d).

(6) Evidence that copy of order excluding land, etc., has been filed in county deed records.

**History**
- *Source Note: The provisions of this §53.105 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.106** Transcript Requirements Applicable to Land Added by Petition {#sec-53.106 omnilex-key=us-tx-regs-official--title-1--53.106}

The following transcript requirements shall apply with respect to land added by petition, if any, in a proposed bond issue (sections 54.711-54.715).

(1) Evidence of city consent, if required.

(2) Petition for addition, properly certified by district's secretary as having been filed on appropriate date.

(3) Evidence of authority for persons signing petition in representative capacity to do so. Representative's affidavit is not acceptable.

(4) Order adding land.

(5) Evidence that petition is filed in county deed records.

(6) TWRC certificate that order adding land has been filed with TWRC (section 54. 727).

**History**
- *Source Note: The provisions of this §53.106 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.107** Transcript Requirements Applicable to Land Added by Petition of Less Than All Landowners {#sec-53.107 omnilex-key=us-tx-regs-official--title-1--53.107}

The following transcript requirements shall apply with respect to land added by petition of less than all the landowners in a proposed bond issue (54.717-54.724).

(1) City consent, if required.

(2) Petition for addition (including description of land) properly certified by district's secretary as having been filed on a given date, stating the following:

(A) signed by majority in value of owners of land; or

(B) signed by 50 landowners if the number of landowners exceeds 50.

(3) County tax assessor-collector's certificate evidencing that signers of petition constituted majority in value of the owners of the land to be annexed, or, if signed by 50 or more, that at least 50 were landowners.

(4) Order fixing time and place for hearing on petition.

(5) Affidavits of posting and publication of notice of annexation hearing.

(6) Order adding land to district.

(7) Evidence that order adding land filed in county deed records.

(8) Order calling election to assume obligation and unissued bonds and to authorize additional bonds.

(9) Affidavit of publication of election.

(10) Order canvassing returns and declaring results of election.

(11) Texas Water Rights Commission certificate that order adding land to district filed.

**History**
- *Source Note: The provisions of this §53.107 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.108** Additional Contents of a Transcript of a Proposed Issue {#sec-53.108 omnilex-key=us-tx-regs-official--title-1--53.108}

A transcript of a proposed issue should additionally contain the following certificates and documentation.

(1) Engineer's certificate as to probable period of construction.

(2) Engineer's projection.

(3) Certificate of assessed values.

(4) Rate orders.

(5) Incumbency certificate for district's directors and officers for entire period covered by transcript.

(6) Incorporation and boundary certification, specifically mentioning each boundary change by acreage and date.

(7) Certification that latest service rate order contained in transcript has not been amended, supplemented, repealed, or altered.

(8) Nonencumbrance certificate.

(9) Certification with regard to whether all or part of the district lies within the boundaries of a city or extraterritorial jurisdiction of any city.

(10) Certification that all data required by law to be filed with the TWRC has been so filed.

(11) Certification as to outstanding tax-supported debt.

(12) Map of district, certified by registered professional engineer, clearly indicating the boundaries of the district as originally created and all additions thereto and exclusions therefrom.

(13) Copies of all water supply or waste disposal agreements and other joint facilities agreements, as authorized and executed, wherein the district will make or receive capital contributions and which have or will have effect on use of bond proceeds.

(14) Certification as to whether petitions for exclusion of land were filed with secretary of the board of directors prior to bond election.

(15) Certification of compliance with any requirements imposed upon district by consent ordinance of city, if any, having extraterritorial jurisdiction of district.

**History**
- *Source Note: The provisions of this §53.108 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.109** Actions by a District's Board of Directors and Any Other Governmental Body {#sec-53.109 omnilex-key=us-tx-regs-official--title-1--53.109}

Each and every action taken by a district's board of directors and any other governmental body must be accompanied by minute entry indicating attendance, and introduction and adoption of such actions; such actions and minute entries must be certified as true and correct copies of same, on file in such body's official minutes; and all meetings at which such actions have been taken must be certified as having been held in full compliance with Texas Civil Statutes, Article 6252-17, Texas Water Code, §54.109, or both, as applicable.

**History**
- *Source Note: The provisions of this §53.109 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.110** Actions Taken by Persons Acting in Representative Capacities {#sec-53.110 omnilex-key=us-tx-regs-official--title-1--53.110}

All actions taken by persons acting in representative capacities (such as execution and attestation by corporate officers of petitions requesting creation of districts or additions of land to districts) must be supported in the transcript by evidence of authority so to act (such as by corporate resolution authorizing or ratifying any such action by corporate officers).

**History**
- *Source Note: The provisions of this §53.110 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.111** Approval of Water District Transcripts {#sec-53.111 omnilex-key=us-tx-regs-official--title-1--53.111}

The transcript of any water district subject to Chapter 255 (House Bill 321) Acts 1975, 64th Legislature, shall not be approved if:

(1) the Texas Water Rights Commission has filed with the attorney general the name of such district as one not in compliance with the Act's requirements relative to filing of audit by such district; and

(2) such district does not obtain and file with the attorney general a certified copy of:

(A) filing of audit as required by the act; and

(B) a letter or certificate issued by authority of the commission indicating that such audit filing is satisfactory to the commission.

**History**
- *Source Note: The provisions of this §53.111 adopted to be effective January 1, 1976.*

#### **Subchapter G** APPROVAL OF POLLUTION CONTROL BONDS AND BONDS ISSUED PURSUANT TO RIVER AUTHORITY SUPPLY CONTRACTS

##### **1 Tex. Admin. Code § 53.131** Pollution Control Bond Issue and Waste Disposal Issues {#sec-53.131 omnilex-key=us-tx-regs-official--title-1--53.131}

The following are the minimum requirements for statutory compliance and documentary composition of transcripts prerequisite to approval of pollution control bond issues and waste disposal issues:

(1) state regulatory agency certifications, as applicable to the particular issue:

(A) Texas Air Control Board;

(B) Texas Water Quality Board;

(C) Texas Water Rights Commission;

(2) proceedings of all parties authorizing execution of basic financing documents by specified officers;

(3) fully executed basic financing documents (including, at least, issuer's bond resolution, order, or ordinance, and agreement between issuer and company, binding company to pay all debt requirements on bonds and to hold issuer harmless from all costs and liabilities in any manner relating to the facilities and bonds);

(4) official statement and notice of sale, if any;

(5) executed bond purchase agreement, if any;

(6) signature identification and no-litigation certificate for issuer;

(7) signature identification certificates for all other persons executing transcript documents;

(8) issuer certifications:

(A) incumbency;

(B) incorporation or creation;

(C) facilities to be located wholly within boundaries of issuer, or "in and out" if applicable, pursuant to Texas Civil Statutes, Article 4477-5a;

(D) facilities not "existing facilities," pursuant to Texas Civil Statutes, Article 4477-51a;

(E) nonencumbrance;

(9) proof of corporate authority of company:

(A) copies certified of all current corporate charters;

(B) copy of certified current bylaws of contracting corporations;

(C) original certificate from appropriate state official of state of incorporation evidencing incorporation, continued corporate existence, and good standing;

(D) original certificate of the secretary of state of Texas evidencing authority of the corporation to do business in Texas, if a foreign corporation;

(E) original certificate of corporate tax good standing from appropriate official of state of incorporation, if a foreign corporation;

(F) original certificate of corporate franchise tax good standing from Comptroller of Public Accounts of the State of Texas;

(G) telegram from appropriate state official of state of incorporation, dated the date of attorney general's approval of the issue, evidencing continued corporate existence and good standing in state of incorporation, if corporation net assets are less than $10 million;

(H) telegram from the secretary of state of Texas evidencing no change in corporate authority to do business in Texas, dated as of date of attorney general's approval of the issue, if a foreign corporation and if corporation net assets are less than $10 million;

(I) telegram from appropriate state official of state of incorporation evidencing no change in corporate tax status subsequent to certificate dated as of date of attorney general's approval of the issue, if a foreign corporation and if net assets are less than $10 million;

(10) company certifications:

(A) incumbency of all officers and representatives executing transcript documents;

(B) incorporation;

(11) latest audited financial statement for company;

(12) acknowledgment by authorized officer that company is not relieved of any responsibility under Texas Clean Air Act, Regional Waste Disposal Act, or any other federal or state statute, rule, or regulation pertaining to air quality, air pollution, or water quality, as the case may be, during or after construction of the facilities;

(13) affidavit of authorized company representative that facilities are not existing facilities pursuant to Texas Civil Statutes, Article 4477-5a;

(14) opinion of company general counsel addressed to attorney general that company is fully bound and obligated by relevant undertaking;

(15) if city or county is issuer pursuant to Texas Civil Statutes, Article 4477-5a:

(A) certified copy of ordinance or order of authorization for publication of notice of intent to issue bonds;

(B) affidavit of publication of notice of intent in newspaper circulated within the city or the county, as the case may be;

(C) no-referendum certificate;

(16) if bonds are guaranteed by parent company, such parent must furnish all documentation relating to it that must be furnished by primarily liable subsidiary;

(17) if bank is involved as trustee or escrow agent, evidence of its corporate authority so to act must be furnished, together with authority for specified officers to execute transcript documents and signature identification certificates for such bank and such officers;

(18) issuer bond order, ordinance, or resolution must conform to requirements of Texas Civil Statutes, Article 4477-5a, §5, and Texas Water Code, §§25.051-25.066, and shall include a specific statement of the sources of payment of principal, interest, and premiums, if any, and the pledge of such revenue sources, and provide, at least, an interest and sinking fund therefor.

**History**
- *Source Note: The provisions of this §53.131 adopted to be effective January 1, 1976.*

#### **Subchapter H** APPROVAL OF BONDS ISSUED BY INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 53.141** Bonds Proposed under the Texas Education Code, §55.171 {#sec-53.141 omnilex-key=us-tx-regs-official--title-1--53.141}

Bonds proposed for issue under Texas Education Code, Chapter 55, Subchapter B, §55.171, must include in the transcript a certified copy of an order or resolution or minute entry of the Coordinating Board, Texas College and University System, showing the board's approval of the specific terms and provisions of said bonds and the pledge for the payment thereof as being in conformance with the board's applicable rules and regulations.

**History**
- *Source Note: The provisions of this §53.141 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.142** Bonds Proposed under the Texas Education Code, §55.172 {#sec-53.142 omnilex-key=us-tx-regs-official--title-1--53.142}

Bonds proposed for issue under Texas Education Code, Chapter 55, Subchapter B, §55.172, must include in the transcript a certified copy of an order or resolution or minute entry of the Coordinating Board, Texas College and University System, showing the board's approval of the specific terms and provisions of said bonds and the pledge for the payment thereof as being in conformance with the board's applicable rules and regulations.

**History**
- *Source Note: The provisions of this §53.142 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.143** Construction Bonds Issued by an Institution of Higher Education {#sec-53.143 omnilex-key=us-tx-regs-official--title-1--53.143}

A transcript for bonds issued by an institution of higher education, the proceeds of which are to be used for the construction, repair, rehabilitation, or remodeling of such institution's building or facilities, as defined in Texas Education Code, §61.003(13), must be accompanied by a certified copy of the Coordinating Board, Texas College and University System, order, resolution, or minute entry approving such construction, repair, rehabilitation, or remodeling, subject to the provisions of Texas Education Code, §61.058.

**History**
- *Source Note: The provisions of this §53.143 adopted to be effective January 1, 1976.*

#### **Subchapter I** APPROVAL OF BONDS TO BE ISSUED BY LOCAL GOVERNMENT FOR THE CONSTRUCTION OF SPORTS CENTERS

##### **1 Tex. Admin. Code § 53.151** Contents of Transcripts {#sec-53.151 omnilex-key=us-tx-regs-official--title-1--53.151}

The transcripts of such a proposed issue shall include engineer certification of and citation to the most recent United States census showing all or at least 51% of the territory of the local government situated in a county having a population of more than 650,000.

**History**
- *Source Note: The provisions of this §53.151 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.152** Pledge Income of a Contract or Lease Involved in the Proposed Issue To Be Supported {#sec-53.152 omnilex-key=us-tx-regs-official--title-1--53.152}

The pledged income of a contract or lease involved in the proposed issue must be supported by:

(1) a certified copy of the articles of incorporation, or filed articles of agreement, if applicable, articles of association, and permit to do business in Texas, if a foreign corporation, of the lessee, franchisee, concessionaire, or other primary part-beneficiary, if nongovernmental of the lease or contract;

(2) a complete audit by a certified public accountant of the lessee, franchisee, concessionaire, or other primary party-beneficiary of the lease or contract dated within not more than 90 days preceding the date of the transcript's submission;

(3) an affidavit of the chief financial officer of the lessee, franchisee, concessionaire, or other primary party-beneficiary of the lease or contract involved to the effect that no changes in the financial condition material to the pledged income have occurred since such audit date. Such affidavit shall be dated within 10 days of the date of submission of the transcript. If a material change has occurred it shall be detailed in the affidavit;

(4) as of the date of the attorney general's approval, telegraphic confirmation of good-standing from the secretary of state of the state of original incorporation or organization of such lessee, franchisee, concessionaire, or primary party-beneficiary, to be delivered to the assistant attorney general examining the transcript as well as verification by the comptroller of public accounts that all taxes due and owing to the State of Texas by such lessee, franchisee, concessionaire, or primary party-beneficiary have been paid.

**History**
- *Source Note: The provisions of this §53.152 adopted to be effective January 1, 1976.*

#### **Subchapter J** REQUIREMENTS OF THE APPROVAL OF SECURITIES WITH RESPECT TO CRIMINAL JUSTICE FACILITIES

##### **1 Tex. Admin. Code § 53.161** Issuance of Bonds for Construction of Jails or Improvements {#sec-53.161 omnilex-key=us-tx-regs-official--title-1--53.161}

Transcripts for the issuance of bonds for the construction of jails or additions or improvements thereto shall include a certificate of compliance with minimum standards of the Jail Standards Commission, signed by the executive director of the Commission on Jail Standards, as to such construction, additions, or improvements, if applicable rules and regulations then are in force and effect and plans and specifications have been prepared. (The commission is required to adopt such rules and regulations on or before January 1, 1977.)

**History**
- *Source Note: The provisions of this §53.161 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.162** Criminal Justice Facilities Contracts Contents {#sec-53.162 omnilex-key=us-tx-regs-official--title-1--53.162}

With respect to criminal justice facilities, pursuant to Texas Civil Statutes, Article 2370c-2, all contracts, with copies of each order and ordinance authorizing the same, between the city and county and the administrative agency, if any, created by the city and county under this Act, relating to matters mentioned in sections 2 through 4 of the Act, must be included in each securities transcript submitted thereunder.

**History**
- *Source Note: The provisions of this §53.162 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.163** Revenue Financing; Projection of Anticipated Income {#sec-53.163 omnilex-key=us-tx-regs-official--title-1--53.163}

Where revenue financing is included, with respect to Texas Civil Statutes, Article 2370c-2 issues, a projection of anticipated income from each source for the life of the revenue securities employed must be furnished, showing the data and basis upon which such projection is made, certified as to its reasonableness by a certified public accountant or by the city chief finance officer, city manager, county judge, or county auditor, as applicable.

**History**
- *Source Note: The provisions of this §53.163 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.164** Division Rules Applicable {#sec-53.164 omnilex-key=us-tx-regs-official--title-1--53.164}

Division rules for general obligation bond transcripts, revenue bond transcripts, and certificate of obligation transcripts shall apply to those types of securities used for funding subject facilities. One executed copy of each lease, if any, must be in the transcript with a copy of the authorizing orders or ordinances.

**History**
- *Source Note: The provisions of this §53.164 adopted to be effective January 1, 1976.*

##### **1 Tex. Admin. Code § 53.165** Pledged Parking Fees and Other Fee Income Transcripts {#sec-53.165 omnilex-key=us-tx-regs-official--title-1--53.165}

Pledged parking fees and other fee income require transcript inclusion of a copy of each ordinance or order authorizing the assessment and collection of such fees.

**History**
- *Source Note: The provisions of this §53.165 adopted to be effective January 1, 1976.*

#### **Subchapter K** APPROVAL OF SAN ANTONIO RIVER AUTHORITY AND POLLUTION CONTROL DISTRICT BONDS

##### **1 Tex. Admin. Code § 53.171** Certified Copies of All Proceedings {#sec-53.171 omnilex-key=us-tx-regs-official--title-1--53.171}

Certified copies of all proceedings under the authority cited above must be submitted as prescribed for general obligation bond transcripts. Additionally, a scaled map of the boundaries of each pollution control district shall be included in the transcript.

**History**
- *Source Note: The provisions of this §53.171 adopted to be effective January 1, 1976.*

#### **Subchapter L** GENERAL REQUIREMENTS FOR NONPROFIT CORPORATION BONDS

##### **1 Tex. Admin. Code § 53.181** Form of Documents {#sec-53.181 omnilex-key=us-tx-regs-official--title-1--53.181}

All documents and certificates submitted to the Public Finance Section of the attorney general's office are to be dated, fully executed originals, unless otherwise indicated in this chapter. Undated certificates shall be accompanied by authorization from the appropriate party to the attorney general to complete the date of such certificate upon approval of the bonds and to rely upon such information unless notified otherwise.

**History**
- *Source Note: The provisions of this §53.181 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.182** Governing Law {#sec-53.182 omnilex-key=us-tx-regs-official--title-1--53.182}

The governing law provisions for letter of credit and reimbursement agreements, bond purchase agreements, remarketing agreements, and similar agreements may be that of the state of domicile of the bank or financial institution, but the rights, duties, and liabilities of the issuer of the bonds must be governed by Texas law. The trust indenture must be governed by Texas law, but the rights, duties, and obligations of the trustee may be interpreted and construed according to the laws of the trustee's state of domicile. Except as provided in this section, all other documents to which the issuer of the bonds is a party shall contain a provision to the effect that such document shall be governed by and construed in accordance with the laws of the State of Texas.

**History**
- *Source Note: The provisions of this §53.182 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.183** Closings {#sec-53.183 omnilex-key=us-tx-regs-official--title-1--53.183}

(a) Basic financing documents are to be submitted to the Public Finance Section of the attorney general's office a minimum of 12 working days prior to the proposed bond closing along with the appropriate examination fee as required by Texas Civil Statutes, Article 717k-6. One of the 12 days is needed in order to transmit approved bonds to the comptroller of public accounts for registration. Under extraordinary circumstances, a shorter review period will be considered, but only upon preclearance with the Public Finance Section. Certificates and other documentation should be submitted with, or as soon as possible after, the submission of the basic financing documents. It is highly recommended that closings not be scheduled prior to contacting the Public Finance Section.

(b) If documents cannot be executed in time to meet submittal requirements, it is acceptable to submit unexecuted documents in substantially final form. If any changes are made to the documents after they are first submitted, blacklined copies showing all changes must also be submitted. Any substantive changes may delay approval.

(c) The attorney general will send a representative to out-of-town closings only if truly necessary and only if precleared with the Public Finance Section.

**History**
- *Source Note: The provisions of this §53.183 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.184** General Submission Requirements {#sec-53.184 omnilex-key=us-tx-regs-official--title-1--53.184}

The following transcript items are to be submitted for all nonprofit corporation bonds:

(1) index of all documents comprising the bond transaction, with appropriate notation of those documents submitted to the attorney general;

(2) certification with respect to all bond proceedings held in compliance with Texas Civil Statutes, Article 6252-17, if applicable;

(3) certification that due notice of meetings has been given to the directors of the issuer, in accordance with the bylaws;

(4) transcripts for refunding of bonds which should contain additional items. Even though a current refunding under federal tax law allows redemption of the bonds within 90 days from the closing, for state law purposes the delay of redemption of the refunded bonds until after closing would be treated as an advance refunding and must comply with applicable requirements, including:

(A) escrow agreement or other document governing disposition and investment of bond proceeds pending redemption of the refunded bonds;

(B) verification of the sufficiency of the escrow, if applicable;

(C) copy of refunded bond resolution(s) or indenture(s); and

(D) authorization and instruction to call bonds for redemption;

(5) all other certificates or documents requested by the attorney general or otherwise relevant to the attorney general's approval of the financing.

**History**
- *Source Note: The provisions of this §53.184 adopted to be effective November 14, 1990, 15 TexReg 6289.*

#### **Subchapter M** DEVELOPMENT CORPORATION BONDS

##### **1 Tex. Admin. Code § 53.193** Generally {#sec-53.193 omnilex-key=us-tx-regs-official--title-1--53.193}

In addition to the requirements of Subchapter L of this chapter (relating to General Requirements for Nonprofit Corporation Bonds), this subchapter outlines the minimum transcript requirements prerequisite to approval of bonds issued pursuant to Texas Civil Statutes, Article 5190.6, as amended, Development Corporation Act of 1979 (the Act). Unless otherwise indicated in this subchapter, terms not defined herein have the meanings assigned to them in the Act.

**History**
- *Source Note: The provisions of this §53.193 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.194** Basic Financing Documents {#sec-53.194 omnilex-key=us-tx-regs-official--title-1--53.194}

The following shall constitute basic financing documents:

(1) loan agreement or other financing document between the corporation and the user;

(2) trust indenture, bond resolution, or other document, which shall include the following provisions:

(A) terms of the sale of the bonds, i.e., negotiated, competitive or otherwise, identification of the purchaser, whether sold at par or discount;

(B) place and manner of payment for the bonds;

(C) title, aggregate amount, denomination, bond number(s), and purpose of the bonds;

(D) maturity schedule;

(E) payment date(s), interest rate(s), and/or method or formula for setting the interest rate(s);

(F) redemption provisions, if any;

(G) designation of registrar and provisions for registration and transfer of the bonds;

(H) form of bond, including on the face of all bonds a statement to the effect that neither the State of Texas, the unit, nor any other political corporation, subdivision, or agency of the State of Texas shall be obligated to pay the bonds or the interest thereon and that neither the faith and credit nor the taxing power of the State of Texas, the unit, or any other political corporation, subdivision, or agency thereof is pledged to the payment of the principal of or interest on the bonds;

(I) pledge and source of payment of the bonds and disposition of the bond proceeds;

(J) creation and designation of all funds relating to the disposition of bond proceeds and the payment and security for the bonds;

(K) authorization to use official seal on the bonds and for the appropriate officers to sign the bonds and the form of such signature and seal (manual and/or facsimile); and

(L) specific description of the project to be financed or refinanced which includes a general, functional description of the type and use of the facility; the owner, operator, or manager of the facility and the prospective location of the facility by its street address or, if none, by a general description of its specific location;

(3) credit agreement or other documents such as tender agent agreement, remarketing agreement, or other agreements which provide or facilitate credit enhancement for the bonds, if any, or govern provisions of the bonds. If the corporation is not a party to such agreements, they need only be submitted in substantially final form, unexecuted;

(4) guarantee agreement or other documents guaranteeing the bonds, if any;

(5) official statement (or preliminary official statement if the official statement is not available) or other offering document and official notice of sale, if any;

(6) bond purchase agreement, if any;

(7) deed of trust or other mortgage documents, if any, in substantially final form, unexecuted.

**History**
- *Source Note: The provisions of this §53.194 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.195** Documentation of Approving Governing Body {#sec-53.195 omnilex-key=us-tx-regs-official--title-1--53.195}

The following shall constitute documentation of the approving governing body:

(1) resolution of the governing body approving the resolution of the corporation providing for the issuance of the bonds which resolution shall not be adopted more than 60 days prior to the delivery date of the bonds. Such resolution shall include:

(A) approval of issuance of the bonds;

(B) statement of the purpose and amount of the bonds; and

(C) identification of the user;

(2) undated general certificate of the governing body, executed by at least two officers of the governing body, which includes certifications and provisions with respect to:

(A) incumbency of the governing body and directors of the corporation;

(B) approval of all programs and expenditures of the corporation;

(C) approval of the initial bylaws and articles of incorporation of the corporation and all amendments to the corporation's articles of incorporation, if any; and

(D) no-litigation pending or threatened against the unit or governing body with respect to the issuance or approval of the bonds, the creation of the corporation, or the title or authority of the governing body or directors of the corporation.

**History**
- *Source Note: The provisions of this §53.195 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.196** Documentation of Corporation {#sec-53.196 omnilex-key=us-tx-regs-official--title-1--53.196}

The following shall constitute documentation of the corporation:

(1) undated general certificate of the corporation, executed by at least two officers of the corporation, which includes certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) incumbency of the officers and directors;

(B) due incorporation, valid existence, and good standing;

(C) official seal;

(D) appointment of authorized representative, if any;

(E) signature identifications;

(F) no-litigation pending or threatened against the corporation with respect to the issuance of the bonds, or the title or authority of the officers and directors of the corporation;

(G) bond documents submitted were properly executed by the corporation, have not been amended or rescinded, and due performance thereof has been authorized by the corporation;

(H) the terms and performance of the bond documents by the corporation are not in conflict with the articles of incorporation or bylaws of the corporation or any other instrument or restriction to which the corporation is a party or subject to;

(I) documents submitted are in substantially the form approved by or on behalf of the corporation; and

(J) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of the articles of incorporation as certified by the secretary of state of Texas and bylaws or, alternatively, a certification that there have been no amendments to the articles of incorporation or bylaws since the last submission of bonds or copies of any amendments;

(ii) copy of certificate of continued existence from the secretary of state of Texas and copy of certificate of good standing from the comptroller of public accounts of Texas, both dated within 60 days of transcript submission; and

(iii) copy of the department's approval;

(2) resolution authorizing issuance of the bonds, including the following provisions:

(A) title of bonds;

(B) legal citation for authority to issue bonds;

(C) specific purpose for which the bonds are issued;

(D) identification of the user; and

(E) total principal amount of bonds to be issued.

**History**
- *Source Note: The provisions of this §53.196 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.197** Documentation of User {#sec-53.197 omnilex-key=us-tx-regs-official--title-1--53.197}

The following shall constitute documentation of the user:

(1) undated general certificate of the user, executed by at least two officers or authorized representatives of the user, including certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) due incorporation or creation, valid existence, and good standing;

(B) incumbency of officers executing bond documents;

(C) appointment of authorized representative, if any;

(D) signature identifications;

(E) the bond documents submitted were properly executed by the user, have not been amended or rescinded, and due performance thereof has been authorized by the user;

(F) the terms and performance of the bond documents by the user are not in conflict with the articles of incorporation, bylaws, partnership, or other agreement, of the user or any other instrument or restriction to which the user is a party or subject to;

(G) receipt of all necessary permits and approvals of governmental bodies or agencies with respect to the issuance and sale of the bonds and the user has received or expects to receive and has applied or shall apply with due diligence for all necessary permits and approvals with respect to the construction or operation of the project;

(H) no event has occurred since the date of the user's application to the department that would result in a material adverse change in the financial condition of the user or in the user's ability to perform its obligations under the bond transaction documents;

(I) no default under any agreement to which the user is a party which would have a material adverse effect on the user, or a certification that the corporation has been provided with a complete description of the facts and circumstances of such default;

(J) location of project facilities (whether within the limits of the unit);

(K) no-litigation pending or threatened against the user with respect to the authority of the user to enter into the bond transaction or to perform its obligations thereunder;

(L) documents submitted are in substantially the form approved by or on behalf of the corporation;

(M) all documents, including counsel opinions, are in substantially the form submitted to the department and approved by or on behalf of the corporation or, alternatively, a letter from bond counsel containing a certification to such effect; and

(N) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of articles of incorporation or other evidence of creation as certified by the appropriate state official;

(ii) copy of bylaws, partnership, or other agreement;

(iii) copy of certificate from appropriate state official of state of incorporation or creation of continued existence and good standing, dated within 60 days of transcript submission;

(iv) for a user created outside the State of Texas, copies of certificate of good standing from the comptroller of public accounts of Texas and certificate of the secretary of state of Texas evidencing authority to do business in the State of Texas, both dated within 60 days of transcript submission; and

(v) if a project is to be financed within the limits of a unit different from that of the corporation issuing the bonds, a copy of the request(s) for financing from such unit(s);

(2) resolution or other evidence approving the bond financing and related documents.

**History**
- *Source Note: The provisions of this §53.197 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.198** Bank/Credit Facility Documentation {#sec-53.198 omnilex-key=us-tx-regs-official--title-1--53.198}

The following shall constitute documentation of the bank/credit facility:

(1) if a bank or other entity is involved as trustee or escrow agent, evidence of the entity's corporate authority to act as such;

(2) if a credit or similar agreement is to be submitted in executed form pursuant to §53.194(3) of this title (relating to Basic Financing Documents), evidence of the credit facility's corporate authority to act as such;

(3) authority for specified officers to execute transcript documents and signature identification of such officers.

**History**
- *Source Note: The provisions of this §53.198 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.199** Documentation of Guarantor {#sec-53.199 omnilex-key=us-tx-regs-official--title-1--53.199}

If the bonds are guaranteed by another entity, such entity must furnish the same documentation as the user, to the extent applicable.

**History**
- *Source Note: The provisions of this §53.199 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.200** Miscellaneous {#sec-53.200 omnilex-key=us-tx-regs-official--title-1--53.200}

(a) Any agreement relating to any project shall contain a provision that in the event of a default in the payment of the principal of or the interest or premium on the bonds or in the performance of any agreement contained in such proceedings, mortgage, or instrument, such payment and performance may be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect rents, purchase price payments and loan payments, and to apply the revenues from the project in accordance with such resolution, mortgage, or instrument.

(b) If a corporation finances projects in enterprise zones designated under Texas Civil Statutes, Article 5190.7, the Texas Enterprise Zone Act, as amended, please contact the Public Finance Section for additional transcript requirements.

**History**
- *Source Note: The provisions of this §53.200 adopted to be effective November 14, 1990, 15 TexReg 6289.*

#### **Subchapter N** HEALTH FACILITIES DEVELOPMENT CORPORATION BONDS

##### **1 Tex. Admin. Code § 53.211** Generally {#sec-53.211 omnilex-key=us-tx-regs-official--title-1--53.211}

In addition to the requirements of Subchapter L of this chapter (relating to General Requirements for Nonprofit Corporation Bonds), this subchapter outlines the minimum transcript requirements prerequisite to approval of bonds issued pursuant to the Health and Safety Code, Title 4, Chapter 221, as amended, Health Facilities Development Act (the Act). Unless otherwise indicated in this subchapter, terms not defined herein have the meanings assigned to them in the Act.

**History**
- *Source Note: The provisions of this §53.211 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.212** Basic Financing Documents {#sec-53.212 omnilex-key=us-tx-regs-official--title-1--53.212}

The following shall constitute basic financing documents:

(1) loan agreement or other financing document between the corporation and the user;

(2) trust indenture, bond resolution, or other document, which shall include the following provisions:

(A) terms of the sale of the bonds, i.e., negotiated, competitive or otherwise, identification of the purchaser, whether sold at par or discount;

(B) place and manner of payment for the bonds;

(C) title, aggregate amount, denomination, bond number(s), and purpose of the bonds;

(D) maturity schedule;

(E) payment date(s), interest rate(s), and/or method or formula for setting the interest rate(s);

(F) redemption provisions, if any;

(G) designation of registrar and provisions for registration and transfer of the bonds;

(H) form of bond, including on the face of all bonds a statement to the effect that neither the State of Texas, nor a political subdivision or agency of the State of Texas, including the sponsoring entity is obligated to pay the bonds or the interest thereon and that neither the faith and credit nor the taxing power of the State of Texas, the sponsoring entity, nor any other political subdivision, or agency of the State of Texas is pledged to the payment of the principal of or interest or any redemption premium on the bonds;

(I) pledge and source of payment of the bonds and disposition of the bond proceeds;

(J) creation and designation of all funds relating to the disposition of bond proceeds and to the payment and security for the bonds;

(K) authorization to use official seal on the bonds and for the appropriate officers to sign the bonds and the form of such signature and seal (manual and/or facsimile); and

(L) specific description of the health facility to be financed or refinanced which includes a general, functional description of the type and use of the health facility; the owner, operator, or manager of the health facility and the prospective location of the health facility by its street address or, if none, by a general description of its specific location;

(3) credit agreement or other documents such as tender agent agreement, remarketing agreement, or other agreements which provide or facilitate credit enhancement for the bonds, if any, or govern provisions of the bonds. If the corporation is not a party to such agreements, they need only be submitted in substantially final form, unexecuted;

(4) guarantee agreement or other documents guaranteeing the bonds, if any;

(5) official statement (or preliminary official statement if the official statement is not available) or other offering document and official notice of sale, if any;

(6) bond purchase agreement, if any;

(7) deed of trust or other mortgage documents, if any, in substantially final form, unexecuted.

**History**
- *Source Note: The provisions of this §53.212 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.213** Documentation of Governing Body {#sec-53.213 omnilex-key=us-tx-regs-official--title-1--53.213}

The following shall constitute documentation of the governing body:

(1) certificate of receipt of notice from the corporation to the governing body of intent to issue bonds, with notice attached, which includes the description of the health facilities, projected cost and necessity for the health facility, name of proposed user of the facility, or a cash flow forecast, as applicable;

(2) undated general certificate of the governing body including certifications and provisions with respect to:

(A) approval of the bylaws and articles of incorporation of the corporation and all amendments thereto;

(B) incumbency of the directors of the corporation; and

(C) whether any action has been taken pursuant to the Health Facilities Development Act, §221.035, or otherwise to limit the effectiveness of the bond resolution or affect the bond transaction.

**History**
- *Source Note: The provisions of this §53.213 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.214** Documentation of Corporation {#sec-53.214 omnilex-key=us-tx-regs-official--title-1--53.214}

The following shall constitute documentation of the corporation:

(1) undated general certificate of the corporation, executed by at least two officers of the corporation, including certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) incumbency of the officers and directors;

(B) due incorporation, valid existence, and good standing;

(C) official seal;

(D) appointment of authorized representative, if any;

(E) signature identifications;

(F) no-litigation pending or threatened against the corporation with respect to the issuance of the bonds, or the title or authority of the officers and directors of the corporation;

(G) the bond documents submitted were properly executed by the corporation, have not been amended or rescinded, and due performance thereof has been authorized by the corporation;

(H) the terms and performance of the bond documents by the corporation are not in conflict with the articles of incorporation or bylaws of the corporation or any other instrument or restriction to which the corporation is a party or subject to; and

(I) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) a copy of the corporation's articles of incorporation as certified by the secretary of state of Texas and bylaws, or, alternatively, a certification that there have been no amendments to the corporation's articles of incorporation or bylaws since the last submission of bonds or copies of any amendments;

(ii) copy of certificate of continued existence from the secretary of state of Texas and copy of certificate of good standing from the comptroller of public accounts of Texas, both dated within 60 days of transcript submission;

(2) resolution designating management committee(s), if any;

(3) resolution authorizing issuance of the bonds, including the following provisions:

(A) title of bonds;

(B) legal citation for authority to issue bonds;

(C) specific purpose for which the bonds are issued;

(D) identification of the user; and

(E) total principal amount of bonds to be issued.

**History**
- *Source Note: The provisions of this §53.214 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.215** Documentation of User {#sec-53.215 omnilex-key=us-tx-regs-official--title-1--53.215}

The following shall constitute documentation of the user:

(1) undated general certificate of the user, executed by at least two officers or authorized representatives of the user, including certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) due incorporation or creation, valid existence, and good standing;

(B) incumbency of officers executing bond documents;

(C) appointment of authorized representative, if any;

(D) signature identifications;

(E) the bond documents submitted were properly executed by the user, have not been amended or rescinded, and due performance thereof has been authorized by the user;

(F) the terms and performance of the bond documents are not in conflict with the articles of incorporation, bylaws, partnership, or other agreement, of the user or any other instrument or restriction to which the user is a party or subject to;

(G) receipt of all necessary permits and approvals of governmental bodies or agencies with respect to the issuance and sale of the bonds and the user has received or expects to receive and has applied or shall apply with due diligence for all necessary permits and approval with respect to the construction or operation of the project;

(H) no event has occurred since the date of the user's application to the corporation to issue the bonds that would result in a material adverse change in the financial condition of the user or in the user's ability to perform its obligations under the bond transaction documents or certification that the corporation has been provided with a complete description of the facts and circumstances of such event;

(I) no default under any agreement to which the user is a party which would have a material adverse effect on the user or certification that the corporation has been provided with a complete description of the facts and circumstances of such default;

(J) location of health facilities (whether located within limits of sponsoring entity);

(K) no-litigation pending or threatened against the user with respect to the authority of the user to enter into the bond transaction or to perform the obligations thereunder;

(L) documents submitted are in substantially the form approved by or on behalf of the corporation; and

(M) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of articles of incorporation or other evidence of creation as certified by the appropriate state official;

(ii) copy of bylaws, partnership, or other agreement;

(iii) copy of certificate from appropriate state official of state of incorporation or creation of continued existence and good standing, dated within 60 days of transcript submission;

(iv) for a user created outside this state, copies of certificate of good standing from the comptroller of public accounts of Texas and certificate of the secretary of state of Texas evidencing authority to do business in the State of Texas, both dated within 60 days of transcript submission; and

(v) if a health facility is to be financed within the limits of a sponsoring entity different from that of the corporation issuing the bonds, a copy of the consent of such sponsoring entity;

(2) resolution or other evidence approving the bond financing and related documents.

**History**
- *Source Note: The provisions of this §53.215 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.216** Bank/Credit Facility Documentation {#sec-53.216 omnilex-key=us-tx-regs-official--title-1--53.216}

The following shall constitute documentation of the bank/credit facility:

(1) if a bank or other entity is involved as trustee, escrow agent, or credit facility, evidence of the entity's corporate authority to act as such;

(2) if a credit or similar agreement is to be submitted in executed form pursuant to §53.212(3) of this title (relating to Basic Financing Documents), evidence of corporate authority to act as such;

(3) authority for specified officers to execute transcript documents and signature identification of such officers.

**History**
- *Source Note: The provisions of this §53.216 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.217** Documentation of Guarantor {#sec-53.217 omnilex-key=us-tx-regs-official--title-1--53.217}

If the bonds are guaranteed by another entity, such entity must furnish the same documentation as the user, to the extent applicable.

**History**
- *Source Note: The provisions of this §53.217 adopted to be effective November 14, 1990, 15 TexReg 6289.*

#### **Subchapter O** HOUSING FINANCE CORPORATION BONDS

##### **1 Tex. Admin. Code § 53.227** Generally {#sec-53.227 omnilex-key=us-tx-regs-official--title-1--53.227}

(a) In addition to the requirements of Subchapter L of this chapter (relating to General Requirements for Nonprofit Corporation Bonds), this subchapter outlines the minimum transcript requirements prerequisite to approval of housing finance corporation bonds issued pursuant to the Local Government Code (the Act), Title 12, Chapter 394, Housing Finance Corporation Act. Unless otherwise indicated in this subchapter, terms not defined herein have the meanings assigned to them in the Act.

(b) Unless otherwise indicated, the following requirements apply to single family and multifamily housing bonds issued by a housing finance corporation (the issuer).

**History**
- *Source Note: The provisions of this §53.227 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.228** Basic Financing Documents {#sec-53.228 omnilex-key=us-tx-regs-official--title-1--53.228}

The following shall constitute basic financing documents:

(1) loan agreement or other financing document;

(2) trust indenture, bond resolution, or other document which shall include the following provisions:

(A) terms of the sale of the bonds, i.e., negotiated, competitive or otherwise, identification of the purchaser, whether sold at par or discount;

(B) place and manner of payment for the bonds;

(C) title, aggregate amount, denomination, bond number(s), and purpose of the bonds;

(D) maturity schedule;

(E) payment date(s), interest rate(s) and/or method or formula for setting interest rate(s);

(F) redemption provisions, if any;

(G) designation of registrar and provisions for registration and transfer of the bonds;

(H) form of bond, including on the face of all bonds a statement to the effect that such bonds have been issued under the Act and do not constitute, within the meaning of any statutory or constitutional provision, an indebtedness, an obligation, or a loan of credit of the State of Texas, the local government, or any other municipality, county, or other municipal or political corporation or subdivision of the State of Texas;

(I) pledge and source of payment of the bonds and disposition of the bond proceeds;

(J) creation and designation of all funds relating to the disposition of bond proceeds and the payment and security for the bonds;

(K) authorization to use official seal on the bonds and for the appropriate officers to sign the bonds and the form of such signature and seal (manual and/or facsimile); and

(L) specific description of the project to be financed or refinanced which includes a general, functional description of the type and use of the facility; the owner, operator, or manager of the facility and the prospective location of the facility by its street address or, if none, by a general description of its specific location;

(3) credit agreement or other documents such as tender agent agreement, remarketing agreement, or other agreements which provide or facilitate credit enhancement for the bonds, if any, or govern provisions of the bonds. If the corporation is not a party to such agreements, they need only be submitted in substantially final form, unexecuted;

(4) guarantee agreement or other documents guaranteeing the bonds, if any;

(5) official statement (or preliminary official statement if the official statement is not available) or other offering document and official notice of sale, if any;

(6) bond purchase agreement, if any;

(7) deed of trust or other mortgage documents, if any, in substantially final form, unexecuted;

(8) lender documents for single family bonds, including:

(A) invitation to originate mortgage financing;

(B) offer to originate mortgage financing;

(C) origination, sale, and servicing agreement executed by the servicer and the issuer;

(D) evidence of receipt by the issuer of the commitment fee from participating lenders along with the allocation of mortgage loans to be originated by participating lenders; and

(E) a corporate authority and signature identification certificate of the servicer.

**History**
- *Source Note: The provisions of this §53.228 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.229** Documentation of Governing Body {#sec-53.229 omnilex-key=us-tx-regs-official--title-1--53.229}

The following shall constitute documentation of the governing body: undated general certificate of the governing body, including certifications and provisions with respect to:

(1) incumbency of the directors of the issuer;

(2) whether the governing body has created a joint housing finance corporation (a joint issuer) and if so, that the governing body has not created any other joint issuer with powers as provided in the Local Government Code (the Act), §394.012(c);

(3) approval of all amendments to the issuer's articles of incorporation, if any; and

(4) whether any action has been taken pursuant to the Act, §394.016(c), or otherwise to limit the effectiveness of the bond resolution or affect the bond transaction.

**History**
- *Source Note: The provisions of this §53.229 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.230** Documentation of Issuer {#sec-53.230 omnilex-key=us-tx-regs-official--title-1--53.230}

The following shall constitute documentation of the issuer:

(1) undated general certificate of the issuer, executed by at least two officers of the issuer, which includes certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) incumbency of the officers and directors;

(B) due incorporation, valid existence, and good standing;

(C) official seal;

(D) for single family bonds only, compliance with the Local Government Code, §394.005;

(E) appointment of authorized representative, if any;

(F) signature identifications;

(G) no-litigation pending or threatened against the issuer with respect to the issuance of the bonds or the title or authority of the officers and directors of the issuer;

(H) the bond documents submitted were properly executed by the issuer, have not been amended or rescinded, and due performance thereof has been authorized, by the issuer;

(I) the terms and performance of the bond documents by the issuer are not in conflict with the articles of incorporation or bylaws of the issuer or any other instrument or restriction to which the issuer is a party or subject to;

(J) if a joint issuer, that such issuer is not operating in more than one state planning region;

(K) the directors of the issuer are residents of the local government or if a joint issuer that the directors reside in a sponsoring local government;

(L) if the proceeds of the bonds are used for a residential development, that such development is located within the local government;

(M) the issuer's articles of incorporation, most recent annual report, and all other filings have been delivered to the Texas Department on Aging;

(N) documents are in substantially the form approved by or on behalf of the issuer; and

(O) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of the articles of incorporation as certified by the secretary of state of Texas and bylaws or, alternatively, a certification that there have been no amendments to the articles of incorporation or bylaws since the last submission of bonds or copies of any amendments; and

(ii) copy of certificate of continued existence from the secretary of state of Texas and certificate of good standing from the comptroller of public accounts of Texas, both dated within 60 days of transcript submission;

(2) resolution authorizing issuance of the bonds, including the following provisions:

(A) title of bonds;

(B) legal citation for authority to issue bonds;

(C) specific purpose for which the bonds are issued;

(D) identification of the developer; and

(E) total principal amount of bonds to be issued.

**History**
- *Source Note: The provisions of this §53.230 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.231** Documentation of Developer (Multifamily Bonds Only) {#sec-53.231 omnilex-key=us-tx-regs-official--title-1--53.231}

The following shall constitute documentation of the developer:

(1) undated general certificate of the developer, executed by at least two officers or authorized representatives, including certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) due incorporation or creation, valid existence and good standing;

(B) incumbency of officers executing bond documents;

(C) appointment of authorized representative, if any;

(D) signature identifications;

(E) the bond documents submitted were properly executed by the developer, have not been amended or rescinded, and due performance thereof has been authorized by the developer;

(F) the terms and performance of the bond documents by the developer are not in conflict with the articles of incorporation or bylaws, partnership, or other agreement, of the developer or any other instrument or restriction to which the developer is a party or subject to;

(G) receipt of all necessary permits and approvals of governmental bodies or agencies with respect to the issuance and sale of the bonds and the developer has received or expects to receive and has applied or shall apply with due diligence for all necessary permits and approvals with respect to the construction or operation of the project;

(H) no event has occurred since the date of the developer's application to the issuer to issue the bonds that would result in a material adverse change in the financial condition of the developer or in the developer's ability to perform its obligation under the bond transaction documents or certification that the issuer has been provided with a complete description of the facts and circumstance of such event;

(I) no default under any agreement to which the developer is a party which would have a material adverse effect on the developer or certification that the issuer has been provided with a complete description of the facts and circumstance of such default;

(J) no-litigation pending or threatened against the developer with respect to the authority of the developer to enter into the bond transaction or to perform its obligations thereunder;

(K) documents submitted are in substantially the form approved by or on behalf of the issuer; and

(L) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of articles of incorporation or other evidence of creation as certified by the appropriate state official;

(ii) copy of bylaws, partnership, or other agreement;

(iii) copy of certificate from appropriate state official of state of incorporation or creation of continued existence and good standing, dated within 60 days of transcript submission; and

(iv) if a developer created outside the State of Texas, certificate of good standing from the comptroller of public accounts of Texas and certificate of the secretary of state of Texas evidencing authority to do business in the State of Texas, both dated within 60 days of transcript submission;

(2) resolution or other evidence approving the bond financing and related documents;

(3) evidence of compliance with the Local Government Code (the Act), §394.902, if applicable (compliance is not required for refunding bonds):

(A) certification by the developer of reservation of the units in compliance with the Act, §394.902(a), and certificate of design engineer for the development that the reserved units meet the standards of the Texas Department on Aging; or

(B) form of receipt or other evidence from the issuer or the trustee acknowledging payment of the required fee pursuant to the Act, §394.902(b), (executed receipt to be submitted post-closing).

**History**
- *Source Note: The provisions of this §53.231 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.232** Bank/Credit Facility Documentation {#sec-53.232 omnilex-key=us-tx-regs-official--title-1--53.232}

The following shall constitute documentation of the bank/credit facility:

(1) if a bank or other entity is involved as trustee or escrow agent, evidence of the entity's corporate authority to act as such;

(2) if a credit or similar agreement is to be submitted in executed form pursuant to §53.228(3) of this title (relating to Basic Financing Documents), evidence of the credit facility's corporate authority to act as such;

(3) authority for specified officers to execute transcript documents and signature identification of such officers.

**History**
- *Source Note: The provisions of this §53.232 adopted to be effective November 14, 1990, 15 TexReg 6289.*

##### **1 Tex. Admin. Code § 53.233** Documentation of Guarantor {#sec-53.233 omnilex-key=us-tx-regs-official--title-1--53.233}

If the bonds are guaranteed by another entity, such entity must furnish the same documentation as the developer, to the extent applicable.

**History**
- *Source Note: The provisions of this §53.233 adopted to be effective November 14, 1990, 15 TexReg 6289.*

#### **Subchapter P** OTHER CORPORATION BONDS

##### **1 Tex. Admin. Code § 53.244** Generally {#sec-53.244 omnilex-key=us-tx-regs-official--title-1--53.244}

(a) In addition to the requirements of Subchapter L of this chapter (relating to General Requirements for Nonprofit Corporation Bonds), this subchapter outlines the minimum transcript requirements prerequisite to approval of bonds issued for certain corporation financings pursuant to statutes other than Texas Civil Statutes, Article 5190.6, as amended, the Health and Safety Code, Title 4, Chapter 221, and the Local Government Code, Title 12, Chapter 394. Unless otherwise indicated in this subchapter, terms not defined herein have the meanings assigned to them in Texas Civil Statutes, Article 5190.6.

(b) The nature of the financing and the statutory authority used will dictate the specific transcript requirements. The minimum requirements that can be expected are outlined in this subchapter. The issuing corporation (the issuer) or its representative is encouraged to contact the Public Finance Section prior to taking official action with respect to the financing in order to determine the additional documentation that will be necessary for approval of the bonds.

**History**
- *Source Note: The provisions of this §53.244 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.245** Basic Financing Documents {#sec-53.245 omnilex-key=us-tx-regs-official--title-1--53.245}

The following shall constitute basic financing documents:

(1) loan agreement or other financing document;

(2) trust indenture, bond resolution, or other document, which shall include the following provisions:

(A) terms of the sale of the bonds, i.e., negotiated, competitive or otherwise, identification of the purchaser, whether sold at par or discount;

(B) place and manner of payment for the bonds;

(C) title, aggregate amount, denomination, bond number(s), and purpose of the bonds;

(D) maturity schedule;

(E) payment date(s), interest rate(s), and/or method or formula for setting interest rate(s);

(F) redemption provisions, if any;

(G) designation of registrar and provisions for registration and transfer of the bonds;

(H) form of bond;

(I) pledge and source of payment of the bonds and disposition of the bond proceeds;

(J) creation and designation of all funds relating to the disposition of bond proceeds and to the payment and security for the bonds;

(K) authorization to use official seal on the bonds and for the appropriate officers to sign the bonds and the form of such signature and seal (manual and/or facsimile); and

(L) specific description of the project to be financed or refinanced which includes a general, functional description of the type and use of the facility; the owner, operator, or manager of the facility and the prospective location of the facility by its street address or, if none, by a general description of its specific location;

(3) credit agreement or other documents such as tender agent agreement, remarketing agreement, or other agreements which provide or facilitate credit enhancement for the bonds, if any, or govern provisions of the bonds. If the issuer is not a party to such agreements, they need only be submitted in substantially final form, unexecuted;

(4) guarantee agreement or other documents guaranteeing the bonds, if any;

(5) official statement (or preliminary official statement if the official statement is not available) or other offering document and official notice of sale, if any;

(6) bond purchase agreement, if any;

(7) deed of trust or other mortgage documents, if any, in substantially final form, unexecuted.

**History**
- *Source Note: The provisions of this §53.245 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.246** Documentation of Governing Body {#sec-53.246 omnilex-key=us-tx-regs-official--title-1--53.246}

The following shall constitute documentation of the governing body: undated general certificate of the governing body, including certifications and provisions with respect to incumbency of the officers and directors of the issuer.

**History**
- *Source Note: The provisions of this §53.246 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.247** Documentation of Issuer {#sec-53.247 omnilex-key=us-tx-regs-official--title-1--53.247}

The following shall constitute documentation of the issuer:

(1) undated general certificate of the issuer, executed by at least two officers of the issuer, which includes certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) incumbency of the officers and directors;

(B) due incorporation, valid existence, and good standing;

(C) official seal;

(D) documents are in substantially the form approved by or on behalf of the issuer;

(E) appointment of authorized representative, if any;

(F) signature identifications;

(G) the bond documents were properly executed by the issuer, have not been amended or rescinded, and due performance thereof has been authorized by the issuer;

(H) the terms and performance of the bond documents by the issuer are not in conflict with the articles of incorporation or bylaws of the issuer or any other instrument or restriction to which the issuer is a party or subject to;

(I) no-litigation pending or threatened against the issuer with respect to the issuance of the bonds, or the title or authority of the officers and directors of the issuer;

(J) documents submitted are in substantially the form approved by or on behalf of the issuer; and

(K) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of the articles of incorporation as certified by the secretary of state of Texas and bylaws or, alternatively, a certification that there have been no amendments to the articles of incorporation or bylaws since the last submission of bonds or copies of any amendments; and

(ii) copy of certificate of continued existence from the secretary of state of Texas and copy of certificate of good standing from the comptroller of public accounts of Texas, both dated within 60 days of transcript submission;

(2) resolution authorizing issuance of the bonds, including the following provisions:

(A) title of bonds;

(B) legal citation for authority to issue bonds;

(C) specific purpose for which the bonds are issued;

(D) identification of the user; and

(E) total principal amount of bonds to be issued.

**History**
- *Source Note: The provisions of this §53.247 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.248** Documentation of User {#sec-53.248 omnilex-key=us-tx-regs-official--title-1--53.248}

The following shall constitute documentation of the user:

(1) undated general certificate of the user, executed by at least two officers or authorized representatives of the user, including certifications and provisions (or confirmation of any such certifications and provisions which are contained in the basic financing documents) with respect to:

(A) due incorporation or creation, valid existence, and good standing;

(B) incumbency of officers executing bond documents;

(C) appointment of authorized representative, if any;

(D) signature identifications;

(E) the bond documents were properly executed by the user, have not been amended or rescinded, and due performance thereof has been authorized by the user;

(F) the terms and performance of the bond documents by the user are not in conflict with the articles of incorporation, bylaws, partnership, or other agreement, of the user or any other instrument or restriction to which the user is a party or subject to;

(G) receipt of all necessary permits and approvals of governmental bodies or agencies with respect to the issuance and sale of the bonds and that the user has received or expects to receive and has applied or shall apply with due diligence for all necessary permits and approvals with respect to the construction and operation of the project;

(H) no event has occurred since the date of the user's application to the issuer to issue the bonds that would result in a material adverse change in the financial condition of the user or in the user's ability to perform its obligations under the bond transaction documents, or certification that the issuer has been provided with a complete description of the facts and circumstances of such event;

(I) no default under any agreement to which the user is a party which would have a material adverse effect on the user, or certification that the issuer has been provided with a complete description of the facts and circumstances of such default;

(J) no-litigation pending or threatened against the user with respect to the authority of the user to enter into the bond transaction or to perform its obligations thereunder;

(K) documents are in substantially the form approved by or on behalf of the issuer; and

(L) incorporated as exhibits, as applicable (or may be included as separate documents if certified as to accuracy):

(i) copy of articles of incorporation or other evidence of creation as certified by the appropriate state official;

(ii) copy of bylaws, partnership, or other agreement;

(iii) copy of certificate from appropriate state official of state of incorporation or creation of continued existence and good standing, dated within 60 days of transcript submission; and

(iv) for a user created outside the State of Texas, copies of certificate of good standing from the comptroller of public accounts of Texas and certificate of the secretary of state of Texas evidencing authority to do business in the State of Texas, dated within 60 days of transcript submission;

(2) resolution or other evidence approving the bond financing and related documents.

**History**
- *Source Note: The provisions of this §53.248 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.249** Bank/Credit Facility Documentation {#sec-53.249 omnilex-key=us-tx-regs-official--title-1--53.249}

The following shall constitute documentation of the bank/credit facility:

(1) if a bank or other entity is involved as trustee or escrow agent, evidence of the entity's corporate authority to act as such;

(2) if a credit or similar agreement is to be submitted in executed form pursuant to §53.245(c) of this title (relating to Basic Financing Documents), evidence of the credit facility's corporate authority to act as such;

(3) authority for specified officers to execute transcript documents and signature identification of such officers.

**History**
- *Source Note: The provisions of this §53.249 adopted to be effective November 14, 1990, 15 TexReg 6290.*

##### **1 Tex. Admin. Code § 53.250** Documentation of Guarantor {#sec-53.250 omnilex-key=us-tx-regs-official--title-1--53.250}

If the bonds are guaranteed by another entity, such entity must furnish the same documentation as the user, to the extent applicable.

**History**
- *Source Note: The provisions of this §53.250 adopted to be effective November 14, 1990, 15 TexReg 6290.*

### **Chapter 54** SPECIAL PROGRAMS

#### **Subchapter B** PEACE OFFICER-INVOLVED SHOOTING REPORTS

##### **1 Tex. Admin. Code § 54.70** Forms {#sec-54.70 omnilex-key=us-tx-regs-official--title-1--54.70}

The Office of the Attorney General adopts by reference the peace officer-involved shooting report forms found on the Office of the Attorney General website at https://www.texasattorneygeneral.gov/cj/peace-officer-involved-shooting-report.

**History**
- *Source Note: The provisions of this §54.70 adopted to be effective June 1, 2016, 41 TexReg 3905.*

#### **Subchapter C** HUMAN TRAFFICKING PREVENTION SIGNS

##### **1 Tex. Admin. Code § 54.80** Required Posting of Human Trafficking Signs by Certain Entities {#sec-54.80 omnilex-key=us-tx-regs-official--title-1--54.80}

(a) A person who operates any of the following entities must post at the entity a sign as prescribed by this subchapter or, if applicable, similar signs or notices as prescribed by other state law:

(1) an entity permitted or licensed under Chapter 25, 26, 28, 32, 69, or 71, Alcoholic Beverage Code, other than an entity holding a food and beverage certificate;

(2) a cosmetology facility;

(3) a hospital;

(4) a massage establishment;

(5) a massage school;

(6) a sexually oriented business;

(7) a tattoo studio;

(8) a transportation hub; or

(9) a state park and other recreational site under the Parks and Wildlife Department's jurisdiction.

(b) A sign required to be posted under Texas Government Code §402.0351 must at a minimum:

(1) contain information regarding services and assistance to victims of human trafficking;

(2) be in both English and Spanish; and

(3) include:

(A) a toll-free telephone number and Internet website for accessing human trafficking resources;

(B) the contact information for reporting suspicious activity to the Department of Public Safety; and

(C) the key indicators that a person is a victim of human trafficking.

(c) A sign required under this subchapter must be clearly legible and posted in a conspicuous place that is either:

(1) near the public entrance; or

(2) in clear view of the public and employees and near the location similar notices are currently posted.

(d) The Office of the Attorney General, in consultation with the Human Trafficking Prevention Coordinating Council or Human Trafficking Prevention Task Force, must:

(1) develop best practices and outline any exceptions to posting requirements for each entity required to post human trafficking signs in accordance with this section;

(2) develop signs that comply with the requirements of this subchapter; and

(3) make the signs, best practices, and any exceptions available on the agency's Internet website to persons required to post a sign in accordance with Texas Government Code §402.0351 and the public.

**History**
- *Source Note: The provisions of this §54.80 adopted to be effective November 28, 2018, 43 TexReg 7667; amended to be effective November 15, 2020, 45 TexReg 7997; amended to be effective December 2, 2021, 46 TexReg 8003.*

##### **1 Tex. Admin. Code § 54.81** Enforcement of Required Posting of Human Trafficking Signs by Certain Entities {#sec-54.81 omnilex-key=us-tx-regs-official--title-1--54.81}

(a) If the Office of the Attorney General becomes aware that a person is in violation or may be in violation of a law enforced by another state agency that requires the posting of a sign or notice relating to human trafficking, the Office of the Attorney General may notify the appropriate state agency of the violation or potential violation.

(b) The Office of the Attorney General must issue a warning to a person described by §54.80(a) of this title (relating to Required Posting of Human Trafficking Signs by Certain Entities) for a first violation of this subchapter.

(c) For each subsequent violation of this subchapter, a person described by §54.80(a) of this title is subject to a civil penalty in the amount of $200 for each violation. Each day a violation continues is considered a separate violation.

**History**
- *Source Note: The provisions of this §54.81 adopted to be effective November 15, 2020, 45 TexReg 7997; amended to be effective December 2, 2021, 46 TexReg 8003.*

#### **Subchapter D** REPORTS CONCERNING HUMAN TRAFFICKING CASES

##### **1 Tex. Admin. Code § 54.90** Reporting Human Trafficking Cases {#sec-54.90 omnilex-key=us-tx-regs-official--title-1--54.90}

(a) This section applies to:

(1) the Department of Public Safety; and

(2) a municipal police department, sheriff's department, constable's office, county attorney's office, district attorney's office, and criminal district attorney's office, as applicable, in a county with a population of more than 50,000.

(b) An entity described by subsection (a) of this section that investigates the alleged commission of an offense under Chapter 20A of the Penal Code, or the alleged commission of an offense under Chapter 43 of the Penal Code, which may involve human trafficking, must submit to the Office of the Attorney General information required under Article 2.305 of the Code of Criminal Procedure.

(c) An entity described by subsection (a) of this section must submit the required information on a form provided by the Office of the Attorney General at least biannually.

**History**
- *Source Note: The provisions of this §54.90 adopted to be effective September 8, 2020, 45 TexReg 6225; amended to be effective December 2, 2021, 46 TexReg 8003.*

#### **Subchapter E** PREVENTION TRAINING AND SIGNS FOR COMMERCIAL LODGING ESTABLISHMENTS

##### **1 Tex. Admin. Code § 54.100** Human Trafficking Prevention Training for Commercial Lodging Establishments {#sec-54.100 omnilex-key=us-tx-regs-official--title-1--54.100}

(a) The operator of a commercial lodging establishment, as defined by Texas Business and Commerce Code Chapter 114, must require each employee who is directly employed by the establishment to complete an annual human trafficking awareness and prevention training program. New employees must complete this training no later than the 90th day after the date the employee was hired.

(b) The Office of the Attorney General must approve all training programs and must publish a list of approved and preapproved training programs on the agency's Internet website.

(c) All training programs required under this subchapter must:

(1) be at least 20 minutes in duration;

(2) include:

(A) an overview of human trafficking, including a description of:

(i) the experience of human trafficking victims;

(ii) how and why human trafficking takes place in the hospitality industry; and

(iii) how human trafficking is defined;

(B) guidance on how to identify individuals who are most at risk for human trafficking;

(C) information on the difference between labor and sex trafficking as that relates to identification of human trafficking in the hospitality industry;

(D) guidance on the role of an employee in reporting and responding to human trafficking; and

(E) the contact information of appropriate entities for reporting human trafficking, including:

(i) the National Human Trafficking Hotline toll-free telephone number and text line;

(ii) appropriate law enforcement agencies; and

(iii) a telephone number for reporting suspected human trafficking; and

(3) provide a certificate of completion.

(d) Training programs may be online or in person. Online training must include a pacing mechanism that requires the employee to read all course materials, view all videos, complete all coursework, and certify that the employee has completed all coursework before issuing a certificate of completion.

**History**
- *Source Note: The provisions of this §54.100 adopted to be effective December 2, 2021, 46 TexReg 8003.*

##### **1 Tex. Admin. Code § 54.101** Human Trafficking Prevention Training Compliance {#sec-54.101 omnilex-key=us-tx-regs-official--title-1--54.101}

(a) The operator of a commercial lodging establishment must maintain all documentation and certificates of completion for all current and former employees of the establishment.

(b) At a minimum, records maintained in accordance with subsection (a) of this section must include:

(1) the employee's name

(2) date the employee was hired;

(3) name of the approved training course;

(4) date the employee completed the approved training course; and

(5) the certificate of completion generated after the employee completed the training course.

(c) The operator of a commercial lodging establishment must make records described in subsection (a) of this section available to the Office of the Attorney General within 72 hours after request.

(d) Records maintained under this section may be in physical or electronic format and must be retained for at least two years after the date of completion of the training course.

**History**
- *Source Note: The provisions of this §54.101 adopted to be effective December 2, 2021, 46 TexReg 8003.*

##### **1 Tex. Admin. Code § 54.102** Effect on Municipal Ordinances {#sec-54.102 omnilex-key=us-tx-regs-official--title-1--54.102}

If a municipal ordinance, rule, or other regulation related to human trafficking conflicts with a provision of Texas Business and Commerce Code Chapter 114 or a rule adopted under that chapter, the more stringent regulation controls to the extent of the conflict.

**History**
- *Source Note: The provisions of this §54.102 adopted to be effective December 2, 2021, 46 TexReg 8003.*

##### **1 Tex. Admin. Code § 54.103** Human Trafficking Prevention Signs for Commercial Lodging Establishments {#sec-54.103 omnilex-key=us-tx-regs-official--title-1--54.103}

(a) The operator of a commercial lodging establishment must display a sign at the establishment that includes:

(1) a statement that employees of the commercial lodging establishment are required to receive annual human trafficking training and may not be disciplined, retaliated against, or otherwise discriminated against for making a good faith report of a suspected act of human trafficking;

(2) information on how to recognize and report human trafficking, including a list of indicators of human trafficking;

(3) a phone number for reporting a suspected act of human trafficking or a violation of this chapter; and

(4) contact information for reporting suspicious activity to the Department of Public Safety.

(b) The sign must, at a minimum, be:

(1) at least 11 inches by 17 inches in size and written in at least a 16-point font;

(2) posted separately in English, Spanish, and any other primary language spoken by 10 percent or more of the establishment's employees; and

(3) posted in a location that is easily visible to all employees.

**History**
- *Source Note: The provisions of this §54.103 adopted to be effective December 2, 2021, 46 TexReg 8003.*

##### **1 Tex. Admin. Code § 54.104** Enforcement of Human Trafficking Prevention Training and Signs Requirement {#sec-54.104 omnilex-key=us-tx-regs-official--title-1--54.104}

(a) If the Office of the Attorney General has reason to believe an operator of a commercial lodging establishment has violated this subchapter, the Office of the Attorney General must provide notice to the operator that:

(1) identifies the operator's violation;

(2) states that the commercial lodging establishment may be liable for a civil penalty if the operator does not cure the violation before the 30th day after the date the operator receives the notice; and

(3) includes the maximum potential civil penalty that may be imposed for the violation.

(b) The Office of the Attorney General may bring an action in the name of the state:

(1) to recover a civil penalty in accordance with the Texas Business and Commerce Code Chapter 114; or

(2) for injunctive relief to require compliance with this rule and the Texas Business and Commerce Code Chapter 114.

**History**
- *Source Note: The provisions of this §54.104 adopted to be effective December 2, 2021, 46 TexReg 8003.*

### **Chapter 55** CHILD SUPPORT ENFORCEMENT

#### **Subchapter A** GENERAL GUIDELINES

##### **1 Tex. Admin. Code § 55.1** Agency and Agency Attorneys in Child Support Cases {#sec-55.1 omnilex-key=us-tx-regs-official--title-1--55.1}

(a) The Office of the Attorney General is designated by Texas law as the state's Title IV-D Agency to perform the functions and provide the services required by the Social Security Act, title IV, part D; 42 United States Code §§651, et seq.; and 45 Code of Federal Regulations, Parts 300-399 (hereafter IV-D services); as these federal statutes and regulations now exist or may in the future be amended. In providing services required by federal and state law, the Title IV-D Agency may:

(1) determine which services and remedies are appropriate in each case;

(2) employ attorneys to represent the interests of the State of Texas in providing such services;

(3) contract with private attorneys to provide services in IV-D cases; and

(4) appear as a party in any legal proceeding in any trial or appellate court.

(b) The Title IV-D Agency shall inform all recipients of IV-D services that attorneys providing services under this chapter represent the State of Texas, but do not represent any individual.

**History**
- *Source Note: The provisions of this §55.1 adopted to be effective November 30, 2000, 25 TexReg 11645.*

##### **1 Tex. Admin. Code § 55.2** Title IV-D Agency May Appear as a Party at Any Stage of Litigation {#sec-55.2 omnilex-key=us-tx-regs-official--title-1--55.2}

The Title IV-D Agency, in providing services pursuant to state and federal law, may appear as a party at any stage in any legal proceeding, whether or not the agency was a party at trial.

**History**
- *Source Note: The provisions of this §55.2 adopted to be effective November 30, 2000, 25 TexReg 11645.*

##### **1 Tex. Admin. Code § 55.3** Cooperation Required for Recipients of Child Support Services {#sec-55.3 omnilex-key=us-tx-regs-official--title-1--55.3}

(a) Cooperation by Temporary Assistance for Needy Families (TANF) Program Recipients. All TANF recipients whose assistance is funded under Title IV, Part A, of the Social Security Act are required to cooperate with the Title IV-D Agency in performing the required IV-D functions set out in Texas Family Code, Chapter 231, and other applicable provisions of law, unless there exists good cause as specified under §55.5 of this subchapter (relating to Good Cause for Failure to Cooperate).

(1) Recipients must cooperate in:

(A) identifying and locating obligors and potential obligors;

(B) establishing paternity of a child born out of wedlock, including participating in genetic testing;

(C) establishing, enforcing, or modifying child support obligations;

(D) establishing, enforcing, or modifying medical support obligations;

(E) obtaining support payments for the recipient or a child for whom the recipient is receiving services;

(F) obtaining medical support payments for which an obligor is responsible;

(G) obtaining any other payments or property due the recipient or a child for whom the recipient is receiving services;

(H) providing information on any third party who may be liable for medical care and services, including, but not limited to:

(i) the name of the health insurance policy holder;

(ii) the policy holder's relationship to the recipient and child;

(iii) the social security number of the policy holder; and

(iv) the name and address of the insurance company and policy number.

(2) To accomplish the above, a recipient must:

(A) keep appointments made with the Title IV-D Agency;

(B) provide verbal or written information, or documentary evidence, known to, possessed by, or reasonably obtainable by the recipient;

(C) appear as a witness at judicial or administrative hearings or proceedings;

(D) provide information, or attest to the lack of information, under penalty of perjury;

(E) pay to the Title IV-D Agency any support payments sent to the recipient in error;

(F) pay to the Title IV-D Agency any support payments received from the obligor after an assignment under 42 USC §608(a)(3) has been made, including current and past due support payments;

(G) pay to the Title IV-A Agency any overpayment of TANF resulting from the receipt of direct support payments, and

(H) perform any other action required of a recipient by state and federal law or federal regulations applicable to Title IV-D.

(b) Cooperation by Medical Assistance-Only Recipients. All persons referred to the Title IV-D Agency pursuant to 42 USC §654(4), who are receiving Medical Assistance-Only benefits are entitled to receive all IV-D services.

(1) Such persons are required to cooperate with the Title IV-D Agency in:

(A) identifying and locating obligors or potential obligors;

(B) establishing paternity of a child born out of wedlock, including participating in genetic testing;

(C) establishing, enforcing, or modifying medical support obligations;

(D) obtaining medical support payments for which an obligor is responsible;

(E) providing information on any third party who may be liable for medical care and services, including, but not limited to:

(i) the name of the health insurance policy holder;

(ii) the policy holder's relationship to the recipient and child;

(iii) the social security number of the policy holder; and

(iv) the name and address of the insurance company and policy number.

(2) To accomplish the above, a recipient must:

(A) keep appointments made with the Title IV-D Agency;

(B) provide verbal or written information, or documentary evidence, known to, possessed by, or reasonably obtainable by the recipient;

(C) appear as a witness at judicial or administrative hearings or proceedings;

(D) provide information, or attest to the lack of information, under penalty of perjury;

(E) pay to the Title IV-D Agency any support payments sent to the recipient in error;

(F) perform any other required IV-D function.

(c) Cooperation by Former TANF and Former Medical Assistance-Only Recipients. All former TANF recipients and former Medical Assistance-Only recipients must continue to cooperate with the Title IV-D Agency as long as there remain assigned child support and/or assigned medical support arrears recoverable by the state.

(d) Cooperation by Applicants for IV-D Services. All persons who complete an application for IV-D services (where there is no prior assignment of support rights to the state) must accept all appropriate services provided by the agency.

(1) Applicants must cooperate with the agency in:

(A) identifying and locating obligors and potential obligors;

(B) establishing paternity of a child born out of wedlock, including participating in genetic testing;

(C) establishing, enforcing, or modifying child support obligations;

(D) establishing, enforcing, or modifying medical support obligations;

(E) obtaining child support payments;

(F) obtaining medical support payments;

(G) obtaining any other payments or property due the recipient or a child for whom the applicant is receiving services.

(2) To accomplish the above, an applicant must:

(A) keep appointments made with the Title IV-D Agency;

(B) provide verbal or written information, or documentary evidence, known to, possessed by, or reasonably obtainable by the recipient;

(C) appear as a witness at judicial or administrative hearings or proceedings;

(D) provide information, or attest to the lack of information, under penalty of perjury;

(E) pay to the Title IV-D Agency any support payments sent to the applicant in error;

(F) perform any other required IV-D function.

**History**
- *Source Note: The provisions of this §55.3 adopted to be effective November 30, 2000, 25 TexReg 11645; amended to be effective June 1, 2003, 28 TexReg 4095.*

##### **1 Tex. Admin. Code § 55.4** Determination of Cooperation {#sec-55.4 omnilex-key=us-tx-regs-official--title-1--55.4}

The Title IV-D Agency shall make the determination as to whether an individual is cooperating as required by §55.3 of this subchapter relating to Cooperation Required for Recipients of Child Support Services.

(1) If a TANF recipient or a Medical Assistance-Only recipient (where both parent and child receive benefits) fails to cooperate:

(A) The Title IV-D Agency must report the determination of non-cooperation to the Health and Human Services Commission.

(B) The Health and Human Services Commission will notify the recipient and impose penalties pursuant to Human Resources Code, §31.0032, by:

(i) terminating the total amount of cash assistance for the family if a TANF recipient, or

(ii) terminating only the recipient's medical benefits if a Medical Assistance-Only recipient.

(C) To avoid interruption of benefits, the recipient may request a hearing to show good cause for not cooperating not later than the 13th day after receipt of the notice of non-cooperation issued by the Health and Human Services Commission, in which case, the procedures in §55.5 of this subchapter (relating to Good Cause for Failure to Cooperate) apply.

(D) The penalty for failure to cooperate shall remain in effect until the recipient complies with the specific IV-D requirement the recipient failed to satisfy. When the Title IV-D Agency determines the recipient is cooperating:

(i) the Title IV-D Agency shall immediately notify the Health and Human Services Commission the recipient is cooperating and

(ii) on receiving a report of cooperation from the Title IV-D Agency, it is the responsibility of the Health and Human Services Commission to end the penalty.

(2) If a person who is a former recipient of public assistance (TANF or Medical Assistance-Only) fails to cooperate, the Title IV-D Agency shall notify the person that failure to cooperate may result in termination of IV-D services.

(3) If a person who has never been a recipient of public assistance fails to cooperate, the Title IV-D Agency shall notify the person that failure to cooperate will result in termination of IV-D services.

**History**
- *Source Note: The provisions of this §55.4 adopted to be effective November 30, 2000, 25 TexReg 11645; amended to be effective June 1, 2003, 28 TexReg 4095; amended to be effective March 5, 2008, 33 TexReg 1759.*

##### **1 Tex. Admin. Code § 55.5** Good Cause for Failure To Cooperate {#sec-55.5 omnilex-key=us-tx-regs-official--title-1--55.5}

When a TANF or Medical Assistance-Only recipient claims good cause for not cooperating with IV-D requirements, the Health and Human Services Commission determines if the recipient has good cause pursuant to Human Resources Code §31.0032 and §31.0033.

(1) If the Title IV-D Agency receives final notification that the Health and Human Services Commission determined good cause exists for failure to cooperate with IV-D requirements, the Title IV-D Agency shall cease all IV-D services and terminate the recipient's child support case.

(2) If the Title IV-D Agency receives notice that the Health and Human Services Commission determined good cause does not exist, the Title IV-D Agency shall continue to provide appropriate IV-D services.

**History**
- *Source Note: The provisions of this §55.5 adopted to be effective November 30, 2000, 25 TexReg 11645; amended to be effective March 5, 2008, 33 TexReg 1759.*

#### **Subchapter B** LOCATE-ONLY SERVICES

##### **1 Tex. Admin. Code § 55.31** Application {#sec-55.31 omnilex-key=us-tx-regs-official--title-1--55.31}

An "authorized person" as defined by 42 U.S.C. §653(c) may apply to the Title IV-D agency for locate-only services.

**History**
- *Source Note: The provisions of this §55.31 adopted to be effective March 3, 2004, 29 TexReg 1855; amended to be effective March 5, 2008, 33 TexReg 1759.*

##### **1 Tex. Admin. Code § 55.32** Parental Kidnapping and Child Custody Services {#sec-55.32 omnilex-key=us-tx-regs-official--title-1--55.32}

Parental kidnapping and child custody services are available only to authorized persons to make or enforce child custody or visitation determinations as allowed under 42 U.S.C. §663. Authorized persons include district judges, county attorneys, district attorneys, or any other official with authority to make or enforce child custody or visitation determinations.

**History**
- *Source Note: The provisions of this §55.32 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759.*

#### **Subchapter C** ADMINISTRATIVE REVIEW

##### **1 Tex. Admin. Code § 55.101** Contesting Federal Income Tax Refund Intercept {#sec-55.101 omnilex-key=us-tx-regs-official--title-1--55.101}

(a) A non-custodial parent, who the Office of the Attorney General has determined owes past-due child support and whose federal income tax refund is therefore subject to interception by the Office of the Attorney General, may contest the determined amount of past-due child support or arrears by contacting the Office of the Attorney General and submitting a written complaint to the Office of the Attorney General, Child Support Division, at the office address which appears on the notice of an intended or actual administration action, requesting either:

(1) an informal resolution of any issue in dispute; or

(2) a formal administrative review hearing. A request for an informal resolution of an issue in dispute shall not preclude the non-custodial parent from subsequently requesting a formal hearing.

(b) If the order upon which the Office of the Attorney General computed the amount of past-due child support owed was entered by a court of another state, the non-custodial parent may request a hearing in that state.

(c) A request for administrative review must be submitted no later than 30 days from the date the non-custodial parent receives notice of an intended or actual report of past-due amounts to the federal Internal Revenue Service.

(d) The Office of the Attorney General shall grant a request for hearing on the non-custodial parent's submission, not later than 30 days following the non-custodial parent's receipt of notice of the actual offset, of a completed request for administrative review form to be obtained from the Office of the Attorney General. (The request for administrative review form for contesting federal income tax refund intercepts, appears at the end of this section.)

(e) In an interstate case in which a non-custodial parent has requested a hearing in Texas to contest an arrearage amount calculated by the IV-D agency of another state, the Office of the Attorney General shall grant the requested hearing upon notification of the request by the other state. The Office of the Attorney General shall then provide the non-custodial parent with a request for administrative review form to be returned to the Office of the Attorney General not later than 10 days prior to the hearing date.

(f) The parties may appear in person or by telephone, with or without a representative. An in-person hearing must be requested at the time the Request for Hearing is submitted. The hearing record shall be made by an audio recording.

(1) The non-custodial parent may submit any contentions and evidence in the form of an affidavit properly acknowledged, thereby making an appearance unnecessary. If the non-custodial parent does not participate in the hearing, any properly acknowledged affidavit from the non-custodial parent may be submitted and admitted as evidence into the hearing record and may be considered by the hearing examiner in determining the facts; and

(2) In non-TANF cases, if the custodial parent chooses not to participate, the information and affidavit provided at the time of application shall be considered. If the custodial parent does not participate in the hearing, a properly acknowledged affidavit from the custodial parent may be submitted and admitted as evidence into the hearing record and may be considered by the hearing examiner in determining the facts. The prescribed Request for Administrative Review form (Form 3F006e & 3F006s) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.101 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.102** Criteria for Reporting Past-Due Child Support to Consumer Credit Reporting Agencies {#sec-55.102 omnilex-key=us-tx-regs-official--title-1--55.102}

(a) Pursuant to Texas Family Code §231.114, the Office of the Attorney General shall report the amount of a child support obligation, including the amount of any past-due child support, to consumer credit reporting agencies.

(b) The Office of the Attorney General shall report a past-due amount of child support as "past-due, and zero months delinquent," if:

(1) the court of continuing jurisdiction has previously entered an order which adjudicated the amount of past-due child support owed by the non-custodial parent and required periodic payments to reduce that arrearage; and

(2) the non-custodial parent has timely paid each periodic payment for current and past-due child support required by that order.

**History**
- *Source Note: The provisions of this §55.102 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759.*

##### **1 Tex. Admin. Code § 55.103** Contesting Reporting to Consumer Credit Reporting Agencies {#sec-55.103 omnilex-key=us-tx-regs-official--title-1--55.103}

(a) A non-custodial parent, who owes a child support obligation and is therefore subject to being reported to consumer credit reporting agencies by the Office of the Attorney General, may contest the amount of child support being reported by the Office of the Attorney General, including the determined amount of any past-due child support or arrears, by contacting the Office of the Attorney General and submitting a written complaint to the Office of the Attorney General, Child Support Division, at the office address which appears on the notice of an intended or actual administrative action, requesting either:

(1) an informal resolution of any matter in dispute; or

(2) a formal administrative review hearing. A request for informal resolution shall not preclude the non-custodial parent's subsequently requesting a formal hearing.

(b) A hearing shall be granted by the Office of the Attorney General upon the non-custodial parent's submission of a completed request for administrative review form to be obtained from the Office of the Attorney General. (The request for administrative review form for contesting consumer credit reporting appears at the end of §55.101 of this title (relating to Contesting Federal Income Tax Refund Intercept.))

(c) A request for administrative review must be submitted not later than 30 days from the date the non-custodial parent receives notice of the proposed report of child support amounts to a consumer credit reporting agency and not later than 45 days from the date shown on the notice of the proposed report of child support amounts to a consumer credit reporting agency.

(d) The parties may appear in person or by telephone, with or without a representative. An in-person hearing must be requested at the time the Request for Hearing is submitted. The hearing record shall be made by an audio recording.

(1) The non-custodial parent may submit any contention and evidence in the form of a properly acknowledged affidavit, thereby making participation in the hearing unnecessary. If the non-custodial parent does not participate in the hearing, any properly acknowledged affidavit from the non-custodial parent may be submitted and admitted as evidence into the hearing record and may be considered by the hearing examiner in determining the facts; and

(2) In non-TANF cases, if the custodial parent chooses not to participate, the information and affidavit provided at the time of application shall be considered. If the custodial parent does not participate in the hearing, a sworn affidavit from the custodial parent may be submitted and admitted as evidence into the hearing record and may be considered by the hearing examiner in determining the facts.

(e) In an interstate case in which a non-custodial parent requests a hearing in Texas to contest a child support amount calculated by the IV-D agency of another state, the Office of the Attorney General shall grant the requested hearing upon notification of the request by the other state. The Office of the Attorney General shall then provide the non-custodial parent with a request for administrative review form to be returned to the Office of the Attorney General not later than 10 days prior to the hearing date.

**History**
- *Source Note: The provisions of this §55.103 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759.*

##### **1 Tex. Admin. Code § 55.104** Timely Administrative Appeals {#sec-55.104 omnilex-key=us-tx-regs-official--title-1--55.104}

(a) Written administrative appeals required by these rules must be submitted either by hand delivery or by first class mail in an envelope or wrapper properly addressed, with postage prepaid, to the Office of the Attorney General, Child Support Division, at the address shown on the notice of intended or actual administrative action or final administrative review decision.

(b) In computing any period of time prescribed or allowed by these rules or any applicable statute, the day of the act, event, or default after which the designated period of time begins to run is not to be included. The last day of the period so computed is to be included, unless it is a Saturday, Sunday, or legal holiday as defined by Texas Government Code, §662.003, in which event the period runs until the end of the next day which is neither a Saturday, Sunday, nor legal holiday. When the last day of the period is the next day which is neither a Saturday, Sunday, nor legal holiday, any document filed by mail as provided in subsection (a) of this section is mailed on time when it is postmarked on the last day of the period.

(c) The date of submission of an administrative review request is presumed to be the date that a written request is postmarked by the United States Postal Service or dated by a postal meter. If the postmark and a postal meter date conflict, the appeal was submitted on the postmark date. An appeal received in an envelope bearing no legible postmark or postal meter date will be considered to be submitted three days before receipt by the Child Support Division.

(d) There is no good cause exception to the preceding timeliness rules.

**History**
- *Source Note: The provisions of this §55.104 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759.*

##### **1 Tex. Admin. Code § 55.105** Proper Address of Record {#sec-55.105 omnilex-key=us-tx-regs-official--title-1--55.105}

(a) The address for the Office of the Attorney General, Child Support Division, shown on the notice of an intended or actual administrative action is the proper address of record for the submission of a request for administrative review.

(b) The address for the complainant shown on the notice of an intended or actual administrative action is the proper address of record for the complainant until such time as the complainant submits written notification of a change of address to the proper address of record for the Office of the Attorney General, Child Support Division. After an administrative review request has been submitted, the complainant's address on that request will be the complainant's address of record.

(c) A copy of the notice of hearing and the final decision shall be mailed by first class mail to the complainant and the complainant's legal representative, if any in an administrative review.

**History**
- *Source Note: The provisions of this §55.105 adopted to be effective May 25, 1992, 17 TexReg 3464; amended to be effective March 5, 2008, 33 TexReg 1759.*

#### **Subchapter D** FORMS FOR CHILD SUPPORT ENFORCEMENT

##### **1 Tex. Admin. Code § 55.111** Notice of Application for Judicial Writ of Withholding {#sec-55.111 omnilex-key=us-tx-regs-official--title-1--55.111}

The following form is to be used in IV-D or non-IV-D cases, if there is a delinquency equal to one month's support or income withholding was not previously ordered. The prescribed form for Notice of Application for Judicial Writ of Withholding (Form 1619A) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.111 adopted to be effective December 2, 1999, 24 TexReg 10521; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.112** Motion to Stay {#sec-55.112 omnilex-key=us-tx-regs-official--title-1--55.112}

This form is filed by the child support obligor, and prohibits the clerk of the court from delivering the judicial writ of withholding to any employer of the obligor before a hearing is held. The prescribed form for Motion to Stay (Form 1836) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.112 adopted to be effective December 2, 1999, 24 TexReg 10521; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.115** Form for Employer's Motion for Hearing on Applicability of Writ or Order of Withholding {#sec-55.115 omnilex-key=us-tx-regs-official--title-1--55.115}

The following form is to be used by an employer of the obligor to request judicial determination as to the applicability of a writ or court order of withholding under the Texas Family Code §158.205. "Employer" is broadly defined in the Texas Family Code §101.012, to include individuals, partnerships, worker's compensation insurance carriers, governmental entities and the United States, or any other entity that pays or owes earnings to an individual. The prescribed form for Employer's Motion for Hearing on Applicability of Income Withholding for Support (Form 1851) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.115 adopted to be effective May 25, 1992, 17 TexReg 3465; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective January 4, 2009, 33 TexReg 10413; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.116** Notice of Administrative Writ of Withholding and the Income Withholding for Support {#sec-55.116 omnilex-key=us-tx-regs-official--title-1--55.116}

(a) This form is sent to the obligor by the Title IV-D agency, or a domestic relations office, informing the obligor that withholding has commenced and providing procedures for contesting the withholding. The prescribed form for Notice of Administrative Writ of Withholding (Form 1852) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(b) This form is issued by the Title IV-D agency or domestic relations office to initiate withholding for the enforcement of an existing order. The prescribed form for Income Withholding for Support (Form OMB 0970-0154) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.116 adopted to be effective December 2, 1999, 24 TexReg 10521; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective June 3, 2008, 33 TexReg 4133; amended to be effective January 4, 2009, 33 TexReg 10413; amended to be effective September 26, 2011, 36 TexReg 6253; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.117** Request for Issuance of Income Withholding for Support {#sec-55.117 omnilex-key=us-tx-regs-official--title-1--55.117}

This form is used to request issuance of the Income Withholding for Support. The prescribed form for Request for Issuance of Income Withholding for Support (Form 1853) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.117 adopted to be effective December 2, 1999, 24 TexReg 10521; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective January 4, 2009, 33 TexReg 10413; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.118** Income Withholding for Support {#sec-55.118 omnilex-key=us-tx-regs-official--title-1--55.118}

This form is federally mandated for use in IV-D and non IV-D cases. It is used as a judicial withholding document, when issuing an original withholding order, amended withholding order, or to terminate withholding. The prescribed form for Income Withholding for Support (Form OMB 0970-0154) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.118 adopted to be effective December 2, 1999, 24 TexReg 10521; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective January 4, 2009, 33 TexReg 10413; amended to be effective September 26, 2011, 36 TexReg 6253; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.119** Forms for Notice of Lien, for Release of Child Support Lien, and for Partial Release of Child Support Lien {#sec-55.119 omnilex-key=us-tx-regs-official--title-1--55.119}

(a) The following form is to be filed with the county clerk of a county in which real or personal property of the obligor is believed to be located in accordance with the Texas Family Code, Chapter 157, Subchapter G. Notice of the lien may be given to any person known to be in possession of real or personal property of the obligor, and if such notice is given the property may not be paid over, released, sold, transferred, encumbered, or conveyed without incurring the penalties provided by the Texas Family Code, §157.324. The prescribed form for Notice of Lien (Form OMB 0970-0152) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(b) The following form is to be used when the payment in full of all child support, costs, and attorney fees has been made. The prescribed form for Release of Child Support Lien (Form 1854B) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(c) The following form is to be used when not all child support, costs and attorney fees have been paid but the claimant agrees to release the lien on specific property. The prescribed form for Partial Release of Child Support Lien (Form 1854C) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.119 adopted to be effective May 25, 1992, 17 TexReg 3465; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective January 4, 2009, 33 TexReg 10413; amended to be effective March 15, 2010, 35 TexReg 2151; amended to be effective September 26, 2011, 36 TexReg 6253; amended to be effective February 26, 2013, 38 TexReg 1141; amended to be effective November 10, 2014, 39 TexReg 8685; amended to be effective November 5, 2024, 49 TexReg 8701.*

##### **1 Tex. Admin. Code § 55.120** National Medical Support Notice, Request for Review of National Medical Support Notice, Termination of National Medical Support Notice {#sec-55.120 omnilex-key=us-tx-regs-official--title-1--55.120}

(a) The National Medical Support Notice is federally mandated for use in IV-D cases and may be used in any other suit in which an obligor is ordered to provide health insurance coverage for a child. The prescribed form for National Medical Support Notice (Form OMB 0970-0222) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(b) The Request for Review of National Medical Support Notice may be used by an obligor to contest the National Medical Support Notice sent to the employer. The prescribed form for Request for Review of National Medical Support Notice (Form 1669) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(c) The Termination of National Medical Support Notice may be used in any Suit Affecting the Parent Child Relationship order to terminate medical child support. The prescribed form for Termination of National Medical Support Notice (Form 1855) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.120 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective May 3, 2006, 31 TexReg 3527; amended to be effective March 15, 2010, 35 TexReg 2151; amended to be effective October 18, 2010, 35 TexReg 9231; amended to be effective September 26, 2011, 36 TexReg 6253; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.121** Record of Support {#sec-55.121 omnilex-key=us-tx-regs-official--title-1--55.121}

The prescribed form for the Record of Support (Form 1828) for the state case registry can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms. The clerk of the court may provide the state case registry with a record of a court order for child support by either completing this form or providing the information on the Attorney General Child Support Web Portal.

**History**
- *Source Note: The provisions of this §55.121 adopted to be effective June 10, 2013, 38 TexReg 3525.*

#### **Subchapter F** COLLECTIONS AND DISTRIBUTIONS

##### **1 Tex. Admin. Code § 55.140** Recoupment of Collections Reversed after Distribution {#sec-55.140 omnilex-key=us-tx-regs-official--title-1--55.140}

(a) By receiving and negotiating a child support payment through a state warrant, the Texas Debit card, or direct deposit into a bank account from the State of Texas, all custodial parents or other persons entitled to receive child support consent to the Office of the Attorney General's policy for recovering payments which have been reversed after they have been disbursed.

(b) Any person receiving Child Support Payment Processing services from the Office of the Attorney General, who receives and negotiates a child support payment, must repay the amount of that payment if the Office of the Attorney General subsequently notifies them that the collection has been reversed. Full payment must be received within 30 days of the Office of the Attorney General sending notice of the reversal. Failure to make timely payment will result in all future child support collections being withheld and applied to the debt until it is fully satisfied.

**History**
- *Source Note: The provisions of this §55.140 adopted to be effective September 20, 1998, 23 TexReg 9299; amended to be effective June 4, 2006, 31 TexReg 4419.*

##### **1 Tex. Admin. Code § 55.141** Contesting Distribution of Collections on Child Support Obligations {#sec-55.141 omnilex-key=us-tx-regs-official--title-1--55.141}

(a) A custodial parent or other person entitled to receive child support:

(1) may contest the amounts withheld from collections on child support obligations and retained by the State to be applied to unreimbursed public assistance provided to the family under Texas Human Resources Code, Chapter 31; or

(2) may contest the amounts retained from collections on child support obligations and recouped by the State to offset payments improperly disbursed to a custodial parent or other person entitled to receive child support.

(b) When notified of a contest, the Office of the Attorney General shall provide a report showing the support collected on the obligation, how the collection was allocated between the contestant and the State, and the basis for that allocation. This report is not required if the contestant has previously received a monthly notice of collection report from the Office of the Attorney General covering the same time period. The Office of the Attorney General shall provide the contestant with the report or upon request a form for requesting an administrative hearing.

(c) A hearing shall be conducted by the Office of the Attorney General upon the contestant's submission of a completed request for administrative review form. The request for administrative review must be submitted in writing not later than 30 days after the date the report in subsection (b) was prepared for the contestant. If the dispute is resolved informally before the hearing, the formal request shall be dismissed.

(d) The custodial parent may participate in the hearing, with or without a licensed representative. The custodial parent may submit any contentions and evidence in the form of a properly acknowledged affidavit, thereby making participation in the hearing unnecessary.

(e) The request for hearing shall be made using the prescribed form for Request for Administrative Review - Distribution of Child Support Payments (Form 1757) which can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.141 adopted to be effective September 20, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective November 10, 2014, 39 TexReg 8685.*

##### **1 Tex. Admin. Code § 55.142** Unclaimed Property {#sec-55.142 omnilex-key=us-tx-regs-official--title-1--55.142}

(a) Child support payments being held for disbursement by the state disbursement unit or a local registry may be reported as unclaimed property as outlined in the Texas Property Code. If the location of the person to whom the money is owed is unknown, the Title IV-D agency will conduct periodic locate attempts to locate the owner of the payments. If, after three years from the date the child support payments have been held, there has been no contact by the property owner and attempts to locate the owner have failed, the child support payments may be reported as unclaimed property. If locate information is present at the end of a reporting period, the reporting of the unclaimed payments may be deferred to the next reporting period.

(b) If the person to whom the child support payments are owed is deceased, and if after three years from the date of the death there has been no claim to the payments by a caretaker, emancipated child, or executor of the owner's estate, the child support payments may be reported as unclaimed property.

(c) If reporting has been deferred pending location of the person to whom the money is owed, child support payments being held for disbursement by the state disbursement unit will be reported as unclaimed property at the end of the second deferral year.

**History**
- *Source Note: The provisions of this §55.142 adopted to be effective October 11, 2010, 35 TexReg 9077.*

##### **1 Tex. Admin. Code § 55.143** Arrears Payment Incentive Program {#sec-55.143 omnilex-key=us-tx-regs-official--title-1--55.143}

(a) The Arrears Payment Incentive Program is a voluntary program administered by the Office of the Attorney General (OAG), a Title IV-D agency, to promote payment by obligors who are delinquent in satisfying child support arrearages assigned to the Title IV-D agency under Texas Family Code §231.104(a). The program is established pursuant to Texas Family Code §231.124. The program provides a credit for every dollar amount paid by the obligor on interest and arrearage balances during each month of the obligor's voluntary enrollment in the program. Participation by an obligor in the program does not prohibit the OAG from pursuing any other collection method authorized by law.

(b) The following criteria must be met for an obligor to be eligible to participate in the program:

(1) There must be a final Texas child support order in the obligor's case;

(2) The obligor must have and maintain a current address on record with the OAG;

(3) There must be at least $500 in both state-owned arrears (the child support obligation assigned to the state under Texas Family Code §231.104(a) that accrued during any month the obligee received TANF/AFDC public assistance benefits), and unrecovered assistance (the amount of money paid in the form of public assistance under the Title IV-A program that has not yet been recovered from collections applied to state-owned arrears for the case);

(4) the child support obligation must not be payable to the Department of Family and Protective Services;

(5) the obligor must not have a pending bankruptcy case;

(6) the obligor's case must not be one in which the OAG is providing intergovernmental services under Texas Family Code Chapter 159; and

(7) the obligor must not be currently incarcerated.

(c) The following conditions apply to an obligor's continued participation in the program:

(1) to receive program matching payment credits reducing state-owned arrears, an obligor must pay the current support obligations for the month in full, including medical and dental support, if any, plus make a payment toward the child support arrears balance;

(2) an obligor must make at least one qualifying arrearage payment within any 180-day period for continued participation in the program. Failure by an obligor to make at least one qualifying arrearage payment within any 180-day period may result in the OAG removing the obligor from the program;

(3) payments must be voluntarily paid by the obligor or by the obligor's employer through income withholding; and

(4) if an obligor enrolled in the program seeks federal bankruptcy protection, the obligor will no longer be eligible to receive program matching payment credits and will be removed from the program while the bankruptcy proceeding is pending.

(d) The following procedures apply to enrollment in the program:

(1) the OAG will make the Texas Attorney General, Child Support Division's Arrears Payment Incentive Program Application (Form 1575) available on its website;

(2) if an obligor has multiple cases and wants each case enrolled in the program, the obligor will need to apply to the program for each case;

(3) the obligor may apply for initial enrollment in the program, regardless of whether the obligor is currently making payments on the case;

(4) if the obligor is removed from the program, there will be a six-month waiting period to be eligible to re-apply; and

(5) an obligor may be immediately eligible for re-enrollment if a lump sum payment equaling at least three full months of support obligations, including any periodic court-ordered arrears payments, is paid through the Texas Child Support State Disbursement Unit.

(e) The following terms apply to the financial incentives to be offered under the program:

(1) if the obligor pays all current support obligations for the month, any additional amounts paid towards the child support arrears will be matched with a dollar-for-dollar credit that will be applied to reduce state-owned child support arrears. Program matching payment credits will not be applied to reduce medical support or dental support arrears. Program matching payment credits will not reduce any family-owned arrears;

(2) an obligor is eligible to earn program matching payment credits from the date of acceptance into the program;

(3) program matching payment credits automatically stop once unrecovered assistance is paid in full or state-owned child support arrears are paid in full, whichever occurs first; and

(4) payments received on other cases involving the obligee may impact the portion of arrears on the obligor's case that are eligible for program matching payment credits.

(f) The following payments are not eligible for program matching payment credits:

(1) federal offsets;

(2) state debt setoffs;

(3) lottery intercepts;

(4) bond forfeitures;

(5) monies received as the result of child support liens or levies; or

(6) payments made directly to the obligee and not through the Texas Child Support State Disbursement Unit.

**History**
- *Source Note: The provisions of this §55.143 adopted to be effective March 16, 2022, 47 TexReg 1223.*

#### **Subchapter G** AUTHORIZED COSTS AND FEES IN IV-D CASES

##### **1 Tex. Admin. Code § 55.151** Authorized Costs and Fees in IV-D Cases {#sec-55.151 omnilex-key=us-tx-regs-official--title-1--55.151}

(a) The clerk of the court may charge the Office of the Attorney General costs and fees in Title IV-D cases, including a case filed under Chapter 159 of the Texas Family Code. The Title IV-D Agency shall pay only the following costs and fees:

(1) filing fees and fees for issuance and service of process as provided by Chapter 110 of the Texas Family Code and by Sections 51.317(b)(1), (2), and (3) and (b-1), 51.318(b)(2) and 51.319(2), Texas Government Code;

(2) fees for transfer as provided by Chapter 110 of the Texas Family Code;

(3) fees for the issuance and delivery of orders and writs of income withholding in the amounts provided by Chapter 110 of the Texas Family Code;

(4) a reasonable fee not to exceed $15 for filing an original administrative writ of withholding. A fee cannot be charged for duplicate copies of an administrative writ of withholding;

(5) the fee for issuance of a subpoena as provided by §51.318(b)(1), Texas Government Code; and

(6) a fee authorized under a local rule for electronic filing of documents with a clerk.

(b) The clerk of the court, the sheriff, or a constable may charge the Office of the Attorney General a fee that sheriffs and constables are authorized to charge under Section 118.131, Local Government Code for serving each item of process to each individual on whom service is required, including service by certified or registered mail, and a fee authorized under Texas Family Code §157.103(b) for serving a capias.

**History**
- *Source Note: The provisions of this §55.151 adopted to be effective January 23, 2003, 28 TexReg 537; amended to be effective February 19, 2004, 29 TexReg 1329; amended to be effective March 5, 2008, 33 TexReg 1760; amended to be effective March 15, 2010, 35 TexReg 2151.*

##### **1 Tex. Admin. Code § 55.152** Billing for Costs and Fees in IV-D Cases {#sec-55.152 omnilex-key=us-tx-regs-official--title-1--55.152}

Each county may bill the Office of the Attorney General monthly for fees and costs not previously billed. The county must credit the Office of the Attorney General each month for amounts reimbursed to the county by the parties during the proceeding thirty (30) days. Monthly reimbursement requests should be submitted electronically or mailed using the IV-D Filing and Service Fees Reimbursement Form provided by the Office of the Attorney General.

**History**
- *Source Note: The provisions of this §55.152 adopted to be effective January 23, 2003, 28 TexReg 537; amended to be effective March 5, 2008, 33 TexReg 1760.*

##### **1 Tex. Admin. Code § 55.153** Monitoring and Auditing for Costs and Fees in IV-D Cases {#sec-55.153 omnilex-key=us-tx-regs-official--title-1--55.153}

The Office of the Attorney General may monitor and conduct, at reasonable times, fiscal and/or program audits of county performance in assessing and billing for costs and fees in IV-D cases. A county must grant the Office of the Attorney General access, without prior notice, to all books and records of the county pertinent to the audit. County records relating to costs and fees in IV-D cases may be inspected, monitored, evaluated, audited or copied by the Office of the Attorney General.

**History**
- *Source Note: The provisions of this §55.153 adopted to be effective January 23, 2003, 28 TexReg 537.*

##### **1 Tex. Admin. Code § 55.154** Reasonable Attorney's Fees in IV-D Cases {#sec-55.154 omnilex-key=us-tx-regs-official--title-1--55.154}

(a) The usual and customary attorney's fees for attorneys representing the state under Section 231.109 of the Texas Family Code is $150 per hour.

(b) The reasonable attorney's fees for attorneys representing the state under Section 231.109 of the Texas Family Code is $150 per hour.

**History**
- *Source Note: The provisions of this §55.154 adopted to be effective June 24, 2004, 29 TexReg 5917.*

##### **1 Tex. Admin. Code § 55.155** Collecting Annual Service and Payment Processing Fees {#sec-55.155 omnilex-key=us-tx-regs-official--title-1--55.155}

(a) The Title IV-D agency may assess and collect an annual service fee allowed under Texas Family Code §231.103(a)(2) and 42 U.S.C. §654(6)(B)(ii). Beginning October 1, 2019, an annual service fee of $35 will be assessed in full service monitoring and enforcement cases which are not current or former TANF or foster care cases and have received over $550 in child support collections during the federal fiscal year. The annual service fee will be automatically deducted from the child support payment when the child support collections for that fiscal year total over $550.

(b) The Title IV-D agency may assess and collect a $3 monthly payment processing fee allowed under Texas Family Code §231.103(f). Beginning September 1, 2011, a monthly fee will be assessed in cases that receive only payment processing and record keeping services through the State Disbursement Unit, and receive over $3 per month in child support collections that month. The monthly service fee will be automatically deducted from the child support payment each month in which at least $3 in child support is received. If a parent has more than one case, fees will be assessed in each case.

(c) Information regarding child support fees can be obtained from the Texas Attorney General's website.

**History**
- *Source Note: The provisions of this §55.155 adopted to be effective August 24, 2011, 36 TexReg 5199; amended to be effective October 7, 2019, 44 TexReg 5761.*

#### **Subchapter H** LICENSE SUSPENSION

##### **1 Tex. Admin. Code § 55.201** Scope {#sec-55.201 omnilex-key=us-tx-regs-official--title-1--55.201}

This subchapter applies to hearings conducted by the Title IV-D agency on petitions to suspend licenses pursuant to the authority of the Family Code, Chapter 232. The Administrative Procedure Act, the Government Code, Chapter 2001, Subchapter C, §§2001.051-2001.053, §§2001.055-2001.062, Subchapter D, and Subchapter F, applies to the Chapter 232 hearings.

**History**
- *Source Note: The provisions of this §55.201 adopted to be effective September 22, 1995, 20 TexReg 7063.*

##### **1 Tex. Admin. Code § 55.202** Definitions {#sec-55.202 omnilex-key=us-tx-regs-official--title-1--55.202}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Obligee--The person to whom child support is due.

(2) Obligor--The person who owes child support.

(3) Parties--The parties to a Chapter 232 hearing are the petitioner, the obligor, and the designated representative of the Title IV-D agency in a Title IV-D case.

(4) Petitioner--The party filing the Petition to Suspend License; the petitioner may be the designated representative of a child support agency, or the obligee, either personally or through his or her representative.

(5) Representative--An attorney licensed in the State of Texas or another state or a Certified Public Accountant licensed in the State of Texas or another state.

(6) Title IV-D agency--The Office of the Attorney General is the agency designated by Texas law to perform the functions and provide the services required by Title IV-D of the Social Security Act.

(7) Administrative Law Judge--Includes an administrative law judge of the State Office of Administrative Hearings or any other administrative law judge designated by the Title IV-D Director or the Director's designee.

**History**
- *Source Note: The provisions of this §55.202 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.203** Forms {#sec-55.203 omnilex-key=us-tx-regs-official--title-1--55.203}

(a) The prescribed form for Administrative Notice of Filing of Petition to Suspend License (Form 1832) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(b) The prescribed form for Administrative Petition to Suspend License (Form 1831) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(c) The prescribed form for Request for Hearing (Form 1830) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(d) The prescribed form for Notification to Licensing Authority of Order Suspending License (Form 1829) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(e) The prescribed form for Notification to Licensing Authority of Order Vacating or Staying Order Suspending License (Form 1833) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(f) The prescribed suggested model forms for use by the Courts (Form 1834 and Form 1835) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.203 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective September 18, 1997, 22 TexReg 9241; amended to be effective March 1, 1998, 23 TexReg 1527; amended to be effective November 7, 1999, 24 TexReg 9605; amended to be effective April 27, 2000, 25 TexReg 3511; amended to be effective November 17, 2005, 30 TexReg 7427; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective June 10, 2013, 38 TexReg 3525.*

##### **1 Tex. Admin. Code § 55.204** Coordinator {#sec-55.204 omnilex-key=us-tx-regs-official--title-1--55.204}

(a) The coordinator may be contacted at: (512) 460-6046, Office of the Attorney General, Child Support Division, 5500 E. Oltorf, Austin, Texas 78741 (hand delivery); P.O. Box 12017, Mail Code 039-3, Austin, Texas 78711-2017 (Postal Service delivery).

(b) The coordinator's office will be open from 8:00 a.m. to 5:00 p.m., Monday through Friday. The coordinator's office will be closed on those days specified as holidays in Government Code, §662.003.

(c) Questions to the Office of the Attorney General must be directed to the coordinator.

(d) Documents and pleadings shall be deemed filed only when actually file marked with the official stamp of the Coordinator, Office of the Attorney General.

**History**
- *Source Note: The provisions of this §55.204 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective January 8, 1998, 23 TexReg 127; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.205** Initiating a Proceeding {#sec-55.205 omnilex-key=us-tx-regs-official--title-1--55.205}

(a) Filing the Petition. The petitioner initiates a proceeding by filing the Petition to Suspend License packet with: Coordinator, Office of the Attorney General, Child Support Division, 5500 E. Oltorf, Austin, Texas 78741 (hand delivery); P.O. Box 12017, Mail Code 039-3, Austin, Texas 78711-2017 (Postal Service delivery).

(b) Petition to Suspend License Packet. The packet is the Notice of Filing Petition to Suspend License, with all attachments, including the Petition to Suspend License, Request for Hearing, all relevant court orders and payment records.

(c) Issuance of Notice of Filing of Petition to Suspend License. After determining that the packet is complete, the coordinator will assign a docket number to the petition, seal the notice, and file-stamp the notice and petition.

(d) Service. The coordinator is responsible for obtaining service of the notice on the obligor in accordance with Texas Family Code § 232.006.

(e) Evidence of Service. Upon obtaining service on the obligor, the coordinator must file evidence that service has been obtained. A copy of the return of service, a copy of the return receipt on certified mail, or an affidavit of service issued by the coordinator is evidence that service has been obtained.

**History**
- *Source Note: The provisions of this §55.205 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective January 8, 1998, 23 TexReg 127; amended to be effective April 18, 2000, 25 TexReg 3231; amended to be effective November 17, 2005, 30 TexReg 7427; amended to be effective June 10, 2013, 38 TexReg 3525; amended to be effective September 26, 2023, 48 TexReg 5537.*

##### **1 Tex. Admin. Code § 55.206** Computation of Time {#sec-55.206 omnilex-key=us-tx-regs-official--title-1--55.206}

In computing any period of time prescribed in this subchapter, the period shall begin on the day after the act or event specified and shall end on the last day of the computed period, unless that day is a day when the coordinator's office is closed, in which event the period runs until the end of the next day that the coordinator's office is open.

**History**
- *Source Note: The provisions of this §55.206 adopted to be effective September 22, 1995, 20 TexReg 7063.*

##### **1 Tex. Admin. Code § 55.207** Pre-hearing Matters {#sec-55.207 omnilex-key=us-tx-regs-official--title-1--55.207}

(a) Not later than 20 days prior to the hearing, each party shall file with the coordinator, and serve on the other parties, a list of witnesses the party will call at the hearing and copies of any supplemental documentary evidence, not previously filed with the coordinator, to be offered into evidence at the hearing.

(b) Objections to documentary evidence must be in writing and filed with the coordinator not later than 10 days prior to the hearing. An administrative law judge, including an administrative law judge of the State Office of Administrative Hearings, may convene a pre-hearing conference on the evidentiary objections to rule on the objections, or shall rule on the objections at the hearing.

(c) Not later than ten days prior to the hearing, the coordinator will compile and transmit to the parties a petitioner's evidentiary packet and an obligor's evidentiary packet. The respective packets will contain the list of witnesses and any supplemental documentary evidence submitted pursuant to subsection (a) above to be offered by the respective party.

(d) A party must obtain permission of the administrative law judge to supplement the list of witnesses or documentary evidence if submitted less than 20 days prior to the hearing. Objections to such evidence shall be resolved at the hearing.

**History**
- *Source Note: The provisions of this §55.207 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective November 7, 1999, 24 TexReg 9605; amended to be effective April 18, 2000, 25 TexReg 3231; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.208** Conduct of the Hearing {#sec-55.208 omnilex-key=us-tx-regs-official--title-1--55.208}

(a) An administrative law judge, including an administrative law judge of the State Office of Administrative Hearings, shall preside at the hearing on the petition.

(b) The petitioner is entitled to open and close at the hearing.

**History**
- *Source Note: The provisions of this §55.208 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.209** Procedure for a Telephone Hearing {#sec-55.209 omnilex-key=us-tx-regs-official--title-1--55.209}

(a) The obligor may request a telephone hearing at the time he or she requests a hearing on the petition as provided in the Request for Hearing form.

(b) Failure of the obligor to be available for the telephone hearing, at the telephone number supplied by the obligor, shall result in a default order suspending the obligor's license.

**History**
- *Source Note: The provisions of this §55.209 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective January 8, 1998, 23 TexReg 127.*

##### **1 Tex. Admin. Code § 55.212** Decision {#sec-55.212 omnilex-key=us-tx-regs-official--title-1--55.212}

Following the conclusion of the hearing, the administrative law judge, including an administrative law judge of the State Office of Administrative Hearings, as the designee of the director of the Title IV-D agency, will issue a decision and final order.

**History**
- *Source Note: The provisions of this §55.212 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective April 18, 2000, 25 TexReg 3231; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.213** Cost of Record {#sec-55.213 omnilex-key=us-tx-regs-official--title-1--55.213}

A party who appeals an order under Chapter 232 shall pay all of the costs of preparation of any original or certified copy of the record of the proceedings that is required to be transmitted to the reviewing court.

**History**
- *Source Note: The provisions of this §55.213 adopted to be effective September 22, 1995, 20 TexReg 7063.*

##### **1 Tex. Admin. Code § 55.214** Notification to the Licensing Authority {#sec-55.214 omnilex-key=us-tx-regs-official--title-1--55.214}

(a) The Coordinator will transmit the final order suspending license to the licensing authority as soon as the final order is enforceable. The Coordinator will transmit the final order using the Notification to Licensing Authority of Order Suspending License form promulgated as a part of this subchapter.

(b) The Coordinator will transmit the order vacating or staying order suspending license to the license authority as soon as it is effective. The Coordinator will transmit the order using the Notification to Licensing Authority of Order Vacating or Staying Order Suspending License form promulgated as a part of this subchapter.

**History**
- *Source Note: The provisions of this §55.214 adopted to be effective September 22, 1995, 20 TexReg 7063; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.215** Prerequisites for Suspension of Licenses Relating to State Taxes {#sec-55.215 omnilex-key=us-tx-regs-official--title-1--55.215}

(a) Each petition seeking to suspend a license relating to state taxes shall list each license to be suspended by license type and, if applicable, by license number.

(b) An order suspending a license issued pursuant to the Tax Code, §155.041, shall be served on the agency issuing the license. The order shall be issued directly to the Comptroller of Public Accounts.

(c) An order suspending a license relating to state taxes must be served on each licensing authority which issued a license suspended by the order.

**History**
- *Source Note: The provisions of this §55.215 adopted to be effective March 29, 1996, 21 TexReg 2225; amended to be effective November 17, 2005, 30 TexReg 7427.*

##### **1 Tex. Admin. Code § 55.216** Dismissal of Petition for Want of Prosecution {#sec-55.216 omnilex-key=us-tx-regs-official--title-1--55.216}

(a) A Petition to Suspend License may be dismissed for want of prosecution:

(1) if the petition has been on file with the coordinator for more than one calendar year and has not been finally adjudicated within that time; or

(2) on failure of any party seeking affirmative relief to appear for any hearing of which the party had notice.

(b) The coordinator shall send notice of the administrative law judge's intent to dismiss to each party who has entered an appearance or to their representative of record.

(c) The administrative law judge shall dismiss the petition without prejudice on the date stated in the notice of intent to dismiss unless a party requests a hearing and shows good cause for the case to be maintained on the docket.

**History**
- *Source Note: The provisions of this §55.216 adopted to be effective June 26, 1997, 22 TexReg 5825; amended to be effective March 5, 2008, 33 TexReg 1761.*

#### **Subchapter I** STATE DIRECTORY OF NEW HIRES

##### **1 Tex. Admin. Code § 55.301** Scope {#sec-55.301 omnilex-key=us-tx-regs-official--title-1--55.301}

Section 453A of the Social Security Act, (42 U.S.C. §653A), as amended by Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), requires each state to establish and maintain a State Directory of New Hires to provide a means for employers to assist in the state's efforts both to prevent fraud in the welfare, workers' compensation, and unemployment insurance programs, and to locate and/or collect from absent parents who owe child support by reporting information concerning newly hired and rehired employees directly to a centralized state database. This subchapter establishes within the Office of the Attorney General (Title IV-D agency) a centralized employee registry called the State Directory of New Hires and establishes procedures for employers to report employee information to the State Directory of New Hires under Chapter 234, Subchapter B of the Texas Family Code.

**History**
- *Source Note: The provisions of this §55.301 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.302** Definitions {#sec-55.302 omnilex-key=us-tx-regs-official--title-1--55.302}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Common paymaster--Has the meaning as described in 26 CFR §31.3121(s)-1.

(2) New hire--The term new hire shall have the meaning of any employee required to be reported to the State Directory of New Hires under 453A of the Social Security Act within twenty days of the employee's first day on the job.

(3) Date of hire--The date of hire for a new employee is considered to be the first day services are performed for pay by an individual.

(4) Employee--The term employee means an individual who is an employee as defined in Chapter 24 of the Internal Revenue Code (IRC) of 1986 or an independent contractor as defined by the Internal Revenue Service and whose income is required to be reported on Form 1099-MISC; and does not include an employee of a federal or state agency performing counter intelligence functions, if the head of such agency has determined that reporting pursuant to section 453A of the Social Security Act with respect to the employee could endanger the safety of the employee or compromise an ongoing investigation or intelligence mission. Chapter 24 of the IRC and the regulations promulgated thereunder define an "employee" as every individual performing services if the relationship between the individual and the person for whom the services are performed is the legal relationship of employer and employee (see IRC section 3401(c) and 26 CFR 31.3401(c)-1(a)). Generally, the legal relationship of employer and employee exists when the person for whom the services are performed has the right to control and direct the individual who performs the services not only as to the results to be accomplished, but also as to the details and means by which that result is to be accomplished. 26 CFR 31.3401(c)-1(b).

(5) Employer--In General. The term employer has the meaning given such term in section 3401(d) of the Internal Revenue Code of 1986 and includes any governmental entity and any labor organization. At a minimum, in any case where an employer is required to give an employee a Form W-2 showing the amount of taxes withheld, the employer must meet the new hire reporting requirements. Section 3401(d) goes on to provide in part that "if the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term employer means the person having control of the payment of such wages." Thus, every entity (including governmental entities and labor organizations) is an employer if the entity exercises or has the right to exercise control and direction over an individual who performs or has performed any service for the entity unless the entity does not have control of the payment of the employee's wages. In these cases, the entity having control of the payment of such wages is the "employer." All entities satisfying 3401(d) of the IRC must meet the new hire reporting requirements set forth in section 453(b)(1) of the Social Security Act, as amended.

(6) Illegible record--A record containing indecipherable writing or print.

(7) Incomplete record--A record that does not contain all six required data elements (employee name, address, social security number and employer name, address and federal identification number).

(8) Labor organization--The term labor organization shall have the meaning given such term in section 2(5) of the National Labor Relations Act, and includes any entity (also known as Hiring Hall) which is used by the organization and an employer to carry out requirements described in section 8(f)(3) of such Act of an agreement between the organization and the employer.

(9) Reporting agent--Has the meaning as described in IRS Rev. Proc. 2007-38.

**History**
- *Source Note: The provisions of this §55.302 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective September 7, 2011, 36 TexReg 5665; amended to be effective June 13, 2015, 41 TexReg 4241.*

##### **1 Tex. Admin. Code § 55.303** Employer New Hire Reporting Requirements {#sec-55.303 omnilex-key=us-tx-regs-official--title-1--55.303}

(a) Except as provided in §§55.304 - 55.306 of this title (relating to Common Paymaster, Multi-State Employers, and Federal Government Employers), each Texas employer shall furnish to the State Directory of New Hires in the state in which a newly hired employee works a report of all new hires that contains the following seven required data elements:

(1) the employee name,

(2) the employee address,

(3) the employee social security number,

(4) the employee's date of hire,

(5) the employer name,

(6) the employer address, and

(7) the Federal Employer Identification Number (FEIN).

(b) Employers, at their option may also provide the following additional information in the report:

(1) the employee's date of birth, and

(2) the employee's expected salary or wages,

(3) Employer payroll addresses for mailing of notice to withhold child support.

(c) All employers shall report new hire information on a Form W-4 or an equivalent form by first class mail, telephonically, or electronically as determined by the employer and in a format acceptable to the Title IV-D agency. The Title IV-D agency reserves the right to decline any type of form that it deems as illegible or inappropriate for new hire report processing and requests employers who elect to submit new hire reports via hardcopy to adopt the Employer New Hire Reporting Form supplied by the IV-D agency.

(1) Formats available to employers include:

(A) Fully and accurately completed copy of the new employee's W-4 form with all mandatory information, as specified by Employer New Hire Reporting requirements, typed or written using large, capitalized lettering (cursive writing is not permitted);

(B) The prescribed Employer New Hire Reporting Form (Form 1856e & 1856s) can be obtained from the Texas Attorney General's Child Support Division webpage www.texasattorneygeneral.gov under Child Support, Forms.

(C) Existing employer report or printout;

(D) Facsimile; or

(E) Any other means authorized by the Title IV-D agency for conveying information which includes electronic transmission.

(2) All printed lists must be provided in 10 point font, or larger.

(d) To ensure timely receipt of information, Texas employers are required to report the hiring or rehiring of persons to the Title IV-D agency. Employer New Hire reports shall be considered timely if postmarked by the due date or if filed electronically, upon receipt by the agency. Employer New Hire reports are due:

(1) not later than the 20 calendar days after the date the employer hires the employee; or

(2) in the case of an employer transmitting reports electronically, by two monthly transmissions (if necessary) not more than 16 days apart.

(e) Employers should send reports for newly hired or rehired employees to Texas Employer New Hire Reporting Operations Center, Post Office Box 149224, Austin, Texas 78714-9224.

(f) Questions regarding the Employer New Hire Reporting Program should be directed to Texas Employer New Hire Reporting on the Internet. The Internet address is: www.employer.texasattorneygeneral.gov.

(g) Each employer submitting an incomplete or illegible report, upon request, must resubmit the incomplete or illegible data within 10 days after receiving notice.

**History**
- *Source Note: The provisions of this §55.303 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective March 15, 2010, 35 TexReg 2151; amended to be effective September 7, 2011, 36 TexReg 5665; amended to be effective November 10, 2014, 39 TexReg 8686.*

##### **1 Tex. Admin. Code § 55.304** Common Paymaster {#sec-55.304 omnilex-key=us-tx-regs-official--title-1--55.304}

A report filed by the common paymaster or reporting agent of an employer is sufficient to meet the new hire reporting requirements for each of the related employees for which the common paymaster or payroll reporting agent provides new hire information.

**History**
- *Source Note: The provisions of this §55.304 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.305** Multi-State Employers {#sec-55.305 omnilex-key=us-tx-regs-official--title-1--55.305}

(a) An employer that has employees who are employed in Texas and one or more other states may choose to report to a state other than Texas provided the employer designates only one state in which such employer has employees; transmits the required reports using electronic media authorized by the Title IV-D agency for conveying information; and notifies the Secretary of the Department of Health and Human Services, in writing, prior to reporting.

(b) When submitting written notification to the Secretary of the Department of Health and Human Services about the designation of the single State for Employer New Hire Reporting, an employer should include the following information:

(1) The same Federal Employer Identification Number (FEIN) used for the Texas Workforce Commission,

(2) Employer's name, address, telephone number related to the FEIN,

(3) State selected for reporting purposes,

(4) Other States in which the company has employees,

(5) Corporate point of contact.

(c) If the company will be reporting new hires on behalf of subsidiaries who operate under different names and FEINs, the employer should also list the names, FEINs and states where they have employees working.

(d) An employer can notify the Secretary of the Department of Health and Human Services in one of three ways:

(1) Notify the Secretary in writing at the following address: Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement Multi State Employer Notification, P.O. Box 509, Randallstown, MD 21133;

(2) Notify the Secretary in writing by facsimile: Department of Health and Human Services Administration for children and Families, Office of child Support Enforcement, Multistate Employer Notification, 1-410-277-9325; or

(3) Notify the Secretary via the Internet by accessing the Multistate Employer option on the OCSE Internet home Page. The Internet address is: http://www.acf.hhs.gov/programs/cse/newhire/employer/home.htm.

**History**
- *Source Note: The provisions of this §55.305 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.306** Federal Government Employers {#sec-55.306 omnilex-key=us-tx-regs-official--title-1--55.306}

Any department, agency, or instrumentality of the United States must report directly to the National Directory of New Hires established pursuant to 42 U.S.C. 653a.

**History**
- *Source Note: The provisions of this §55.306 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.307** Civil Money Penalties on Noncomplying Employers {#sec-55.307 omnilex-key=us-tx-regs-official--title-1--55.307}

(a) An employer who knowingly violates any procedures found in §§55.301 - 55.308 of this title for reporting employee information may be liable for a civil penalty, which may not exceed:

(1) $25 for each occurrence in which an employer fails to report an employee; or

(2) $500 for each occurrence in which the conduct is the result of a conspiracy between the employer and employee to not supply a required report, or to submit a false or incomplete report.

(b) The Attorney General may sue to collect the civil penalty.

**History**
- *Source Note: The provisions of this §55.307 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.308** Confidentiality and Security {#sec-55.308 omnilex-key=us-tx-regs-official--title-1--55.308}

(a) Confidentiality of Records. The records contained in the new hire directory shall be confidential and may be accessed for the following purposes only:

(1) Location of Child Support Obligors. The Title IV-D Agency shall use the Employer New Hire Reporting (ENHR) information to locate individuals for purposes of establishing paternity and establishing, modifying, and enforcing child support obligations, and may disclose such information to any agent of the agency that is under contract with the agency to carry out such purposes.

(2) Verification of Eligibility for Certain Programs. A State agency responsible for administering a program specified in section 1137(b) of the Social Security Act shall have access to information reported by employers for purposes of verifying eligibility for the program.

(3) Administration of Employment Security and Workers' Compensation. State agencies operating employment security and workers' compensation programs shall have access to ENHR information reported by employers for the purposes of administering such programs.

(b) Security. The State IV-D agency shall have in effect safeguards on the integrity, accuracy and completeness of, access to, and use of data in the automated system required by 453A of the Social Security Act.

**History**
- *Source Note: The provisions of this §55.308 adopted to be effective October 1, 1998, 23 TexReg 9299; amended to be effective March 5, 2008, 33 TexReg 1761.*

#### **Subchapter J** VOLUNTARY PATERNITY ACKNOWLEDGMENT PROCESS

##### **1 Tex. Admin. Code § 55.401** Scope {#sec-55.401 omnilex-key=us-tx-regs-official--title-1--55.401}

Fathers and mothers who wish to voluntarily establish paternity for their child or rescind a previously executed Acknowledgment of Paternity or Denial of Paternity may do so through any local child support office of the Office of the Attorney General, Child Support Division; the Texas Department of State Health Services, Vital Statistics Unit; a local birthing hospital or birthing center; or any entity certified by the Office of the Attorney General to provide such services. The Acknowledgment of Paternity must be executed according to the rules contained herein and under the Texas Family Code, Chapter 160, Subchapter D, Voluntary Acknowledgment of Paternity. Entities that are required by law to provide paternity establishment services and entities that voluntarily elect to provide paternity establishment services must abide by the rules of this subchapter.

**History**
- *Source Note: The provisions of this §55.401 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective July 25, 2002, 27 TexReg 6501; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective September 7, 2011, 36 TexReg 5665.*

##### **1 Tex. Admin. Code § 55.402** Definitions {#sec-55.402 omnilex-key=us-tx-regs-official--title-1--55.402}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Acknowledgment of Paternity form--An agreement affirming parentage for a child signed by both the man claiming to be the biological father and the mother, that is executed on a form prescribed by the Texas Department of State Health Services, Vital Statistics Unit. The mother and the father may sign separate acknowledgments before or after the birth of the child.

(2) Denial of Paternity form--A statement executed by a presumed father denying parentage of the child of whom he is presumed to be the father, on a form prescribed by the Texas Department of State Health Services, Vital Statistics Unit.

(3) Rescission of Acknowledgment of Paternity form--A statement executed by a signatory rescinding an Acknowledgment of Paternity or Denial of Paternity, on a form prescribed by the Texas Department of State Health Services, Vital Statistics Unit.

(4) Certified entity--An agency, organization, or individual that is certified by the Office of the Attorney General to perform voluntary paternity establishment services. The certified entity must comply with all rules established for such certification.

(5) Presumed father--A man who is legally assumed to be the father of a child because he meets the criteria found under Texas Family Code §160.204.

(6) Parent Survey on the Acknowledgment of Paternity--A form promulgated by the Office of the Attorney General to assist parents and the certified entity in the completion of the Acknowledgment of Paternity.

**History**
- *Source Note: The provisions of this §55.402 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective July 25, 2002, 27 TexReg 6501; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective September 7, 2011, 36 TexReg 5665.*

##### **1 Tex. Admin. Code § 55.403** Forms {#sec-55.403 omnilex-key=us-tx-regs-official--title-1--55.403}

The certified entities offering voluntary paternity establishment services may obtain the prescribed Acknowledgment of Paternity and Denial of Paternity forms and the Rescission of the Acknowledgment of Paternity forms by contacting the Texas Department of State Health Services, Vital Statistics Unit.

**History**
- *Source Note: The provisions of this §55.403 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective September 7, 2011, 36 TexReg 5665.*

##### **1 Tex. Admin. Code § 55.404** Voluntarily Acknowledging Paternity {#sec-55.404 omnilex-key=us-tx-regs-official--title-1--55.404}

(a) A man claiming to be the biological father and the mother may establish paternity before or after the birth of their child by voluntarily acknowledging paternity through a certified entity providing such services. The mother and father must read the Acknowledgment of Paternity form. In addition, both must listen to or view a video presentation of the rights and responsibilities of a parent, and alternatives to and legal consequences of acknowledging or denying paternity. Both the mother and father, separately or together, must then complete an Acknowledgment of Paternity form with the assistance of the certified entity.

(b) Both mother and father must present to the certified entity a valid driver license or another document (preferably a photo I.D.) to verify identity.

(c) The certified entity is responsible for filing the Acknowledgment of Paternity form with the Texas Department of State Health Services, Vital Statistics Unit, and providing all signatories with a copy of the form.

(d) The Office of the Attorney General shall designate staff who are certified entities to assist any party who is outside the state of Texas or is incarcerated in Texas and is unable to complete an acknowledgment of paternity in person with a certified entity. Certified entities should seek the assistance of the Office of the Attorney General for completion of such acknowledgments of paternity.

**History**
- *Source Note: The provisions of this §55.404 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective July 25, 2002, 27 TexReg 6501; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective June 10, 2013, 38 TexReg 3526.*

##### **1 Tex. Admin. Code § 55.405** Denial of Paternity Form {#sec-55.405 omnilex-key=us-tx-regs-official--title-1--55.405}

If the mother declares in the Acknowledgment of Paternity form that there is a presumed father of the child, the acknowledgment must be accompanied by a Denial of Paternity form signed by the mother and the presumed father, unless the presumed father is the man who is acknowledging paternity. The Denial of Paternity is signed using the same procedures as the Acknowledgment of Paternity outlined in §55.404 of this title. The Acknowledgment of Paternity form and the Denial of Paternity form may be filed with the Texas Department of State Health Services, Vital Statistics Unit separately or simultaneously. If the acknowledgment and denial are both necessary, neither document is valid until both documents are filed.

**History**
- *Source Note: The provisions of this §55.405 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective July 25, 2002, 27 TexReg 6501; amended to be effective March 5, 2008, 33 TexReg 1761.*

##### **1 Tex. Admin. Code § 55.406** Entities Providing Paternity Establishment Services {#sec-55.406 omnilex-key=us-tx-regs-official--title-1--55.406}

(a) The following entities must provide voluntary paternity establishment services after being certified by the Office of the Attorney General:

(1) all public and private birthing hospitals;

(2) all birthing centers;

(3) the Texas Department of State Health Services, Vital Statistics Unit; and

(4) a registered nurse working in a partnership program funded through the nurse-family partnership competitive grant program under Chapter 531, Subchapter M, Texas Government Code.

(b) The following entities may provide voluntary paternity establishment services at their option, but only after being certified by the Office of the Attorney General:

(1) local birth registrars;

(2) public health clinics;

(3) private health care providers;

(4) certified nurse midwives;

(5) licensed midwives;

(6) agencies providing assistance or services under Title IV, Part A of the Social Security Act, agencies providing food stamp eligibility service, and agencies providing child support enforcement (IV-D) services;

(7) Head Start, child care facilities, and individual child care providers;

(8) community action agencies and community action programs;

(9) secondary education schools;

(10) legal aid agencies;

(11) private attorneys;

(12) any public or private health, welfare or social services organization; and

(13) an individual with a role in birthing, birth records, healthcare services, social services or legal services who can demonstrate to the satisfaction of the Office of the Attorney General that they have specialized training, relevant experience or other factors appropriate to become a certified entity.

**History**
- *Source Note: The provisions of this §55.406 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective June 10, 2013, 38 TexReg 3526.*

##### **1 Tex. Admin. Code § 55.407** Certification {#sec-55.407 omnilex-key=us-tx-regs-official--title-1--55.407}

All birthing hospitals, all birthing centers, the Texas Department of State Health Services, Vital Statistics Unit, a registered nurse working in a partnership program funded through the nurse-family partnership competitive grant program, and each certified entity must have staff who:

(1) provide the mother and father the opportunity to voluntarily acknowledge paternity;

(2) provide the mother and father an opportunity to speak, either by telephone or in person, with staff who are trained to clarify information and answer questions about paternity establishment;

(3) receive training from the Office of the Attorney General at least once yearly on the requirements for voluntarily establishing paternity. (The training is not to exceed eight (8) hours at locations throughout the state established by the Office of the Attorney General and the Texas Department of State Health Services, Vital Statistics Unit.)

(4) use only the Acknowledgment of Paternity and Denial of Paternity forms and Rescission of Acknowledgment of Paternity forms promulgated by the Texas Department of State Health Services, Vital Statistics Unit.

(5) use the brochures and training manuals, including the oral and written information, provided by the Office of the Attorney General and the Texas Department of State Health Services, Vital Statistics Unit.

(6) are periodically evaluated by the Office of the Attorney General.

**History**
- *Source Note: The provisions of this §55.407 adopted to be effective April 23, 2000, 25 TexReg 3232; amended to be effective July 25, 2002, 27 TexReg 6501; amended to be effective March 5, 2008, 33 TexReg 1761; amended to be effective September 7, 2011, 36 TexReg 5655.*

##### **1 Tex. Admin. Code § 55.408** Parent Survey {#sec-55.408 omnilex-key=us-tx-regs-official--title-1--55.408}

(a) Each certified entity must provide the parents (and presumed father, if applicable,) with the opportunity to complete and sign the Parent Survey if the parent was provided the opportunity to voluntarily acknowledge paternity. The Parent Survey on the Acknowledgment of Paternity (AOP) may be found at: http://www.oag.state.tx.us/cs/forms/1798patsurvey.pdf.

(b) If the parents or presumed father do not wish to complete the survey, the certified entity must note this on the form.

(c) The certified entity must retain the parent survey in its files.

**History**
- *Source Note: The provisions of this §55.408 adopted to be effective March 5, 2008, 33 TexReg 1762; amended to be effective March 15, 2010, 35 TexReg 2152.*

##### **1 Tex. Admin. Code § 55.409** Rescinding Acknowledgment or Denial {#sec-55.409 omnilex-key=us-tx-regs-official--title-1--55.409}

Any signatory to an Acknowledgment of Paternity or Denial of Paternity may rescind an acknowledgment or denial through a certified entity providing such services. The rescinding party must:

(1) Complete a Rescission of Acknowledgment of Paternity form.

(2) Mail copies of the Rescission of Acknowledgment of Paternity form by certified or registered mail to all people who signed the original Acknowledgment of Paternity or Denial of Paternity and the Attorney General's Office, if required.

(3) Submit to Texas Department of State Health Services, Vital Statistics Unit:

(A) the original Rescission of Acknowledgment of Paternity form; and

(B) the original proof of mailing of the copies.

(4) Submissions to the Texas Department of State Health Services, Vital Statistics Unit must be made by the date a proceeding related to the child is initiated or the 60th day after the effective date of the acknowledgment, whichever comes earlier.

**History**
- *Source Note: The provisions of this §55.409 adopted to be effective September 7, 2011, 36 TexReg 5655.*

#### **Subchapter K** RELEASE OF INFORMATION

##### **1 Tex. Admin. Code § 55.501** Release of Information {#sec-55.501 omnilex-key=us-tx-regs-official--title-1--55.501}

(a) Upon request to the IV-D agency by an authorized person or his or her authorized representative, the IV-D agency may provide the following information:

(1) the status of pending or possible legal action regarding a case involving the authorized person;

(2) copies of legal documents that have been filed with the court and that are maintained in the files and records of the agency, so long as the authorized person is a party and the documents have not been sealed by the court or there is no order prohibiting the release of the documents;

(3) copies of correspondence or documents previously provided to the IV-D agency by the authorized person making the request;

(4) copies of correspondence or documents previously provided by the IV-D agency to the authorized person making the request;

(5) records of child support payments and any arrearage balances regarding the authorized person's child support case;

(6) amount submitted to a credit reporting agency regarding the authorized person's child support obligation; and

(7) any other information authorized to be released pursuant to federal statute or rule.

(b) As used herein, "authorized person" means:

(1) the applicant or recipient, or former applicant or recipient, of IV-D services;

(2) the custodial parent;

(3) the noncustodial parent;

(4) the alleged or presumed father;

(5) the obligor or obligee;

(6) the authorized representative of any of the above, as defined herein.

(c) As used herein, the term authorized representative means:

(1) a private attorney representing an authorized person as identified herein;

(2) a person designated in writing by an authorized person, including a public official, so long as the designation has not been rescinded by the authorized person.

**History**
- *Source Note: The provisions of this §55.501 adopted to be effective December 10, 2000, 25 TexReg 11929; amended to be effective March 5, 2008, 33 TexReg 1762; amended to be effective March 15, 2010, 35 TexReg 2152.*

#### **Subchapter L** FINANCIAL INSTITUTION DATA MATCHES

##### **1 Tex. Admin. Code § 55.551** Scope {#sec-55.551 omnilex-key=us-tx-regs-official--title-1--55.551}

Section 466 of the federal Social Security Act (the Act), as amended by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P. L. 104-193), requires each state to establish procedures under which the state's child support enforcement agency (Title IV-D agency) shall enter into agreements with financial institutions for the purpose of securing information leading to the enforcement of child support orders. The Title IV-D agency shall develop and operate, in coordination with such financial institutions and the Federal Parent Locator Service, a data match system in which each financial institution will provide each calendar quarter the name, record address, social security number or other taxpayer identification number, and other identifying information for each non-custodial parent who maintains an account at such institution and who owes past-due child support, as identified by the Title IV-D agency by name and social security number or other taxpayer identification number.

**History**
- *Source Note: The provisions of this §55.551 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.552** Definitions {#sec-55.552 omnilex-key=us-tx-regs-official--title-1--55.552}

The following words and terms when used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise:

(1) "Account" means a demand deposit account, checking or negotiable withdrawal order account, savings account, time deposit account, or money-market mutual fund account.

(2) "Account owner record" means the record used by a financial institution to report account owner information including payee identification information, account balance and account type.

(3) "Account file" means an electronic file submitted to the Title IV-D agency listing all accounts of the financial institution under the option provided by Match Method 1 (infra).

(4) "Authorized representative" means an officer or executive of a financial institution authorized to sign a memorandum of agreement (infra) on behalf of the institution.

(5) "FEIN" means the federal employer identification number.

(6) "Financial institution" means:

(A) a depository institution, as defined in Section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c));

(B) an institution-affiliated party, as defined in Section 3(u) of the Federal Deposit Insurance Act (12 U.S.C. 1813(u));

(C) any federal credit union or state credit union, as defined in Section 101 of the Federal Credit Union Act (12 U.S.C. 1752), including an institution-affiliated party of such a credit union, as defined in Section 206(r) of such Act (12 U.S.C. 1786(r)); or

(D) any benefit association, insurance company, safe deposit company, money-market mutual fund, or similar entity authorized to do business in the State.

(7) "Financial institution record" means the record used by a financial institution to report identifying information about the financial institution including name, address, service bureau and reporting agent.

(8) "Inquiry file" means electronic files sent by the Title IV-D agency or OCSE (infra) to financial institutions electing to report under Match Method 2 (infra) that contain records of delinquent child support obligors that the institution will use to match against its records.

(9) "Match Method 1" means the process used by a financial institution to submit an electronic file containing all its open accounts to the Title IV-D agency or its agent that is matched against records of delinquent child support obligors.

(10) "Match Method 2" means the process used by a financial institution to conduct matches against an inquiry file (supra).

(11) "Match file" means electronic files sent by a financial institution to the Title IV-D agency or OCSE (infra) that report accounts matched against an inquiry file supplied by the Title IV-D agency or OCSE to the financial institution under Match Method 2 (supra).

(12) "Memorandum of agreement" means a form completed and signed by an authorized representative (supra) and the Title IV-D agency or its agent for the purpose of exchanging information by way of an automated data exchange system that serves as the official agreement between the financial institution and the Title IV-D agency.

(13) "Multi-state financial institution" means any financial institution operating in two or more states that maintains accounts for its customers.

(14) "OCSE" means the Office of Child Support Enforcement within the federal Department of Health and Human Services.

(15) "Record" has the meaning given such term in section 1101 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401).

(16) "Reporting agent" means a service provider who has a contract with a financial institution to report data match information.

(17) "Single-state financial institution" means a financial institution doing business exclusively within the State or a multi-state financial institution declining the option to process data matches through OCSE.

(18) "Total record" means the entire file submitted by a financial institution to report individual accounts and the dollar amount associated with each account, the total number of accounts and total dollar amount of the records contained in the file.

**History**
- *Source Note: The provisions of this §55.552 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.553** Financial Institution Data Match Reporting Requirements {#sec-55.553 omnilex-key=us-tx-regs-official--title-1--55.553}

(a) A financial institution doing business in the State shall participate on a calendar quarter basis in the exchange of data with the Title IV-D agency or its agent, matching the names of delinquent child support obligors with the names of account holders and providing information from matched account owner records on all accounts owned by the delinquent child support obligor. A financial institution must share the required information with the Title IV-D agency using data specifications approved by the federal Office of Management and Budget (OMB Control No: 0970-0196) on March 5, 1999, in one of two methods:

(1) Match Method 1 ("all accounts method"): A financial institution shall submit to the Title IV-D agency or its designated agent an account file and total record on a quarterly basis and within fourteen days of the end of the week designated by the financial institution; or

(2) Match Method 2 ("matched accounts"): A financial institution shall conduct a data match against an inquiry file supplied by the Title IV-D agency, OCSE, or authorized agent on all customer accounts maintained by the financial institution. The financial institution must provide an account file on all accounts that were matched with the inquiry file. The financial institution must submit the total record to the Title IV-D agency, OCSE, or authorized agent within forty-five (45) days of its receipt of the inquiry file. The financial institution shall destroy, erase, or return the inquiry file to the Title IV-D agency or OCSE within forty-five (45) days of its receipt of the inquiry file.

(b) Financial institutions may contract with reporting agents (also known as service agents, service providers, or transmitters). If a financial institution chooses to contract with a service provider to report information for the financial institution, the financial institution, rather than the service provider, must sign the memorandum of agreement and the financial institution remains responsible for compliance with the law.

(c) Financial institutions conducting data matches with the Title IV-D agency that choose to use a reporting agent/transmitter must inform the Title IV-D agency by completing the appropriate section on the memorandum of agreement. The Title IV-D agency must be informed of the institution's decision to use an agent/transmitter in order to ensure the confidentiality of data. Similarly, if an institution wishes the Title IV-D agency to send the match file to a recipient whose Federal Employer Identification Number (FEIN) is different from the institution, the Title IV-D agency must be notified.

(d) Multi-state financial institutions that choose to use a reporting agent/transmitter must inform OCSE by completing the appropriate section on the memorandum of agreement. OCSE must be informed of the institution's decision to use an agent/transmitter in order to ensure the confidentiality of data. Similarly, if an institution wishes OCSE to send the data match file to a recipient whose Federal Employer Identification Number (FEIN) is different from the institution, OCSE must be notified.

**History**
- *Source Note: The provisions of this §55.553 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.554** Memorandum of Agreement {#sec-55.554 omnilex-key=us-tx-regs-official--title-1--55.554}

(a) Each financial institution shall complete a memorandum of agreement for the purpose of exchanging information by way of an automated data exchange system implemented and managed by the Title IV-D agency. All data provided shall meet the standards as set forth in the "Financial Data Match Specifications Handbook," dated March 5, 1999. Multi-state financial institutions may choose to conduct the data match through OCSE, and are governed under §55.555 of this subchapter.

(b) The memorandum of agreement shall include all agreements, attachments to agreements, revised attachments, notices, financial institution record, and other documents related to the status of the agreement between the financial institution and the Title IV-D agency, and shall be governed by the following:

(1) All data and match results, including tapes or other media, shall be addressed to the Title IV-D agency or its agent for data processing as follows, or to such address as the Title IV-D agency shall later designate in writing: Tier Technologies, Bldg. 3 1st Floor, Suite 101, 171 Jersey St., Trenton, NJ 08611

(2) The financial institution shall submit and, as needed, update a schedule of the quarterly submission dates to the Title IV-D agency.

(3) The financial institution shall file an amended memorandum of agreement with the Title IV-D agency whenever information provided by the financial institution on the agreement changes and shall submit those changes to the Title IV-D agency within 30 days of the effective date of change.

(4) The financial institution shall file an amended memorandum of agreement if the financial institution is involved in any merger, acquisition, change of name, or any other transaction that could affect the financial institution's performance under the agreement.

(5) A memorandum of agreement commences on the date that the last required signature is affixed to it and continues in effect until terminated by mutual consent of the parties, as permitted by federal and state law.

(6) A memorandum of agreement may be amended in writing at any time by mutual consent of the parties.

(7) A memorandum of agreement must be signed by both the financial institution's authorized representative and by the financial institution's agent, if an agent is used to process data matches for the institution, and must include the FEINs for both the financial institution and the financial institution's agent.

(8) The financial institution shall designate a contact person, who may be an agent of the institution, to perform the data match on its behalf, and include the following information:

(A) title,

(B) street address,

(C) mailing address,

(D) e-mail address,

(E) telephone number, and

(F) facsimile number

(9) The financial institution shall provide the name of a contact person who will accept service for the institution of all legal notices resulting from this agreement and include the following information:

(A) title,

(B) financial institution name,

(C) street address,

(D) mailing address,

(E) e-mail address,

(F) telephone number, and

(G) facsimile number

(10) The financial institution shall provide the name of a contact person for resolution of lien and levy processing and include the following information:

(A) title

(B) financial institution name

(C) street address

(D) mailing address

(E) e-mail address

(F) telephone number, and

(G) facsimile number

(11) The financial institution shall identify its preferred media format for reporting to and receiving information from the Title IV-D agency's agent from the following options:

(A) 3480 or 3490 tape cartridges

(B) EBCDIC or ASCII format

(C) tape reel

(D) diskette - 3.5 or 5.25 inch

(E) CD-ROM

(F) DAT - 4mm or 8mm

(G) file transfer protocol

(H) internet

(I) CONNECT:Direct

(J) any other media format as authorized by the Title IV-D agency.

(12) The financial institution will indicate on the memorandum of agreement which week of the calendar quarter it will transmit data or perform the data match. Calendar quarters begin January 1, April 1, July 1 and October 1 of each year.

**History**
- *Source Note: The provisions of this §55.554 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.555** Multi-State Financial Institution Data Match Reporting Requirements {#sec-55.555 omnilex-key=us-tx-regs-official--title-1--55.555}

(a) The Child Support Performance and Incentive Act of 1998 (P.L.105-200) modified the federal Social Security Act to better facilitate the data match for multi-state financial institutions. 42 U.S.C. 652(l), as amended, authorizes OCSE to act as the conduit between the States and territories and the multi-state financial institutions in the development and implementation of a centralized, quarterly data match program for the collection of delinquent child support. Multi-state financial institutions may choose to match through OCSE or with the individual states in which they do business. Financial institutions choosing to participate as a multi-state financial institution must use Match Method 2.

(b) A multi-state financial institution choosing to match through OCSE may contact OCSE at: Office of Child Support Enforcement, Multi-state Financial Institution Data Match, Post Office Box 509, Randallstown, Maryland 21133. Assistance may be found via e-mail at: fidm@ssa.gov, or Web site: http://www.acf.hhs.gov/programs/cse/.

(c) If a multi-state financial institution discontinues its reporting through OCSE, it shall promptly submit a memorandum of agreement to enter the match process with the Title IV-D agency its agent.

**History**
- *Source Note: The provisions of this §55.555 adopted to be effective August 15, 2001, 26 TexReg 6009; amended to be effective March 15, 2010, 35 TexReg 2152.*

##### **1 Tex. Admin. Code § 55.556** Liability of Financial Institutions for Disclosure of Information {#sec-55.556 omnilex-key=us-tx-regs-official--title-1--55.556}

(a) The federal Social Security Act (42 USC 666(a)(17)) provides that a financial institution shall not be liable under any federal or state law to any person

(1) for any disclosure of information to the State child support enforcement agency,

(2) for encumbering or surrendering any assets they hold in response to a notice of lien or levy issued by the state child support enforcement agency, or

(3) for any other action taken in good faith to comply with the requirements of Section 466(a)(17)(A) of the Act. Section 469A of the Act also provides protection from liability for multi-state financial institutions disclosing information to the federal parent locate service through the multi-state financial institution data match.

(b) Subsection 231.307(d) of the Texas Family Code provides that a financial institution providing information or responding to a notice of child support lien provided under Subchapter G, Chapter 157, or otherwise acting in good faith to comply with the Title IV-D agency's procedures under this section may not be held liable under any federal or state law for any damages that arise from those acts.

**History**
- *Source Note: The provisions of this §55.556 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.557** Reimbursement to Financial Institutions for Data Processing {#sec-55.557 omnilex-key=us-tx-regs-official--title-1--55.557}

Reimbursement to financial institutions for the cost of processing the data required by this subchapter is not available.

**History**
- *Source Note: The provisions of this §55.557 adopted to be effective August 15, 2001, 26 TexReg 6009.*

##### **1 Tex. Admin. Code § 55.558** Confidentiality and Security {#sec-55.558 omnilex-key=us-tx-regs-official--title-1--55.558}

(a) The Title IV-D agency and each financial institution shall develop procedures, subject to State and federal law and regulation, to ensure that information contained in their respective records and obtained from each other shall be kept confidential.

(b) In accordance with section 453 of the Act, the information provided to the financial institutions, or their designated agents, for the purpose of conducting the data matches may not be used by such institutions or agents for any other purpose and may not be disclosed to any person except to the extent necessary to conduct the data matches. The financial institutions or any of its agents shall return, destroy or erase all information provided to the financial institution or any of its agents after completion of the data matches. The total record provided by a financial institution to the Title IV-D agency under this agreement remains confidential under federal law 42 U.S.C. §669a(b).

**History**
- *Source Note: The provisions of this §55.558 adopted to be effective August 15, 2001, 26 TexReg 6009.*

#### **Subchapter M** INTERCEPT OF INSURANCE CLAIMS

##### **1 Tex. Admin. Code § 55.601** Scope {#sec-55.601 omnilex-key=us-tx-regs-official--title-1--55.601}

(a) Under Texas Family Code §231.015, the Child Support Division (CSD) of the Office of the Attorney General, in consultation with the Texas Department of Insurance and representatives of the insurance industry, is required to operate by rule an insurance intercept program under which insurers must cooperate with the CSD in matching the names of claimants with the names of child support obligors who owe past-due child support. When such an individual is identified, the insurer will receive either a notice of child support lien or an income withholding order to secure the payment of the amount of past-due support. This subchapter explains how the matching process and the reporting process work.

(b) Except as provided by subsection (c) of this section, as used in this subchapter, a "claim" that must be matched and must be reported is any which seeks an economic benefit for the claimant.

(1) An "economic benefit" under a life, accident, health policy or annuity is defined as a payment in which an individual is paid as the payee or co-payee:

(A) for a claim by a beneficiary under a life insurance policy;

(B) for the cash surrender value by an owner of a life insurance policy or annuity;

(C) for payments to an annuitant; or

(D) a payment to an individual as the payee or co-payee on a first-party claim as defined herein, unless excluded under subsection (c)(2) of this section.

(2) An "economic benefit" under a property and casualty insurance policy is defined as a payment involving:

(A) a payment to an individual as the payee or co-payee on a first-party claim as defined herein, unless excluded under subsection (c)(1) of this section; payments involving third-party claims, as defined herein, where the individual would be entitled to compensations from an insured covered by a liability insurance policy or self-insurer including claims covering personal or bodily injury, lost wages, property damage, non-economic tort damages, wrongful death damages, or accidental death damages; or

(B) payments to individuals for employment or workers' compensation benefits covered by an insurance policy or certified self-insurer.

(3) The term "first-party claim" means:

(A) a claim that is made by the insured or policyholder under an insurance policy or contract or by a beneficiary named in a life insurance policy or annuity; and

(B) the proceeds must be paid by the insurer directly to the insured or beneficiary.

(4) The term "third-party claim" means a claim for bodily injury, property damage or other damages that is brought by a third-party against an insured that is covered by a liability insurance policy or contract or by a self-insured.

(c) The following economic benefits are not considered economic benefits that require reporting:

(1) "first-party actual property damage claims" defined as benefits payable under an insurance policy arising out of covered damage for actual repair, replacement, or loss of use of insured property. Examples include:

(A) physical damage coverage under a personal automobile policy for actual repair, replacement, loss of use, or other associated costs including, but not limited to towing, storage, vehicle rentals, or costs to an insured vehicle;

(B) coverage for loss of damage to an insured dwelling and contents under a residential, homeowners, farm and ranch owners, condominium owners, tenant property insurance policy, or other similar policies including additional living expenses payable under such a policy;

(C) benefits paid to the mortgagee or lienholder of the property including payments issued jointly to the insured and mortgagee; and

(D) coverage for physical loss or damage to commercial property or business personal property insured under a commercial property, farm, inland marine, builder's risk, or other similar policies.

(2) "actual medical expenses" defined as a payment

(A) issued and sent directly to a healthcare provider; or

(B) issued and sent directly to the claimant after the claimant provides proof of the amount actually paid by the claimant to the healthcare provider or providers, the amount is at least as much as the insurance payment and, the amount does not include any amounts billed but not paid.

(3) A co-payable insurance payment mailed directly to a vendor, repair facility, or healthcare provider that includes the claimant as a co-payee under subsection (1) or (2) of this section.

(4) A loan against the cash value or surrender value of an insurance policy or annuity, including loans for premium payments.

(5) Dividends or other payments made under an insurance policy or annuity that are credited or retained by the insurer or that will not exceed $1,200 over a 12-month period.

(6) Benefits payable directly to a creditor of a claimant under the terms of the policy.

(7) Benefits assigned to be paid to a healthcare provider or facility for "actual expenses" defined as the amount actually owed by the insured not otherwise paid or reimbursed.

(8) Limited benefits that include coverage for one or more specified diseases or illnesses; dental or vision benefits; hospital indemnity or other fixed indemnity insurance coverage; and, short-term major medical contracts, including any benefits to be paid under a plan or rider of accident insurance, accidental death, or loss of limb coverage.

(9) Benefits paid in accordance with a "long term care benefit plan" as defined in §1651.003 of the Insurance Code.

(10) Benefits paid on behalf of an individual directly to a retirement plan or an accelerated death benefit as defined in Chapter 1111 of the Insurance Code.

(11) "third-party property damage claims" defined as benefits paid or payable to:

(A) a vendor or repair facility for the actual repair, replacement, or loss of use of:

(i) a dwelling, condominium, or other improvements on real property;

(ii) a vehicle, including a motor vehicle, motorcycle, or recreational vehicle; or

(iii) other tangible property that has sustained actual damage or loss; or

(B) a claimant for reimbursement of the claimant for payments made by the claimant to a vendor or repair facility for the actual repair, replacement, or loss of use of:

(i) a dwelling, condominium, or other improvements on real property;

(ii) a vehicle, including a motor vehicle, motorcycle, or recreational vehicle; or

(iii) other tangible property that has sustained actual damage or loss.

(12) Benefits paid or payable to a claimant under workers' compensation coverage where the claimant has paid a healthcare provider's bill and payment is no greater than the amount owed for the treatment rendered.

(13) A claim for benefits, or a portion of a claim for benefits, assigned to be paid to a funeral service provider or facility for actual funeral expenses owed by the insured that are not otherwise paid or reimbursed.

(d) All insurers are subject to the matching and reporting requirements under this subchapter and must match and report any claim seeking an economic benefit in which:

(1) the owner of a life policy or annuity that was issued to an individual resides in Texas;

(2) the beneficiary making a claim on a life policy or annuity resides in Texas;

(3) a first-party claimant making a claim resides in Texas;

(4) a third-party claimant making a third-party claim, as defined in subsection (b)(4) of this section, resides in Texas; or

(5) a liability insurer or an eligible surplus lines insurer is providing coverage to an insured on a third-party claim and the claim occurs in Texas.

(e) For a claim under subsection (d)(4) or (d)(5) of this section, the liability insurer must comply with the match and reporting requirements if coverage to an insured would result in payments to the third-party claimant as a child support obligor based on the liability of the insured to the third-party claimant.

(f) To determine whether a recipient of funds paid under a claim owes child support arrearages or is subject to a lien for child support arrearages, insurers are encouraged to report all claims.

(g) As used in this subchapter, "insurer" means:

(1) a domestic, foreign, or alien company which provides insurance coverage of any kind, including:

(A) life insurance;

(B) health insurance;

(C) liability insurance for an occurrence;

(D) an annuity; or

(E) any combination of subparagraphs (A) - (D) of this paragraph;

(2) a Lloyd's plan;

(3) a reciprocal or interinsurance exchange;

(4) a fraternal benefit society;

(5) a mutual aid association, including a mutual insurance company;

(6) a surplus lines insurer;

(7) a certified self-insurer granted a certificate of authority as authorized by Labor Code Chapter 407;

(8) a certified self-insurer group granted a certificate of approval as authorized by Labor Code Chapter 407A; or

(9) a governmental entity that self-insures, either individually or collectively under an interlocal cooperation contract as authorized by Government Code Chapter 791.

(h) To assure the flexibility to accommodate the various types of operations of the entities subject to the rules, these rules will be liberally construed.

(i) If compliance with these rules may result in an operational hardship or an injustice to any party, the rules may be suspended at the discretion of the Title IV-D Director. An exemption request under this provision must be sent to the Office of the Attorney General of Texas, Special Collections Unit, by mail: P.O. Box 12027, Austin, Texas 78711-2027, by FAX: (512) 433-4691, or by e-mail: txinsscu@oag.texas.gov, providing the basis or the hardship or injustice and the length of time needed to comply.

(j) The Title IV-D Director may delegate a power, duty, or responsibility under these rules to one or more persons in the Child Support Division.

**History**
- *Source Note: The provisions of this §55.601 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 5, 2008, 33 TexReg 1762; amended to be effective March 16, 2010, 35 TexReg 2153; amended to be effective December 2, 2013, 38 TexReg 8639; amended to be effective May 12, 2022, 47 TexReg 2727.*

##### **1 Tex. Admin. Code § 55.602** Data Matching Options {#sec-55.602 omnilex-key=us-tx-regs-official--title-1--55.602}

(a) The Child Support Division (CSD) has contracted with the State of Rhode Island and Providence Plantations to participate in the Child Support Lien Network (CSLN). CSLN provides an insurer with two methods of matching: an Automated Data Match and an Interactive Lookup. An insurer subject to the requirements of this subchapter may choose to provide or obtain matching information using either or both the CSLN Automated Data Match process and the CSLN Interactive Lookup.

(b) As an alternative to an automated data match with CSLN, an insurer may participate in a similar automated data match with the federal Office of Child Support Enforcement (OCSE). An insurer may obtain information about the OCSE match program, including enrollment options, through the OCSE website (http://www.acf.hhs.gov/css). An insurer or agent of an insurer participating in OCSE's automated, data match process may either submit information on claims to OCSE or receive a file from OCSE containing information about individuals who owe past-due support (delinquent obligor information) and generate a match file to OCSE.

(c) A data match must occur before any claim is paid. The data match must be made at the time or after a claim is filed but before the claim has been paid. In addition to this match, an insurer can perform periodic data matching in advance of such claims. In the event of a match prior to a claim, the insurer will not pay the claim without first confirming with CSD that the match is still valid, and without first receiving and processing either a notice of child support lien or an income withholding order to secure payment of the amount of past-due support or a release.

**History**
- *Source Note: The provisions of this §55.602 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 5, 2008, 33 TexReg 1762; amended to be effective March 16, 2010, 35 TexReg 2153; amended to be effective December 2, 2013, 38 TexReg 8639; amended to be effective May 12, 2022, 47 TexReg 2727.*

##### **1 Tex. Admin. Code § 55.603** Insurance Services Office Data Match {#sec-55.603 omnilex-key=us-tx-regs-official--title-1--55.603}

(a) An insurer can conduct an automatic data match of its pending claims against a list of delinquent child support obligors maintained by the Insurance Services Office (ISO). ISO is an industry service provider, located in New Jersey, which provides a claim search service to assist subscribing insurers in fraud detection.

(b) An insurer participating in the automated data matching process must give ISO permission to match the insurer's claim data with Child Support Lien Network (CSLN) or the federal Office of Child Support Enforcement (OCSE).

(c) CSLN matches its list of child support obligors daily against the ISO claim data. ISO returns matches to OCSE to distribute to the State child support agency(ies) responsible for collecting past-due support.

(d) A participating insurer will receive a notice of child support lien (or withholding instrument for a workers' compensation claim) only on those claims that the insurer has registered with ISO and that match the name of an obligor who owes past-due child support. Claims information that does not match individuals who owe past-due support is discarded.

**History**
- *Source Note: The provisions of this §55.603 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 16, 2010, 35 TexReg 2153; amended to be effective December 2, 2013, 38 TexReg 8639; amended to be effective May 12, 2022, 47 TexReg 2727.*

##### **1 Tex. Admin. Code § 55.604** Interactive Lookup {#sec-55.604 omnilex-key=us-tx-regs-official--title-1--55.604}

(a) By accessing the Child Support Lien Network (CSLN) database (http://www.childsupportliens.com), an insurer may determine whether a claimant owes past-due child support.

(b) Secure access to the CSLN database will be approved once the registration information and confidentiality statement have been received and reviewed.

(c) Unless the insurer is participating in the CSLN or the federal Office of the Child Support Enforcement (OCSE) Automated Data Match, the insurer must query the database prior to the payment of the claim.

(1) For claims involving periodic payments after the insurer has determined that benefits will be payable, the query must be made only prior to the initial payment after the insurer has determined that benefits are payable. No inquiry is required for each periodic payment for 12 months thereafter. Examples of these types of claims would include:

(A) periodic payments under a disability policy;

(B) workers' compensation policy;

(C) accident or health insurance policy involving periodic payments; or

(D) payments to an annuitant for an annuitization including systematic withdrawal.

(2) If additional information is required to be submitted to continue periodic payments, this will not be considered a new claim if the information is provided within 12 months of the initial determination.

(3) A claim involving different benefits or coverages will be considered a new claim and the data base must be queried.

(d) Insurers are notified when a query of the database results in:

(1) no match.

(2) a positive match, in which basic match data is provided.

(3) multiple positive matches within one state, in which the insurer is prompted to contact CSLN to identify the correct obligor.

(4) multiple possible matches within more than one state, in which the insurer is notified that CSLN will work with the insurer and the affected states to determine the appropriate course of action.

(e) When an interactive match occurs, CSLN notifies the State child support enforcement agency of a match. CSLN or the State child support agency will send a notice of child support lien (or, in the case of workers' compensation claim, a withholding instrument) to the insurer.

(f) As an alternative to CSLN, a life insurance company can use OCSE's web-based application, the Debt Inquiry Service, to submit information about life insurance beneficiaries who have filed a claim prior to making a payout to determine if a beneficiary owes past-due support. The information may be provided through individual look-ups or by uploading a single file containing information about multiple individuals. The information provided by the life insurance companies is compared with individuals who owe past-due child support. If there is a match, the life insurance company receives the name of the State(s) where the individual owes past-due support and contact information for that State. If the match identifies an individual subject to a child support order being enforced by the Child Support Division (CSD), the life insurance company may either contact the CSD or await notice from the CSD concerning the match; however, no payout will be made to the claimant unless authorized by the CSD.

(g) Apart from life insurance claims, the OCSE Debt Inquiry Services portal does not provide enough information to satisfy the insurance data match requirements under this subchapter.

**History**
- *Source Note: The provisions of this §55.604 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 5, 2008, 33 TexReg 1762; amended to be effective March 16, 2010, 35 TexReg 2153; amended to be effective December 2, 2013, 38 TexReg 8639; amended to be effective May 12, 2022, 47 TexReg 2727.*

##### **1 Tex. Admin. Code § 55.605** Protection from Liability; Remittance of Funds {#sec-55.605 omnilex-key=us-tx-regs-official--title-1--55.605}

(a) An insurer that provides information required by this subchapter or acts in good faith to comply with procedures established by the Child Support Division (CSD) for the operation of the insurance intercept program under this subchapter, including the remittance of funds as specified under this rule, or responds to a notice of child support lien or levy under Texas Family Code Chapter 157, Subchapter G, is not liable for those acts under any law to any person. This includes but is not limited to any claims asserted under Chapter 541, Chapter 542, Chapter 601, or Chapter 602 of the Insurance Code; Chapter 17 of the Business and Commerce Code; Chapter 181 of the Health and Safety Code; or an action for common law bad faith. However, an insurer who fails to comply with a child support lien, including the remittance of funds as specified under this rule, may be liable to the CSD as the child support lien claimant in an amount equal to the amount of funds payable under an insurance claim, not to exceed the amount of the child support arrearages for which the lien was issued. *See* Texas Family Code §157.324. An insurer who has questions or concerns about a child support lien, including the appropriate remittance of funds under a policy to which the lien attaches, must contact the Texas Special Collections Unit, P.O. Box 12027, Austin, Texas 78711-2027, before paying out any funds under the policy.

(b) An insurer should remit funds in satisfaction of a child support lien in one of the following ways:

(1) On receipt of a signed agreement between the CSD and a claimant and/or claimant's attorney, the insurer should remit the funds agreed to be paid to satisfy the child support lien to: Texas State Disbursement Unit, Insurance Intercept, P.O. Box 245996, San Antonio, Texas 78224-5996. The funds should be made payable to the Office of the Attorney General, and the remittance should identify the name of the claimant/obligor and the CSD's case number(s) as shown on the Notice of Lien.

(2) If the claimant is represented by an attorney but the insurer has not received a copy of any signed agreement between the attorney and the CSD, the insurer should remit all the funds directly to the claimant's attorney and must include the Office of the Attorney General as a co-payee and provide the Office of the Attorney General with written notice of the data and amount of the payment sent to the attorney.

(3) If the claimant has no attorney, and the insurer has not received a copy of any signed agreement between the claimant and the CSD, the insurer must remit all the funds to the Texas State Disbursement Unit, Insurance Intercept, P.O. Box 245996, San Antonio, Texas 78224-5996 with the funds being made payable to the Office of the Attorney General and the remittance should identify the name of the claimant/obligor and the CSD's case number(s) as shown on the Notice of Lien.

**History**
- *Source Note: The provisions of this §55.605 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 16, 2010, 35 TexReg 2153; amended to be effective December 2, 2013, 38 TexReg 8639; amended to be effective May 12, 2022, 47 TexReg 2727.*

##### **1 Tex. Admin. Code § 55.606** Confidentiality and Security {#sec-55.606 omnilex-key=us-tx-regs-official--title-1--55.606}

(a) The Title IV-D agency shall consider any information received from an insurer as confidential. Such information shall be used or disclosed by the Child Support Division only for the purpose of collecting past-due child support or for other purposes as enumerated in subsection (c) of Family Code §231.108.

(b) In accordance with §453 of the federal Social Security Act, any information provided by the Child Support Division to an insurer, or its designated agent, for the purpose of conducting a data match may not be used by the insurer or its agent for any other purpose and may not be disclosed to any person except to the extent necessary to conduct the data match. The insurer or its agent shall destroy or erase all information provided to the insurer after completion of a data match. This subsection does not apply to data contained in a child support lien or other encumbering instrument received from the Child Support Division after the data match process.

**History**
- *Source Note: The provisions of this §55.606 adopted to be effective June 10, 2003, 28 TexReg 4409; amended to be effective March 16, 2010, 35 TexReg 2153.*

#### **Subchapter N** NATIONAL MEDICAL SUPPORT NOTICE

##### **1 Tex. Admin. Code § 55.701** Scope {#sec-55.701 omnilex-key=us-tx-regs-official--title-1--55.701}

The National Medical Support Notice ("the Notice") is intended to provide a standardized means of communication between State child support enforcement agencies, employers, and parents. The Notice will facilitate the process of enrolling children in the group health plans for which their parents are eligible and create a uniform and streamlined process for enforcement of health care coverage to ensure that all children receive the health care coverage for which they are eligible and to which they are entitled.

**History**
- *Source Note: The provisions of this §55.701 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 55.702** Form {#sec-55.702 omnilex-key=us-tx-regs-official--title-1--55.702}

The Notice is a federally mandated form and can be found at §55.120 of this title.

**History**
- *Source Note: The provisions of this §55.702 adopted to be effective January 18, 2004, 29 TexReg 355.*

##### **1 Tex. Admin. Code § 55.703** Use of Form {#sec-55.703 omnilex-key=us-tx-regs-official--title-1--55.703}

The Notice must be used by the Title IV-D Agency. It may be used in conjunction with an order in any Suit Affecting the Parent-Child Relationship to enforce health care coverage.

**History**
- *Source Note: The provisions of this §55.703 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 55.704** Title IV-D Agency Responsibilities {#sec-55.704 omnilex-key=us-tx-regs-official--title-1--55.704}

(a) The Title IV-D Agency shall use the Notice to inform employers of the requirement for insurance coverage for the child(ren) of employees.

(b) In a IV-D case, the Title IV-D Agency may transfer the National Medical Support Notice to the employer of an employee obligated to provide health care coverage within two business days after the date of entry of the employee in the State Directory of New Hires.

(c) The Title IV-D Agency must promptly notify the employer when there is no longer a current order for health care coverage in effect for which the IV-D Agency is responsible.

(d) The Title IV-D Agency, in consultation with the custodial parent, must promptly select from available insurance plan options when the plan administrator reports that there is more than one option available under the plan and when there is no default plan.

**History**
- *Source Note: The provisions of this §55.704 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 55.705** Employer Responsibilities {#sec-55.705 omnilex-key=us-tx-regs-official--title-1--55.705}

(a) If the child cannot be enrolled in the employer health insurance plan because the employer does not maintain a plan, the employee is not eligible, or the employee is no longer employed by the employer, the employer must complete the Employer Response Form and provide the employer representative information to the Title IV-D Agency within 20 business days of receipt of the Notice.

(b) Employers must transfer the Notice to the appropriate group health plan administrator within 20 business days after the date of the Notice.

(c) Employers must withhold any obligation of the employee for employee contributions necessary for coverage of the child(ren) and send any amount withheld directly to the plan.

(d) Employees may contest the withholding based on a mistake of fact. If the employee contests such withholding, the employer must initiate withholding until such time as the employer receives notice that the contest is resolved.

(e) The employer must notify the Title IV-D Agency should the federal withholding limitation prevent the withholding from the employee's income of the amount reported to obtain coverage under the terms of the plan.

(f) If an employer would like to receive the Notice through electronic transmission the employer must notify the Title IV-D Agency.

(g) If the child is enrolled in the employer's health plan, or is already enrolled in another health insurance plan in accordance with a previous child support or medical support order to which the child is subject, the employer must provide this information by first class mail to the IV-D agency. The statement must be sent no later than 30 days after the date the employer receives the National Medical Support Notice.

**History**
- *Source Note: The provisions of this §55.705 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective March 5, 2008, 33 TexReg 1763; amended to be effective March 15, 2010, 35 TexReg 2155.*

##### **1 Tex. Admin. Code § 55.706** Plan Administrator Responsibilities {#sec-55.706 omnilex-key=us-tx-regs-official--title-1--55.706}

(a) The employer's plan administrator must complete the Health Insurance Enrollment Information sheet and the plan administrator's response and return them within 40 business days of the date of the Notice.

(b) If multiple health insurance plans are available, the employer must enroll the child(ren) in the employer's default health insurance plan. If no default plan is designated, the employer must contact the Title IV-D Agency.

(c) If the plan administrator determines the Notice does not constitute a qualified Medical Support Order, the plan administrator must notify the Title IV-D Agency of the deficit.

**History**
- *Source Note: The provisions of this §55.706 adopted to be effective January 18, 2004, 29 TexReg 355.*

##### **1 Tex. Admin. Code § 55.707** Employee Contest Procedures {#sec-55.707 omnilex-key=us-tx-regs-official--title-1--55.707}

(a) The employee may contest withholding under the Notice based upon a mistake of fact by requesting a review by the Title IV-D agency no later than 30 calendar days from the date of the notice of issuance.

(b) The form for requesting a review to contest withholding under the Notice is located on the Office of the Attorney General's website www.oag.state.tx.us.

(c) The Title IV-D Agency shall provide the employee, within 10 business days of receipt of the request for review, information regarding the date, time, and place of the review, which may be by telephonic conference or in person, as may be appropriate under the circumstances.

(d) The Title IV-D agency shall complete the review within 30 business days from the date of receipt of a request for review. The employer and employee must comply with the terms of the Notice during the contest period until notified by the Title IV-D agency to revise or terminate coverage.

(e) After the review, the Title IV-D agency may issue a revised Notice to the employer or terminate the Notice. A revised Notice or Termination Notice shall be sent to the employer no later than 10 business days after the date of the review.

(f) If the review fails to resolve an issue in dispute, and the National Medical Support Notice is not terminated or revised, the Title IV-D agency shall notify the employee of that determination within five business days of the date of the review and inform the employee that he/she may request a court hearing to resolve the issue(s) in dispute by filing a Motion to Withdraw the National Medical Support Notice and requesting a hearing with the court of continuing jurisdiction.

**History**
- *Source Note: The provisions of this §55.707 adopted to be effective January 18, 2004, 29 TexReg 355; amended to be effective March 5, 2008, 33 TexReg 1763; amended to be effective October 18, 2010, 35 TexReg 9231.*

#### **Subchapter O** STATE DISBURSEMENT UNIT

##### **1 Tex. Admin. Code § 55.801** Scope {#sec-55.801 omnilex-key=us-tx-regs-official--title-1--55.801}

The Office of the Attorney General operates the State Disbursement Unit, which is responsible for receiving, disbursing, maintaining and furnishing child support payments and records in accordance with applicable federal and state law. Texas Family Code §234.006 authorizes the adoption of rules in compliance with federal law for the operation of the State Disbursement Unit.

**History**
- *Source Note: The provisions of this §55.801 adopted to be effective June 4, 2006, 31 TexReg 4419.*

##### **1 Tex. Admin. Code § 55.802** Definitions {#sec-55.802 omnilex-key=us-tx-regs-official--title-1--55.802}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Office of the Attorney General--The state's Title IV-D agency administered by the Child Support Division of the Office of the Attorney General.

(2) State Disbursement Unit--The unit established and operated by the Title IV-D agency, the Office of the Attorney General Child Support Division, under 42 U.S.C. Section 654(b) that has responsibility for receiving, disbursing, maintaining and furnishing child support payments and records.

(3) Authorization for Release of Information Form 1A004--The form used when a custodial or noncustodial parent wishes to authorize the Office of the Attorney General to release case status information, redirect correspondence or redirect payments to another person, company, organization, or governmental entity.

(4) Revocation of Authorization for Release of Information Form 1A005--The form used when a custodial or noncustodial parent wishes to cancel their authorization for the Office of the Attorney General to release case status information, redirect correspondence or redirect payments to another person, company, organization, or governmental entity previously named on the Authorization for Release of Information Form 1A004.

(5) Direct Deposit Application Form 6A002--The form signed by an obligee that authorizes the State Disbursement Unit to set up direct deposit for all child support payments to be deposited directly into a bank account.

(6) Texas Debit Card--The plastic card used by obligees to gain immediate access to child support payments through the use of electronic fund transfer systems via automated teller machines or the electronic funds transfer point-of-sale system.

(7) Obligee--A person or entity entitled to receive payments of child support, including an agency of this state or of another jurisdiction to which a person has assigned the person's right to support.

**History**
- *Source Note: The provisions of this §55.802 adopted to be effective June 4, 2006, 31 TexReg 4419.*

##### **1 Tex. Admin. Code § 55.803** Forms {#sec-55.803 omnilex-key=us-tx-regs-official--title-1--55.803}

The prescribed forms for Direct Deposit Application (Form 6A002), the Authorization for Release of Information (Form 1A004) and the Revocation of Authorization for Release of Information (Form 1A005) can be obtained on the Office of the Attorney General's website www.oag.state.tx.us under Child Support, Forms.

**History**
- *Source Note: The provisions of this §55.803 adopted to be effective June 4, 2006, 31 TexReg 4419.*

##### **1 Tex. Admin. Code § 55.804** Methods of Disbursement {#sec-55.804 omnilex-key=us-tx-regs-official--title-1--55.804}

(a) The OAG's Child Support Division will disburse child support payments to an obligee by electronic funds transfer either by direct deposit into an account maintained by the obligee in a financial institution or through the Texas Debit Card system unless the obligee has signed an Authorization for Release of Information Form (1A004) to allow payments to be sent to a private collection agency or other third party.

(b) An obligee may choose to receive their child support payment through direct deposit into their bank account by completing the Direct Deposit Application Form (6A002).

(c) An obligee may decline to receive payments by electronic funds transfer and request payment by paper warrants if the obligee alleges in writing that receiving payments by electronic funds transfer would impose a substantial hardship.

(d) If an obligee fails to notify the State Disbursement Unit of the existence of an account maintained with a financial institution, or closes an account maintained with a financial institution previously used to accept direct deposit of a child support payment, without establishing a new account and informing the State Disbursement Unit, the Title IV-D Agency will issue a debit card and provide the obligee with instructions for activating and using the debit card.

(e) An obligee who has signed an Authorization for Release of Information Form (1A004) must revoke that authorization by signing a Revocation of Authorization for Release of Information Form (1A005) to receive their payments through the Texas Debit Card.

**History**
- *Source Note: The provisions of this §55.804 adopted to be effective June 4, 2006, 31 TexReg 4419; amended to be effective March 5, 2008, 33 TexReg 1763; amended to be effective March 16, 2010, 35 TexReg 2156.*

#### **Subchapter P** REVIEW AND ADJUSTMENT OF A SUPPORT ORDER

##### **1 Tex. Admin. Code § 55.851** Review and Adjustment of a Child Support Order {#sec-55.851 omnilex-key=us-tx-regs-official--title-1--55.851}

(a) For persons receiving Title IV-D services, the Title IV-D agency will review the support order for modification every three years:

(1) for a TANF case;

(2) at the request of either parent for a post-assistance or Medical Assistance-Only case; or

(3) at the request of either parent for a case in which the parent has applied for Title IV-D services.

(b) After such review and if appropriate, the Title IV-D agency will adjust the support order in accordance with Texas Family Code, §156.401.

(c) The Title IV-D agency may review and adjust the support order sooner than three years, if there has been a material change in circumstances of the child or persons affected by the support order as allowed by Texas Family Code, §156.401.

**History**
- *Source Note: The provisions of this §55.851 adopted to be effective March 30, 2008, 33 TexReg 2535.*

### **Chapter 56** DISTRICT AND COUNTY ATTORNEY REPORTING REQUIREMENTS

##### **1 Tex. Admin. Code § 56.1** General Reporting Requirements {#sec-56.1 omnilex-key=us-tx-regs-official--title-1--56.1}

District Attorneys and County Attorneys presiding in a district or county with a population of 400,000 or more persons must submit an initial, and quarterly and annual reports relating to criminal matters, and the interest of the state, to the Office of the Attorney (OAG) in a manner prescribed by the OAG and as set forth in this chapter.

**History**
- *Source Note: The provisions of this §56.1 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.2** Definitions {#sec-56.2 omnilex-key=us-tx-regs-official--title-1--56.2}

The following words and terms, when used in this subchapter, have the following meanings:

(1) "Case file" means all documents, notes, memoranda, and correspondence, in any format such as handwritten, typed, electronic, or otherwise, including drafts and final copies, that were produced within or received by the reporting entity's office, including work product and otherwise privileged and confidential matters. A "case file" does not include a reporting entity employee's correspondence that is purely personal in nature and has no connection with the transaction of official business.

(2) "Correspondence" means any email, letter, memorandum, instant message, text message, or direct message, received or issued by an employee of the reporting entity. "Correspondence" does not include a reporting entity employee's correspondence that is purely personal in nature and has no connection with the transaction of official business.

(3) "Electronic copies" means a digital version of a record that can be stored on a computer device.

(4) "Reporting year" means the period of September 1 through August 31.

(5) "Report" means all information submitted to the OAG by a reporting entity under this chapter.

(6) "Reporting entity" means the office of a District Attorney or County Attorney serving a population of 400,000 or more persons.

(7) "Violent crime" includes capital murder, murder, other felony homicides, aggravated assault, sexual assault of an adult, indecency with a child, sexual assault of a child, family violence assault, aggravated robbery, robbery, burglary, theft, automobile theft, riot, any crime listed in Code of Criminal Procedure §17.50(3), and any attempt to commit such crimes.

**History**
- *Source Note: The provisions of this §56.2 adopted to
be effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.3** Quarterly and Initial Reporting Requirements {#sec-56.3 omnilex-key=us-tx-regs-official--title-1--56.3}

(a) Content of reports. Reporting entities must submit electronic copies of the following information to the OAG quarterly in accordance with this chapter.

(1) The number of instances that the Reporting Entity indicted a peace officer for the peace officer's conduct during official duties;

(2) The number of instances that the reporting entity indicted an individual for a criminal violation under the Texas Election Code.

(3) The number of prosecutions involving a defendant's discharge of a firearm resulting in any prosecutorial decision based on Title 9 of the Penal Code;

(4) The case file for instances a recommendation made by the Reporting Entity is made to a judicial body that a person subject to a final judgment of conviction be released from prison before the expiration of their sentence; resentenced to a lesser sentence; or granted a new trial based on a confession of error;

(5) The case file for prosecutions for which the Texas Governor has announced that The Office of the Texas Governor is considering a pardon;

(6) Any case file for prosecutions relating to criminal matters and the interests of the state, as requested by the Attorney General through the Oversight Advisory Committee, including cases where there are substantial doubts by the Oversight Advisory Committee whether probable cause exists to support a prosecution;

(7) The number of instances that an arrest was made for a violent crime but no indictment was issued, the case was resolved by deferred prosecution or a similar program, or all charges were dropped;

(8) All correspondence requested by OAG's Oversight Advisory Committee for a matter listed in response to paragraph (7) of this subsection on a prior quarterly report;

(9) All correspondence and other documentation describing and analyzing a reporting entity's policy not to indict a category or sub-category of criminal offenses;

(10) All correspondence with any employee of a federal agency regarding a decision whether to indict an individual;

(11) All correspondence with any non-profit organization regarding a decision whether to indict an individual; and

(12) All correspondence written at any time by an assistant district attorney or assistant county attorney regarding the attorney's resignation under a formal or informal complaint process. This section does not include communications regarding salary negotiations or retirement policies.

(b) Initial Report. A reporting entity must submit an electronic copy of the information outlined in this section for which a reporting event occurred between January 1, 2021, and the effective date of this rule, unless:

(1) The reporting entity obtains a written exception, in whole or in part, from the OAG;

(2) The reporting entity provides a sworn affidavit that states the information:

(A) was the exclusive product of a previous District or County Attorney; and

(B) is not reflective of the reporting entity's current operations due to a formal change in the office's policies, and the formal change is described in detail and transmitted to the Oversight Advisory Committee; or

(3) The reporting entity provides a sworn affidavit that states the information cannot be produced because it was destroyed or otherwise discarded pursuant to a *bona fide* document retention policy that existed prior to the effective date of this rule and that is described in detail and transmitted to the Oversight Advisory Committee.

**History**
- *Source Note: The provisions of this §56.3 adopted to
be effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.4** Annual Reports {#sec-56.4 omnilex-key=us-tx-regs-official--title-1--56.4}

Reporting entities must submit electronic copies of the following information for the prior reporting year in accordance with this chapter.

(1) All policies, rules, and orders, including internal operating procedures and public policy documents, that were modified during the prior 12 months;

(2) A list of all local, county, state, and federal ordinances, statutes, laws, and rules for which the reporting entity files reports, whether that requirement is regular or arises upon the occurrence of an event;

(3) A list of individual expenditures and purchases made based on funds or assets received through civil asset forfeiture;

(4) All information regarding funds accepted by the commissioners court of their county pursuant to Texas Government Code §41.108 that were passed on to the reporting entity. The reporting entity must detail how much of the funds were passed on to the reporting entity and provide a detailed accounting of how the reporting entity disposed of any funds received; and

(5) All information regarding funds accepted by the commissioners court of their county pursuant to Texas Government Code §41.108 that were not passed on to the reporting entity, but were used to benefit the reporting entity, its personnel, or its operations. The report must include any correspondence regarding accepted funds, as well as a detailed account of how the funds were used to benefit the reporting entity, its personnel, or its operations.

**History**
- *Source Note: The provisions of this §56.4 adopted to
be effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.5** Report Submission Deadlines and Requirements {#sec-56.5 omnilex-key=us-tx-regs-official--title-1--56.5}

(a) Deadlines.

(1) The quarterly report under §56.3 of this chapter (relating to Quarterly and Initial Reporting Requirements) is due within 30 days of the beginning of each new reporting quarter for all reporting events that occurred in the prior reporting quarter.

(2) The reporting quarters are as follows:

(A) Quarter one: September through November;

(B) Quarter two: December through February;

(C) Quarter three: March through May; and

(D) Quarter four; June through August.

(3) The annual report under §56.4 of this chapter (relating to Annual Reports) is due at the end of each reporting year and no later than September 30.

(4) The initial report under this section is due within 90 days of the effective date of this rule.

(5) The Oversight Advisory Committee may grant an extension on a case-by-case basis if the reporting entity can establish good cause for not meeting the reporting deadlines.

(b) Electronic Submissions. A reporting entity submit all reports under this chapter electronically. Information on how to submit reports electronically can be found on the OAG's website.

**History**
- *Source Note: The provisions of this §56.5 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.6** Document Retention {#sec-56.6 omnilex-key=us-tx-regs-official--title-1--56.6}

Reporting entities must implement document retention policies reasonably designed to preserve all documents which are, or may be, subject to the requirements in this chapter. The retention policies must preserve documents for at least two years after the dates when they are due to be reported.

**History**
- *Source Note: The provisions of this §56.6 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.7** Overdue reports {#sec-56.7 omnilex-key=us-tx-regs-official--title-1--56.7}

If an entity fails to comply with this chapter, in whole or in part, the OAG may send notice to the reporting entity identifying the reporting entity of its failure to comply. A reporting entity must remedy the identified reporting failure within 30 days after receipt of notice. Any reporting entity that fails to timely comply with this chapter's reporting requirements may be identified on the OAG's website as being out of compliance with both this chapter as well as Texas Government Code §41.006.

**History**
- *Source Note: The provisions of this §56.7 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.8** Compliance {#sec-56.8 omnilex-key=us-tx-regs-official--title-1--56.8}

If a reporting entity violates this chapter, without limitation:

(1) The OAG may construe the violation to constitute "official misconduct" under Local Government Code §87.011;

(2) The OAG may file a petition for quo warranto under Civil Practice and Remedies Code §66.002 for the performance of an act that by law causes the forfeiture of the County or District Attorney's office; or

(3) The OAG may initiate a civil proceeding seeking to order the County or District Attorney to comply with this chapter.

**History**
- *Source Note: The provisions of this §56.8 adopted to
be effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.9** Oversight Advisory Committee {#sec-56.9 omnilex-key=us-tx-regs-official--title-1--56.9}

(a) The Attorney General will establish an Oversight Advisory Committee composed of three members of the Office of the Attorney General designated by the Attorney General.

(b) The Oversight Advisory Committee may issue notifications of overdue reports under §56.7 of this chapter (relating to Overdue reports).

(c) The Oversight Advisory Committee may request entire case files based on submitted reports or any other information that the Oversight Advisory Committee desires relating to criminal matters and the interests of the state on a case-by-case basis,

(d) The Oversight Advisory Committee may waive any provision of this chapter if a reporting entity demonstrates that compliance would impose an undue hardship.

**History**
- *Source Note: The provisions of this §56.9 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

##### **1 Tex. Admin. Code § 56.10** Severability {#sec-56.10 omnilex-key=us-tx-regs-official--title-1--56.10}

(a) All provisions of this chapter are severable.

(b) If any application of any provision of this rule is held to be invalid for any reason, all valid provisions are severable from the invalid provisions and remain in effect. If any section or portion of a section is held to be invalid in one or more of its applications, in all valid applications the provisions remain in effect and are severable from the invalid applications.

**History**
- *Source Note: The provisions of this §56.10 adopted to be
effective April 2, 2025, 50 TexReg 2173.*

### **Chapter 57** OUTSIDE COUNSEL CONTRACTS

##### **1 Tex. Admin. Code § 57.1** Definitions {#sec-57.1 omnilex-key=us-tx-regs-official--title-1--57.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Agency--A department, commission, board, authority, office, or other agency in the executive branch of state government, including university systems and institutions of higher education as defined by §61.003 of the Education Code, but excluding public junior colleges.

(2) Chief Administrator--Has the meaning defined by §660.002(4) of the Government Code.

(3) Contingency Fee--Has the meaning defined by §2254.101(1) of the Government Code.

(4) Invoice--An itemized list of legal services provided, and fees, charges, or expenses associated with those services, by Outside Counsel to an Agency pursuant to an Outside Counsel Contract.

(5) Invoice Summary--As provided by the Outside Counsel Contract, a document furnished by Outside Counsel to the Agency that supports a submitted Invoice. The Invoice Summary must indicate the total number of hours worked by each legal professional during the billing period and the total number of hours billed by each timekeeper during the billing period; or, if the fee is based on a fixed fee basis or fee schedule, the number and type of projects or matters. The Invoice Summary must also include a subtotal for all legal fees, expenses, and the total amount of the Invoice, as well as the total amount of all Invoices submitted to the Agency to date under the Outside Counsel Contract.

(6) Outside Counsel--An attorney or law firm selected by an Agency to provide legal services. The term does not include a full-time employee of the Agency or the Office of the Attorney General.

(7) Outside Counsel Contract--A contract for legal services between an Agency and Outside Counsel selected by the Agency that must be approved by the Office of the Attorney General pursuant to this chapter.

(8) Request for Voucher Approval--A request made by an Agency to the Office of the Attorney General for the Office of the Attorney General to:

(A) review an Outside Counsel's Invoice; and

(B) to approve the payment of the Invoice, pursuant to this chapter.

(9) Request to Retain Outside Counsel--A request made by an Agency to the Office of the Attorney General for approval to retain an Outside Counsel pursuant to this chapter.

(10) State Fiscal Biennium--Period of time running concurrent with that set by the General Appropriations Act.

**History**
- *Source Note: The provisions of this §57.1 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.2** Application {#sec-57.2 omnilex-key=us-tx-regs-official--title-1--57.2}

(a) This chapter does not constitute independent authority for any Agency to contract for legal services with Outside Counsel.

(b) This chapter does not apply to an Agency excluded by §402.0212(a) of the Government Code or an Agency granted an exemption by, and at the sole discretion of, the Office of the Attorney General.

(c) The Attorney General, First Assistant Attorney General, or their designee, as designated in writing, may waive or modify any provision or requirement contained in this chapter at their sole discretion. To be effective, any such waiver or modification must be in writing.

(d) The Office of the Attorney General, at its sole discretion, may grant exemptions from or modify the retention of Outside Counsel process and the Request for Voucher Approval process in certain instances. Such exemptions or modifications may be based on the type and subject matter of the Outside Counsel Contract at issue.

**History**
- *Source Note: The provisions of this §57.2 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.3** Retention of Outside Counsel {#sec-57.3 omnilex-key=us-tx-regs-official--title-1--57.3}

(a) The Attorney General serves as the State of Texas' legal counsel and the Office of the Attorney General therefore represents state agencies and institutions of higher education. Accordingly, Agencies may not retain or select any Outside Counsel without first receiving authorization and approval from the Office of the Attorney General to do so. The Office of the Attorney General will determine if retaining Outside Counsel is in the best interest of the State.

(b) An Agency requiring legal services from Outside Counsel must first submit a completed Request to Retain Outside Counsel form to the Office of the Attorney General. The form and instructions for submitting the form are available on the Office of the Attorney General's official website or upon request from the General Counsel Division of the Office of the Attorney General.

(c) No later than ten (10) business days of receipt of the Request to Retain Outside Counsel form, the Office of the Attorney General will notify the requesting Agency that:

(1) the Agency's request has been approved and it may proceed with the process of selecting Outside Counsel;

(2) the Agency's request has been denied; or

(3) the Agency must provide the Office of the Attorney General with additional information before a decision to approve or deny the request will be made.

(d) A notification under subsection (c)(1) of this section may include limitations and requirements on the selection and retention of Outside Counsel, including, but not limited to, the requirement that the requesting Agency use the Request for Qualification Process outlined in §57.4 of this chapter.

(e) A notification under subsection (c)(1) of this section does not constitute approval of an Outside Counsel Contract.

(f) Except as expressly allowed by a Texas statute, final decision by the Texas Supreme Court or a final judgment by a federal court, an Agency requiring legal services from Outside Counsel on a contingency fee arrangement must first seek the written approval of the Executive Director of the Legislative Budget Board, or their authorized designee, before submitting a Request to Retain Outside Counsel form pursuant to subsection (b) of this section. The Office of the Attorney General shall not approve an Agency's Request to Retain Outside Counsel, involving a contingency fee arrangement, until the Agency provides the Office of the Attorney General with the written approval of the Executive Director of the Legislative Budget Board, or their authorized designee.

**History**
- *Source Note: The provisions of this §57.3 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.4** Request for Qualification Process {#sec-57.4 omnilex-key=us-tx-regs-official--title-1--57.4}

(a) An Agency seeking to obtain legal services from Outside Counsel must publish a Request for Qualifications for Outside Counsel in the Texas State Business Daily for thirty (30) days.

(b) The Request for Qualifications for Outside Counsel publication must contain:

(1) a description of the legal services that the Outside Counsel will provide;

(2) the name and contact information for an Agency employee who should be contacted by an attorney or law firm that intends to submit their qualifications;

(3) the closing date for the receipt of qualifications;

(4) the procedure by which the Agency will make a selection of Outside Counsel;

(5) notice that the selection of and contracting with, Outside Counsel is subject to the approval of the Office of the Attorney General; and

(6) any other information the Agency deems necessary.

(c) After the closing date for the receipt of qualifications, the Agency may select an Outside Counsel. The Agency may only select an Outside Counsel that complied with the Request for Qualifications for Outside Counsel. The Agency shall make the selection of Outside Counsel:

(1) on the basis of demonstrated competence and qualifications to perform the legal services; and

(2) for a fair and reasonable price, which includes, but is not limited to, the hourly rates or fixed fee basis or fee schedule and expenses for legal services.

(d) Conflict of Interest.

(1) After selecting the Outside Counsel, the Agency shall require the law firm to submit a written disclosure statement identifying every matter in which the firm represents, or has represented, within the past calendar year, any entity or individual in any litigation matter in which the entity or individual is directly adverse to the State of Texas or any of its boards, agencies, commissions, universities, or elected or appointed state agency officials in connection with their official job duties and responsibilities. "Litigation" means the matter has been filed in the public record in either state or federal court.

(2) If a disclosure statement is submitted, it must include a short description of the nature of the matter and the relief requested or obtained in each matter and any identifying cause or case number.

(e) The Agency shall determine given the disclosure statement whether to continue with its choice of Outside Counsel.

**History**
- *Source Note: The provisions of this §57.4 adopted to be effective March 27, 2012, 37 TexReg 2065; amended to be effective June 5, 2014, 39 TexReg 4233.*

##### **1 Tex. Admin. Code § 57.5** Outside Counsel Contract {#sec-57.5 omnilex-key=us-tx-regs-official--title-1--57.5}

(a) Except as authorized by law, an Outside Counsel Contract or any amendment to an Outside Counsel Contract must be approved by the Office of the Attorney General to be valid and enforceable.

(b) When entering into an Outside Counsel Contract, an Agency and Outside Counsel must use the Outside Counsel Contract template promulgated by the Office of the Attorney General. The contract template and instructions on submitting it are available on the Office of the Attorney General's official website or upon request from the General Counsel Division of the Office of the Attorney General.

(c) In the event of an inconsistency between this chapter and an executed Outside Counsel Contract, the contract shall prevail.

(d) Once an Agency selects an Outside Counsel, the Agency shall submit one copy of its proposed Outside Counsel Contract to the Office of the Attorney General for approval pursuant to this chapter. The Outside Counsel Contract must be signed by an authorized representative of the Outside Counsel and the chief administrator of the Agency, or authorized designee.

(e) Agency shall submit to the OAG the disclosure statement previously submitted by the selected Outside Counsel to the Agency. If the Agency is satisfied in its choice of Outside Counsel selected, the Agency shall submit to the OAG an affirmative statement that it is satisfied in its choice of selected Outside Counsel notwithstanding the information contained in the disclosure statement.

(f) Upon receipt of a proposed Outside Counsel Contract, the Office of the Attorney General will review the contract and either approve or reject it based upon the best interest of the State and compliance with state law.

(g) If the Office of the Attorney General approves a proposed Outside Counsel Contract, an authorized representative of the Office of the Attorney General will indicate that approval on the contract and return the signed copy to the Agency.

(h) If the Office of the Attorney General rejects a proposed Outside Counsel Contract, it will contact the submitting Agency to discuss the basis for the rejection and to explore whether revisions to the proposed contract could rectify the basis for the rejection. In the event the proposed contract is rejected and rectifying amendments are not acceptable or possible, the Office of the Attorney General will contact the submitting Agency to discuss alternatives to representation by the selected Outside Counsel.

**History**
- *Source Note: The provisions of this §57.5 adopted to be effective March 27, 2012, 37 TexReg 2065; amended to be effective June 5, 2014, 39 TexReg 4233.*

##### **1 Tex. Admin. Code § 57.6** Invoices for Legal Services and Expenses {#sec-57.6 omnilex-key=us-tx-regs-official--title-1--57.6}

(a) Outside Counsel shall prepare correct and complete Invoices and submit them, along with an Invoice Summary, for the billing period to the Agency for payment.

(b) A correct and complete Invoice must include, at a minimum, the following information:

(1) Outside Counsel Contract identification number;

(2) Agency name;

(3) Outside Counsel name;

(4) Vendor Identification Number (assigned by the Texas Comptroller of Public Accounts), Social Security Number of an authorized representative of Outside Counsel or other appropriate payment identification number;

(5) Invoice number and date;

(6) Billing period of services rendered for which payment is being sought;

(7) Description and date of the task or service provided, the billable time for the task or service, the name and position (partner, associate, paralegal, etc.) of the timekeeper that performed the task or service, and the applicable hourly rate; or, if the fee is based on a fixed fee basis or fee schedule, the number and type of projects or matters;

(8) For filing charges, a description of the document filed and the name and location of the entity the document was filed with;

(9) For expenses, a copy of each receipt or other proof of payment; and

(10) Other information requested by the Agency or the Office of the Attorney General.

(c) Unless requested to do so by the Agency or the Office of the Attorney General, Outside Counsel must not include information in its Invoices that is not related to compensable charges or reimbursable expenses.

(d) Outside Counsel must verify, in writing, upon the submittal of each Invoice, that the Invoice is correct and complete and that:

(1) the legal services being billed for were performed and were reasonable and either necessary or advisable;

(2) the legal services being billed for were within the term and scope of services of the Outside Counsel Contract;

(3) the legal billing rates are the same as those set in the Outside Counsel Contract;

(4) any expense that requires the Agency's pre-approval was in fact pre-approved; and

(5) the total amount of the Invoice, along with all prior payments made to Outside Counsel under the Outside Counsel Contract, do not exceed the maximum liability amount set in the Outside Counsel Contract.

**History**
- *Source Note: The provisions of this §57.6 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.7** Agency Review of Invoices {#sec-57.7 omnilex-key=us-tx-regs-official--title-1--57.7}

(a) Upon receipt of an Invoice, the Agency shall immediately mark the Invoice with the date the Agency received the Invoice. The Agency must review the submitted Invoice, and any other information deemed necessary, to verify that:

(1) the legal services contained in the Invoice were performed and were reasonable and either necessary or advisable;

(2) the legal services contained in the Invoice were performed within the term and scope of services of the Outside Counsel Contract;

(3) the legal billing rates are the same as those set in the Outside Counsel Contract;

(4) any expense that requires the Agency's pre-approval was in fact pre-approved; and

(5) the total amount of the Invoice, along with all prior payments made to Outside Counsel under the Outside Counsel Contract, do not exceed the maximum liability amount set in the Outside Counsel Contract.

(b) If the Agency determines that the submitted Invoice is correct and complete, and should be paid, the Agency's chief administrator or their designee must:

(1) approve the Invoice;

(2) verify that the requirements in subsection (a)(1) - (5) of this section have been met and attest to that verification with his or her signature;

(3) submit the Invoice and other required information to the Office of the Attorney General pursuant to §57.8(b) of this chapter; and

(4) if necessary, enter relevant information into the Uniform Statewide Accounting System.

(c) If the Agency determines that the Invoice is not correct and complete, and should not be paid, even in part, the Agency's designated representative must immediately notify Outside Counsel in writing that the Invoice is deficient and attempt to resolve the Invoice deficiency with Outside Counsel in a mutually agreeable manner.

(1) If the Invoice deficiency can be resolved in a reasonable time and in a mutually agreeable manner that results in a correct and complete Invoice, Outside Counsel should submit that Invoice to Agency for review and approval pursuant to §57.6 of this chapter.

(2) If the Invoice deficiency cannot be resolved in a reasonable time, the Agency should reject and deny payment for the disputed portions of the Invoice and approve the undisputed portions of the Invoice pursuant to subsection (b) of this section so that the undisputed portions of the Invoice can be processed for payment pursuant to this chapter. If necessary, Outside Counsel may resubmit the disputed and rejected portions of the Invoice to Agency once the deficiency is resolved in a mutually agreeable manner with Agency. In the event that Outside Counsel and Agency mutually agree on a resolution, then Outside Counsel must follow the steps in §57.6 of this chapter.

(d) Contingency Fee Outside Counsel may be required to submit Invoices for review as requested by the Office of the Attorney General.

**History**
- *Source Note: The provisions of this §57.7 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.8** Agency Submission of Request for Voucher Approval to the Office of the Attorney General {#sec-57.8 omnilex-key=us-tx-regs-official--title-1--57.8}

(a) An Invoice may not be paid without the prior approval of the Office of the Attorney General.

(b) If the Agency approves an Invoice, or a portion of an Invoice, pursuant to §57.7(b) of this chapter, the Agency must submit the following information to the Office of the Attorney General within ten (10) business days of receiving the Invoice from Outside Counsel:

(1) a Request for Voucher Approval;

(2) a copy of the Invoice and Invoice Summary at issue;

(3) evidence of the date the Agency received the Invoice;

(4) a copy of the verification required by §57.7(b)(2) of this chapter;

(5) other information requested by the Office of the Attorney General;

(6) any other information the Agency deems necessary for the Office of the Attorney General to conduct a review of the Invoice; and

(7) if necessary, a description of any disputed charge that the Agency has not approved for payment and the reason(s) why it was not approved.

(c) If the Office of the Attorney General determines that a properly submitted Invoice, or a portion thereof, is eligible for payment, it will provide the Agency with a voucher approval and, if necessary, enter relevant information in the Uniform Statewide Accounting System.

(d) If the Office of the Attorney General determines that any portion of an Invoice is not eligible for payment, it will immediately notify the Agency of that decision. The Agency may then, after consulting with Outside Counsel:

(1) abide by the Office of the Attorney General's determination to deny payment;

(2) inform the Office of the Attorney General that the Agency and the Outside Counsel agree that the payment should be denied and the Invoice will be withdrawn; or

(3) submit a new Invoice for review and approval after resolving the Invoice deficiency with Outside Counsel in a mutually agreeable manner.

(e) The Office of the Attorney General will not approve payment of an Invoice in an amount that is greater than the amount approved by the Agency under §57.7(b) of this chapter.

(f) The Office of the Attorney General, at its sole discretion, may permit Agencies to submit information other than the information specified in subsection (b)(1) - (7) of this section before the Office of the Attorney General approves or disapproves payment of an Invoice. The Office of the Attorney General will specify what information is acceptable for an Agency to submit under this subsection.

(g) Except as allowed by the Office of the Attorney General, Agencies may submit only one Request for Voucher Approval per billing period per contract.

**History**
- *Source Note: The provisions of this §57.8 adopted to be effective March 27, 2012, 37 TexReg 2065.*

##### **1 Tex. Admin. Code § 57.9** Administrative Fee {#sec-57.9 omnilex-key=us-tx-regs-official--title-1--57.9}

(a) Outside Counsel must pay a non-refundable administrative fee to the Office of the Attorney General for the Invoice review described in §57.8 of this chapter. Outside Counsel may not charge, or seek reimbursement from, the Agency for payment of this administrative fee.

(b) The administrative fee described in subsection (a) of this section is incurred on the date that the first Invoice after the effective date of this chapter is submitted to the Agency. Any Invoice submitted to the Office of the Attorney General by the Agency before the administrative fee has been submitted by the Outside Counsel to the Office of the Attorney General shall be deemed incorrect and incomplete and not eligible for payment.

(c) The administrative fee is set as follows:

(1) For an Outside Counsel Contract with a maximum liability of less than $2,000.00, but more than $0.00, the administrative fee is $100.00.

(2) For an Outside Counsel Contract with a maximum liability equal to or greater than $2,000.00 but less than $10,000.00, the administrative fee is $200.00.

(3) For an Outside Counsel Contract with a maximum liability equal to or greater than $10,000.00 but less than $50,000.00, the administrative fee is $500.00.

(4) For an Outside Counsel Contract with a maximum liability equal to or greater than $50,000.00 but less than $150,000.00, the administrative fee is $1,000.00.

(5) For an Outside Counsel Contract with a maximum liability equal to or greater than $150,000.00 but less than $1,000,000.00, the administrative fee is $1,500.00.

(6) For an Outside Counsel Contract with a maximum liability of equal to or greater than $1,000,000.00, the administrative fee is $2,000.00.

(7) For Contingency Fee Outside Counsel Contracts, the Office of the Attorney General will establish a reasonable administrative fee when Invoices are submitted to the Office of the Attorney General for review.

(d) The administrative fee due under subsection (c) of this section covers the then current State Fiscal Biennium in an Outside Counsel Contract term. Outside Counsel must pay a non-refundable administrative fee to the Office of the Attorney General, as set by subsection (c) of this section, for every State Fiscal Biennium covered in an Outside Counsel Contract term. Subsequent biennial administrative fees are due upon submission of the first Invoice of a new State Fiscal Biennium.

(e) The administrative fee described in subsection (a) of this section is not due for a contract having a zero dollar liability or a contract that is only seeking reimbursement for expenses.

(f) For exceptional circumstances, the Office of the Attorney General, at its sole discretion, may modify the amount of the administrative fee due under subsection (c) of this section. If the Office of the Attorney General, at its sole discretion, permits an Agency to submit information other than the information specified in §57.8(b)(1) - (7) of this chapter, the Office of the Attorney General, in its sole discretion, may reduce or waive the administrative fee.

(g) When an Outside Counsel Contract is amended to increase the maximum liability of the contract to an amount that requires Outside Counsel to pay a higher administrative fee, under subsection (c) of this section, then Outside Counsel shall pay the difference between the original lesser fee, if already paid, and the new higher fee upon submission of the next submitted Invoice.

(h) The administrative fee described in subsection (a) of this section shall be sent to the Office of the Attorney General and not to the Agency.

**History**
- *Source Note: The provisions of this §57.9 adopted to be effective March 27, 2012, 37 TexReg 2065.*

### **Chapter 58** LEGAL SUFFICIENCY REVIEW OF COMPREHENSIVE DEVELOPMENT AGREEMENTS

#### **Subchapter A** PURPOSE AND DEFINITIONS

##### **1 Tex. Admin. Code § 58.1** Purpose {#sec-58.1 omnilex-key=us-tx-regs-official--title-1--58.1}

(a) This chapter implements §371.051 of the Texas Transportation Code, which provides that a toll project entity may not enter into a comprehensive development agreement for toll projects unless the attorney general reviews the proposed agreement and determines that it is legally sufficient.

(b) The purpose of this chapter is to:

(1) Describe the legal sufficiency review conducted by the Office of the Attorney General;

(2) Establish minimum requirements for the submission of a transcript of proceedings relating to a proposed comprehensive development agreement;

(3) Set forth the general procedures for the completion of a legal sufficiency review by the Office of the Attorney General; and

(4) Establish and provide for the assessment and collection of examination fees required for legal sufficiency reviews of comprehensive development agreements.

(c) This chapter applies to all comprehensive development agreements submitted on or after June 17, 2011 for toll projects described by Texas Transportation Code §201.001(b), regardless of whether the toll project is part of the state highway system or otherwise subject to the jurisdiction of the Texas Transportation Commission and/or Texas Department of Transportation.

**History**
- *Source Note: The provisions of this §58.1 adopted to be effective October 25, 2011, 36 TexReg 7155.*

##### **1 Tex. Admin. Code § 58.2** Definitions {#sec-58.2 omnilex-key=us-tx-regs-official--title-1--58.2}

(a) Comprehensive development agreement or CDA shall have the meanings given by Texas Transportation Code Chapters 223, 284, 366, 370, or other law, as applicable for the type of toll project entity subject to Texas Transportation Code Chapter 371.

(b) Department shall have the meaning as provided by Texas Transportation Code §201.001.

(c) Toll Project and Toll Project Entity shall have the meaning given by Texas Transportation Code §371.001.

(d) Private Participant or Private Entity. When referenced in this chapter, a private participant or a private entity means a private, non-governmental, enterprise that is a party to a comprehensive development agreement for the acquisition, design, development, financing, construction, reconstruction, extension, expansion, maintenance or operation of a toll project. This term does not include a toll project entity.

(e) Transcript or Transcript of Proceedings. When referenced in this chapter, transcript and/or transcript of proceedings means the documents, certifications, and other information deemed necessary by the Office of the Attorney General, in its sole discretion, to be submitted by a toll project entity to support a determination that a comprehensive development agreement is legally sufficient for the purposes of Texas Transportation Code §371.051.

(f) OAG. When referenced in this chapter, OAG refers to the Office of the Attorney General.

(g) Any terms used in this chapter that are not specifically defined by this section will be construed according to their plain and common meaning unless a contrary intention is apparent from the context.

**History**
- *Source Note: The provisions of this §58.2 adopted to be effective October 25, 2011, 36 TexReg 7155.*

##### **1 Tex. Admin. Code § 58.3** Legal Sufficiency Review {#sec-58.3 omnilex-key=us-tx-regs-official--title-1--58.3}

(a) Scope. The legal sufficiency review of a proposed comprehensive development agreement (CDA) by the Office of the Attorney General (OAG) under Texas Transportation Code §371.051 is a limited review that seeks to determine whether a proposed CDA substantially satisfies the applicable procedural, constitutional, statutory, and regulatory requirements such that a court would have some basis on which to sustain the authority of the toll project entity to enter into the CDA.

(b) Excluded Matters. A legal sufficiency review does not generally address any matters related to the viability or advisability of the CDA or the underlying project. As such, the investigation, evaluation, consideration, and assessment of matters including, but not limited to, the following are generally outside of the scope of the legal sufficiency review:

(1) policy determinations regarding the proposed CDA;

(2) consideration of business advisability and business risks associated with the proposed CDA;

(3) the technical adequacy or advisability of specific terms of a proposed CDA;

(4) the particular business, legal, or financial risks to any counter-party to a CDA;

(5) technical specifications of the proposed CDA; and

(6) the viability, timing, or financial risks associated with the proposed CDA.

**History**
- *Source Note: The provisions of this §58.3 adopted to be effective October 25, 2011, 36 TexReg 7155.*

#### **Subchapter B** PROCEDURES FOR OBTAINING LEGAL SUFFICIENCY REVIEW OF PROPOSED COMPREHENSIVE DEVELOPMENT AGREEMENTS

##### **1 Tex. Admin. Code § 58.4** General Procedures and Requirements for Review {#sec-58.4 omnilex-key=us-tx-regs-official--title-1--58.4}

(a) Toll project entities must submit one hard copy and one machine-readable/searchable electronic copy of the transcript of proceedings in a standard electronic format.

(b) The required transcript of proceedings should be sent to the General Counsel Division of the Office of the Attorney General at its Austin office location by one of the following methods: United States Postal Service first-class mail in a properly addressed and sufficiently stamped envelope or box; or by courier or overnight delivery service in a properly addressed and prepaid envelope or box. The address for delivery by United States Postal Service mail is: General Counsel Division, Office of the Attorney General, Mail Code 074, P.O. Box 12548, Austin, Texas 78701-2548, Attn: CDA Review. The address for courier or overnight delivery service is: General Counsel Division, Office of the Attorney General, Room 102; Mail Code: 074, 300 W. 15th Street, Austin, Texas 78701, Attn: CDA Review.

(c) Except as provided by subsection (e) of this section, the OAG will provide the legal sufficiency review no later than the 60th business day after the date the examination fee and the complete transcript of proceedings are properly received as required by Texas Transportation Code §371.051(b).

(d) The legal sufficiency determination will be issued in writing and sent to the toll project entity. The legal sufficiency determination is public information and is subject to disclosure.

(e) If the OAG cannot provide a legal sufficiency determination within the 60 business day period, the OAG will notify the toll project entity in writing of the reason for the delay and may, in its sole discretion, extend the review period for not more than an additional 30 business days.

(f) The computation of the 60 business day review period under Texas Transportation Code §371.051(d) does not begin until the OAG determines that it has received a complete transcript and any fee required in accordance with §58.7 of this chapter. The toll project entity will be notified in writing of the date upon which the OAG received the complete transcript and review fee.

(g) The OAG will not make a legal sufficiency determination without receiving documents, certifications, and other information from the toll project entity that are deemed necessary by the OAG, in its sole discretion, to support a determination that a comprehensive development agreement is legally sufficient for the purposes of Texas Transportation Code §371.051, including the payment of any examination fees required under §58.7 of this chapter.

(h) The OAG may request one or more conferences or teleconferences with authorized members or representatives of the Department or the toll project entity as may be necessary to obtain additional information and seek clarification regarding the contents of the proposed comprehensive development agreement. Additionally, the OAG may request clarification, briefing, or additional supporting documentation as deemed necessary by the OAG to support a determination of legal sufficiency.

(i) If, after consultation with the Department or the toll project entity as appropriate, the OAG determines, in its sole discretion, that the comprehensive development agreement is, or is not, legally sufficient, the OAG will issue a written determination to that effect that includes a brief explanatory statement.

**History**
- *Source Note: The provisions of this §58.4 adopted to be effective October 25, 2011, 36 TexReg 7155.*

##### **1 Tex. Admin. Code § 58.5** Redetermination Review {#sec-58.5 omnilex-key=us-tx-regs-official--title-1--58.5}

(a) If the OAG issues a determination that a proposed CDA is not legally sufficient, a toll project entity may supplement the transcript of proceedings or amend the CDA to facilitate a redetermination by the OAG of the prior legal sufficiency determination.

(b) The general procedures and requirements for review as set forth in §58.4 of this chapter apply to a redetermination review, except to the extent that the OAG may agree in writing to waive the requirement to submit the complete transcript of proceedings. A request for a waiver of the transcript requirements should be made in writing by the toll project entity and the OAG will respond to the waiver request in writing.

(c) The OAG reserves the right not to issue a redetermination of legal sufficiency in the event that the OAG determines that:

(1) a toll project entity's submission of supplemental information or amendments to the CDA fails to substantively correct legal sufficiency issues raised by the OAG; or

(2) a toll project entity submits supplemental information or amendments to the CDA that substantially change or modify the fundamental terms of the CDA or the underlying toll project in such a manner as to constitute a different or new CDA.

(d) No additional examination fee is required for a redetermination review provided that the toll project entity paid the examination fee as required for an initial review by §58.7 of this chapter.

**History**
- *Source Note: The provisions of this §58.5 adopted to be effective October 25, 2011, 36 TexReg 7155.*

##### **1 Tex. Admin. Code § 58.6** Transcript Requirements {#sec-58.6 omnilex-key=us-tx-regs-official--title-1--58.6}

(a) Form of the Transcript of Proceedings. The transcript submitted to the OAG must conform to the following requirements unless such requirements are expressly negated under applicable law:

(1) each transcript shall be submitted in a loose-leaf binder or expanding file folder;

(2) transcript page size shall not exceed 8-1/2 by 11 inches, and each line of each page should be entirely legible (oversize documents, such as maps and charts, should be folded within the 8-1/2 by 11 inch requirement);

(3) all transcripts shall contain a table of contents keyed to right side tab numbers;

(4) each transcript shall be arranged in chronological order or in some other consistent, logical arrangement that will permit an efficient review and shall be labeled in a manner consistent with the table of contents; and

(5) the machine-readable/searchable electronic copy of the transcript of proceedings should be in the format of a single file containing all information and exhibits in the hard copy transcript presented in the order they appear in the hard copy, and should be provided on a CD or DVD clearly labeled with the name of the toll project entity, project name, and project location.

(b) Contents of Transcript. The transcript shall include the following, as applicable:

(1) the contact name(s), address(es), e-mail address(es), and phone number(s) for the appropriate representative(s) of the toll project entity to whom the legal sufficiency determination should be issued, and to whom all other inquiries, notifications, and correspondence regarding the proposed CDA should addressed;

(2) a written overview of the CDA that includes:

(A) a summary description of the project;

(B) identification of each entity that is a signatory to the CDA and to each ancillary agreement;

(C) citation to the applicable statutes and rules that establish the legal authority for each signatory to enter into the CDA and each ancillary agreement;

(D) a description of the procurement process used;

(E) a summary description of the CDA and its key terms;

(F) an overview of the method of finance for the CDA, including a summary description of each financial document included in the transcript of proceedings;

(G) a summary that includes any other information that may be material to the legal sufficiency determination;

(3) a list identifying the various approvals required as a condition precedent to the CDA and each ancillary agreement, including the sequence and record of dates when such approvals occurred or are expected to occur;

(4) citations to the applicable statutes, rules or other legal authority defining the procurement method and requirements for the CDA and each ancillary agreement;

(5) citations to the applicable statutes, rules or other legal authority requiring public notice, or public hearings as part of the procurement process, accompanied by documentation evidencing compliance with all such requirements;

(6) a machine-readable/searchable electronic copy of any Request for Qualifications (RFQ), Request for Detailed Proposals (RFDP), or other applicable document soliciting offers to contract for the CDA and ancillary agreements;

(7) citations to the applicable statutes, rules or other legal authority requiring public notice or public hearings required as a condition precedent to execution of the CDA and any ancillary agreements, accompanied by documentation evidencing compliance with all such requirements;

(8) a copy of the CDA;

(9) copies of any ancillary agreements to the CDA;

(10) evidence of signature authority for those executing documents on behalf of the toll project entity;

(11) to the extent that any funds are used with the project that were made available as the result of the American Recovery and Reinvestment Act of 2009 (Pub.L. 111-5), evidence of compliance with all applicable state and federal law, rules, and regulations related to the use of such funds;

(12) copies of all opinion(s) of counsel given in connection with the transaction, which may be drafts in substantially final form;

(13) the toll project entity's general certification of the following:

(A) certification of the toll project entity's authority to enter into the CDA and ancillary agreements;

(B) certification that documents submitted by the toll project entity constitute legal, valid, and binding obligations of the entity enforceable in accordance with their terms;

(C) certification that the terms of the transcript documents and the performance of toll project entity's obligations thereunder are not in conflict with and do not constitute a breach of or a default under the constitution or the laws of the United States or the State of Texas, or the terms and provisions of any instrument or restriction to which toll project entity is presently a party to or by which the toll project entity is presently subject;

(D) certification that the toll project entity has received all permits and approvals of any governmental authority, board, agency or commission having jurisdiction that are required to be obtained by the toll project entity prior to the execution, delivery and performance by toll project entity of the transcript documents;

(E) certification that the toll project entity has complied with all applicable publication and procurement requirements associated with the transcript documents, including but not limited to, any applicable requirements for the use of competitive procurement methods;

(F) certification that the toll project entity will retain ownership to the project under the terms of the transcript documents as required by law, and providing citation to the applicable provision(s) of the Texas Transportation Code;

(G) certification that the transcript documents are being entered into and the underlying project is being undertaken in compliance with applicable provision(s) of the Texas Transportation Code, providing citations and including an explanation of why the CDA is authorized under any applicable statutory moratorium;

(H) certification that there is no action, suit, hearing, proceeding, inquiry, investigation or litigation of any nature, at law or in equity, before or by any court, public board, agency or body, pending or threatened against or affecting the toll project entity (or to the best of the authorized signatory's knowledge any basis therefore) wherein an unfavorable decision, ruling or finding would, in any way, materially adversely affect:

(i) the creation, organization, existence or powers of the toll project entity or the title or authority of the officers and commissioners of the toll project entity;

(ii) the transactions contemplated by the transcript documents; or

(iii) the validity or enforceability of the transcript documents;

(I) certification that the authorization, approval and execution of the transcript documents, and all other proceedings of the toll project entity relating to the transcript documents, have been performed in accordance with all applicable open meetings laws and all other applicable laws, rules and regulations of the State of Texas;

(J) the identification of the duly appointed and qualified incumbents of the offices of the toll project entity and certification that the persons named were, on the date or dates of all actions taken in connection with the execution of the transcript documents and any related documents, the duly appointed and qualified incumbents of the offices of the toll project entity;

(K) certification that as of the date of the certificate, the transcript documents are substantially in the form approved by the governing body of toll project entity; and

(L) certification to the Attorney General of the State of Texas that, as of the date of the general certificate, and as of the date of his completion of the legal sufficiency review and all other matters certified therein, the contents of the transcript of proceedings shall be deemed for all purposes to be true, accurate and correct on and as of that date, and as of the delivery date of the transcript of proceedings.

(c) If the toll project entity cannot provide the required certifications as of the date of the general certificate, or as of completion of the legal sufficiency review, then toll project entity, through an officer, shall promptly provide written explanation to the OAG.

(d) The OAG may require a toll project entity to timely provide such other information as may be deemed necessary by the OAG, in its sole discretion, to support a determination that a comprehensive development agreement is legally sufficient for the purposes of Texas Transportation Code §371.051.

(e) Toll project entities anticipating the OAG's review of a CDA that may contain novel or uncommon characteristics or transactions that could be likely to require variance from these requirements are required to contact the OAG to discuss the possible variances prior to submission of the transcript of proceedings.

(f) The transcript requirements described by this section may be waived or modified by the OAG, in its sole discretion, to the extent the OAG is satisfied that the OAG can issue an appropriate legal sufficiency determination.

(g) The transcript of proceedings and other information submitted to the OAG by a toll project entity are subject to the Texas Public Information Act, Chapter 552 of the Texas Government Code ("the Act"). All transcripts and other information shall be presumed to be subject to disclosure unless a specific exception to disclosure under the Act applies. If it is necessary for a toll project entity to include proprietary or otherwise confidential information in its submission, that particular information should be clearly identified and reference shall be made to the specific exception to disclosure in the Act. A blanket claim that the entire transcript is protected from disclosure because it may contain some proprietary information is not acceptable, and will not render the entire transcript confidential. Any information, which is not clearly identified as proprietary or confidential shall be deemed to be subject to disclosure pursuant to the Act.

**History**
- *Source Note: The provisions of this §58.6 adopted to be effective October 25, 2011, 36 TexReg 7155.*

#### **Subchapter C** REQUIRED EXAMINATION FEE

##### **1 Tex. Admin. Code § 58.7** Fee Requirements {#sec-58.7 omnilex-key=us-tx-regs-official--title-1--58.7}

(a) A transcript of proceedings for a legal sufficiency review of a proposed comprehensive development agreement must be accompanied by a non-refundable examination fee as required by Texas Transportation Code §371.051. The examination fee is due and payable at the time the toll project entity submits its transcript of proceedings to the OAG for review in accordance with Subchapter B of this chapter.

(b) The examination fee required for the legal sufficiency review shall be $100,000 for each CDA submitted to the OAG for a legal sufficiency determination review.

(c) A toll project entity is entitled to collect or seek reimbursement of the full amount of the examination fee from the private participant under the proposed comprehensive development agreement as authorized by Texas Transportation Code §371.051(f).

(d) If the toll project entity submits multiple proposed comprehensive development agreements or supplements relating to the same toll project for review, the entity shall pay the required examination fee for each proposed comprehensive development agreement.

(e) The examination fee required by this section applies only to a comprehensive development agreement submitted to the OAG on or after June 17, 2011.

(f) Warrants or checks should be payable to The Office of the Attorney General.

(g) No waivers or exceptions to the fee requirement are authorized by Texas Transportation Code §371.051.

**History**
- *Source Note: The provisions of this §58.7 adopted to be effective October 25, 2011, 36 TexReg 7155.*

### **Chapter 59** COLLECTIONS

##### **1 Tex. Admin. Code § 59.1** Lawsuit Authorization by Local Taxing Authorities {#sec-59.1 omnilex-key=us-tx-regs-official--title-1--59.1}

(a) For the purposes of this section, authority means a municipality, a rapid transit authority, a regional transit authority, including a subregional transportation authority, a municipal mass transit department, a county or special purpose district empowered to adopt a sales and use tax pursuant to the Texas Tax Code, Title 3.

(b) An authorization by an authority to the Office of the Attorney General of Texas to include such authority as a plaintiff in a suit seeking a recovery of delinquent sales and/or use taxes, penalties, and interest due under the Texas Tax Code, Title 2, Chapter 151, and under Title 3, Chapters 321, 322, 323, 324 and 325 shall constitute a blanket authorization to the attorney general to include such authority in any suit brought by the attorney general pursuant to said chapters. The blanket authorization shall remain in effect unless a written notice of revocation of authority is sent by United States certified or registered mail to the Office of the Attorney General of Texas, Bankruptcy and Collections Division, P.O. Box 12548, Austin, Texas 78711-2548.

(c) The authorization to the Office of the Attorney General of Texas should be substantially in the form of the sample set out as follows.

Attached Graphic

**History**
- *Source Note: The provisions of this §59.1 adopted to be effective June 10, 1988, 13 TexReg 2611; amended to be effective October 23, 2001, 26 TexReg 8339.*

##### **1 Tex. Admin. Code § 59.2** Collection Process: Uniform Guidelines and Referral of Delinquent Collections {#sec-59.2 omnilex-key=us-tx-regs-official--title-1--59.2}

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Attorney general--The Office of the Attorney General of Texas, acting through the Bankruptcy and Collections Division of the agency.

(2) Debtor--Any person or entity liable or potentially liable for an obligation owed to the state or a state agency or against whom a claim or demand for payment has been made.

(3) Delinquent--Payment is past due by law or by customary business practice, and all conditions precedent to payment have occurred or been performed.

(4) Make demand--To deliver or cause to be delivered by United States mail, first class, a writing setting forth the nature and amount of the obligation owed to the agency. A writing making demand is a "demand letter."

(5) Obligation--A debt, judgment, claim, account, fee, fine, tax, penalty, interest, loan, charge, or grant.

(6) Security--Any right to have property owned by an entity with an obligation to a state agency sold or forfeited in satisfaction of the obligation; and any instrument granting a cause of action in favor of the State of Texas and/or the agency against another entity and/or that entity's property, such as a bond, letter of credit, or other collateral that has been pledged to the agency to secure an obligation.

(7) State agency--Any agency, board, commission, institution, or other unit of state government.

(b) Uniform guidelines for state agencies in collecting delinquent obligations.

(1) A state agency shall adopt procedures to establish and determine the liability of each person responsible for the obligation, whether that liability can be established by statutory or common law. Agency records shall contain and reflect the identity of all persons liable on the obligation or any part thereof. All agency collection procedures shall apply to every debtor, subject to reasonable tolerances established by the agency. (See paragraph (8) of this subsection.)

(2) A state agency shall adopt procedures to ensure that agency records reflect the correct physical address of the debtor's place of business, and, where applicable, the debtor's residence. Where a fiduciary or trust relationship exists between the agency (or the state) as principal and the debtor as trustee, an accurate physical address shall be maintained. A post office box address should not be used. Agency records may reflect a post office box where it is impractical to obtain a physical address, or where the post office box address is in addition to a correct physical address maintained on the agency's books and records.

(3) All demand letters should be mailed in an envelope bearing the notation "address correction requested" in conformity with 39 Code of Federal Regulations, Chapter III, Subchapter A, Part 3001, Subpart C, Appendix A, §911. If an address correction is provided by the United States Postal Service, the demand letter should be re-sent to that address prior to the referral procedures described herein. Demand should be made upon every debtor prior to referral of the account to the attorney general. The final demand letter should include a statement, where practical, that the debt, if not paid, will be referred to the attorney general.

(4) Where state law allows an agency to record a lien securing the obligation, the agency shall file the lien in the appropriate records of the county where the debtor's principal place of business, or, where appropriate, the debtor's residence, is located or in such county as may be required by law. The lien shall be filed as soon as the obligation becomes delinquent or as soon as is practicable. After referral of the delinquency to the attorney general, any lien securing the indebtedness may not be released, except on full payment of the obligation, without the approval of the attorney representing the agency in the matter.

(5) Where practicable, agencies shall maintain individual collection histories of each account in order to document attempted contacts with the debtor, the substance of communications with the debtor, efforts to locate the debtor and his assets, and other information pertinent to collection of the delinquent account.

(6) Prior to referral of the obligation to the attorney general, the agency shall:

(A) verify the debtor's address and telephone number;

(B) transmit no more than two demand letters to the debtor at the debtor's verified address. The first demand letter should be sent no later than 30 days after the obligation becomes delinquent. The second demand letter should be sent no sooner than 30 days, but not more than 60 days, after the first demand letter. Where agency procedures, statutory mandates, or the requirements of this section indicate that a lawsuit on the account may be filed by the Attorney General, the demand letters shall so indicate;

(C) verify that the obligation is not legally uncollectible or uncollectible as a practical matter. Agencies shall adopt procedures to ensure that referred obligations are not uncollectible. By way of example, the following illustrations apply.

(i) Bankruptcy. Agencies should prepare and timely file a proof of claim, when appropriate, in the bankruptcy case of each debtor, subject to reasonable tolerances adopted by the agency. Copies of all such proofs of claims filed should be sent to the attorney general absent the granting of a variance. Agencies shall maintain records of notices of bankruptcy filings, dismissals and discharge orders received from the United States bankruptcy courts to enable the agency to ascertain whether the collection of the claim is subject to the automatic stay provisions of the bankruptcy code or whether the debt has been discharged. Agencies may seek the assistance of the attorney general in bankruptcy collection matters where necessary, including the filing of a notice of appearance and preparation of a proof of claim.

(ii) Limitations. If the obligation is subject to an applicable limitations provision that would prevent suit as a matter of law, the obligation should not be referred unless circumstances indicate that limitations has been tolled or is otherwise inapplicable.

(iii) Corporations. If a corporation has been dissolved, has been in liquidation under Chapter 7 of the United States Bankruptcy Code, or has forfeited its corporate privileges or charter, or, in the case of a foreign corporation, had its certificate of authority revoked, the obligation should be referred unless circumstances indicate that the account is clearly uncollectible.

(iv) Out-of-state debtors. If the debtor is an individual and is located out-of-state, or outside the United States, the matter should not be referred unless a determination is made that the domestication of a Texas judgment in the foreign forum would more likely than not result in collection of the obligation, or that the expenditure of agency funds to retain foreign counsel to domesticate the judgment and proceed with collection attempts is justified.

(v) Deceased debtors. If the debtor is deceased, agencies should file a claim in each probate proceeding administering the decedent's estate. If such probate proceeding has concluded and there are no remaining assets of the decedent available for distribution, the delinquent obligation should be classified as uncollectible and not be referred. In cases where a probate administration is pending, or where no administration has been opened, all referred obligations should include an explanation of any circumstances indicating that the decedent has assets available to apply toward satisfaction of the obligation.

(7) Not later than the 90th day after the date an obligation becomes delinquent, the agency shall report the uncollected and delinquent obligation to the attorney general for further collection efforts as hereinafter provided. See §2107.003, Texas Government Code.

(8) Agencies shall adopt reasonable tolerances, subject to review by the attorney general, below which an obligation shall not be referred. Factors to be considered in establishing tolerances include the size of the debt; the existence of any security; the likelihood of collection through passive means such as the filing of a lien where applicable; expense to the agency and to the attorney general in attempting to collect the obligation; and the availability of resources both within the agency and within the Office of the Attorney General to devote to the collection of the obligation.

(9) An agency should utilize the "warrant hold" procedures of the Comptroller of Public Accounts authorized by the Texas Government Code, §403.055, to ensure that no treasury warrants are issued to debtors until the debt is paid. Please see Accounting Policy Statement 28, "Reporting of Debts and Certain Tax Delinquencies to the State," issued April 16, 1999 and reissued October 6, 2000 available on the Comptroller of Public Accounts' website at www.cpa.state.tx.us.

(c) Referral to attorneys.

(1) Suit on the obligation by in-house attorneys.

(A) Agencies seeking to use in-house attorneys to collect delinquent obligations through court proceedings must submit a written request to the attorney general's Bankruptcy and Collections Division. Upon written approval, a state agency may file suit to collect a delinquent obligation through an attorney serving as a full-time employee of the agency. Where circumstances make it impractical to secure attorney general approval for every delinquent obligation upon which a lawsuit is to be filed, a state agency may apply to the attorney general for an authorization to bring suit on particular types of obligations through attorneys employed full-time by the agency. Such authorization, if given, must be renewed at the beginning of each fiscal year.

(B) After an obligation is referred to agency attorneys employed as in-house counsel, the obligation shall be reduced to judgment against all entities legally responsible for the obligation where the lawsuit and judgment will make collection of the obligation more likely and the expenditure of agency resources in recovering judgment on the obligation is justified.

(C) Where authorized by law, the agency shall plead for and recover attorney's fees, investigative costs, and court costs in addition to the obligation.

(D) Every judgment taken on a delinquent obligation should be abstracted and recorded by the agency in every county where the debtor: owns real property; operates an active business; is likely to inherit real property; owns any mineral interest; or has maintained a residence for more than one year.

(2) Referral to the attorney general.

(A) Agencies are encouraged to explore the exchange of accounts with the Attorney General by computer tape or other electronic data transfer and to discuss any variances as may be appropriate. The agency and the Attorney General may agree upon an exchange of certain minimum account information necessary for collection efforts by the Attorney General.

(B) Agencies may refer individual accounts to the attorney general after the procedures set forth in subsection (b)(6) - (8) of this section. Individual accounts referred to the attorney general should include by the following:

(i) copies of all correspondence between the agency and the debtor;

(ii) a log sheet (see subsection (b)(5) of this section) documenting all attempted contacts with the debtor and the result of such attempts;

(iii) a record of all payments made by the debtor and, where practicable, copies of all checks tendered as payment;

(iv) any information pertaining to the debtor's residence and his assets; and

(v) copies of any permit application, security, final orders, contracts, grants, or instrument giving rise to the obligation.

(C) Delinquent accounts upon which a bond or other security is held shall be referred to the attorney general no later than 60 days after becoming delinquent. All such accounts where the principal has filed for relief under federal bankruptcy laws shall be referred immediately, since collection of the security may obviate the need to file a claim or to appear in the bankruptcy case.

(D) The attorney general may decide that a particular obligation or class of obligations may be assigned after referral to the appropriate division within the Office of the Attorney General.

(3) Referral to collection firms or private attorneys.

(A) Prior approval of attorney general. Except as provided by §2107.003, Texas Government Code, no agency may contract with, retain, or employ any person other than a full-time employee of the agency to collect a delinquent obligation without prior written approval of the attorney general. Any existing arrangements must receive the written approval of the attorney general to be renewed or extended in any fashion.

(i) Approval of contract with private firm or attorney. Prior to contracting with, retaining, or employing a person other than a full-time employee of the agency to collect a delinquent obligation, an agency must submit a proposal to the attorney general requesting the attorney general to collect the obligation(s). Any agency contracting with any person other than a full-time employee of the agency for the collection of a delinquent obligation must submit the proposed contract to the attorney general for written approval. The proposal must disclose any fee that the agency proposes to pay the private collection firm or attorney. The attorney general may elect to undertake representation of the agency on the same or similar terms as contained in the proposed contract. If the attorney general declines or is unable to perform the services requested, the attorney general may approve the contract. If the attorney general decides that the agency has not complied with this subsection, the attorney general may:

(I) decline to approve the contract; or

(II) require the agency to submit or resubmit a proposal to the attorney general for collection of the obligation in accordance with this subsection.

(ii) If the attorney general fails to act as set forth in clause (i) of this subparagraph within 60 days of receipt of the proposed contract or receipt of additional information requested, the attorney general is deemed to have approved the contract in accordance with this rule.

(B) Requirements of proposed contracts with private persons presented for attorney general approval. In addition to information required by other state laws, all contracts for collection of delinquent obligations must contain or be supported by a proposal containing the following:

(i) a description of the obligations to be collected sufficient to enable the attorney general to determine what measures are necessary to attempt to collect the obligation(s);

(ii) explicit terms of the basis of any fee or payment for the collection of the obligation(s);

(iii) a description of the individual accounts to be collected in the following respects:

(I) the total number of delinquent accounts;

(II) the dollar range;

(III) the total dollar amount;

(IV) a summary of the collection efforts previously made by the agency; and

(V) the legal basis of the delinquent obligations to be collected.

(C) Suggested requirements of proposed contracts with private persons presented for attorney general approval. All contracts for collection of delinquent obligations should contain provisions stating the following:

(i) that litigation on the delinquent account is prohibited unless the private person obtains specific written authorization from the agency and the attorney general and complies with the requirements of this rule;

(ii) that the person is required to place any funds collected in an interest bearing account with amounts collected, plus interest, less collections costs, payable to the agency on a monthly basis or by direct deposit to the agency's account on a weekly basis with the agency billing once a month; in either case a listing of the accounts and amounts collected per account should be submitted to the agency upon deposit of the funds;

(iii) that the person refer any bankruptcy notice to the agency within three working days of receipt;

(iv) that the agency may recall any account without charge;

(v) that the person may not settle or compromise the account for less than the full amount owed (including collection costs where authorized by statute or terms of the obligation) without written authority from the agency;

(vi) that the person is not an agent of the agency but is an independent contractor; and providing further that the person will indemnify the agency for any loss incurred by his violation of state and federal debt collection statutes or by the negligence of the person, his employees or agents;

(vii) that any dispute arising under the contract be submitted to a court of competent jurisdiction in Texas, unless any other venue is statutorily mandated, in which case the specific venue statute will apply, subject to any alternative dispute resolution procedures adopted by the agency pursuant to Chapter 2009, Texas Government Code.

**History**
- *Source Note: The provisions of this §59.2 adopted to be effective December 11, 1992, 17 TexReg 8283; amended to be effective October 23, 2001, 26 TexReg 8339; amended to be effective November 22, 2012, 37 TexReg 9085.*

### **Chapter 60** TEXAS CRIME VICTIM SERVICES GRANT PROGRAMS

#### **Subchapter A** GENERAL PROVISIONS AND ELIGIBILITY

##### **1 Tex. Admin. Code § 60.1** Definitions {#sec-60.1 omnilex-key=us-tx-regs-official--title-1--60.1}

The following terms and abbreviations, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Application Kit--The information that is required to be completed and submitted by an applicant for a grant contract;

(2) Applicant--An entity that files an application for a grant contract with the OAG;

(3) CFR--Code of Federal Regulations;

(4) Claimant--An individual as defined in the Texas Code of Criminal Procedure, Article 56.32(a)(2);

(5) COG--Council of Governments, a regional planning commission or similar regional planning agency created under Texas Local Government Code, Chapter 391;

(6) Competitive allocation--The distribution of grant funds to grantees based on an application process as well as an evaluation and review process;

(7) Computing devices--Machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or peripherals) for printing, transmitting and receiving, or storing electronic information;

(8) CVSD--Crime Victim Services Division, a division of the Office of the Attorney General;

(9) Eligible application--An application that meets the minimum requirements set forth in the RFA and Application Kit;

(10) Employee--A person under the direction and supervision of the grantee, who is on the payroll of the grantee and for whom the grantee is required to pay applicable income withholding taxes; or a person who will be on the grantee's payroll and for whom the grantee will pay applicable income withholding taxes once the grant is awarded;

(11) Equipment--Tangible personal property (including information technology systems) having a useful life of more than one year and a per unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the grantee for financial statement purposes or $5,000;

(12) Fringe benefits--Allowances and services provided by the grantee to its employees as compensation in addition to regular salaries and wages;

(13) Grantee--An entity or sub-recipient of an entity that receives a grant contract from the OAG;

(14) Indirect costs--Any cost not directly identified with a single, final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective;

(15) Information technology systems--Computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources;

(16) Local criminal prosecutor--A district attorney, a criminal district attorney, a county attorney with felony responsibility, or a county attorney who prosecutes criminal cases;

(17) Local law enforcement agency--The police department of a municipality or the sheriff's department of any county;

(18) OAG--Office of the Attorney General;

(19) Other direct operating expenses--Costs not included in other budget categories and which are directly related to the day-to-day operation of the grant program;

(20) OVAG--Other Victim Assistance Grants administered by the OAG;

(21) Professional and consultant services--Any service for which the grantee uses an outside source for necessary support;

(22) RFA--Request for Applications;

(23) Special condition--A condition placed on a grant because of a need for information, clarification, or submission of an outstanding requirement of the grant that may result in a hold being placed on the OAG funded portion of a grant program. Special conditions may be placed on a grant at any time;

(24) Statewide program--An entity that actively offers or provides victim-related services or assistance in six or more COG regions;

(25) Supplies--All tangible personal property other than that described in paragraph (11) of this section. A computing device is a supply if the acquisition cost is less than the lesser of the capitalization level established by the grantee for financial statement purposes or $5,000, regardless of the length of its useful life;

(26) UGMS--The Uniform Grant Management Standards, promulgated by the Texas Comptroller of Public Accounts;

(27) VCLG--Victim Coordinator and Liaison Grants administered by the OAG to provide the victim assistance coordinator and crime victim liaison duties as provided in Texas Code of Criminal Procedure, Article 56.04;

(28) Victim--Unless otherwise allowed by law, an individual as defined in the Texas Code of Criminal Procedure, Article 56.32(a)(11); and

(29) Victim-related services or assistance--Pursuant to the Texas Code of Criminal Procedure, Article 56.32(a)(13), compensation, services, or assistance provided directly to a victim or claimant for the purpose of supporting or assisting the recovery of the victim or claimant from the consequences of criminally injurious conduct.

**History**
- *Source Note: The provisions of this §60.1 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.2** Construction of Rules {#sec-60.2 omnilex-key=us-tx-regs-official--title-1--60.2}

Unless otherwise noted, these rules apply to both OVAG and VCLG grant programs. If good cause is established to show that compliance with these rules may result in an injustice to any interested person, the rules may be suspended at the discretion of the OAG.

**History**
- *Source Note: The provisions of this §60.2 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective September 24, 2003, 28 TexReg 8131; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.3** Source of Funds {#sec-60.3 omnilex-key=us-tx-regs-official--title-1--60.3}

(a) Texas Code of Criminal Procedure, Article 56.541(e) authorizes the OAG to use money appropriated from the Texas Compensation to Victims of Crime Fund for grants or contracts supporting victim-related services or assistance.

(b) The source of grant funds for both programs is a biennial appropriation by the Texas Legislature. Allocation of funds in the OVAG program is competitive.

**History**
- *Source Note: The provisions of this §60.3 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.4** Availability of Funds {#sec-60.4 omnilex-key=us-tx-regs-official--title-1--60.4}

All funding is contingent upon the appropriation of funds by the Texas Legislature and upon approval of a grant application by the OAG.

**History**
- *Source Note: The provisions of this §60.4 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.5** Purpose of Funds and Grant Funding Decisions {#sec-60.5 omnilex-key=us-tx-regs-official--title-1--60.5}

(a) The purpose of the OAG VCLG program is to fund the mandated positions described in the Texas Code of Criminal Procedure, Article 56.04, specifically Victim Assistance Coordinators (VAC) in prosecutor offices and Crime Victim Liaisons (CVL) in law enforcement agencies, using a competitive allocation method.

(b) The purpose of the OAG OVAG program is to provide funds, using a competitive allocation method, to programs that address the unmet needs of victims by maintaining or increasing their access to quality services.

(c) The OAG reserves the right to give priority to programs that provide direct victim services with grant funds, that provide information and education, or that utilize volunteers.

(d) Within its discretion, the OAG shall determine the manner and procedure for making funding decisions that support the efficient and effective use of appropriated funds.

(e) The OAG may award OVAG funds to programs that would otherwise be eligible for funding under another OAG grant program.

**History**
- *Source Note: The provisions of this §60.5 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.6** OVAG and VCLG Eligible Purpose Areas {#sec-60.6 omnilex-key=us-tx-regs-official--title-1--60.6}

(a) Grant contracts awarded under the OAG OVAG program may be used for victim-related services or assistance for the following purposes:

(1) providing direct victim services including, but not limited to, counseling, crisis intervention, assistance with Crime Victim's Compensation, legal assistance, victim advocacy, and information and referral;

(2) providing outreach or community education to help identify crime victims who might not otherwise be reached and provide or refer them to needed services;

(3) connecting crime victims to services for the purpose of supporting or assisting in their recovery;

(4) training professionals and volunteers to improve their ability to inform victims of their rights, to assist victims in their recovery, or to establish a continuum of care for victims;

(5) providing administrative functions to OAG designated grants;

(6) other purposes, consistent with state law, that are authorized by applicable federal grants; or

(7) other support for victim related services or assistance as determined by the OAG.

(b) Grant contracts awarded under the OAG VCLG program shall be used for victim assistance coordinator and/or crime victim liaison positions for the purposes set forth in Texas Code of Criminal Procedure, Article 56.04.

**History**
- *Source Note: The provisions of this §60.6 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.7** OVAG Eligible Applicants {#sec-60.7 omnilex-key=us-tx-regs-official--title-1--60.7}

The following entities are eligible to apply under the OVAG program:

(1) local units of government;

(2) non-profit agencies with 26 U.S.C. §501(c)(3) status; and

(3) state agencies.

**History**
- *Source Note: The provisions of this §60.7 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.8** VCLG Eligible Applicants {#sec-60.8 omnilex-key=us-tx-regs-official--title-1--60.8}

The following entities are eligible to apply under the VCLG program:

(1) A local criminal prosecutor may apply for a grant to fund a Victim Assistance Coordinator (VAC) position, or part of a VAC position, as defined in Article 56.04 (a); and

(2) A local law enforcement agency may apply for a grant to fund a Crime Victim Liaison (CVL) position, or part of a CVL position, as defined in Article 56.04 (c) and (d) of the Texas Code of Criminal Procedure.

**History**
- *Source Note: The provisions of this §60.8 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.9** Volunteer Requirements {#sec-60.9 omnilex-key=us-tx-regs-official--title-1--60.9}

The specific requirements for the volunteer component will be stated in the RFA and the Application Kit.

**History**
- *Source Note: The provisions of this §60.9 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.10** Funding Levels {#sec-60.10 omnilex-key=us-tx-regs-official--title-1--60.10}

(a) For OVAG and VCLG programs, the minimum and maximum for which an applicant may apply per fiscal year is stated in the RFA and the Application Kit.

(b) The amount of an award is determined solely by the OAG. The OAG may award grants at amounts above or below the established funding levels and is not obligated to fund a grant at the amount requested.

**History**
- *Source Note: The provisions of this §60.10 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective September 24, 2003, 28 TexReg 8131; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.11** Grant Contract Period {#sec-60.11 omnilex-key=us-tx-regs-official--title-1--60.11}

(a) Generally, grant contracts may be awarded for any number of months up to a two year period unless stated otherwise in the RFA.

(b) The OAG reserves the right to alter the starting date and length of the grant contract period.

(c) If the grant contract period extends for more than one fiscal year, the grantee may be required to submit additional documentation relating to the subsequent fiscal year of the grant contract period, including an updated budget. The OAG may base its decision on subsequent fiscal year funding amounts on the grantee's prior performance, including but not limited to the timeliness and thoroughness of reporting, effective and efficient use of grant funds and the success of the program in meeting its goals.

**History**
- *Source Note: The provisions of this §60.11 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.12** Continuation of Funding {#sec-60.12 omnilex-key=us-tx-regs-official--title-1--60.12}

Because a grant is not a right or an entitlement, there is no commitment by the OAG that a grant contract, once funded, will receive subsequent funding.

**History**
- *Source Note: The provisions of this §60.12 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective September 24, 2003, 28 TexReg 8131; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.13** Additional Award Opportunities {#sec-60.13 omnilex-key=us-tx-regs-official--title-1--60.13}

(a) The OAG may fund programs outside the standard application cycle or process or at amounts higher or lower than provided for in this chapter based on availability of funds and an identified need.

(b) The OAG may choose to award a grant contract from a different funding source than that for which the applicant applied.

**History**
- *Source Note: The provisions of this §60.13 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.14** Applicant Registration {#sec-60.14 omnilex-key=us-tx-regs-official--title-1--60.14}

(a) The OAG may require applicants to register their intent to apply for funding. If registration is required, the deadline to file, including a time, date and place certain, will be given in the RFA.

(b) Grant applications will not be considered if the registration is not filed by the established deadline.

(c) The OAG will notify an applicant if their application will not be considered due to failure of timely registration.

**History**
- *Source Note: The provisions of this §60.14 adopted to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.15** Filings with the OAG {#sec-60.15 omnilex-key=us-tx-regs-official--title-1--60.15}

(a) All documents that are required to be submitted to the OAG must be received by the OAG to be considered as filed. If a deadline is established by the OAG, it will include a time, date and place certain.

(b) Proof of sending a document by email or other means is not proof that the OAG received the information.

(c) All filing decisions rest completely within the discretionary authority of the OAG and the decisions made by the OAG are final and are not subject to appeal.

**History**
- *Source Note: The provisions of this §60.15 adopted to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.16** Compliance with Other Standards {#sec-60.16 omnilex-key=us-tx-regs-official--title-1--60.16}

(a) Grantees must comply with all applicable state and federal statutes, rules, regulations, and guidelines. In instances where both federal and state requirements apply to a grantee, the more restrictive requirement applies.

(b) The relevant standards include, but are not limited to:

(1) Uniform Grant Management Standards (UGMS) adopted pursuant to the Uniform Grant and Contract Management Act, Texas Government Code, Chapter 783. These requirements apply to all grants, including grants to non-profit corporations; and

(2) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as set forth in federal regulations.

**History**
- *Source Note: The provisions of this §60.16 adopted to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.17** Use of the Internet {#sec-60.17 omnilex-key=us-tx-regs-official--title-1--60.17}

(a) The OAG may transmit notices, forms or other documents and information via the Internet or other electronic means.

(b) The OAG may require the submission of notices, forms or other documents and information via the Internet or other electronic means.

(c) Transmission or submission via electronic means meets the relevant requirements contained within this chapter for submitting information in writing. Submitted information may not disclose any information received from reports, collected case information, or site-monitoring visits that would identify a person providing or receiving services.

**History**
- *Source Note: The provisions of this §60.17 adopted to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

#### **Subchapter B** APPLICATION, REVIEW AND AWARD PROCESS

##### **1 Tex. Admin. Code § 60.100** Application Process {#sec-60.100 omnilex-key=us-tx-regs-official--title-1--60.100}

(a) The OAG will publish a RFA in the *Texas Register* and post the RFA on the OAG's official agency website.

(b) The RFA, at a minimum, will provide the following information:

(1) applicable funding sources for the types of grants available and eligibility requirements;

(2) how to obtain Application Kits;

(3) deadlines and filing instructions for the grant application;

(4) minimum and maximum amounts of funding available;

(5) start date and length of grant contract period;

(6) any match or volunteer requirements;

(7) award criteria;

(8) any prohibitions on the use of grant funds; and

(9) OAG contact information.

(c) After the RFA is published in the *Texas Register,* the Application Kit will be available on the official agency website.

(d) An applicant must submit an application to the OAG, as referenced in the RFA.

(e) The application, with the required attachments, must be filed and received by the OAG, by the deadline and manner stated in the RFA.

(f) Once the application is filed, it will be initially screened for eligibility, and if eligible it will be evaluated and reviewed, and a grant decision will be made.

(g) Providing false information, knowingly or unknowingly, on a grant application may cause an application to be denied or cause the grant contract, once awarded, to be terminated.

**History**
- *Source Note: The provisions of this §60.100 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.101** Screening, Evaluation, and Review Process {#sec-60.101 omnilex-key=us-tx-regs-official--title-1--60.101}

(a) The OAG determines eligibility for an award. Applications that are not eligible will not be scored further and will not be eligible for a grant award. If an applicant is deemed ineligible by the OAG, that applicant will not receive a grant.

(b) The OAG will designate teams to screen, evaluate, and review applications. The evaluation teams may consist of OAG employees, employees of other state agencies, or other designees. Evaluation factors will be developed to assess the award criteria as stated in the RFA or Application Kit.

(c) During the screening, evaluation, or review process, an applicant may be contacted to provide additional information.

(d) There are several steps in the screening, evaluation, and review process. A decision to deny an application may be made at any point during the process.

**History**
- *Source Note: The provisions of this §60.101 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.102** Grant Decision Notification Process {#sec-60.102 omnilex-key=us-tx-regs-official--title-1--60.102}

(a) The OAG shall notify the applicant in writing of its decision regarding a grant award.

(b) The OAG may utilize a grant contract document or a notice of grant document once a decision is made to award a grant. The applicant will be given a deadline to act to accept the grant award and to return the appropriate document to the OAG within the time prescribed by the OAG. An applicant's failure to return the signed document to the OAG within the applicable time period may be construed as a rejection of the grant award, and the OAG may de-obligate funds.

(c) The OAG may add special conditions to the grant award. Until satisfied, these special conditions will affect the grantee's ability to receive funds. If special conditions are not resolved, the OAG may de-obligate the entire amount of the grant award.

**History**
- *Source Note: The provisions of this §60.102 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.103** Grant Decisions {#sec-60.103 omnilex-key=us-tx-regs-official--title-1--60.103}

(a) All grant decisions, including, but not limited to, eligibility, evaluation and review, and funding rest completely within the discretionary authority of the OAG and the decisions made by the OAG are final and are not subject to appeal.

(b) The award of a grant contract to a program shall not commit or obligate the OAG in any way to make any additional, supplemental, continuation, or other award to that program.

**History**
- *Source Note: The provisions of this §60.103 adopted to be effective September 24, 2003, 28 TexReg 8132; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061.*

#### **Subchapter C** GRANT BUDGET REQUIREMENTS

##### **1 Tex. Admin. Code § 60.200** General Budget Provisions {#sec-60.200 omnilex-key=us-tx-regs-official--title-1--60.200}

(a) Unless otherwise stated by the Request for Applications and the Application Kit, eligible budget categories are limited to the following categories:

(1) personnel;

(2) fringe benefits;

(3) professional and consultant services;

(4) travel;

(5) equipment;

(6) supplies; and

(7) other direct operating expenses.

(b) All applicants must submit a completed budget on the form prescribed by the OAG.

(c) Grants awarded by the OAG are reimbursement-only grants. Grantees are reimbursed for authorized actual expenditures substantiated by documentation submitted to the OAG, as requested. If necessary, the OAG may use an alternative method of payment.

(d) An individual paid with grant funds may not receive dual compensation for the same work, even if the services performed benefit more than one entity.

(e) All grantees, including but not limited to non-profit entities and local governmental agencies, must follow the rules and requirements as outlined in UGMS, and all federal regulations.

(f) For budget items funded partially by the OAG, an entity must have a documented method for the allocation of direct costs consistent with the benefit received and must maintain adequate receipts and records.

(g) All budget items must be reasonable and necessary and be allocated proportionately within each budget category.

(h) The OAG is not obligated to fund budget items at the amounts requested by the applicant and is not obligated to continue to fund budget items once a grant has been awarded.

**History**
- *Source Note: The provisions of this §60.200 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.201** Personnel {#sec-60.201 omnilex-key=us-tx-regs-official--title-1--60.201}

(a) The personnel budget category may include salaries of employees only, and not compensation paid to independent contractors.

(b) Salaries for grant funded positions must be reasonable and comply with the grantee's salary classification schedule. If a grantee does not have a classification schedule, the grantee must maintain documentation supporting that the salary is commensurate with that paid in the geographic area for positions with similar duties and qualifications. In any event, the OAG will determine whether a salary is reasonable and may limit the grant funded portion of any salary.

(c) The OAG may set minimum restrictions on the percentage of salary that may be funded.

(d) Any changes to the job duties or employment status of a grant funded position must be reported to the OAG immediately.

(e) A grantee may not use grant funds to pay any portion of the salary or any other compensation for an elected government official.

**History**
- *Source Note: The provisions of this §60.201 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.202** Fringe Benefits {#sec-60.202 omnilex-key=us-tx-regs-official--title-1--60.202}

(a) Fringe benefits include, but are not limited to, the costs of leave, employee insurance, pensions, and unemployment benefit plans.

(b) Grant funds may be used to pay fringe benefits of an employee only if grant funds are also being used to pay for the salary of the same employee.

(c) A grantee must provide grant-funded personnel the same fringe benefits provided to all other non-grant-funded employees of the grantee.

**History**
- *Source Note: The provisions of this §60.202 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.203** Professional and Consultant Services {#sec-60.203 omnilex-key=us-tx-regs-official--title-1--60.203}

(a) Professional and consultant services include, but are not limited to, accounting services, counseling, legal services, and computer support.

(b) Any contract or agreement entered into by a grantee that obligates grant funds must be in writing and consistent with Texas contract law. Grantees must maintain adequate documentation supporting budget items for a contractor's time, services, and rates of compensation. Grantees must establish a contract administration and monitoring system to regularly and consistently ensure that contract deliverables are provided as specified in the contract.

(c) Grant funds may not be used to pay for any professional and consultant services for a person or vendor who participates directly in writing a grant application.

**History**
- *Source Note: The provisions of this §60.203 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.204** Travel {#sec-60.204 omnilex-key=us-tx-regs-official--title-1--60.204}

(a) Travel expenses may be reimbursed according to the Texas State Travel Guidelines, unless a grantee's travel policy provides a lesser reimbursement.

(b) Travel expenses must be reasonable and necessary for activities funded on the grant.

(c) Grant funds requested in the travel category should be for grant-related travel performed by grant-funded staff and volunteers assigned to the grant only.

(d) Travel must relate directly to the delivery of services that supports the program funded by the OAG grant.

**History**
- *Source Note: The provisions of this §60.204 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.205** Equipment {#sec-60.205 omnilex-key=us-tx-regs-official--title-1--60.205}

(a) A grantee may use equipment paid for with OAG funds only for grant-related purposes and not for personal or non-grant-related purposes.

(b) Grant funds may not be used to purchase or lease vehicles.

**History**
- *Source Note: The provisions of this §60.205 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.206** Supplies {#sec-60.206 omnilex-key=us-tx-regs-official--title-1--60.206}

(a) Allowable items include, but are not limited to, office supplies, paper, postage, education resource materials, and certain computing devices described in §60.1(25) of this chapter.

(b) The OAG will not approve funds for the purchase of program promotional items or recreational activities.

**History**
- *Source Note: The provisions of this §60.206 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.207** Other Direct Operating Expenses {#sec-60.207 omnilex-key=us-tx-regs-official--title-1--60.207}

(a) Funds may not be used to purchase food and beverages.

(b) Registration fees for conferences and other training sessions should be included in this category.

**History**
- *Source Note: The provisions of this §60.207 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.208** Indirect Costs {#sec-60.208 omnilex-key=us-tx-regs-official--title-1--60.208}

The OAG will not fund indirect costs.

**History**
- *Source Note: The provisions of this §60.208 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.209** Unallowable Costs {#sec-60.209 omnilex-key=us-tx-regs-official--title-1--60.209}

(a) OAG grant funds may not be used for the following:

(1) to pay for lobbying;

(2) to purchase food and beverages except as allowed under Texas State Travel Guidelines;

(3) to purchase or lease vehicles;

(4) to purchase promotional items or recreational activities;

(5) to pay for travel that is unrelated to the direct delivery of services that supports the OAG funded program;

(6) to pay consultants or vendors who participate directly in writing a grant application; or

(7) any unallowable costs set forth in state or federal cost principles.

(b) Funds may not be used to purchase any other products or services the OAG identifies as inappropriate or unallowable within the RFA or the Application Kit.

**History**
- *Source Note: The provisions of this §60.209 adopted to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061; amended to be effective March 7, 2019, 44 TexReg 1117.*

#### **Subchapter D** REQUIRED ATTACHMENTS

##### **1 Tex. Admin. Code § 60.300** Comprehensive Certification and Assurances Form {#sec-60.300 omnilex-key=us-tx-regs-official--title-1--60.300}

(a) Each Application Kit will have a Comprehensive Certification and Assurances Form. Unless otherwise directed by the RFA or the Application Kit, applicants must submit a signed Comprehensive Certification and Assurances Form with the grant application.

(b) The form includes, but is not limited to, the following certifications and assurances:

(1) Equal Employment Opportunity Program Certification;

(2) Certification Regarding Lobbying;

(3) Nonprocurement Debarment Certification;

(4) Drug-Free Workplace Certification;

(5) Audit Certification;

(6) UGMS Certifications;

(7) Certified Assurances;

(8) Conflict of Interest; and

(9) Other certifications and assurances required by the OAG.

**History**
- *Source Note: The provisions of this §60.300 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.301** Resolution {#sec-60.301 omnilex-key=us-tx-regs-official--title-1--60.301}

(a) The resolution permits the applicant to submit an application. Unless otherwise directed by the RFA or the Application Kit, the resolution must be submitted at the same time the grant application is submitted by the applicant.

(b) The specific requirements for the resolution will be stated in the Application Kit.

(c) A resolution from the applicable governing body (such as the City Council, County Commissioners' Court, or Board of Directors) must contain, at a minimum, the following:

(1) authorization for the submission of the grant application to the OAG; and

(2) a designation of the name or title of an authorized official who is given the power to apply for, accept, reject, alter, or terminate a grant on behalf of the grantee.

**History**
- *Source Note: The provisions of this §60.301 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 5, 2007, 32 TexReg 1061.*

##### **1 Tex. Admin. Code § 60.302** Other Required Forms {#sec-60.302 omnilex-key=us-tx-regs-official--title-1--60.302}

An applicant must submit all other required forms as listed in the Application Kit.

**History**
- *Source Note: The provisions of this §60.302 adopted to be effective March 7, 2019, 44 TexReg 1117.*

#### **Subchapter E** ADMINISTERING GRANTS

##### **1 Tex. Admin. Code § 60.400** Grant Forms {#sec-60.400 omnilex-key=us-tx-regs-official--title-1--60.400}

(a) Unless otherwise stated, all required forms will be provided by the OAG.

(b) Failure to timely submit the required forms provided by the OAG may result in sanctions as stated in §60.409.

**History**
- *Source Note: The provisions of this §60.400 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.401** Grant Contact and Authorized Signator {#sec-60.401 omnilex-key=us-tx-regs-official--title-1--60.401}

(a) A grantee must have the following designees:

(1) Grant contact must be an employee of the grantee who is responsible for operating and monitoring the project and who is able to readily answer questions about the grant project's day-to-day operations. All grant-related information will be sent to this contact person.

(2) Authorized signator is the person authorized to apply for, accept, decline, or cancel the grant for the applicant entity. This person signs all grant adjustment requests, progress reports, and financial reports, as well as any other official documents related to the grant. This person may be, for example, the executive director of the entity, or a county judge, mayor, city manager, assistant city manager, or designee authorized by the governing body in the resolution.

(b) Any changes in the grant contact or authorized signator must be submitted in writing to the OAG immediately.

(c) An authorized signator may designate alternate persons to sign certain grant documents.

**History**
- *Source Note: The provisions of this §60.401 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.402** Financial Reporting and Reimbursement {#sec-60.402 omnilex-key=us-tx-regs-official--title-1--60.402}

(a) Because grants awarded under this chapter are reimbursement-only grants, a grantee must regularly submit financial status reports and invoices, as directed by the OAG.

(b) A grantee must ensure that its final invoice is received no later than the 45th calendar day after the end of the grant period (liquidation date). If this date falls on a weekend or a holiday, then the OAG will honor receipt on the following business day. On the liquidation date, if grant funds are on hold for any reason, the funds will lapse and cannot be recovered by the grantee.

(c) Invoices received after the above deadline may not be paid by the OAG.

(d) If necessary, the OAG may allow an extension beyond the deadline stated in subsection (b).

**History**
- *Source Note: The provisions of this §60.402 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.403** Performance Reporting {#sec-60.403 omnilex-key=us-tx-regs-official--title-1--60.403}

(a) A grantee must regularly submit performance reports as directed by the OAG. Failure to do so may result in the OAG placing a grantee on financial hold and may affect future funding requests.

(b) The OAG, or its designee, may assess project effectiveness through review of required performance reports, on-site visits, and/or desk reviews. Information relating to performance reporting must be maintained in the grantee's files and must be available for review by the OAG or its designee.

**History**
- *Source Note: The provisions of this §60.403 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.405** Grant Adjustments {#sec-60.405 omnilex-key=us-tx-regs-official--title-1--60.405}

(a) Within each fiscal year, a grantee may transfer funds between direct cost line items in different approved budget categories, not to exceed a cumulative total of ten percent of the approved grant budget during that year, without requesting a grant adjustment from the OAG.

(b) If it becomes necessary to move funds that are greater than ten percent of the total budget between existing budget categories, revise the scope or target of the program, add new budget categories, or alter project activities, a grantee must first request and receive approval from the OAG for a grant adjustment. The person designated to make such requests or the authorized signator must sign all grant adjustment request forms.

**History**
- *Source Note: The provisions of this §60.405 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.406** Copyrights {#sec-60.406 omnilex-key=us-tx-regs-official--title-1--60.406}

If a grantee uses any OAG funds to purchase or receive a copyright or for a subgrantee to purchase or receive a copyright, the OAG reserves a royalty-free and irrevocable license to reproduce, publish, use, or authorize others to use the copyrighted material.

**History**
- *Source Note: The provisions of this §60.406 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.407** Procurement, Property Management, and Contract Oversight Procedures {#sec-60.407 omnilex-key=us-tx-regs-official--title-1--60.407}

A grantee shall use the procurement procedures, property management procedures, and contract oversight guidelines set forth in UGMS and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as set forth in federal regulations. A grantee must comply with UGMS and all applicable state and local laws and regulations.

**History**
- *Source Note: The provisions of this §60.407 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.408** Maintenance of Records {#sec-60.408 omnilex-key=us-tx-regs-official--title-1--60.408}

(a) The grantee shall maintain adequate records to support its charges, procedures, and performances to the OAG for all work related to the grant. The grantee also shall maintain such records as are deemed necessary by the OAG and auditors of the State of Texas, the United States, or such other persons or entities designated by the OAG, to ensure proper accounting for all costs and performances related to the grant.

(b) The grantee shall maintain and retain records as required by Texas Government Code Chapter 441, Subchapter L, and the grant contract.

(c) Records may be retained in an electronic format.

**History**
- *Source Note: The provisions of this §60.408 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.409** Sanctions {#sec-60.409 omnilex-key=us-tx-regs-official--title-1--60.409}

(a) Reimbursement for grant-related expenses is contingent upon a grantee's strict compliance with these rules, related requirements, and OAG procedures. Any failure to comply may result in the imposition of temporary or permanent sanctions or both.

(b) Sanctions may include:

(1) Placing a grantee on financial hold;

(2) Requiring repayment of grant funds;

(3) Transferring the administration of a grant project to another entity;

(4) Termination of a grant;

(5) Ineligibility for future funding with the OAG;

(6) Any other sanction or corrective action that the OAG deems necessary.

(c) The OAG will notify a grantee if grounds for sanctions exist.

(d) If the grantee receives notice of grounds for sanctions and subsequently provides satisfactory evidence that the deficient condition has been corrected, the OAG may release funds.

(e) If the grantee fails to correct the deficient condition, in the time and manner as indicated by the OAG, and the grant is terminated, the OAG may require the grantee to return any equipment purchased with grant funds, and all unexpended or unobligated funds awarded to a grantee will revert to the OAG.

(f) A grantee may request a review of the sanctions imposed, as described below:

(1) The grantee must make a written request for reconsideration no later than 10 days after the receipt of an OAG notice of sanctions.

(2) A grantee should submit any documentation necessary to support the reconsideration.

(3) The OAG will send the final determination to the grantee in writing.

(4) The OAG decision concerning sanctions is final.

**History**
- *Source Note: The provisions of this §60.409 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective July 31, 2005, 30 TexReg 4209.*

#### **Subchapter F** PROGRAM MONITORING AND AUDITING

##### **1 Tex. Admin. Code § 60.500** Violations of Laws {#sec-60.500 omnilex-key=us-tx-regs-official--title-1--60.500}

A grantee must immediately provide notification to the OAG and, if applicable, the local prosecutor's office, of any knowledge, suspicion, or evidence of any violation of law that affects or is related to the grant. Such violations include misappropriation of funds, fraud, theft, embezzlement, forgery, or any serious irregularity or noncompliance with the requirements of this chapter.

**History**
- *Source Note: The provisions of this §60.500 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.501** Conflict of Interest {#sec-60.501 omnilex-key=us-tx-regs-official--title-1--60.501}

(a) Grantee personnel, members of a grantee board or governing body, or other persons affiliated with the grant project shall not participate in any proceeding or action where grant funds personally benefit, directly or indirectly, the individuals or their relatives. For the purposes of this chapter, "relatives" means persons related to the individual within the third degree by consanguinity or within the second degree by affinity, as determined by Chapter 573 of the Government Code.

(b) Grant personnel and officials must avoid any action that results in or creates the appearance of:

(1) using their official positions for private gain;

(2) giving preferential treatment to any person;

(3) losing independent judgment or impartiality;

(4) making an official decision outside of official channels; or

(5) adversely affecting the confidence of the public in the integrity of the program or the OAG.

**History**
- *Source Note: The provisions of this §60.501 adopted to be effective July 15, 2003, 28 TexReg 5523.*

##### **1 Tex. Admin. Code § 60.502** Compliance Assurance {#sec-60.502 omnilex-key=us-tx-regs-official--title-1--60.502}

(a) Compliance reviews include programmatic monitoring, financial monitoring, and financial auditing.

(b) The OAG will conduct compliance reviews throughout the existence of a grant. A grantee must make all grant-related records available to OAG representatives unless the information is sealed by law.

(c) Compliance reviews may be on-site or desk reviews and may include any information that the OAG deems relevant to the project.

(d) The OAG, or its designee, may make unannounced visits at any time.

(e) The OAG reserves the right to conduct its own audit or contract with another entity to audit any grantee.

(f) Based on the information gathered during monitoring or auditing, the OAG will issue a compliance report.

(g) A grantee must submit documentation to the OAG responding to any findings and questioned costs contained in the report.

(h) The compliance determination of the OAG is final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §60.502 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

##### **1 Tex. Admin. Code § 60.503** Audit Standards {#sec-60.503 omnilex-key=us-tx-regs-official--title-1--60.503}

(a) Grantee will contract with an independent, licensed CPA firm to perform an annual financial audit engagement. If applicable, grantee's independent, licensed CPA firm will determine the type of annual financial audit, which may include a compliance attestation in accordance with federal audit requirements and/or Texas Single Audit Circular (Single Audit or non-Single Audit financial audit).

(b) A grantee must submit to the OAG one copy of all audit reports, including audits as required in UGMS and all other audits that a grantee undergoes, regardless of the purpose. The grantee must submit an audit report to the OAG within 30 calendar days after receipt of the auditor report, or nine months after the end of the audit period.

(c) OAG grant funds may only be used for the fair and reasonable share of audit costs required by the OAG, in accordance with applicable federal and state cost principles governing allowability and allocation.

**History**
- *Source Note: The provisions of this §60.503 adopted to be effective July 15, 2003, 28 TexReg 5523; amended to be effective March 7, 2019, 44 TexReg 1117.*

### **Chapter 61** CRIME VICTIMS' COMPENSATION

#### **Subchapter A** SCOPE AND CONSTRUCTION OF RULES AND GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 61.1** Scope and Construction of Rules {#sec-61.1 omnilex-key=us-tx-regs-official--title-1--61.1}

(a) This chapter is intended to apply solely to the administration of the Crime Victims' Compensation Act (CVCA), Texas Code of Criminal Procedure Chapter 56, Articles 56.06, 56.065, and Subchapter B. The Office of the Attorney General (OAG) adopts this chapter consistent with the CVCA and the authority granted under Texas Code of Criminal Procedure Articles 56.33(a) and 56.42(c).

(b) To assure a just determination for every application submitted to the OAG for compensation by victims of crime, this chapter will be given its most reasonable meaning taken in their total context, and will be construed to secure a just resolution or decision for every controversy.

(c) If good cause is established to show that compliance with this chapter may result in an injustice to any interested person, the chapter may be suspended at the discretion of the OAG.

(d) All ranges of calendar dates shall be inclusive of the listed dates. Unless otherwise provided by law, all applications shall be governed by the statutes in effect on the date of the criminally injurious conduct or the date of the forensic medical examination for emergency medical care applications.

(e) All prior rules promulgated by the OAG in the administration of the CVCA shall continue in effect for the administration of applications arising out of criminally injurious conduct during the effective period of such prior rules.

(f) This chapter shall be liberally construed to promote fairness, due process and the interests of justice.

**History**
- *Source Note: The provisions of this §61.1 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.2** Insufficient Funds {#sec-61.2 omnilex-key=us-tx-regs-official--title-1--61.2}

If the OAG adjusts the amount of awards and payments pursuant to Texas Code of Criminal Procedure Article 56.58(a), available funds will be awarded to emergency payments, loss of earnings, loss of support, and relocation and housing rental expenses. Other allowable awards will be adjusted and paid as directed by the OAG.

**History**
- *Source Note: The provisions of this §61.2 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.3** Closing Applications {#sec-61.3 omnilex-key=us-tx-regs-official--title-1--61.3}

(a) An application for compensation may be closed at the discretion of the OAG if any of the following conditions occurs:

(1) The victim has been awarded the statutory maximum amount of compensation allowed under Texas Code of Criminal Procedure Article 56.42, in accordance with the law in effect at the date of the criminally injurious conduct or the date of the forensic medical examination for emergency medical care applications;

(2) The 30-day time period for appealing the decision of the OAG to award or deny an application or award has passed without a request from the victim or claimant for reconsideration;

(3) The 30-day time period for appealing the reconsideration has passed without a request from the victim or claimant for a hearing;

(4) The 40-day period has passed for filing a written notice of dissatisfaction with the OAG's final decision;

(5) The 40-day period has passed to bring suit in district court after filing a written notice of dissatisfaction with the OAG's final decision;

(6) The victim or claimant knowingly or intentionally submits false or forged information to the OAG;

(7) The victim or claimant submits an incomplete application or a service provider submits an incomplete file on behalf of the victim or claimant;

(8) The victim or claimant fails to respond within a 30-day period to a request made by the OAG for information;

(9) The OAG is unable, within 30 days of receiving an application, to obtain information substantiating that a crime occurred;

(10) The victim or claimant fails to report a collateral source or any other source of income; or

(11) The victim is approved for compensation and subsequently dies without a claimant on the application. Payment may only be made on crime related bills submitted to the OAG prior to the victim's death which meet all payment requirements. Upon the victim's death, the individual who is legally charged with administering the victim's estate may request to become a claimant and the application may remain open or be reopened for payment of crime related expenses;

(12) The victim or claimant fails to provide requested medical reports pursuant to §61.502(a) of this chapter (relating to Medical Reports and Records);

(13) The victim or claimant fails to submit to an independent physical or mental examination requested pursuant to §61.502(d) of this chapter; or

(14) The victim or claimant delays medically recommended treatment or is non-compliant with medical orders.

(b) A closed application may be reopened upon the receipt of requested information, the OAG's own motion, or upon written request showing good cause by the victim or claimant.

**History**
- *Source Note: The provisions of this §61.3 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 8, 2007, 32 TexReg 7893; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

##### **1 Tex. Admin. Code § 61.4** Confidentiality of Records {#sec-61.4 omnilex-key=us-tx-regs-official--title-1--61.4}

(a) The OAG shall keep confidential all applications, records and other information to the extent authorized by law.

(b) The application and all documentation submitted to or created by the OAG is a governmental record.

**History**
- *Source Note: The provisions of this §61.4 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter B** DEFINITIONS

##### **1 Tex. Admin. Code § 61.101** Definitions {#sec-61.101 omnilex-key=us-tx-regs-official--title-1--61.101}

(a) The following words and terms, when used in this chapter, shall have the following meanings:

(1) Application--A request for compensation in accordance with Texas Code of Criminal Procedure Article 56.36(a), including an emergency medical care application.

(2) Closed Application--An application which has been administratively closed under §61.3 of this chapter (relating to Closing Applications). The administrative closure of an application will prevent further payments, reimbursements or other claim processing to occur unless the application is reopened under §61.3(b) of this chapter.

(3) Disability Period--The length of time that a victim has a medically determinable physical or mental impairment that causes the victim to be unable to perform their work as a direct result of the criminally injurious conduct. For a victim under 18, the disability period means the length of time the victim has a medically determinable physical or mental impairment, or a combination of impairments, that causes marked and severe functional limitations as a direct result of the criminally injurious conduct. The disability period must be determined by a Medical Doctor (M.D.), Doctor of Osteopathy (D.O.), or the OAG.

(4) Extraordinary Pecuniary Losses--As used in Texas Code of Criminal Procedure Article 56.42(b), means economic losses which exceed the limits on compensation in effect on the date of the criminally injurious conduct giving rise to the application for compensation. Extraordinary pecuniary losses may include loss of earnings, but only in addition to the statutorily enumerated costs, which are further described in §61.407 of this chapter (relating to Additional Compensation for Extraordinary Pecuniary Losses).

(5) Funeral Purchase Agreement--A written statement of funeral goods and services signed by a claimant and a representative of the service provider which itemizes the cost of funeral services or merchandise selected by a claimant. The agreement may or may not include terms governing burial expenses, but it must include the following information:

(A) the funeral goods and funeral services selected by that person and the prices to be paid for each, unless there is an itemized discounted package arrangement;

(B) specifically itemized cash advance items; and

(C) the total cost of the goods and services selected.

(6) Health Care Service Provider--Any person or entity that provides medical, psychiatric care or counseling services, and includes a doctor or other person duly licensed to practice one or more of the healing arts, a health care facility, or an entity providing health care.

(7) Incarcerated--A person who is confined in a penal institution as a result of being arrested for, charged with, or convicted of a criminal offense. This term also includes persons who have been detained in a confined space pending or during transport to or from a penal institution.

(8) Interested Person--As used in Texas Code of Criminal Procedure Article 56.40(c), includes a victim and any valid claimants whose application for compensation may be affected by the outcome of a final ruling hearing and does not include the accused criminal offender or non-claimant creditors.

(9) Law enforcement agency--As used in Texas Code of Criminal Procedure Chapter 56, means a governmental organization that employs commissioned peace officers as defined by Texas Code of Criminal Procedure Article 2.12.

(10) Medical--As used in Texas Code of Criminal Procedure Article 56.32(a)(9)(A), means medical, hospital, nursing, physical therapy or dental services and includes the costs of medical treatment, or any other medical cost deemed appropriate by the OAG. Except for an admission to a hospital or clinic for in-patient psychiatric treatment, a residential treatment center, or intensive outpatient programs, the term medical does not include psychiatric care or counseling, as that term is defined in this chapter.

(11) Medically Indicated Services--As used in Texas Code of Criminal Procedure Article 56.32(a)(9)(B)(ii), means medical treatment, or psychiatric care or counseling related to the disability period resulting from the personal injury which is ordered and provided by a heath care service provider.

(12) Medically Necessary--As used in Texas Code of Criminal Procedure Article 56.385, refers to services that a health care service provider, exercising prudent clinical judgment, would provide to a victim or claimant for the purpose of evaluating, diagnosing or treating an illness, injury, disease or its symptoms.

(13) Penal Institution--As used in Texas Code of Criminal Procedure Article 56.41(b)(6) and as defined in the Texas Penal Code §1.07, refers to a place designated by law for confinement of persons arrested for, charged with, or convicted of an offense.

(14) Physical Therapy--As used in Texas Code of Criminal Procedure Article 56.32(a)(9)(A), refers to treatment prescribed by a M.D., D.O., or Chiropractic Doctor (D.C.), conducted under the direct supervision of the M.D., D.O., D.C., or a physical therapist, and means health care services that prevent, identify, correct, or alleviate acute or prolonged movement dysfunction or pain of anatomical or physiological origin.

(15) Psychiatric Care or Counseling--As used in Texas Code of Criminal Procedure Articles 56.32(a)(9)(A) and 56.32(a)(2)(D)(I), means psychiatric care or counseling performed by a mental health service provider with a professional license and may include any modality recognized by the Texas Department of Insurance, Division of Workers Compensation in their medical fee guidelines. The types of licenses approved by the OAG to provide psychiatric care or counseling are listed on the OAG website. The term psychiatric care or counseling does not include an admission to a hospital or clinic for in-patient psychiatric treatment, admission to a residential treatment center or intensive outpatient programs, which are considered medical expenses.

(16) Reports--As used in Texas Code of Criminal Procedure Article 56.38(d), includes both written and oral reports from a law enforcement agency as deemed appropriate by the OAG.

(17) Resident--As used in Texas Code of Criminal Procedure Article 56.32(a)(11)(A)(ii), means a person who has a domicile in Texas or who lives for more than a temporary period in Texas, another state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a possession or territory of the United States.

(18) Service Provider--Any provider of compensable services to a victim or claimant including, but not limited to, health care service providers, mental health counselors, funeral or burial service providers, child care providers, landlords, moving companies, or any other person or entity who is eligible to receive direct payments from the OAG on behalf of a victim or claimant under Texas Code of Criminal Procedure Article 56.44(d) for pecuniary losses under Texas Code of Criminal Procedure Article 56.32(a)(9).

(19) Total and Permanent Disability--As used in Texas Code of Criminal Procedure Article 56.42(b), means the victim is not likely to recover from their crime related personal injury such that an M.D. or D.O. may certify with reasonable medical certainty that a disabling condition will continue indefinitely and results in the victim's disqualification or inability to perform the usual tasks of a worker in such a way as to leave the victim at a substantial disadvantage in the competitive labor market for any type of work. The term does not require permanent unemployment.

(20) Trafficking of Persons--As defined by Texas Code of Criminal Procedure Article 56.32(a)(14), means any offense that results in a person engaging in forced labor or services and that may be prosecuted under Texas Penal Code §§20A.02, 20A.03, 43.03, 43.04, 43.05, 43.25, 43.251, or 43.26.

(b) The definitions in this chapter will be given their most ordinary meaning unless the context clearly indicates otherwise, in accordance with Texas Government Code §312.002(a).

**History**
- *Source Note: The provisions of this §61.101 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 8, 2007, 32 TexReg 7893; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

#### **Subchapter C** APPLICATION

##### **1 Tex. Admin. Code § 61.201** Application for Compensation {#sec-61.201 omnilex-key=us-tx-regs-official--title-1--61.201}

(a) As required by Texas Code of Criminal Procedure Article 56.36, all communications and OAG approved applications for compensation shall be submitted to the Crime Victims' Compensation Program, Office of the Attorney General, P.O. Box 12198, Austin, Texas 78711-2198. An OAG approved application for compensation is considered complete and will be processed when the application:

(1) is filled out in relevant part;

(2) is signed by a victim or a claimant as defined by Texas Code of Criminal Procedure Article 56.32;

(3) except when the application is an emergency medical care application, provides the case number or other sufficient information concerning the relevant law enforcement or public safety agency to enable the OAG to request a criminal report substantiating that the victim or claimant reported the crime; and

(4) provides any other information requested by the OAG to determine eligibility.

(b) If the victim or claimant submits an application that is not complete, the OAG will notify the victim or claimant in writing that his or her application is incomplete and request that the additional information be provided within 30 days. If the victim or claimant does not return the completed application to the OAG within 30 days, the application for compensation may be closed in accordance with §61.3 of this chapter (relating to Closing Applications).

(c) Under Texas Code of Criminal Procedure Article 56.32(a)(2)(E), to be an authorized individual entitled to file an application and act on behalf of a child, an individual must:

(1) be the parent of the child;

(2) have legal guardianship of the child;

(3) be an emancipated child acting on his or her own behalf; or

(4) otherwise have legal authority to act on behalf of the child.

(d) The OAG may merge one or more submitted applications for compensation involving the same victim if:

(1) the applications arise out of the same alleged incident of criminally injurious conduct;

(2) the applications arise out of substantially similar alleged facts involving the same victim and offender; or

(3) the applications allege a pattern of criminally injurious conduct against the same victim by the same offender over a period of time greater than one day.

(e) Subsection (d) of this section shall not be construed to deny an application for compensation for each individually named victim of the same incident of criminally injurious conduct. If a victim or claimant disputes the merging of two or more applications for compensation under this section, the victim or claimant may request a reconsideration of the decision to merge applications.

**History**
- *Source Note: The provisions of this §61.201 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.202** Timely Filing an Application {#sec-61.202 omnilex-key=us-tx-regs-official--title-1--61.202}

Except as provided by paragraph (7) of this section:

(1) An application for compensation based on criminally injurious conduct that occurred between January 1, 1980, and August 31, 1983, must have been filed with the OAG not later than 180 days from the date of the criminally injurious conduct.

(2) An application for compensation based on criminally injurious conduct that occurred between September 1, 1983 and August 31, 1997, must have been filed with the OAG not later than one year from the date of the criminally injurious conduct.

(3) An application for compensation based on criminally injurious conduct that occurred on or after September 1, 1997 must be filed with the OAG not later than three years from the date of the criminally injurious conduct.

(4) In accordance with Texas Code of Criminal Procedure Article 56.37(b), the OAG may extend the time for filing an application upon good cause shown by the claimant or victim. Good cause, as determined by the OAG, includes the following circumstances:

(A) the victim or claimant was not informed about the CVC program by a law enforcement agency, public service agency or service provider and the victim or claimant has not previously applied for or received compensation from the CVC Program;

(B) physical or psychological factors prevented the victim or claimant from filing in a timely manner;

(C) communication barriers existed that prevented the victim or claimant from filing in a timely manner; or

(D) any other circumstance that the OAG considers significant.

(5) In accordance with Texas Code of Criminal Procedure Article 56.37(c), if the victim is a child, the application must be filed within three years from the date the claimant or victim is made aware of the crime but not after the child is 21 years of age.

(6) In accordance with Texas Code of Criminal Procedure Article 56.37(d), the OAG will exclude a period of incapacity from the time to file an application if the victim or claimant:

(A) submits medically documented evidence of a physical or mental incapacity;

(B) the period of incapacity is a result of the criminally injurious conduct; and

(C) the incapacity reasonably prevented the victim or claimant from filing an application within the statutorily prescribed limit in effect on the date of the criminally injurious conduct.

(7) In accordance with Texas Code of Criminal Procedure Article 56.37(e), an application on behalf of a victim of criminal homicide must be filed with the OAG not later than three years after the date the victim's identity is established by a law enforcement agency.

**History**
- *Source Note: The provisions of this §61.202 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

##### **1 Tex. Admin. Code § 61.203** Timely Reporting to Law Enforcement {#sec-61.203 omnilex-key=us-tx-regs-official--title-1--61.203}

(a) As required by Texas Code of Criminal Procedure Article 56.46(a), a victim or claimant may not file an application with the OAG unless he or she timely reports the crime to the appropriate state or local public safety or law enforcement agency. This timely reporting requirement does not apply to a victim who is a child, as defined by Texas Code of Criminal Procedure Article 56.32(a)(1), or emergency medical care applications.

(b) For criminally injurious conduct that occurred prior to September 1, 1997, the report to a law enforcement agency must have been made within 72 hours. After September 1, 1997, the report to a law enforcement agency must have been made within a reasonable time so as not to interfere with or hamper the investigation and prosecution of the crime.

(c) If the OAG determines that extraordinary circumstances exist, then the reporting period may be extended. Extraordinary circumstances, as deemed acceptable by the OAG, may be shown by verification of the following:

(1) physical or psychological factors prevented the victim or claimant from reporting in a timely manner;

(2) threats were made against the victim or claimant in an attempt to prevent the reporting of the crime;

(3) communication barriers existed that prevented the victim or claimant from timely reporting; or

(4) any other circumstance that the OAG considers significant.

**History**
- *Source Note: The provisions of this §61.203 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

#### **Subchapter D** REDUCTION, DENIAL OR REFUND OF AN APPLICATION OR AWARD

##### **1 Tex. Admin. Code § 61.301** Reducing an Application or Award {#sec-61.301 omnilex-key=us-tx-regs-official--title-1--61.301}

(a) To reduce an application or award under Texas Code of Criminal Procedure Article 56.45(a)(2), the OAG may consider the victim's behavior if it was a significant factor in the cause of the personal injury. If the OAG determines that the victim shared a portion of the responsibility for the act or omission that gave rise to the application, the OAG may reduce the award for compensation by 25% or 50%. When an award for compensation is reduced, the reduction applies to each bill, each individual award amount, and the aggregate award amount.

(b) Emergency medical care applications are not subject to Texas Code of Criminal Procedure Article 56.45(a)(2), and therefore this rule does not apply to emergency medical care applications.

(c) When determining whether a victim's behavior is a significant factor in the cause of the personal injury, the OAG will consider the totality of facts and circumstances, including but not limited to:

(1) the victim's ability to have reasonably avoided the incident;

(2) the nature and extent of injuries sustained by the victim;

(3) the nature and extent of injuries sustained by the alleged offender or offenders;

(4) exhibition or use of a deadly weapon;

(5) the relationship, if any, between the victim and offender or offenders, including a history of criminally injurious conduct;

(6) the proportionate responsibility between the parties;

(7) the opinions and conclusion of law enforcement investigators assigned to the case;

(8) the legal opinions and conclusions of prosecutorial agencies regarding the presentation of criminal charges and an assessment of affirmative defenses;

(9) the results of the victim's actions could have been reasonably foreseen by the victim at the time;

(10) there is a causal relationship between the victim's or claimant's conduct; and

(11) the degree of harm that occurred as a result of the criminally injurious conduct and the future harm that may occur if compensation is not awarded.

**History**
- *Source Note: The provisions of this §61.301 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.302** Denying an Application or Award {#sec-61.302 omnilex-key=us-tx-regs-official--title-1--61.302}

(a) An application for compensation shall be denied if:

(1) the criminally injurious conduct is not reported to law enforcement as required by Texas Code of Criminal Procedure Article 56.46;

(2) the application does not satisfy the requirements of Texas Code of Criminal Procedure Articles 56.36 and 56.37;

(3) the victim or claimant knowingly and willingly participated in the criminally injurious conduct as prohibited by Texas Code of Criminal Procedure Article 56.41(b)(3);

(4) the victim or claimant is determined by law enforcement to be the offender or an accomplice as prohibited by Texas Code of Criminal Procedure Article 56.41(b)(4);

(5) an award of compensation to the victim or claimant would benefit the offender or an accomplice as prohibited by Texas Code of Criminal Procedure Article 56.41(b)(5);

(6) the victim or claimant was incarcerated at the time the offense was committed as prohibited by Texas Code of Criminal Procedure Article 56.41(b)(6);

(7) the victim or claimant, as prohibited by Texas Code of Criminal Procedure Article 56.41(b)(7), knowingly or intentionally:

(A) submits, or causes to be submitted by a third party, a material statement or representation of fact that the person knows or intends to be false or forged; or

(B) omits material information in an application or supporting documentation that the person knows or should reasonably know will result in reliance upon the omission.

(b) An application for compensation may be denied under Texas Code of Criminal Procedure Article 56.45 if:

(1) the victim or claimant has not substantially cooperated with the appropriate law enforcement agency;

(2) the victim or claimant is responsible for the act or omission giving rise to the application because of the victim or claimant's behavior and a reduction is not granted under §61.301 of this subchapter (relating to Reducing an Application or Award); or

(3) the victim or claimant was engaging in an activity at the time of the criminally injurious conduct that was prohibited by law, excluding minor traffic offenses or other certain non-violent misdemeanors.

(c) Applications arising out of the criminally injurious conduct of trafficking of persons will not be denied solely because the victim engaged in an activity prohibited by law due to threat, coercion, or intimidation as a part of criminally injurious conduct giving rise to the application.

(d) Under Texas Code of Criminal Procedure Articles 56.311 and 56.45(1), the legislature intended the CVC program to encourage greater public cooperation in the successful apprehension and prosecution of criminals. When determining whether a victim or claimant has substantially cooperated with law enforcement, the OAG will consider the totality of facts and circumstances, including but not limited to:

(1) the victim's physical and mental capacity to participate in the investigation, apprehension and prosecution of the offender or offenders;

(2) whether the victim has provided a true, accurate and complete description of the crime;

(3) the extent to which the victim or claimant has participated in investigative activities;

(4) the extent to which the victim or claimant has participated in the prosecution of the offender; and

(5) whether any delays in substantial cooperation hindered or hampered the successful apprehension and prosecution of the offender.

**History**
- *Source Note: The provisions of this §61.302 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

##### **1 Tex. Admin. Code § 61.303** Other Grounds for Reducing or Denying an Application or Award {#sec-61.303 omnilex-key=us-tx-regs-official--title-1--61.303}

An award of compensation also may be reduced or denied in the manner prescribed in §§61.406, 61.410, and 61.413 of this chapter (relating to Collateral Sources; Changes in Circumstances; and Unjust Enrichment).

**History**
- *Source Note: The provisions of this §61.303 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.304** Refunds from Victims or Claimants {#sec-61.304 omnilex-key=us-tx-regs-official--title-1--61.304}

(a) The OAG may request a refund of any amount awarded on an application by fraud, mistake or because of newly discovered evidence in accordance with Texas Code of Criminal Procedure Article 56.47(c).

(b) The OAG may pursue available administrative or civil penalties as provided under Texas Code of Criminal Procedure Articles 56.62, 56.63 and 56.64 in addition to seeking a refund.

(c) The OAG may:

(1) require the victim or claimant to repay the overpayment in full;

(2) allow the requested refund to be repaid in installments in consideration of the victim or claimant's financial circumstances; or

(3) reduce future payments from the OAG to the victim or claimant by the amount of the overpayment, if future payments are anticipated.

(d) The OAG may discontinue or suspend all current and future payments to a victim or claimant who has received a request for a refund until the OAG is satisfied that the refund requirements have been met or the victim or claimant enters into a refund payment arrangement as described in this section.

**History**
- *Source Note: The provisions of this §61.304 adopted to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.305** Overpayments to Service Providers {#sec-61.305 omnilex-key=us-tx-regs-official--title-1--61.305}

(a) If a service provider is overpaid or paid in error by the OAG for any reason, the service provider shall voluntarily repay the overpaid amount as soon as practicable upon discovering the overpayment or upon notification of the overpayment by the OAG.

(b) The amount of the overpayment to the service provider per CVC application will not reduce the maximum amount available to the victim or claimant for an approved application.

(c) The OAG, at its discretion, may discontinue or suspend all current and future payments to a service provider who has received a request for return of an overpayment until the OAG is satisfied that the overpayment requirements have been met or the service provider enters into an overpayment return arrangement.

(d) The OAG may pursue available administrative or civil penalties as provided under Texas Code of Criminal Procedure Articles 56.62, 56.63, and 56.64.

**History**
- *Source Note: The provisions of this §61.305 adopted to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter E** PECUNIARY LOSS

##### **1 Tex. Admin. Code § 61.401** Applicability {#sec-61.401 omnilex-key=us-tx-regs-official--title-1--61.401}

The OAG shall determine the eligibility, standards, and reasonable limits on compensation for pecuniary losses under Texas Code of Criminal Procedure Article 56.32(a)(9), in a manner consistent with the provisions of this chapter and in accordance with any other controlling provisions of law.

**History**
- *Source Note: The provisions of this §61.401 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

##### **1 Tex. Admin. Code § 61.402** Loss of Earnings {#sec-61.402 omnilex-key=us-tx-regs-official--title-1--61.402}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.32(a)(9)(B) and (I), the OAG shall determine an award for actual loss of past earnings, the anticipated loss of future earnings and bereavement leave. Loss of earnings may be paid to victims who suffer a disability period as defined in §61.101(a)(2) of this chapter (relating to Definitions), or to victims or claimants attending individual appointments, executions, or funerals and memorials as outlined in subsections (e), (i) and (j) of this section. The victim or claimant must submit information to the OAG in the manner prescribed in §61.404 of this subchapter (relating to Travel Expenses).

(b) The actual loss of past earnings will be computed by determining the weekly net earnings of the victim on the date of the criminally injurious conduct multiplied by the disability period. The OAG may determine the initial disability period upon verification of work missed up to fourteen calendar days after the criminally injurious conduct. Verification may be from any source deemed appropriate by the OAG.

(c) If a victim's loss of past or anticipated earnings is a result of a disability period lasting more than fourteen calendar days directly caused by the criminally injurious conduct, the M.D. or D.O. who regularly treats the victim must submit a written statement and any other documentation requested by the OAG in order to verify loss of past or anticipated earnings.

(d) If a victim was unemployed at the time of the criminally injurious conduct and claims a loss of anticipated earnings, the victim or claimant must provide the OAG with a sufficient showing that the victim would have had earnings had the victim not suffered injury or death as a direct result of the criminally injurious conduct. "Sufficient showing" may include a written statement from the employer that the victim was offered employment, but did not begin employment, or any other information deemed appropriate by the OAG.

(e) Loss of earnings may be paid to a claimant, consistent with the rest of this section, if the expense is reasonably and necessarily incurred as a result of the victim's personal injury or death for:

(1) the victim's disability period resulting from the personal injury;

(2) the receipt of medically indicated services related to the victim's disability period resulting from the personal injury; or

(3) the participation in or attendance at investigative, prosecutorial, or judicial processes related to the criminally injurious conduct and participation in or attendance at any post-conviction or post-adjudication proceeding relating to the criminally injurious conduct.

(f) In computing loss of earnings, the OAG will consider any other income earned subsequent to the crime, and any collateral source under Texas Code of Criminal Procedure Article 56.32(a)(3).

(g) Loss of past earnings may be paid upon verification of one of the following:

(1) income reported to the Internal Revenue Service;

(2) documentation from the Texas Workforce Commission;

(3) an affidavit from an employer, including the employer's Texas Workforce Commission employer identification number; or

(4) any other source approved by the OAG.

(h) The loss of earnings available under Texas Code of Criminal Procedure Article 56.32(a)(9)(B) is determined by the date of criminally injurious conduct and is limited pursuant to Texas Code of Criminal Procedure Article 56.42(c) as follows:

(1) Between January 1, 1980 and August 31, 1989, the maximum amount of an award for loss of earnings is $150 per week.

(2) Between September 1, 1989 and August 31, 1995, the maximum amount of an award for loss of earnings is $200 per week.

(3) Between September 1, 1995 and January 31, 1998, the maximum amount of an award for loss of earnings is $400 per week.

(4) Between February 1, 1998 and July 14, 2016, the maximum amount of an award for loss of earnings is $500 per week.

(5) On or after July 15, 2016, the maximum amount of an award for loss of earnings is $700 per week.

(i) Loss of earnings may be paid to a household member, as defined in Texas Code of Criminal Procedure Article 56.32(a)(6), or immediate family member, as defined in Texas Code of Criminal Procedure Article 56.32(a)(7), if it can be substantiated in a manner that is acceptable to the OAG that bereavement leave was taken from work in connection with the death of a victim who died on or after September 1, 2003.

(j) Loss of earnings available to a victim or claimant to attend an execution under Texas Code of Criminal Procedure Article 56.32(a)(9)(B)(iii) is limited to three consecutive days per proceeding and cannot exceed the limits described in subsection (h) of this section. The OAG may extend this limit upon good cause shown.

(k) The amount of loss of earnings awarded under Texas Code of Criminal Procedure Article 56.32(a)(9)(I) for bereavement leave is determined by the date of the criminally injurious conduct, and is limited to ten work days of lost earnings, not to exceed:

(1) $1000 for criminally injurious conduct before July 15, 2016; or

(2) $1400 for criminally injurious conduct on or after July 15, 2016.

(l) Loss of earnings may be paid to a claimant if it can be substantiated in a manner that is acceptable to the OAG that the claimant traveled to witness an execution, if the cost was incurred on or after June 21, 2003.

(m) Reimbursements for loss of earnings are limited to reimbursement for the actual loss of earnings due to individual medical, investigative, or court appointments, including judicial proceedings, but not to exceed four hours of work time, unless evidence presented by the victim or claimant or an investigation by the OAG indicates that the appointment exceeded four hours.

(n) At the discretion of the OAG, an award for loss of earnings due to a disability period may require review and application of the requirements provided in the "Official Disability Guidelines" adopted by the Texas Department of Insurance.

**History**
- *Source Note: The provisions of this §61.402 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective February 17, 2004, 29 TexReg 1329; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective July 5, 2016, 41 TexReg 4797.*

##### **1 Tex. Admin. Code § 61.403** Loss of Support Payments for Dependents {#sec-61.403 omnilex-key=us-tx-regs-official--title-1--61.403}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.32(a)(9)(E), the OAG may make payments for actual loss of support for the dependent(s) of a victim. Under this provision, actual loss of support will be paid to the victim or to a claimant on behalf of a dependent(s) if the victim is deceased.

(b) To determine the actual loss of support for the dependent(s), the OAG may consider the victim's income and the offender's income if the income source was available for the dependent(s) on the date of the criminally injurious conduct and was lost as a result of that criminally injurious conduct. The amount of any award for loss of support shall be reduced by any payments from collateral sources and any loss of earnings paid under §61.402 of this subchapter (relating to Loss of Earnings). Loss of support payments may not exceed the actual pecuniary loss or any other limits set by this section.

(c) Consistent with Texas Code of Criminal Procedure Article 56.41(b)(5), the OAG shall not make loss of support payments for the dependent(s) of a victim if the offender or an accomplice of the offender would benefit from such payment, consistent with §61.413 of this subchapter (relating to Unjust Enrichment).

(d) The OAG will review the supporting documentation provided by the victim or claimant to determine eligibility and amount of an award of loss of support payments. The OAG will determine if the documentation is sufficient to support an award under this section. The victim or claimant must provide all documentation deemed necessary by the OAG as proof of the following:

(1) the dependent is the victim's dependent, as defined in Texas Code of Criminal Procedure Article 56.32(a)(5);

(2) the amount of net income or other verifiable support available for the dependent;

(3) if applicable, verification that the victim is deceased or verification of the medical disability of the victim consistent with §61.502 of this chapter (relating to Medical Reports and Records); and

(4) any other documentation deemed necessary by the OAG.

(e) Payments made under this section are subject to ongoing review by the OAG to determine continued eligibility. If the victim has a medical disability as a result of the criminally injurious conduct and therefore is unable to work, then the victim or claimant must comply with, and is subject to, all provisions of §61.502 of this chapter.

(f) Loss of support payments for the dependent(s) of a deceased victim may be paid on an ongoing basis at 100% of the pecuniary loss, subject to the award cap determined by the date of the criminally injurious conduct, up to the maximum amount of the claim or until the dependent(s) no longer qualifies due to age or emancipation, subject to the following provisions:

(1) If there are multiple dependents of a deceased victim, the OAG will pay the loss of support payments in equal amounts for each eligible dependent claimant not to exceed the aggregate limits set in paragraph (2) of this subsection.

(2) The amount of the loss of support payment awarded for the dependent(s) of a deceased victim is determined by the date of the criminally injurious conduct and is limited pursuant to Texas Code of Criminal Procedure Article 56.42(c) as follows:

(A) Between January 1, 1980 and August 31, 1989, the maximum amount of an award for loss of support is $150 per week.

(B) Between September 1, 1989 and August 31, 1995, the maximum amount of an award for loss of support is $200 per week.

(C) Between September 1, 1995 and January 31, 1998, the maximum amount of an award for loss of support is $400 per week.

(D) Between February 1, 1998 and July 14, 2016, the maximum amount of an award for loss of earnings is $500 per week.

(E) On or after July 15, 2016, the maximum amount of an award for loss of earnings is $700 per week.

(g) Loss of support payments made for the dependent(s) of a surviving victim may be paid to the victim, subject to the following provisions:

(1) To be eligible to receive an award under this section, the criminally injurious conduct causing the injury to the surviving victim must have occurred on or after September 1, 1997.

(2) If there are multiple dependents of a surviving victim, the OAG will pay the loss of support payments in equal amounts for each eligible dependent not to exceed the aggregate limits set in paragraph (3) of this subsection.

(3) The amount of the loss of support payment awarded for dependent(s) of a surviving victim is determined by the date of the criminally injurious conduct and is limited pursuant to Texas Code of Criminal Procedure Article 56.42(c) as follows:

(A) Between September 1, 1997 and January 31, 1998, the maximum amount of an award for loss of support is $400 per week.

(B) Between February 1, 1998 and July 14, 2016, the maximum amount of an award for loss of support is $500 per week.

(C) On or after July 15, 2016, the maximum amount of an award for loss of support is $700 per week.

(4) An award of loss of support for the dependent(s) of a surviving victim is limited to 13 continuous weeks following the date of the criminally injurious conduct. If the surviving victim is medically disabled as a result of the criminally injurious conduct, such that the surviving victim is unable to work, loss of support payments for the dependent(s) of the surviving victim will be paid during the medical disability period and will continue for 13 continuous weeks after the removal of the medical disability. Loss of support payments are subject to the limits in effect on the date of the criminally injurious conduct, and are paid up to the maximum amount of the claim or until the dependent(s) no longer qualifies as a dependent by age or emancipation.

**History**
- *Source Note: The provisions of this §61.403 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective July 5, 2016, 41 TexReg 4797.*

##### **1 Tex. Admin. Code § 61.404** Travel Expenses {#sec-61.404 omnilex-key=us-tx-regs-official--title-1--61.404}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.32(a)(9)(B), (D), and (J), the OAG may reimburse a victim or claimant for actual, reasonable and necessary travel expenses resulting from the criminally injurious conduct. Reasonable and necessary travel expenses include transportation provided by a commercial transportation company, or for mileage for the use of the victim's or claimant's personally owned motor vehicle, including reimbursement to a claimant transporting a victim who is physically or legally unable to operate a motor vehicle. The OAG may reimburse transportation expenses only from the victim's or claimant's residence, unless the applicant demonstrates that good cause exists for another starting destination. The travel distance must exceed 20 miles one-way.

(b) Meals and lodging expenses are considered reasonable and necessary travel expenses under Texas Code of Criminal Procedure Article 56.32(a)(9)(B)(ii) and (iii), (D), and (J). The OAG may reimburse a victim or claimant for meals and lodging if:

(1) the travel distance, one-way from the victim's or claimant's residence, exceeds 60 miles; and

(2) lodging is provided by a commercial lodging establishment including a hotel, motel, inn, apartment, or similar entity that offers lodging to the public in exchange for compensation.

(c) Reimbursement to a victim or claimant for transportation, meals and lodging may not be paid at a rate that exceeds the maximum rates provided by law to Texas state employees. If no state maximum rate for an expense exists by law, the OAG may reimburse the victim or claimant at a rate determined to be reasonable and necessary. Reimbursement for meals may be paid only if the victim or claimant stays overnight, regardless of whether the OAG reimburses for lodging expenses related to the stay.

(d) A victim or claimant seeking reimbursement shall submit a verified statement on a form prescribed by the OAG setting forth the transportation, meals, and lodging expenses under this section. The form shall reflect the number of hours or days of travel and attendance and the mileage using the shortest route between the victim's or claimant's residence and the travel destination if a personal vehicle is used. The victim or claimant shall submit all receipts of transportation and lodging with the claim form. The forms shall contain all of the signatures of the appropriate officials in the following manner:

(1) for psychiatric care or counseling, or medically indicated services, the signature of a health care provider;

(2) for attendance at or participation in the investigation of the criminally injurious conduct leading to the application, the signature of the law enforcement officer, crime victim liaison, or victim assistance coordinator requesting the victim's or claimant's presence;

(3) for attendance at or participation in the prosecution or judicial proceedings of the criminal case forming the basis of the application, the signature of the prosecuting attorney, his or her authorized representative the crime victim liaison, the victim assistance coordinator, the presiding official, or his or her authorized representative;

(4) for attendance at or participation in post-conviction or post-adjudication proceedings, the signature of the prosecuting attorney, his or her authorized representative, the crime victim liaison, the victim assistance coordinator, the presiding official, or his or her authorized representative;

(5) for attendance at the funeral or memorial service of a victim, the signature of the person officiating the service or a representative of the funeral home, or any other person deemed appropriate by the OAG; or

(6) for attendance at an execution proceeding, the signature of a representative, including a victim services professional from the offices of the district attorney, attorney general, a law enforcement agency or the Texas Department of Criminal Justice.

(e) A victim or claimant who is subject to a subpoena may not be reimbursed for travel expenses, pursuant to Texas Code of Criminal Procedure Article 56.32(a)(9)(B)(iii), for attendance at or participation in the prosecution, judicial, post-conviction or post-adjudication proceedings to the extent the witness receives reimbursement pursuant to Texas Code of Criminal Procedure Article 35.27.

(f) Reimbursement for reasonable and necessary travel expenses incurred by a claimant for an execution scheduled on or after June 21, 2003, is available for the purpose of witnessing an execution, as provided by to Texas Code of Criminal Procedure Article 56.32(a)(9)(I).

(g) Reimbursement for reasonable and necessary travel expenses incurred by an immediate family member or household member of a deceased victim to attend the funeral or memorial services of the victim, as provided by Texas Code of Criminal Procedure Article 56.32(a)(9)(D), is available for criminally injurious conduct occurring on or after September 1, 2003.

**History**
- *Source Note: The provisions of this §61.404 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective February 17, 2004, 29 TexReg 1329; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.405** Other Limits on Compensation {#sec-61.405 omnilex-key=us-tx-regs-official--title-1--61.405}

(a) The limits on amounts of awards may be different from the amounts listed in this chapter based on the statute and rules in effect at the time of the criminally injurious conduct.

(b) Under Texas Code of Criminal Procedure Article 56.32(a)(9)(c), the actual cost of care for a child victim, a dependent of a victim or a minor child of a victim may be awarded if the criminally injurious conduct occurred on or after September 1, 1997, and the care is a new and ongoing expense resulting from the criminally injurious conduct. Care of a child or dependent under this section is subject to the following provisions:

(1) For criminally injurious conduct that occurs between May 8, 2005 and July 14, 2016, child care is limited to 13 continuous weeks if the victim is not deceased, unless good cause exists;

(2) For criminally injurious conduct that occurs on or after July 15, 2016, child care is limited to 52 continuous weeks if the victim is not deceased, unless good cause exists;

(3) Limited to children 14 and under, unless good cause exists;

(4) Must be provided by a licensed, registered, or certified care provider;

(5) May not be paid once a person no longer qualifies as a child or dependent; and

(6) Limited to the following amounts for criminally injurious conduct occurring:

(A) Between September 1, 1997 and July 14, 2016, $100 per week for each child or dependent; or

(B) On or after July 15, 2016, $300 per week for each child or dependent.

(c) Funeral and burial expenses provided by Texas Code of Criminal Procedure Article 56.32(a)(9)(D) are limited as follows:

(1) for criminally injurious conduct occurring before July 15, 2016, compensation may not exceed $4500;

(2) for criminally injurious conduct occurring on or after July 15, 2016, compensation may not exceed $6500; and

(3) the actual, reasonable and necessary costs of transporting the deceased victim 50 miles or more to the funeral service location, and 50 miles or more to the place of burial, are allowable funeral and burial expenses which are in addition to the funeral and burial limits associated with paragraphs (1) and (2) of this subsection.

(d) Under Texas Code of Criminal Procedure Article 56.32(a)(9)(F), the actual, reasonable, and necessary cost of cleaning the crime scene is limited as follows:

(1) for criminally injurious conduct that occurs between September 1, 1995 and July 14, 2016, compensation may not exceed $750; and

(2) for criminally injurious conduct that occurs on or after July 15, 2016, compensation may not exceed $2250 per victim.

(e) Under Texas Code of Criminal Procedure Article 56.32(a)(9)(G), the OAG may pay for the reasonable replacement costs as follows:

(1) for criminally injurious conduct that occurs between September 1, 1995 and July 14, 2016, compensation may not exceed $750; and

(2) for criminally injurious conduct that occurs on or after July 15, 2016, compensation may not exceed $1000 per victim.

(f) Under Texas Code of Criminal Procedure Article 56.61, the OAG may reimburse claimants for pecuniary losses within the limits and at the rates in effect on the date the identity of the victim is established by a law enforcement agency.

**History**
- *Source Note: The provisions of this §61.405 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective July 5, 2016, 41 TexReg 4797.*

##### **1 Tex. Admin. Code § 61.406** Collateral Sources {#sec-61.406 omnilex-key=us-tx-regs-official--title-1--61.406}

(a) The crime victims' fund is the payer of last resort, according to Texas Code of Criminal Procedure Article 56.34(f). Under Texas Code of Criminal Procedure Articles 56.34(b) and 56.36(b)(3)(B), the OAG may only pay for those actual pecuniary losses that are not paid by a collateral source.

(b) Collateral sources are those benefits or advantages for pecuniary loss specifically described in Texas Code of Criminal Procedure Article 56.32(a)(3) and do not include other possible sources of reimbursement or recovery.

(c) Service providers should seek payment from all collateral sources which might be readily available to the victim or claimant prior to submitting claims or bills to the OAG, when possible. Service providers shall notify the OAG of all collateral sources being pursued on behalf of the victim or claimant.

(d) The OAG may deny or reduce an award if the OAG notifies the victim, claimant or service provider of a possible collateral source and the victim, claimant or service provider fails to apply or pursue the collateral source within an acceptable time frame for such collateral source. The acceptable time frame will be determined by the OAG upon consideration of all relevant facts and circumstances.

(e) If a service provider receives payment from any other source on behalf of the victim or claimant, the service provider must report the payment and the source to the OAG before receiving reimbursement. If the OAG has already made a payment, the service provider is responsible for notifying the OAG of the amount and the source of the other payment within 10 business days. Payments made to a service provider that reduce the amount of actual pecuniary loss that must be reported to the OAG include, but are not limited to the following: auto insurance; burial insurance; veterans' benefits; worker's compensation; death benefits; foreign consulate payments; gifts, donations and charitable contributions.

(f) Unless good cause exists, a victim or claimant who receives payment, benefits or reimbursement from a collateral source at any time must report that information to the OAG within 30 days.

(g) If the victim or claimant fails to utilize a collateral source that is readily available to the victim or claimant for all or a portion of a pecuniary loss, the OAG may deny or reduce an award to the extent of the unused collateral source.

(h) The OAG may consider good cause shown when determining whether a collateral source is considered readily available to the victim or claimant.

(i) Gifts, donations or charitable contributions made directly to a victim or claimant are not a collateral source and do not reduce the determination of the actual pecuniary losses incurred by the victim or claimant.

**History**
- *Source Note: The provisions of this §61.406 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961; amended to be effective September 18, 2022, 47 TexReg 5473.*

##### **1 Tex. Admin. Code § 61.407** Additional Compensation for Extraordinary Pecuniary Losses {#sec-61.407 omnilex-key=us-tx-regs-official--title-1--61.407}

(a) Compensation for extraordinary pecuniary losses are available to victims of criminally injurious conduct which occurred after September 1, 1995. Losses associated with subsection (g)(6), (7), and (8) of this section are only available for victims of criminally injurious conduct which occurred after September 1, 2001.

(b) Pursuant to Texas Code of Criminal Procedure Article 56.42(b), the OAG may only award an additional amount to be used for actual extraordinary pecuniary losses if the personal injury to a victim is catastrophic and results in a total and permanent disability to the victim. Claims for extraordinary pecuniary losses are governed by the statute and rules in effect on the date of the criminally injurious conduct.

(c) Once the OAG determines that a victim is eligible for additional compensation, the OAG may approve payment of expenses from either the victim's initial compensation amount or from the additional compensation amount, as determined appropriate by the OAG. The additional compensation for extraordinary pecuniary losses is available for the actual, reasonable and necessary costs incurred as a result of the criminally injurious conduct occurring on or after September 1, 1995, as follows:

(1) An award for additional compensation for extraordinary pecuniary losses arising from criminally injurious conduct that occurred between September 1, 1995 and August 31, 1997, shall not exceed $25,000.

(2) An award for additional compensation for extraordinary pecuniary losses arising from criminally injurious conduct that occurred between September 1, 1997 and August 31, 2001, shall not exceed $50,000.

(3) An award for additional compensation for extraordinary pecuniary losses arising from criminally injurious conduct that occurred on or after September 1, 2001, shall not exceed $75,000.

(d) Lost wages under this section has the same meaning as loss of earnings in this chapter. Loss of earnings under this section will be computed, as follows:

(1) By determining the weekly net earnings of a victim at the time of the criminally injurious conduct and multiplying the victim's net earnings by the number of weeks the victim continues to incur a loss of earnings; and

(2) The OAG will consider any other income earned subsequent to the crime, and any collateral source under Texas Code of Criminal Procedure Article 56.32(a)(3).

(e) Lost wages may be paid upon verification of one of the following:

(1) income reported to the Internal Revenue Service;

(2) documentation from the Texas Workforce Commission;

(3) an affidavit from an employer, including the employer's Texas Workforce Commission employer identification number; or

(4) any other source approved by the OAG.

(f) Lost wages available under Texas Code of Criminal Procedure Article 56.42(b) are determined by the date of criminally injurious conduct and are limited pursuant to Texas Code of Criminal Procedure Article 56.42(c) as follows:

(1) Between January 1, 1980 and August 31, 1989, the maximum amount of an award for loss of earnings is $150 per week.

(2) Between September 1, 1989 and August 31, 1995, the maximum amount of an award for loss of earnings is $200 per week.

(3) Between September 1, 1995 and January 31, 1998, the maximum amount of an award for loss of earnings is $400 per week.

(4) Between February 1, 1998 and July 14, 2016, the maximum amount of an award for loss of earnings is $500 per week.

(5) On or after July 15, 2016, the maximum amount of an award for loss of earnings is $700 per week.

(g) The additional compensation for extraordinary pecuniary losses shall be used only for the specific costs articulated in Texas Code of Criminal Procedure Article 56.42(b). Compensation may be made to replace lost wages and the following reasonable and necessary extraordinary pecuniary losses for expenses incurred as follows:

(1) Making a home accessible, including the actual, reasonable and necessary physical or structural modifications to a residence that are necessary to maintain an optimal level of independence in the activities of daily living. This includes, but is not limited to, modifications for ingress and egress to the home, modifying a kitchen, bedroom, or bathroom to accommodate the victim's physical limitations resulting from the criminal injury. The legal owner of the residence must submit to the OAG verification of ownership and written permission to modify the dwelling.

(2) Making an automobile accessible, including equipping a personal vehicle with reasonable and necessary equipment to allow the victim to control or to enter the vehicle to maintain an optimal level of independence in the activities of daily living. Modification of a vehicle is limited to one time per two year period unless good cause exists.

(3) Expenses for job training or vocational rehabilitation may be compensated if the service provider is licensed. Job training or vocational rehabilitation should be based upon a referral by one of the health care service providers treating the victim's injuries that resulted in the disability. All other collateral sources for job training and vocational rehabilitation must be utilized. Itemized bills must indicate the dates of service and the nature of the services provided. Semi-annual reviews of these conditions shall be conducted to assure continued compliance within the predicted length of rehabilitation.

(4) Training in the use of special appliances necessary due to the victim's physical limitations.

(5) Home health care expenses may be paid for services provided by health care service providers upon submission by the victim or claimant to the OAG of an itemized bill. Home health care service providers must be licensed, certified or registered within the state in which services are being provided. Itemized bills must indicate the dates of service and the nature of the services provided.

(6) Durable medical equipment, including those items that can withstand repeated use, are primarily used to serve a medical purpose, are generally not useful to a person in the absence of illness, injury or disease, and are appropriate for use in the victim's home or workplace or to assist with activities of daily living.

(7) Rehabilitation technology, including those therapeutic devices or systems, deemed appropriate by the OAG, which help the victim attain maximum function and an optimal level of independence in the activities of daily living.

(8) Long-term medical expenses are:

(A) incurred for medically indicated treatment which are considered reasonable and necessary and the expense occurs after 12 months of total and permanent disability or after the victim has reached maximum medical improvement, whichever is sooner; and

(B) medical, as defined by §61.101(a)(9) of this chapter (relating to Definitions), expenses which are a direct result of the criminally injurious conduct include, but are not limited to: medications, supplies, surgery, and surgery related expenses necessary to sustain or achieve the highest possible quality of life; or

(C) other expenses resulting from medically indicated treatment related to the criminally injurious conduct in which the OAG finds good cause for an expense to be covered as a long-term medical expense which is either:

(i) prior to the 12 month period of total and permanent disability; or

(ii) outside of the services listed in this section.

**History**
- *Source Note: The provisions of this §61.407 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective July 5, 2016, 41 TexReg 4797; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.408** Lump Sum Payments Under Texas Code of Criminal Procedure Article 56.44 {#sec-61.408 omnilex-key=us-tx-regs-official--title-1--61.408}

(a) A victim or claimant may receive a lump sum payment for pecuniary loss based on an amount equal to the pecuniary loss accrued to the date of the award for installment payments.

(b) A victim or claimant may receive a lump sum payment for future loss of earnings or loss of support. The victim or claimant must request a lump sum payment for future loss of earnings or support in writing to the OAG and must submit documentation that a lump sum payment will promote the best interest of the victim or claimant. If the OAG determines that there is good cause to make a lump sum payment, the lump sum payments based on future loss of earnings or future loss of support may not exceed a total of $1,000. After a lump sum payment for future earnings or support is paid, all other loss of earnings or loss of support expenses incurred shall be paid in installments as the loss is incurred.

**History**
- *Source Note: The provisions of this §61.408 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.409** Emergency Awards {#sec-61.409 omnilex-key=us-tx-regs-official--title-1--61.409}

(a) In accordance with Texas Code of Criminal Procedure Article 56.50, the OAG may make an emergency award, not to exceed $1,500, before acting on an application if it appears likely that:

(1) a final award will be made; and

(2) the victim or claimant will suffer undue hardship if immediate economic relief is not obtained.

(b) All requests for emergency awards under Texas Code of Criminal Procedure Article 56.50 shall include a written statement from the victim or claimant setting forth the reasons why the denial of an emergency award would create an undue hardship.

(c) Awards made under this section will be deducted from the final award or repaid by the victim or claimant to the extent the emergency award exceeds the final award.

**History**
- *Source Note: The provisions of this §61.409 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.410** Changes in Circumstances {#sec-61.410 omnilex-key=us-tx-regs-official--title-1--61.410}

(a) If a victim or claimant is receiving ongoing compensation from the OAG for a pecuniary loss and the victim or claimant begins receiving compensation from a collateral source, the victim or claimant must notify the OAG of the collateral source in accordance with §61.406 of this subchapter (relating to Collateral Sources). The OAG may adjust compensation in accordance with the amount of the collateral source received, pursuant to Texas Code of Criminal Procedure Article 56.45(3) and §61.304 of this chapter (relating to Refunds).

(b) If a victim or claimant is receiving ongoing compensation for loss of past or anticipated future earnings or loss of support from the OAG, and the victim or claimant becomes employed (either part-time or full-time), the victim or claimant must notify the OAG of the change in his or her income status. The OAG may adjust compensation in accordance with the amount of the earnings received, pursuant to §61.304 of this chapter.

**History**
- *Source Note: The provisions of this §61.410 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.411** Evidence of a Pecuniary Loss {#sec-61.411 omnilex-key=us-tx-regs-official--title-1--61.411}

(a) Upon initial notification by the OAG that a victim or claimant is eligible for compensation, the victim or claimant must submit bills, records or other evidence of a pecuniary loss to the OAG within 30 days of the date of notification of the decision to award.

(b) To continue to receive compensation, the victim or claimant must submit bills, records or evidence of the continuing actual pecuniary loss to the OAG within 180 days from the date the services were provided or the cost was incurred.

**History**
- *Source Note: The provisions of this §61.411 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.412** Actual Pecuniary Loss {#sec-61.412 omnilex-key=us-tx-regs-official--title-1--61.412}

(a) The OAG shall award compensation under Texas Code of Criminal Procedure Article 56.34, if the OAG determines that the victim or claimant has incurred an actual pecuniary loss as a result of criminally injurious conduct. This includes actual, reasonable and necessary pecuniary losses incurred by the victim or claimant.

(b) Payments or reimbursements from sources not included under Texas Code of Criminal Procedure Article 56.32(a)(3) will be considered when calculating a victim or claimant's actual pecuniary loss. Any payments from other sources may reduce the amount of an award to the victim or claimant to the extent that the payments have reduced the amount of actual pecuniary loss.

**History**
- *Source Note: The provisions of this §61.412 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.413** Unjust Enrichment {#sec-61.413 omnilex-key=us-tx-regs-official--title-1--61.413}

(a) As provided by Texas Code of Criminal Procedure Article 56.41(c), the OAG may deny an award to prevent the unjust enrichment of an offender or an accomplice of the offender.

(b) When determining whether an application or award for compensation may be denied based on unjust enrichment, pursuant to Texas Code of Criminal Procedure Article 56.41(b)(5), the following factors will be considered:

(1) whether, and to what extent the offender or the accomplice of an offender has access to any cash compensation payments paid to, or on behalf of, the victim or claimant by the OAG;

(2) whether the award is essential to the health or safety of the victim or claimant; and

(3) whether the compensation will directly benefit the offender or an accomplice of the offender in more than a minimal or inconsequential manner.

**History**
- *Source Note: The provisions of this §61.413 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.414** Personal Injury Outside of Texas {#sec-61.414 omnilex-key=us-tx-regs-official--title-1--61.414}

(a) If a Texas resident suffers personal injury or death as a result of criminally injurious conduct that occurs in another state or country that has a crime victims' compensation program, the victim or claimant must first apply for compensation from that state or country. The other state or country must make a compensation eligibility determination prior to the OAG approving or denying an application for compensation. If an application is approved by the other state or country, the victim or claimant must exhaust that collateral source before the OAG makes a compensation award determination.

(b) Texas Code of Criminal Procedure Article 56.32(a)(3)(B) defines a collateral source as a benefit available from a federal agency. If a Texas resident applies for compensation for personal injury or death as a result of international terrorism, the victim or claimant must first apply with the federal International Terrorism Victim Expenses Reimbursement Program (ITVERP). ITVERP must make a compensation eligibility determination prior to the OAG reviewing an application for compensation. If a compensation claim is approved by ITVERP, the victim or claimant must exhaust that collateral source before the OAG makes a compensation award determination.

**History**
- *Source Note: The provisions of this §61.414 adopted to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.415** Funeral and Burial Expenses {#sec-61.415 omnilex-key=us-tx-regs-official--title-1--61.415}

(a) In order to determine whether the funeral and burial expenses are reimbursable, the OAG will review the supporting documentation provided by the claimant or the service provider. Supporting documentation includes, but is not limited to, the funeral purchase agreement, a burial services contract, all other related bills, documentation of any collateral sources, all other sources of payment made to the service provider, and any other documentation relevant to the OAG determination.

(b) If the claimant requests reimbursement for any portion of the funeral and burial bills, he or she must submit proof of payments to include canceled checks, receipts, or bills indicating payment was made.

(c) In addition to the funeral purchase agreement, the following information may be required by the OAG in order to process payments:

(1) the date of death and the date of the funeral service;

(2) the funeral provider's tax identification number;

(3) an itemization of charges for funeral goods and services selected;

(4) itemized cash advance items, including an acknowledgment of such by the claimant; and

(5) any additional supporting documentation requested by the OAG.

(d) The general price list of the funeral service provider applicable on the date of the service may be reviewed by the OAG. Expenses must be verifiable, usual and customary charges and in compliance with the rules and regulations set forth by the licensing entity governing the industry.

(e) If a funeral service provider makes payments to a third party including, but not limited to, other funeral homes, embalming services, airlines, or air freight companies relating to the funeral and burial of the victim, documentation must be provided to substantiate the expenses. This may include an itemization of any costs or additional charges associated with cash advance items.

(f) The funeral service provider must notify the OAG of all payments received by the funeral service provider including payments received after the funeral purchase agreement has been submitted. If changes occur or payments are received after the original submission, the funeral service provider is obligated to notify the OAG, in accordance with this chapter.

(g) If the victim is shipped, the claimant or funeral service provider must submit a bill including: victim's name, cities of departure and arrival, an itemized invoice, a Burial Transmit Permit (Form VS-116) or apostille issued by the appropriate authority, regardless of the method of transportation.

(h) Documentation and services submitted by the funeral service provider must comply with the rules and regulations of the licensing entity governing the industry, as well as any state or federal regulations governing the industry or profession.

**History**
- *Source Note: The provisions of this §61.415 adopted to be effective November 14, 2007, 32 TexReg 8117; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.416** Verification {#sec-61.416 omnilex-key=us-tx-regs-official--title-1--61.416}

(a) The OAG may verify and investigate an application or award. Verification and investigation includes, but is not limited to:

(1) a verification of any evidence submitted to the OAG;

(2) a review of records submitted by a service provider; or

(3) a post payment audit to verify actual charges, bills, payments, and the delivery of goods or services.

(b) The OAG may require additional supporting documentation from a victim, claimant, or service provider.

(c) If the OAG determines that the supporting documentation is insufficient to process a payment, the OAG may deny payment.

(d) If the OAG determines that charges or bills submitted by a service provider are not in compliance with the laws and regulations governing a profession or industry, the OAG may notify the appropriate licensing or regulatory agency governing the service provider.

(e) A service provider is subject to a reduction or denial of payment, a request for a refund of any overpayments as described in §61.305 of this chapter (relating to Overpayments to Service Providers), and any other penalties authorized by law, for the following acts:

(1) submitting charges for services that were not rendered;

(2) submitting charges that are not reasonable and necessary;

(3) violating rules and regulation set forth by a state or federal licensing or regulatory agency; or

(4) failing to submit the required documentation for services rendered and payments received.

(f) In order to verify the reasonableness and necessity of certain pecuniary losses, a victim or claimant may be required to submit to an independent medical evaluation by an M.D. or a D.O. The evaluation will be scheduled and paid for by the OAG. In addition, a health care service provider who treats the victim or claimant may also be required to submit a current treatment recommendation.

(g) In order to receive or continue receiving compensation for personal injury that is or has been exacerbated by the criminally injurious conduct, a victim or claimant may be required to submit to an independent medical evaluation by an M.D. or D.O. The evaluation will be scheduled and paid for by the OAG. In addition, a health care service provider who treats the victim or claimant may also be required to submit medical documentation relating to the personal injury prior to and after the date of crime.

**History**
- *Source Note: The provisions of this §61.416 adopted to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter F** MEDICAL CARE, PSYCHIATRIC CARE OR COUNSELING

##### **1 Tex. Admin. Code § 61.501** Payment of Medical Bills {#sec-61.501 omnilex-key=us-tx-regs-official--title-1--61.501}

(a) All bills for emergency medical treatment, medical, psychiatric care or counseling, and all bills of health care service providers must be itemized and submitted on a form approved by the OAG. If a collateral source is available, the explanation of benefits (EOB) showing the utilization of collateral sources must be attached.

(b) Health care service providers shall be reimbursed according to the Texas Department of Insurance, Division of Workers' Compensation allowable medical fee guidelines, where applicable.

(c) Services not covered under the medical fee guidelines that the OAG deems reasonably and necessarily incurred as a result of the criminally injurious conduct may be compensated at a fair and reasonable amount.

**History**
- *Source Note: The provisions of this §61.501 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.502** Medical Reports and Records {#sec-61.502 omnilex-key=us-tx-regs-official--title-1--61.502}

(a) The OAG may require victims, claimants, or health care service providers to submit current medical reports or records including information regarding the treatment, diagnosis, and prognosis of the victim or claimant's condition. The OAG may require a health care service provider to estimate the length of any disability period or the extent of the physical impairment, and provide an opinion on the victim's or claimant's ability to be employed. To verify treatment and reasonableness of care, the OAG may require reports or records for medical care, dental care, and psychiatric care or counseling.

(b) Costs for medical reports, records, mental health forms, and copies shall be reimbursed to health care service providers according to the Texas Department of Insurance, Division of Workers' Compensation allowable medical fee guidelines for completion of a return to work status report for the Texas Department of Insurance.

(c) Costs for medical reports, records, mental health forms, and copies shall be reimbursed to the victim or claimant for the actual expense incurred.

(d) A victim or claimant shall be subject at all times to an independent physical or mental examination if requested by the OAG and shall submit himself or herself to such further examination as the OAG may require. The OAG shall pay the costs of such examination.

**History**
- *Source Note: The provisions of this §61.502 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.503** Psychiatric Care or Counseling Expenses {#sec-61.503 omnilex-key=us-tx-regs-official--title-1--61.503}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.42(c), the OAG limits compensation for psychiatric care or counseling to:

(1) for criminally injurious conduct between October 12, 1992 and August 31, 1994, $3,000 or 40 sessions per victim or $1,000 per eligible residing family members;

(2) for criminally injurious conduct between September 1, 1994 and December 14, 2002, $3,000 or 40 sessions per victim or claimant;

(3) for criminally injurious conduct between December 15, 2002 and August 31, 2014, $3,000 per victim or claimant; and

(4) for criminally injurious conduct after September 1, 2014, 60 sessions per victim or claimant.

(b) Under unusual facts and circumstances, additional sessions may be allowed, but are limited to those that are authorized and approved by the OAG.

(c) Eligible providers must be health care service providers with a professional license. The types of licenses approved by the OAG to provide psychiatric care or counseling are listed on the OAG's website at https://www.texasattorneygeneral.gov/victims/.

(d) Reimbursement for related psychiatric medication for victims or claimants may be limited to one year from the date of crime, or when the psychiatric care or counseling limits are reached.

(e) When psychiatric care or counseling has been ordered by the court, the OAG may deny payment if another party has been ordered to make payments or if a victim receiving counseling has been ordered to undergo counseling as an offender.

(f) Reimbursement for psychiatric care or counseling for victims or claimants must be submitted to the OAG within three years of the date of service, unless the OAG finds good cause for an extension.

**History**
- *Source Note: The provisions of this §61.503 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective November 14, 2007, 32 TexReg 8118; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.504** Inpatient and Intensive Psychiatric Care or Counseling Expenses {#sec-61.504 omnilex-key=us-tx-regs-official--title-1--61.504}

(a) Expenses relating to the victim's inpatient psychiatric hospitalization, residential treatment or intensive outpatient programs are limited to 30 days of treatment, unless good cause is shown.

(b) The OAG may require a written authorization prior to the victim's admission for treatment before making an award.

(c) Psychiatric hospitals and residential treatment centers must be licensed, certified or registered by the proper state regulatory authority.

(d) Expenses relating to inpatient psychiatric hospitalization, residential treatment or intensive outpatient programs for treatment of a claimant are not considered reasonable or necessary expenses under this chapter.

(e) A victim may receive compensation for the following, at a limit determined by the OAG, pursuant to Texas Code of Criminal Procedure Article 56.42(c):

(1) Admissions to inpatient psychiatric hospitalization care made at the direction of a licensed medical doctor will be paid. Expenses for inpatient psychiatric hospitalization care are limited as follows:

(A) if the date of the criminally injurious conduct was between September 1, 1994 and January 31, 1998, the expenses are limited to $400 per day with a maximum 30 day stay, or $12,000, and includes room, board, medications, therapeutic modalities;

(B) if the date of the criminally injurious conduct was between February 1, 1998 and August 31, 2014, the expenses are limited to $600 per day with a maximum 30 day stay, or $18,000, and includes room, board, medications, therapeutic modalities; or

(C) if the date of the criminally injurious conduct was after September 1, 2014, the expenses will be paid at the medical fee guidelines.

(2) Expenses for residential treatment center care, including partial day programs or intensive outpatient programs, are limited as follows:

(A) if the date of the criminally injurious conduct was between September 1, 1994 and January 31, 1998, the expenses are limited to $200 per day with a maximum 30-day stay, or $6,000;

(B) if the date of the criminally injurious conduct was between February 1, 1998 and August 31, 2014, the expenses are limited to $400 per day for a full day with a maximum 30 days of treatment, or $12,000;

(C) if the date of the criminally injurious conduct was between February 1, 1998 and August 31, 2014, the expenses are limited to $200 per day for a partial day program with a maximum 30 days of treatment, or $6,000; or

(D) if the date of the criminally injurious conduct was after September 1, 2014, the expenses will be paid at the medical fee guidelines.

**History**
- *Source Note: The provisions of this §61.504 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.505** Reimbursement of Medical, Psychiatric Care or Counseling Expenses Paid by Victim or Claimant {#sec-61.505 omnilex-key=us-tx-regs-official--title-1--61.505}

Pursuant to Texas Code of Criminal Procedure Article 56.34, if circumstances require that the victim or claimant personally pay a medical, or psychiatric care or counseling expense incurred as a direct result of criminally injurious conduct or for emergency medical treatment, the OAG will award compensation to the victim or claimant for the amount not compensated by a collateral source.

**History**
- *Source Note: The provisions of this §61.505 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.506** Reimbursement of Expenses for Dental Services {#sec-61.506 omnilex-key=us-tx-regs-official--title-1--61.506}

(a) Compensation for dental services shall be subject to fair and reasonable guidelines. For dental services normally associated with criminally injurious conduct, the OAG has determined that fair and reasonable reimbursements will be paid at the amount published in the current American Dental Association Survey of Dental Fees.

(b) Pre-treatment plans for dental services are recommended, however examinations and x-rays do not require authorization and may be compensated if they are reasonably and necessarily incurred as a result of the criminally injurious conduct.

**History**
- *Source Note: The provisions of this §61.506 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.507** Payments to Health Care Service Providers {#sec-61.507 omnilex-key=us-tx-regs-official--title-1--61.507}

(a) Failure to comply with any provision of this chapter or Texas Code of Criminal Procedure Chapter 56 may subject a health care service provider to a reduction or denial of payments, and any other applicable penalties allowed by law.

(b) The OAG shall award compensation for out of state health care services according to the Texas Department of Insurance, Division of Workers' Compensation medical fee guidelines.

(c) To maximize efficiency, bills submitted by service providers for $5 or less will not be processed. Service providers are encouraged to combine bills of $5 or less to ensure payment can be made.

(d) In the event a victim's pecuniary losses for medically indicated services exceed the maximum aggregate amount allowable for the application, the OAG may distribute awards of compensation to the victim, claimant and service providers in the manner requested by the victim or claimant.

(e) All payments to health care service providers may be held until the application is processed in accordance with Texas Code of Criminal Procedure Chapter 56 and all provisions of this chapter.

**History**
- *Source Note: The provisions of this §61.507 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.508** Other Limits on Medical Expenses {#sec-61.508 omnilex-key=us-tx-regs-official--title-1--61.508}

(a) The OAG considers the following medical services to be reasonable and necessary as a result of the personal injury caused by the criminally injurious conduct:

(1) the one time only repair or replacement of medical or dental devices in use by the victim prior to the criminally injurious conduct, if the device is damaged, lost or rendered unusable as a result of the criminally injurious conduct; and

(2) the one time only purchase, or the reasonable and necessary rental, for medically prescribed assistive or adaptive items.

(b) The OAG does not consider the following medical services to be reasonable and necessary as a result of the personal injury due to the criminally injurious conduct:

(1) treatment for wellness or the prevention of disease;

(2) membership in a health club or gym facility;

(3) the rental or purchase of fitness, exercise, or gym equipment; or

(4) any other items or services which are not regularly used in the course of treating a medical condition in a health care facility or setting.

(c) Unless the OAG has made a determination that good cause exists, the OAG will not process bills and requests for reimbursements for health care services that are received three years after the date of service.

(d) For victims under the age of 18 at the time of the criminally injurious conduct, bills and requests for reimbursements for health care services may be submitted up to the victim's 22nd birthday for consideration of payment.

(e) Physical therapy expenses will be reviewed as health care services under this subchapter. Physical therapy includes the testing and measurement of the function of the musculoskeletal, neurological, pulmonary, and cardiovascular systems and rehabilitative treatment concerned with the restoration of function and prevention of disability. It also includes treatment, consultive, educational, and advisory services for the purpose of reducing the incidence and severity of disability and pain to enable, train, or retrain an individual to perform the independent skills and activities of the victim's daily living at the same level as immediately before the criminally injurious conduct.

**History**
- *Source Note: The provisions of this §61.508 adopted to be effective May 8, 2005, 30 TexReg 2491; amended to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter G** RELOCATION AND HOUSING RENTAL EXPENSES BENEFITS

##### **1 Tex. Admin. Code § 61.601** Definitions Pertaining to Relocation and Housing Rental Expenses Benefits {#sec-61.601 omnilex-key=us-tx-regs-official--title-1--61.601}

(a) For the limited purpose of awarding compensation for relocation and housing rental expenses pursuant to Texas Code of Criminal Procedure Article 56.42(d)(1) and (2), the following terms shall have the following meanings:

(1) Deposits--Expenses for rental deposits are limited to property deposits and utility deposits.

(2) Domestic violence--For purposes of this subchapter the term "domestic violence" shall have the same meaning as the term "family violence" in Texas Family Code §71.004(1). "Domestic violence" refers to an act by a member of a family or household against another member of the family or household that is intended to result in physical harm, bodily injury, assault, or sexual assault, or that is a threat that reasonably places the member in fear of imminent physical harm, bodily injury, assault, or sexual assault, but does not include defensive measures to protect oneself.

(3) Family--As defined in Texas Family Code §71.003, without regard to whether the following individuals reside together, the term "family" includes:

(A) individuals related by consanguinity or affinity, as determined by Texas Government Code, §573.022 and §573.024;

(B) individuals who are former spouses of each other;

(C) individuals who are the biological parents of the same child without regard to marriage; and

(D) a foster child and foster parent.

(4) Family violence--As defined in Texas Family Code §71.004(1), the term "family violence" refers to an act by a member of a family or household against another member of the family or household that is intended to result in physical harm, bodily injury, assault, or sexual assault, or that is a threat that reasonably places the member in fear of imminent physical harm, bodily injury, assault, or sexual assault, but does not include defensive measures to protect oneself.

(5) Household--As defined in Texas Family Code §71.005, the term "household" means a unit composed of persons living together in the same dwelling, without regard to whether they are related to each other.

(6) Member of a household--As defined by the Texas Family Code, §71.006, the term "member of a household" includes a person who previously lived in the household.

(7) Place of Residence--The term means a victim's dwelling, the property under the dwelling, and all other areas and structures on the property under the control of the owner of the property.

(8) Trafficking of Persons--As defined by Texas Code Criminal Procedure Article 56.32(a)(14), means any offense that results in a person engaging in forced labor or services and that may be prosecuted under Texas Penal Code §§20A.02, 20A.03, 43.03, 43.04, 43.05, 43.25, 43.251, or 43.26.

(9) Utility connections--Expenses for utility connections are limited to those associated with establishing service for gas, electricity, water, internet, home security, television, and one telephone land line connection.

(b) The definitions in this subchapter will be given their most ordinary meaning unless the context clearly indicates otherwise, in accordance with Texas Government Code §312.002(a).

**History**
- *Source Note: The provisions of this §61.601 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 14, 2007, 32 TexReg 8119; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.602** Eligibility and Reimbursement for Relocation and Housing Rental Expenses Benefits {#sec-61.602 omnilex-key=us-tx-regs-official--title-1--61.602}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.42(d), the OAG shall determine eligibility for reimbursement of the reasonable and necessary costs for relocation and housing rental expenses. A request for relocation and housing rental expenses must be incurred within three years of the date of the criminally injurious conduct unless the OAG determines that good cause exists for an extension.

(b) A victim of domestic violence that occurred between June 19, 1999, and August 31, 2001, may receive reimbursement for relocation and housing rental expenses.

(c) A victim of family violence that occurred on or after September 1, 2001, may receive reimbursement for relocation and housing rental expenses.

(d) A victim of sexual assault who is sexually assaulted in the victim's place of residence on or after September 1, 2001, may receive reimbursement for relocation and housing rental expenses.

(e) A victim of trafficking of persons on or after September 1, 2013, may receive a reimbursement for relocation and housing rental expenses.

(f) The OAG will verify that the victim requesting this award is eligible by reviewing:

(1) the offense report submitted by a law enforcement agency;

(2) a signed copy of a protective order, including the application for a protective order, pursuant to Texas Family Code Chapters 71, 81, 82 or Texas Code of Criminal Procedure Chapter 7A or 7B; or

(3) evidence of the relationship between the victim and the offender, if necessary.

(g) The OAG may not reimburse a victim for relocation expenses in excess of $2,000. To determine the amount of an award for relocation expenses, the victim must provide the OAG proof of actual costs or an estimate of the relocation expenses on the form provided and approved by the OAG. Relocation expenses may include, but are not limited to the actual costs of rental deposits, utility connections, moving vans, moving labor, packing, and private vehicle mileage. Relocation expenses may be limited to the victim's proportionate share of costs based on the number of adult tenants listed on the leasing agreement. Expenses for transportation, lodging, and meals will be reimbursed in a manner consistent with §61.404 of this chapter (relating to Travel Expenses) and are limited to out of state moves. Restrictions on reimbursement for travel under 20 miles are not applicable for this award.

(h) The victim must provide the OAG with documentation such that the OAG can reconcile the estimated relocation costs with the actual relocation expenditures within 30 days of receipt of CVC funds. In the event the estimated relocation costs were:

(1) less than the actual relocation expenses, the OAG will reimburse the victim for the actual relocation costs. The total amount of a relocation award may not exceed $2,000; or

(2) more than the actual relocation expenses, the OAG will:

(A) reduce other compensation to which the victim may be entitled by an amount equal to the overpayment; or

(B) demand payment from the victim to satisfy the overpayment.

(i) An award for rental expenses under this provision may be approved for three months of rent, not to exceed $1,800. Rent payments shall be limited to the victim's proportionate share of rent based on the number of adult tenants listed on the leasing agreement. To make an award for rental expenses, the victim must provide to the OAG the following information:

(1) a copy of the signed lease or signed contract for a rental agreement for the victim, or a written statement from the landlord showing the location of the rental property, the date of the victim's move-in, the rent amount, the rent due date, and the names of the occupants of the rental property;

(2) the landlord's name, phone number, address, and federal tax identification number or social security number; or the name of the management company to whom the rent is paid and its phone number, address, and federal tax identification number; and

(3) other information deemed necessary by the OAG to assist in locating the victim or claimant.

(j) Pursuant to Texas Code of Criminal Procedure Article 56.41(b)(5), rent expenses shall be denied if the offender is listed on the new rental agreement with the victim or claimant.

(k) In accordance with Texas Code of Criminal Procedure Article 56.42(d), the OAG may reimburse a victim for relocation and rental expenses one time only, per offender.

**History**
- *Source Note: The provisions of this §61.602 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 14, 2007, 32 TexReg 8119; amended to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter H** COMPENSATION TO CERTAIN DISABLED PEACE OFFICERS

##### **1 Tex. Admin. Code § 61.701** Applicability and General Provisions {#sec-61.701 omnilex-key=us-tx-regs-official--title-1--61.701}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.542, a peace officer or a former peace officer, as defined therein, who, in the performance of the officer's duties as a peace officer employed by the state or a local governmental entity, sustains an injury as a result of criminally injurious conduct on or after September 1, 1989, will be entitled to annual payments if the peace officer's condition is a total disability that has persisted for more than 12 months and results in a permanent incapacity for work. In order to be eligible to receive annual payments, the peace officer must comply with the application provisions of this chapter, and other applicable state laws and the OAG will compute the amount of the annual payments in a manner consistent with Texas Code of Criminal Procedure Chapter 56, the Texas Administrative Code, and any other controlling law.

(b) A disabled peace officer, determined to be eligible for benefits pursuant to Texas Code of Criminal Procedure Article 56.542, may also be eligible for compensation pursuant to Texas Code of Criminal Procedure Article 56.42. When a peace officer is eligible to receive payments under both provisions, payments pursuant to Texas Code of Criminal Procedure Article 56.42 will be exhausted before payments will be made under Texas Code of Criminal Procedure Article 56.542.

(c) For purposes of this subchapter, eligibility and award determinations will be made based on the law that was in effect at the time the criminally injurious conduct occurred. The date of the criminally injurious conduct is the date of the injury that resulted in the disability of the peace officer. The date of the disability is determined by the latter of the date of the injury or the date that the peace officer is no longer able to perform the duties of a peace officer due to the criminally injurious conduct.

**History**
- *Source Note: The provisions of this §61.701 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.702** Definitions {#sec-61.702 omnilex-key=us-tx-regs-official--title-1--61.702}

For purposes of this subchapter, the following terms shall have the following meanings:

(1) A peace officer eligible to receive payments under Texas Code of Criminal Procedure Article 56.542 is defined as an individual elected, appointed, or employed to serve as a peace officer for a government entity under Texas Code of Criminal Procedure Article 2.12 or other law, or is a former peace officer, who suffers personal injury as a result of criminally injurious conduct while performing duties as a peace officer.

(2) The terms "total disability" and "permanent incapacity for work" are defined to mean a disability that permanently incapacitates a peace officer from performing the usual and customary duties of a peace officer.

**History**
- *Source Note: The provisions of this §61.702 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.703** Eligibility {#sec-61.703 omnilex-key=us-tx-regs-official--title-1--61.703}

Eligibility of a peace officer to receive benefits under this subchapter shall be determined in accordance with the provisions and requirements of Texas Code of Criminal Procedure Article 56.542.

**History**
- *Source Note: The provisions of this §61.703 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.704** Supporting Evidence for Determination of Total Disability Resulting in Permanent Incapacity for Work {#sec-61.704 omnilex-key=us-tx-regs-official--title-1--61.704}

(a) Any one of the following will be sufficient evidence of total disability resulting in permanent incapacity for work:

(1) a determination of total and permanent disability by the Texas Department of Insurance, Division of Workers' Compensation;

(2) a determination of total and permanent disability by a Pension Board created pursuant to Texas Revised Civil Statutes Article 6243d-1;

(3) a determination of total and permanent disability by another governmental agency authorized to make such a determination; or

(4) a determination of total and permanent disability by an independent medical examination made at the request of the OAG.

(b) A peace officer shall be subject at all times to re-examination by the OAG and shall submit himself or herself to such further examination as the OAG may require. If any peace officer shall refuse to submit himself or herself to any such examination, the OAG may, within its discretion, stop making annual payments.

**History**
- *Source Note: The provisions of this §61.704 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.705** Contents of Application {#sec-61.705 omnilex-key=us-tx-regs-official--title-1--61.705}

(a) A disabled peace officer must submit a completed, OAG approved application for compensation to the Crime Victims' Compensation Program, Office of the Attorney General, P.O. Box 12198, Austin, TX 78711-2198. An application is deemed complete if:

(1) it is signed by the applicant or his or her legal representative, attesting to the truthfulness, accuracy, and completeness of the enclosed information; and

(2) all necessary documents are provided.

(b) The application shall include all relevant supporting documents which will be used by the OAG to determine eligibility and the date and amount of the first annual payment. The OAG requires that the peace officer submit supporting documents to determine continuing eligibility and the amount of each subsequent annual payment. The following is necessary supporting documentation:

(1) The peace officer must submit all necessary supporting documentation, such as that listed in §61.704 of this subchapter (relating to Supporting Evidence for Determination of Total Disability Resulting in Permanent Incapacity for Work), as evidence of the total disability which resulted in a permanent incapacity for work as a peace officer;

(2) The peace officer must submit all necessary supporting documentation as evidence of the officer's average annual net salary during the officer's final three years as a peace officer; or, if employed less than three years, the peace officer must submit evidence of the peace officer's final net salary. This supporting documentation may be copies of the police officer's federal income tax return(s) for the time period or any other documentation deemed necessary by the OAG.

(3) The peace officer may be required to submit a copy of his or her annual income tax return annually; and

(4) The peace officer must submit all necessary supporting documentation as evidence of other sources of income, such as:

(A) settlements relating to the injury or disability;

(B) insurance benefits;

(C) short or long term disability benefits;

(D) federal disability benefits;

(E) workers' compensation benefits;

(F) benefits from another government entity; and/or,

(G) employee wage continuation.

(c) The OAG may request additional information as the OAG deems necessary to make an accurate determination of the amount of award due to the disabled peace officer.

**History**
- *Source Note: The provisions of this §61.705 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.706** Computation of Award {#sec-61.706 omnilex-key=us-tx-regs-official--title-1--61.706}

(a) If the OAG determines that a disabled peace officer is eligible for an award under this subchapter, the OAG will compute the amount of the annual payment based on the average annual net salary, minus any amount from collateral sources, consistent with the provisions of this subchapter and Texas Code of Criminal Procedure Article 56.542 and in accordance with any other controlling provisions of state law, including the Texas Constitution.

(b) The OAG shall add to the initial payment amount the cumulative successive cost of living adjustment for the intervening years computed from the date of injury.

**History**
- *Source Note: The provisions of this §61.706 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

#### **Subchapter J** ADMINISTRATIVE REMEDIES

##### **1 Tex. Admin. Code § 61.901** Request for Reconsideration of an Adverse Action {#sec-61.901 omnilex-key=us-tx-regs-official--title-1--61.901}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.47(a), a victim or claimant may request a reconsideration of all or any part of the OAG's decision to make or deny an award on an application or the amount of an award.

(b) Within 30 days of the date of the OAG's adverse action, the victim or claimant must submit a signed, written request for reconsideration stating the reasons for the request for reconsideration. If the victim or claimant fails to file a written request for reconsideration of the OAG's adverse action within the 30-day time period, the decision of the OAG becomes binding and the victim or claimant waives the right to further appeal.

(c) The OAG may not grant a reconsideration if a request is not filed by the victim or claimant within the 30-day time period, unless the victim or claimant shows good cause for late filing. The victim or claimant must provide to the OAG a signed, written explanation showing good cause for failing to submit a written request for reconsideration of the OAG's adverse action within the 30-day time period. If the OAG does not find that good cause exists for late filing, the decision of the OAG becomes binding and the victim or claimant waives the right to further appeal.

(d) The OAG will provide the victim or claimant a written notification of its reconsideration decision. If the victim or claimant is dissatisfied with the reconsideration of the OAG's award decision, the victim or claimant must file a signed, written request for a hearing with the OAG within 30 days of the date of the reconsideration decision. If the victim or claimant fails to file a written request for a hearing within the 30-day time period, the reconsideration decision becomes binding and the victim or claimant waives the right to a hearing.

(e) The right to request a reconsideration of an OAG adverse action is reserved for victims or claimants. Service providers do not have the right to appeal or request a reconsideration of any OAG adverse action.

(f) A victim or claimant who fails to exhaust all available administrative remedies waives the right to seek judicial review.

**History**
- *Source Note: The provisions of this §61.901 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective November 14, 2007, 32 TexReg 8121; amended to be effective October 30, 2014, 39 TexReg 8373; amended to be effective August 20, 2017, 42 TexReg 3961.*

##### **1 Tex. Admin. Code § 61.902** Prehearing Conference {#sec-61.902 omnilex-key=us-tx-regs-official--title-1--61.902}

At any time before a hearing is conducted, the hearing officer may request a prehearing conference, either in person or by telephone, with the victim, claimant, or his or her legal representative in order to establish whether a hearing on an application for compensation is necessary.

**History**
- *Source Note: The provisions of this §61.902 adopted to be effective December 15, 2002, 27 TexReg 11513.*

##### **1 Tex. Admin. Code § 61.903** Hearing {#sec-61.903 omnilex-key=us-tx-regs-official--title-1--61.903}

(a) If the request for a reconsideration is in accordance with §61.901 of this subchapter (relating to Request for Reconsideration of an Adverse Action, and the victim or claimant is dissatisfied with the reconsideration decision, the victim or claimant may file a signed, written request for hearing, pursuant to §61.901(d) of this subchapter.

(b) The OAG may not grant a request for a hearing if a request is not filed by the victim or claimant within the 30-day time period, unless the victim or claimant shows good cause for late filing. The victim or claimant must provide to the OAG a signed, written explanation showing good cause for failing to submit a written request for hearing within the 30-day time period.

(c) If the OAG does not find that good cause exists for late filing, the decision of the OAG becomes binding and the victim or claimant waives the right to further appeal. If the OAG determines that a hearing is necessary, then the victim or claimant will receive notice of hearing not less than 10 days before the date of the hearing, stating the time, date, and place of the hearing.

(d) The hearing shall be conducted in Texas in manner consistent with Texas Code of Criminal Procedure Article 56.40.

(e) Any costs for the victim or claimant to travel to the hearing are entirely the financial responsibility of the victim or claimant and those costs will not be reimbursed by the OAG.

(f) Failure of the victim or claimant to appear for the hearing, may result in the entry of a final decision based upon the available record. A victim or claimant may have the hearing rescheduled by making a request to reschedule at least two OAG business days prior to the hearing. Multiple requests for reschedule may be denied by the OAG. If a victim or claimant fails to make a timely request to reschedule, the OAG may reschedule the hearing upon good cause shown by the victim or claimant.

(g) The OAG will notify the victim or claimant in writing of the final decision, including the reasons for the decision.

(h) Pursuant to Texas Code of Criminal Procedure Article 56.48 and §61.904 of this subchapter (relating to Judicial Review), a victim or claimant may seek judicial review of all or any part of the final decision.

(i) In any proceeding under this subchapter, the burden of proof is upon the victim or claimant to prove by a preponderance of the evidence that grounds for compensation exist.

(j) A victim or claimant who fails to exhaust all available administrative remedies waives the right to seek judicial review.

(k) A final decision from the attorney general may only be rendered by the OAG hearing officer after a prehearing conference, a final ruling hearing, or based on the available record.

**History**
- *Source Note: The provisions of this §61.903 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.904** Judicial Review {#sec-61.904 omnilex-key=us-tx-regs-official--title-1--61.904}

(a) To seek judicial review pursuant to Texas Code of Criminal Procedure Article 56.48(a), the victim or claimant must have exhausted all other available administrative remedies provided in §61.901 and §61.903 of this subchapter (relating to Request for Reconsideration of an Adverse Action and Hearing), and must submit to the OAG a written notice of dissatisfaction with the OAG's final decision from the hearing. The written notice of dissatisfaction must be filed with the OAG not later than the 40th day after the OAG renders a final decision from the hearing.

(b) Not later than the 40th day after the victim or claimant gives the OAG notice of dissatisfaction with the OAG's final decision from the hearing, the victim or claimant shall bring suit in a district court having jurisdiction over the matter.

**History**
- *Source Note: The provisions of this §61.904 adopted to be effective December 15, 2002, 27 TexReg 11513; amended to be effective October 30, 2014, 39 TexReg 8373.*

##### **1 Tex. Admin. Code § 61.905** Attorney Fees {#sec-61.905 omnilex-key=us-tx-regs-official--title-1--61.905}

(a) Pursuant to Texas Code of Criminal Procedure Article 56.43, the OAG shall determine and award reasonable attorney fees to the attorney representing a victim or claimant in dispute of an OAG compensation determination.

(b) If there is no hearing or dispute about the amount awarded to the victim or claimant and the attorney only assists the victim or claimant in filling out a CVC application for compensation, the attorney fee shall be the lesser of either $300 or 25% of the amount of awarded compensation.

(c) If the victim or claimant disputes the amount awarded and the attorney represents the victim in a reconsideration review or hearing, the OAG shall determine and award reasonable attorney fees commensurate with legal services rendered. Attorney fees for representation in a disputed claim shall not exceed 25% of the amount the attorney assisted the victim or claimant in obtaining. To request payment of attorney fees a written request for payment and the following documentation must be submitted to CVC by the attorney:

(1) an "Attorney's Statement Regarding Fees" form provided by the OAG; and

(2) an itemized statement of legal services rendered.

(d) If the attorney fee is based on an undetermined amount which the attorney assisted the victim or claimant in obtaining, the attorney may request attorney fee payments in installments or in a lump sum upon final payment to or on behalf of a victim or claimant. The attorney may be required to submit an itemized statement of legal services rendered prior to each attorney fee payment. Attorney fee payments shall not be paid in excess of the amount claimed in the itemized statement of legal services.

(e) A victim or claimant who is an attorney may not recover attorney fees associated with obtaining or increasing his or her own compensation.

**History**
- *Source Note: The provisions of this §61.905 adopted to be effective November 14, 2007, 32 TexReg 8121; amended to be effective October 30, 2014, 39 TexReg 8373.*

### **Chapter 62** SEXUAL ASSAULT PREVENTION AND CRISIS SERVICES

#### **Subchapter A** SEXUAL ASSAULT NURSE EXAMINER CERTIFICATION AND SEXUAL ASSAULT NURSE EXAMINER TRAINING PROGRAM CERTIFICATION

##### **1 Tex. Admin. Code § 62.1** Scope and Construction of Rules {#sec-62.1 omnilex-key=us-tx-regs-official--title-1--62.1}

(a) This subchapter is intended to apply to the administration of the Sexual Assault Nurse Examiner Certification under the Sexual Assault Prevention and Crisis Services (SAPCS) Act, Texas Government Code, Chapter 420.

(b) If good cause is established to show that compliance with any part of this subchapter may result in an injustice to any party, these rules may be waived at the discretion of the chief.

(c) The Office of the Attorney General (OAG) may review, audit, or investigate any information submitted by any individual or entity pursuant to this subchapter.

(d) This subchapter is intended to effectuate the purpose of Texas Government Code, Chapter 420 regarding the minimum standards for the certification, suspension, decertification or probation of a sexual assault nurse examiner (SANE), the standards for examiner training courses, and for the interstate reciprocity of SANEs.

(e) These are the minimum standards and are not intended to represent the best possible practices or highest possible standards of a SANE.

**History**
- *Source Note: The provisions of this §62.1 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.2** Definitions {#sec-62.2 omnilex-key=us-tx-regs-official--title-1--62.2}

The following terms and abbreviations, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Chief--As used in this subchapter means the division chief of the OAG's Crime Victim Services Division.

(2) OAG--The Office of the Attorney General.

(3) OAG Sexual Assault Nurse Examiner (OAG SANE)--A person who holds an OAG SANE certification.

(4) OAG Sexual Assault Nurse Examiner Training Program (OAG SANE Training Program)--A training program approved by the OAG to provide Sexual Assault Nurse Examiner training.

(5) OAG SANE Certification--The formal process by which the OAG reviews and approves requests for OAG SANE Certification from qualified applicants set forth under this subchapter and on the OAG website.

(6) OAG SANE Certification Renewal--The formal process by which the OAG reviews and approves requests for OAG SANE Certification from an individual with a current OAG SANE Certification that continues to meet the minimum standards for OAG Certification set forth under this subchapter and on the OAG website.

(7) OAG SANE Training Program Certification--The formal process by which the OAG reviews and approves requests for OAG SANE Training Program Certification from qualified applicants set forth under this subchapter and on the OAG website.

(8) OAG SANE Training Program Renewal--The formal process by which the OAG reviews and approves requests for OAG SANE Training Program Certification from a training program with a current OAG SANE Training Program Certification that continues to meet the minimum standards for OAG certification set forth under this subchapter and on the OAG website.

(9) Registered Nurse (RN)--A person who holds an active, unencumbered professional nursing license as a registered nurse issued by the Texas Board of Nursing, including an RN who practices in Texas pursuant to any multistate licensure privilege.

(10) Sexual Assault Medical Forensic Examination--A specialized examination provided pursuant to Texas Government Code, Chapter 420, that uses an OAG-approved evidence collection kit and protocol.

(11) Sexual Assault Nurse Examiner (SANE)--A nurse who conducts sexual assault forensic medical examinations but does not hold an OAG SANE certification.

(12) Texas Board of Nursing (BON)--The Texas state agency responsible for regulating the practice of professional nursing, pursuant to the Nursing Practice Act, Texas Occupations Code.

**History**
- *Source Note: The provisions of this §62.2 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.3** Standards for OAG SANE Training Program Certification {#sec-62.3 omnilex-key=us-tx-regs-official--title-1--62.3}

(a) For a SANE training program to become certified as an OAG SANE Training Program, the program shall at a minimum, include provisions for the following:

(1) training, including but not limited to the following topics: dynamics of sexual assault, maltreatment of special populations, multidisciplinary team response to sexual assault, role of the advocate, historical perspective of the sexual assault nurse examiner, role and responsibilities of the SANE, vicarious trauma, regulatory laws and standards, criminal justice system and court appearances, the sexual assault medical forensic examination, treatment modalities and nursing care;

(2) clinical requirements; and

(3) courtroom observation requirements.

(b) A description of the minimum standards for each of the components of an OAG SANE Training Program is described on the OAG website.

(c) In developing the minimum standards for an OAG SANE Training Program, the OAG shall consult with individuals and organizations having knowledge and experience relating to sexual assault.

**History**
- *Source Note: The provisions of this §62.3 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.4** OAG SANE and OAG SANE Training Program Certification Process {#sec-62.4 omnilex-key=us-tx-regs-official--title-1--62.4}

(a) Applicants may seek an OAG SANE certification for adult/adolescent OAG SANE certification (CA-SANE) or pediatric OAG SANE certification (CP-SANE).

(b) To apply for an OAG SANE or OAG SANE Training Program certification, an applicant must meet the eligibility requirements specified for the certification and submit a written application with all required documentation, as described on the OAG website.

(c) All complete applications will be reviewed by the OAG for compliance with this subchapter. The applicant will be notified if an application is incomplete and the applicant may be asked to provide clarification or additional information.

(d) The OAG will make a decision on all complete applications and notify an applicant of the decision in writing.

(e) An applicant who has been denied an OAG certification may appeal using the process described in this subchapter.

(f) An OAG SANE or OAG SANE Training Program certification is valid for two years from the date it is issued.

**History**
- *Source Note: The provisions of this §62.4 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.5** OAG SANE Certification Eligibility {#sec-62.5 omnilex-key=us-tx-regs-official--title-1--62.5}

(a) To be eligible for an OAG SANE certification, an RN must:

(1) hold a current and unencumbered license with the Texas BON;

(2) have a minimum of two years direct contact with patients as an RN within the last five years at the time the application for initial certification is submitted; and

(3) have completed an OAG SANE Training Program, including training, clinical requirements for the appropriate OAG SANE certification, and courtroom observation requirements, as described on the OAG website.

(b) An applicant may request a waiver of training, clinical requirements, or courtroom observation requirements by providing documentation that the applicant completed the equivalent of the training or requirements. Requests may be approved on a case-by-case basis.

(c) An applicant who maintains a SANE certification other than an OAG SANE certification may be eligible for an OAG SANE certification. Requests may be approved on a case-by-case basis.

**History**
- *Source Note: The provisions of this §62.5 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.6** Renewal of an OAG SANE Certification {#sec-62.6 omnilex-key=us-tx-regs-official--title-1--62.6}

(a) An application for renewal for an OAG SANE certification must be submitted and received by the OAG prior to the expiration of the existing OAG SANE certification.

(b) To be eligible to renew an OAG SANE certification, an RN must:

(1) hold a current and unencumbered license with the Texas BON;

(2) hold a current OAG SANE certification; and

(3) have completed the currency of practice requirements, as described on the OAG website.

(c) If the renewal application is received prior to the expiration of the OAG SANE certification, the certification shall continue in effect until the OAG makes a decision regarding the renewal.

(d) If the OAG SANE does not submit a renewal application prior to the expiration of the OAG SANE certification, the OAG SANE certification expires.

**History**
- *Source Note: The provisions of this §62.6 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.7** Interstate Reciprocity {#sec-62.7 omnilex-key=us-tx-regs-official--title-1--62.7}

(a) Registered nurses from other party or compact states, as recognized by the BON, may apply for an OAG SANE certification.

(b) To be eligible, an RN must:

(1) hold a current and unencumbered license with the Texas BON; and

(2) meet the standards for an OAG SANE certification.

(c) Reciprocity for training, clinical requirements, or courtroom observation requirements may be approved on a case-by-case basis.

(d) Applicants seeking reciprocity may be required to take components of the OAG SANE Training Program. The required components of the training program will be determined on a case-by-case basis.

**History**
- *Source Note: The provisions of this §62.7 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.8** Changes in Eligibility for OAG SANE Certification {#sec-62.8 omnilex-key=us-tx-regs-official--title-1--62.8}

(a) An OAG SANE must notify the OAG, in writing, of any potential violation of the good professional character provisions used to determine eligibility and disciplinary matters as defined by the BON within five calendar days of the violation.

(b) Reportable events include any adverse licensure action by the BON or other state licensing authority.

(c) Failing to report a possible change in eligibility may result in suspension or revocation of an OAG SANE certification.

**History**
- *Source Note: The provisions of this §62.8 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.9** OAG SANE Training Program Certification Eligibility {#sec-62.9 omnilex-key=us-tx-regs-official--title-1--62.9}

(a) To be eligible for an OAG SANE Training Program Certification, a SANE training program must:

(1) substantially provide the same training components as the OAG SANE Training Program for the appropriate OAG SANE certification, as described on the OAG website; and

(2) be recognized by a credentialing agency that is approved by the BON.

(b) An OAG SANE Training Program has no authority to issue an OAG SANE certification.

**History**
- *Source Note: The provisions of this §62.9 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.10** Renewal of OAG SANE Training Program Certification {#sec-62.10 omnilex-key=us-tx-regs-official--title-1--62.10}

(a) An application for renewal of an OAG SANE Training Program certification must be submitted and received by the OAG prior to the expiration of the existing OAG SANE Training Program certification.

(b) To be eligible to renew an OAG SANE Training Program certification, the program must hold a current SANE Training Program certification.

(c) If the renewal application is received prior to expiration of the OAG SANE Training Program certification, the certification shall continue in effect until the OAG makes a decision regarding the renewal.

(d) If the OAG SANE Training Program does not submit a renewal application prior to the expiration of the OAG SANE Training Program certification, the OAG SANE Training Program certification expires.

**History**
- *Source Note: The provisions of this §62.10 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.11** Changes in Eligibility for OAG SANE Training Program Certification {#sec-62.11 omnilex-key=us-tx-regs-official--title-1--62.11}

An OAG SANE Training Program must notify the OAG of any changes which may result in the training program's failure to meet standards set forth under this subchapter and on the OAG website.

**History**
- *Source Note: The provisions of this §62.11 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.12** Denial, Suspension, Decertification or Probation of OAG SANE or SANE Training Program Certification {#sec-62.12 omnilex-key=us-tx-regs-official--title-1--62.12}

(a) An OAG SANE or OAG SANE Training Program certification may be denied, suspended, decertified or placed on probationary status for:

(1) failure to meet certification application requirements;

(2) failure to meet eligibility requirements;

(3) failure to timely report changes in eligibility;

(4) submission of false or forged documentation in support of the certification; or

(5) any other reason identified by the OAG.

(b) The OAG may investigate any information received that may result in denial, suspension, decertification, or probationary status of an OAG SANE or OAG SANE Training Program.

(c) The OAG will notify an applicant, the OAG SANE or the OAG SANE Training Program in writing, by registered or certified mail, of any decision to deny, decertify, suspend or probate a certification. The notice will contain the specific facts or conduct alleged to warrant the intended action. The OAG may request additional information needed to overturn the decision and provide information regarding the available administrative remedies under this subchapter.

(d) The OAG may reserve the right to make a decision regarding certification denial, suspension, decertification or probation until a complete application is received.

(e) Any information received by the OAG regarding an applicant, the OAG SANE or OAG SANE Training Program may be forwarded to the BON or credentialing agency.

**History**
- *Source Note: The provisions of this §62.12 adopted to be effective September 5, 2013, 38 TexReg 5699.*

##### **1 Tex. Admin. Code § 62.13** Administrative Remedies {#sec-62.13 omnilex-key=us-tx-regs-official--title-1--62.13}

(a) Administrative appeals will be conducted in accordance with the Administrative Procedure Act (APA), Texas Government Code Chapter 2001.

(b) An applicant who disagrees with an OAG decision to deny, decertify, suspend or probate a certification under this subchapter may request, in writing, an opportunity to show compliance within 30 days of the decision. Upon receipt of a request for an opportunity to show compliance, the OAG will review the prior decision and any additional information submitted by the requestor. A decision on a request for an opportunity to show compliance will be issued by the OAG in writing, stating the legal authority for the decision, the particular sections of the statutes and rules involved, and a short, plain statement of the matters asserted. If an opportunity to show compliance does not result in the reversal of a prior OAG decision to deny, decertify, suspend or probate a certification under this subchapter, the applicant may request a contested case hearing, as defined under the APA. The procedure for contested cases will be governed by the APA and this subchapter.

(c) Upon request of the parties or on the hearing officer's own motion, the hearing officer may conduct a pre-hearing conference. The hearing officer may notify the parties, in writing, of the disposition and rulings made on all matters considered at the pre-hearing conference.

(d) If, prior to a final decision by the OAG, the hearing officer is unable to continue to serve, the OAG may appoint another examiner to perform any remaining functions without the necessity of repeating previous proceedings.

(e) All hearings shall be open to the public, except as otherwise required by law, and shall be held telephonically, unless good cause and the public interest merit another place of hearing, as designated by the OAG.

(f) Hearings may be conducted by OAG employees designated as hearings officers. Subject to any limitations imposed by law or rule, the hearing officer shall have broad discretion in regulating the course and conduct of the hearing. The hearing officer shall have, but shall not be limited to, the following authority:

(1) to administer oaths and affirmations, issue subpoenas, authorize the taking of depositions and issue discovery orders as authorized by law, call and examine witnesses, receive and rule on the admissibility of evidence and amendments to pleadings, limit the number of witnesses whose testimony would be merely cumulative, set reasonable times within which a party may testify, cross-examine witnesses, or present evidence, and recess any hearing;

(2) to issue a final decision, including proposed findings of fact and conclusions of law, amend the final decision, or both, based upon post-hearing motions filed by the parties; and

(3) to take any other permissive action which is necessary for a fair, just, and proper hearing.

(g) An applicant who does not pursue the procedures described in the APA and in this subchapter will have failed to exhaust all available administrative remedies.

**History**
- *Source Note: The provisions of this §62.13 adopted to be effective September 5, 2013, 38 TexReg 5699.*

#### **Subchapter B** SEXUAL ASSAULT TRAINING PROGRAM CERTIFICATION

##### **1 Tex. Admin. Code § 62.50** Scope and Construction of Rules {#sec-62.50 omnilex-key=us-tx-regs-official--title-1--62.50}

(a) This subchapter is intended to apply to the administration of the Sexual Assault Training Program Certification under the Sexual Assault Prevention and Crisis Services (SAPCS) Act, Texas Government Code, Chapter 420.

(b) If good cause is established to show that compliance with any part of this subchapter may result in an injustice to any party, these rules may be waived at the discretion of the chief.

(c) The Office of the Attorney General (OAG) may review, audit, or investigate any information submitted by any entity pursuant to this subchapter.

(d) This subchapter is intended to effectuate the purpose of Texas Code of Criminal Procedure Article 56.045 regarding the presence of an advocate or representative during a forensic medical examination for the collection of evidence for an alleged sexual assault.

(e) This subchapter is intended to effectuate the purposes of SAPCS Act by promoting the development throughout the state of locally based and supported nonprofit programs for the survivors of sexual assault and to standardize the quality of services provided.

(f) These are the minimum standards and are not intended to represent the best possible practices or highest possible standards of a Sexual Assault Training Program.

**History**
- *Source Note: The provisions of this §62.50 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.51** Definitions {#sec-62.51 omnilex-key=us-tx-regs-official--title-1--62.51}

The following terms and abbreviations, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Chief--As used in this subchapter means the division chief of the OAG's Crime Victim Services Division.

(2) Local program--A sexual assault program as defined by Texas Government Code, §420.003.

(3) Minimum Services--The following services to address sexual assault:

(A) a 24 hour crisis hotline;

(B) crisis intervention;

(C) public education;

(D) advocacy; and

(E) accompaniment to hospitals, law enforcement offices, prosecutors' offices, and courts.

(4) OAG Sexual Assault Training Program--A local program that holds an OAG Sexual Assault Training Program certification.

(5) OAG Sexual Assault Training Program Certification--The formal process by which the OAG reviews and acknowledges that a local program offers or provides a training program which meets the standards set forth under this subchapter and on the OAG website.

(6) OAG Sexual Assault Training Program Certification Renewal--The formal process by which the OAG reviews and acknowledges that an OAG Sexual Assault Training Program continues to meet the standards set forth under this subchapter and on the OAG website.

**History**
- *Source Note: The provisions of this §62.51 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.52** Standards for OAG Sexual Assault Training Program Certification {#sec-62.52 omnilex-key=us-tx-regs-official--title-1--62.52}

(a) A local program to become certified as an OAG Sexual Assault Training program shall provide at least forty (40) hours of training, including but not limited to the following topics: dynamics of sexual assault, system response, prevention, working with survivors, local program information, forensic medical examinations for the collection of evidence, and the role of an advocate during the sexual assault forensic medical examination.

(b) A local program, at a minimum, shall include provisions for training employees or volunteers of a local program who provide any of the minimum services to address sexual assault.

(c) A local program shall train any advocate or individual who may be present during a forensic medical examination for the collection of evidence for an alleged sexual assault.

(d) A local program may also train other individuals regardless of their relationship or affiliation with the local program.

(e) Additional information regarding the OAG Sexual Assault Training Program certification process requirements and the minimum standards is described on the OAG website.

(f) In developing the minimum standards for an OAG Sexual Assault Training Program, the OAG shall consult with individuals and organizations having knowledge and experience relating to sexual assault.

**History**
- *Source Note: The provisions of this §62.52 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.53** OAG Sexual Assault Training Program Certification Process {#sec-62.53 omnilex-key=us-tx-regs-official--title-1--62.53}

(a) To apply for an OAG Sexual Assault Training Program certification, an applicant must meet the eligibility specified for the OAG Sexual Assault Training Program certification and submit a written application and the required documentation as described on the OAG website.

(b) All complete applications will be reviewed by the OAG for compliance with this subchapter. The applicant will be notified if an application is incomplete and the applicant may be asked to provide clarification or additional information.

(c) The OAG will make a decision on all complete applications and notify an applicant of the decision in writing.

(d) A local program who has been denied an OAG Sexual Assault Training Program certification may appeal using the process described in this subchapter.

(e) An OAG Sexual Assault Training Program certification is valid for two years from the date it is issued.

**History**
- *Source Note: The provisions of this §62.53 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.54** Changes in Eligibility {#sec-62.54 omnilex-key=us-tx-regs-official--title-1--62.54}

An OAG Sexual Assault Training Program must notify the OAG of any changes which may result in the local program's failure to meet standards set forth by this subchapter and on the OAG website.

**History**
- *Source Note: The provisions of this §62.54 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.55** Renewal of OAG Sexual Assault Training Program Certification {#sec-62.55 omnilex-key=us-tx-regs-official--title-1--62.55}

(a) An application for renewal of an OAG Sexual Assault Training Program certification must be submitted and received by the OAG prior to the expiration of the existing certification.

(b) To be eligible to renew an OAG Sexual Assault Training Program certification, the local program must hold a current OAG Sexual Assault Training Program certification.

(c) If the local program does not submit a renewal application prior to the expiration of the OAG Sexual Assault Training Program certification, the OAG Sexual Assault Training Program certification expires.

**History**
- *Source Note: The provisions of this §62.55 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.56** Denial, Suspension, Decertification or Probation of a Sexual Assault Training Program Certification {#sec-62.56 omnilex-key=us-tx-regs-official--title-1--62.56}

(a) An OAG Sexual Assault Training Program certification may be denied, suspended, decertified or placed on probationary status for:

(1) failure to meet certification application requirements;

(2) failure to meet eligibility requirements;

(3) failure to timely report changes in eligibility;

(4) submission of false or forged documentation in support of the certification; or

(5) any other reason identified by the OAG.

(b) The OAG may investigate any information received that may result in denial, suspension, decertification, or probationary status of an OAG Sexual Assault Training Program.

(c) The OAG will notify an applicant or the OAG Sexual Assault Training Program in writing, by registered or certified mail, of any decision to deny, decertify, suspend or probate a certification or renewal of a certification. The notice will contain the specific facts to warrant the intended action. The OAG may request additional information needed to overturn the decision and provide information regarding the available administrative remedies under this subchapter.

(d) The OAG may reserve the right to make a decision regarding certification denial, suspension, decertification or probation until a complete application is received.

**History**
- *Source Note: The provisions of this §62.56 adopted to be effective September 5, 2013, 38 TexReg 5700.*

##### **1 Tex. Admin. Code § 62.57** Administrative Remedies {#sec-62.57 omnilex-key=us-tx-regs-official--title-1--62.57}

(a) Administrative appeals will be conducted in accordance with the Administrative Procedure Act (APA), Texas Government Code Chapter 2001.

(b) An applicant who disagrees with an OAG decision to deny, decertify, suspend or probate a certification under this subchapter may request, in writing, an opportunity to show compliance within 30 days of the decision. Upon receipt of a request for an opportunity to show compliance, the OAG will review the prior decision and any additional information submitted by the requestor. A decision on a request for an opportunity to show compliance will be issued by the OAG in writing, stating the legal authority for the decision, the particular sections of the statutes and rules involved, and a short, plain statement of the matters asserted. If an opportunity to show compliance does not result in the reversal of a prior OAG decision to deny, decertify, suspend or probate a certification under this subchapter, the applicant may request a contested case hearing, as defined under the APA. The procedure for contested cases will be governed by the APA and this subchapter.

(c) Upon request of the parties or on the hearing officer's own motion, the hearing officer may conduct a pre-hearing conference. The hearing officer may notify the parties, in writing, of the disposition and rulings made on all matters considered at the pre-hearing conference.

(d) If, prior to a final decision by the OAG, the hearing officer is unable to continue to serve, the OAG may appoint another examiner to perform any remaining functions without the necessity of repeating previous proceedings.

(e) All hearings shall be open to the public, except as otherwise required by law, and shall be held telephonically, unless good cause and the public interest merit another place of hearing, as designated by the OAG.

(f) Hearings may be conducted by OAG employees designated as hearings officers. Subject to any limitations imposed by law or rule, the hearing officer shall have broad discretion in regulating the course and conduct of the hearing. The hearing officer shall have, but shall not be limited to, the following authority:

(1) to administer oaths and affirmations, issue subpoenas, authorize the taking of depositions and issue discovery orders as authorized by law, call and examine witnesses, receive and rule on the admissibility of evidence and amendments to pleadings, limit the number of witnesses whose testimony would be merely cumulative, set reasonable times within which a party may testify, cross-examine witnesses, or present evidence, and recess any hearing;

(2) to issue a final decision, including proposed findings of fact and conclusions of law, amend the final decision, or both, based upon post-hearing motions filed by the parties; and

(3) to take any other permissive action which is necessary for a fair, just, and proper hearing.

(g) An applicant who does not pursue the procedures described in the APA and in this subchapter will have failed to exhaust all available administrative remedies.

**History**
- *Source Note: The provisions of this §62.57 adopted to be effective September 5, 2013, 38 TexReg 5700.*

#### **Subchapter C** SEXUAL ASSAULT PROGRAM GRANTS

##### **1 Tex. Admin. Code § 62.100** SAPCS Definitions {#sec-62.100 omnilex-key=us-tx-regs-official--title-1--62.100}

The following terms and abbreviations, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--An entity that has filed an application for a grant with the OAG;

(2) Application Kit--The information that is required to be completed and submitted by an applicant for a grant;

(3) CFR--Code of Federal Regulations;

(4) COG--Council of Governments, a regional planning commission or similar regional planning agency created under Texas Local Government Code, Chapter 391;

(5) Computing devices--Machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or peripherals) for printing, transmitting and receiving, or storing electronic information;

(6) CVSD--Crime Victim Services Division, a division of the Office of the Attorney General;

(7) Eligible application--An application that meets the minimum requirements set forth in the RFA and Application Kit;

(8) Employee--A person under the direction and supervision of the grantee, who is on the payroll of the grantee and for whom the grantee is required to pay applicable income withholding taxes; or a person who will be on the grantee's payroll and for whom the grantee will pay applicable income withholding taxes once the grant is awarded;

(9) Equipment--Tangible personal property (including information technology systems) having a useful life of more than one year and a per unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the grantee for financial statement purposes or $5,000;

(10) Fringe benefits--Allowances and services provided by the grantee to its employees as compensation in addition to regular salaries and wages;

(11) Grantee--An entity or sub-recipient of an entity that receives a grant contract from the OAG;

(12) Indirect costs--Any cost not directly identified with a single, final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective;

(13) Information technology systems--Computing devices, ancillary equipment, software, firmware, and similar procedures, services (including support services), and related resources;

(14) OAG--Office of the Attorney General;

(15) Other direct operating expenses--Costs not included in other budget categories and which are directly related to the day-to-day operation of the sexual assault program;

(16) Professional and consultant services--Any service for which the grantee uses an outside source for necessary support;

(17) Relative-- a person related to the individual within the third degree by consanguinity or within the second degree by affinity, as determined by Texas Government Code Chapter 573;

(18) RFA--Request for Applications;

(19) SAPCS--Sexual Assault Prevention and Crisis Services program administered by the OAG;

(20) Sexual assault--any act or attempted act as described in the Texas Penal Code, §§21.11, 22.011, 22.021 or 25.02;

(21) Sexual assault program--any local public or private nonprofit corporation, independent of a law enforcement agency or prosecutor's office, that is operated as an independent program or as part of a municipal, county, or state agency and that provides the minimum services to adult survivors of stranger and non-stranger sexual assault established in Texas Government Code, Chapter 420;

(22) Special condition--A condition placed on a grant because of a need for information, clarification, or submission of an outstanding requirement of the grant that may result in a hold being placed on the OAG funded portion of a sexual assault program. Special conditions may be placed on a grant at any time;

(23) Special project--projects to prevent sexual assault and improve services to survivors that may be outside the standard application cycle or process for SAPCS funding;

(24) State sexual assault coalition--A statewide nonprofit organization that has been identified as a state sexual assault coalition by a state or federal agency authorized to make that designation;

(25) Statewide program--An entity that actively offers or provides services in six or more COG regions;

(26) Supplies--All tangible personal property other than that described in subsection (9) of this section. A computing device is a supply if the acquisition cost is less than the lesser of the capitalization level established by the grantee for financial statement purposes or $5,000, regardless of the length of its useful life;

(27) Survivor--an individual who is a victim of sexual assault, regardless of whether a law enforcement report or conviction is made in the incident;

(28) UGMS--The Uniform Grant Management Standards, promulgated by the Texas Comptroller of Public Accounts.

**History**
- *Source Note: The provisions of this §62.100 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.101** Construction of Rules {#sec-62.101 omnilex-key=us-tx-regs-official--title-1--62.101}

(a) Unless otherwise noted, these rules apply to all SAPCS funded sexual assault programs. If good cause is established to show that compliance with these rules may result in an injustice to any interested person, the rules may be suspended at the discretion of the OAG.

(b) These rules do not apply to the extent of any conflict with a federal law or a duly enacted federal regulation applicable to a federally funded SAPCS grant.

**History**
- *Source Note: The provisions of this §62.101 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.102** Source of Funds {#sec-62.102 omnilex-key=us-tx-regs-official--title-1--62.102}

(a) SAPCS funds originate from federal and state sources.

(b) The source of state funds is a biennial appropriation by the Texas Legislature.

**History**
- *Source Note: The provisions of this §62.102 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.103** Availability of Funds {#sec-62.103 omnilex-key=us-tx-regs-official--title-1--62.103}

All funding is contingent upon the appropriation of funds by the United States Congress and the Texas Legislature and upon approval of an application for funds by the OAG.

**History**
- *Source Note: The provisions of this §62.103 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.104** Purpose of Funds and Grant Funding Decisions {#sec-62.104 omnilex-key=us-tx-regs-official--title-1--62.104}

(a) The purpose of the SAPCS program is to maintain or expand the existing services of a sexual assault program and any other purposes consistent with Texas Government Code, Chapter 420 or other federal grant programs.

(b) The OAG may use a funding method to determine the amount of funding a sexual assault program may receive in its grant contract.

(c) The OAG reserves the right to give priority to sexual assault programs that provide direct victim services with grant funds, that provide information and education, or that utilize volunteers.

(d) Within its discretion, the OAG shall determine the manner and procedure for making funding decisions that support the efficient and effective use of public funds.

**History**
- *Source Note: The provisions of this §62.104 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.105** SAPCS Eligible Purpose Areas {#sec-62.105 omnilex-key=us-tx-regs-official--title-1--62.105}

(a) Grant contracts awarded under SAPCS may be used to provide services to survivors and their families for the following purposes:

(1) 24-hour crisis hotline;

(2) crisis intervention;

(3) public education;

(4) advocacy;

(5) accompaniment to hospitals, law enforcement offices, prosecutors' offices, and courts for survivors and their family members;

(6) activities related to the prevention of sexual assault or violence;

(7) other purposes, consistent with state law, that are authorized by applicable federal grants; and

(8) other support for services to survivors and their families as determined by the OAG.

(b) The OAG may also consult and contract with or award grants to entities described by Texas Government Code §420.005(a) for special projects to prevent sexual assault and improve services to survivors.

**History**
- *Source Note: The provisions of this §62.105 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.106** SAPCS Eligible Applicants {#sec-62.106 omnilex-key=us-tx-regs-official--title-1--62.106}

(a) Entities described by Texas Government Code §420.005(a) are eligible to apply under the SAPCS program.

(b) A sexual assault program applicant must meet the minimum service standards identified by the OAG and provide the following minimum services for at least nine months prior to receiving a SAPCS grant contract:

(1) 24-hour crisis hotline;

(2) crisis intervention;

(3) public education;

(4) advocacy; and

(5) accompaniment to hospitals, law enforcement offices, prosecutors' offices, and courts for survivors and their family members.

(c) Entities described by Texas Government Code §420.005(a) may also be eligible to receive SAPCS grant contracts for special projects.

**History**
- *Source Note: The provisions of this §62.106 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.107** Volunteer Requirements {#sec-62.107 omnilex-key=us-tx-regs-official--title-1--62.107}

The specific requirements for the volunteer component will be stated in the RFA and the Application Kit.

**History**
- *Source Note: The provisions of this §62.107 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.108** Funding Levels {#sec-62.108 omnilex-key=us-tx-regs-official--title-1--62.108}

(a) For SAPCS sexual assault programs, the minimum and maximum for which an applicant may apply per fiscal year is stated in the RFA and the Application Kit.

(b) The amount of an award is determined solely by the OAG. The OAG may award grants at amounts above or below the established funding levels and is not obligated to fund a grant at the amount requested.

**History**
- *Source Note: The provisions of this §62.108 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.109** Grant Contract Period {#sec-62.109 omnilex-key=us-tx-regs-official--title-1--62.109}

(a) Generally, grant contracts may be awarded for any number of months up to a two year period unless stated otherwise in the RFA.

(b) The OAG reserves the right to alter the starting date and length of the grant contract period.

(c) If the grant contract period extends for more than one fiscal year, the grantee may be required to submit additional documentation relating to the subsequent fiscal year of the grant contract period, including an updated budget. The OAG may base its decision on subsequent fiscal year funding amounts on the grantee's prior performance, including but not limited to the timeliness and thoroughness of reporting, effective and efficient use of grant funds and the success of the sexual assault program in meeting its goals.

**History**
- *Source Note: The provisions of this §62.109 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.110** Continuation of Funding {#sec-62.110 omnilex-key=us-tx-regs-official--title-1--62.110}

Because the grant contract is not a right or entitlement, there is no commitment by the OAG that a grant contract, once funded, will receive subsequent funding.

**History**
- *Source Note: The provisions of this §62.110 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.111** Additional Award Opportunities {#sec-62.111 omnilex-key=us-tx-regs-official--title-1--62.111}

(a) The OAG may fund sexual assault programs outside the standard application cycle or process or at amounts higher or lower than provided for in this chapter based on availability of funds and an identified need.

(b) The OAG may choose to award a grant contract from a different OAG funding source than that for which the applicant applied.

**History**
- *Source Note: The provisions of this §62.111 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.112** Applicant Registration {#sec-62.112 omnilex-key=us-tx-regs-official--title-1--62.112}

(a) The OAG may require applicants to register their intent to apply for funding. If registration is required, the deadline to file, including a time, date and place certain, will be given in the RFA.

(b) Grant applications will not be considered if the registration is not filed by the established deadline.

(c) The OAG will notify an applicant if their application will not be considered due to failure of timely registration.

**History**
- *Source Note: The provisions of this §62.112 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.113** Filings with the OAG {#sec-62.113 omnilex-key=us-tx-regs-official--title-1--62.113}

(a) All documents that are required to be submitted to the OAG must be received by the OAG to be considered as filed. If a deadline is established by the OAG, it will include a time, date and place certain.

(b) Proof of sending a document by email or other means is not proof that the OAG received the information.

(c) All filing decisions rest completely within the discretionary authority of the OAG and the decisions made by the OAG are final and are not subject to appeal.

**History**
- *Source Note: The provisions of this §62.113 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.114** Compliance with Other Standards {#sec-62.114 omnilex-key=us-tx-regs-official--title-1--62.114}

(a) Consistent with §62.101(b), grantees must comply with all applicable federal statutes and duly enacted federal regulations, and all applicable state statutes and rules.

(b) The relevant standards include, but are not limited to:

(1) Uniform Grant Management Standards (UGMS) adopted pursuant to the Uniform Grant and Contract Management Act, Texas Government Code, Chapter 783. These requirements apply to SAPCS grants, including grants to non-profit corporations; and

(2) Uniform Administrative Requirements, Cost Principles, and Audit Requirements as set forth in federal regulations.

**History**
- *Source Note: The provisions of this §62.114 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.115** Use of the Internet {#sec-62.115 omnilex-key=us-tx-regs-official--title-1--62.115}

(a) The OAG may transmit notices, forms or other documents and information via the Internet or other electronic means.

(b) The OAG may require the submission of notices, forms or other documents and information via the Internet or other electronic means.

(c) Transmission or submission via electronic means meets the relevant requirements contained within this chapter for submitting information in writing. Submitted information may not disclose any information received from reports, collected case information, or site-monitoring visits that would identify a person providing or receiving services.

**History**
- *Source Note: The provisions of this §62.115 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.200** Application Process {#sec-62.200 omnilex-key=us-tx-regs-official--title-1--62.200}

(a) The OAG will publish a RFA in the *Texas Register* and post the RFA on the OAG's official agency website.

(b) The RFA, at a minimum, will provide the following information:

(1) applicable funding sources for the types of grants available and eligibility requirements;

(2) how to obtain Application Kits;

(3) deadlines and filing instructions for the grant application;

(4) minimum and maximum amounts of funding available;

(5) start date and length of grant contract period;

(6) any match or volunteer requirements;

(7) award criteria;

(8) any prohibitions on the use of grant funds; and

(9) OAG contact information.

(c) After the RFA is published in the *Texas Register,* the Application Kit will be available on the official agency website.

(d) An applicant must submit an application to the OAG, as referenced in the RFA.

(e) The application, with the required attachments, must be filed and received by the OAG, by the deadline and manner stated in the RFA.

(f) Once the application is filed, it will be initially screened for eligibility, and if eligible it will be evaluated and reviewed, and a grant decision will be made.

(g) Providing false information, knowingly or unknowingly, on a grant application may cause an application to be denied or cause the grant contract, once awarded, to be terminated.

**History**
- *Source Note: The provisions of this §62.200 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.201** Screening, Evaluation, and Review Process {#sec-62.201 omnilex-key=us-tx-regs-official--title-1--62.201}

(a) The OAG determines eligibility for an award. If an applicant is deemed ineligible by the OAG, that applicant will not receive a grant.

(b) The OAG will designate teams to screen, evaluate, and review applications. The evaluation teams may consist of OAG employees, employees of other state agencies, or other designees. Evaluation factors will be developed to assess the award criteria as stated in the RFA or Application Kit.

(c) During the screening, evaluation, or review process, an applicant may be contacted to provide additional information.

(d) There are several steps in the screening, evaluation, and review process. A decision to deny an application may be made at any point during the process.

**History**
- *Source Note: The provisions of this §62.201 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.202** Grant Decision Notification Process {#sec-62.202 omnilex-key=us-tx-regs-official--title-1--62.202}

(a) The OAG shall notify the applicant in writing of its decision regarding a grant award.

(b) The OAG may utilize a grant contract document or a notice of grant document once a decision is made to award a grant. The applicant will be given a deadline to act to accept the grant award and to return the appropriate document to the OAG within the time prescribed by the OAG. An applicant's failure to return the signed document to the OAG within the applicable time period may be construed as a rejection of the grant award, and the OAG may de-obligate funds.

(c) The OAG may add special conditions to the grant award. Until satisfied, these special conditions will affect the grantee's ability to receive funds. If special conditions are not resolved, the OAG may de-obligate the entire amount of the grant award.

**History**
- *Source Note: The provisions of this §62.202 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.203** Grant Decisions {#sec-62.203 omnilex-key=us-tx-regs-official--title-1--62.203}

(a) All grant decisions, including, but not limited to, eligibility, evaluation and review, and funding rest completely within the discretionary authority of the OAG and the decisions made by the OAG are final and are not subject to appeal.

(b) The award of a grant contract to a sexual assault program shall not commit or obligate the OAG in any way to make any additional, supplemental, continuation, or other award to that sexual assault program.

**History**
- *Source Note: The provisions of this §62.203 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.300** General Budget Provisions {#sec-62.300 omnilex-key=us-tx-regs-official--title-1--62.300}

(a) Unless otherwise stated by the Request for Applications and the Application Kit, eligible budget categories are limited to the following categories:

(1) personnel;

(2) fringe benefits;

(3) professional and consultant services;

(4) travel;

(5) equipment;

(6) supplies; and

(7) other direct operating expenses.

(b) All applicants must submit a completed budget on the form prescribed by the OAG.

(c) Grants awarded by the OAG are reimbursement-only grants. Grantees are reimbursed for authorized actual expenditures substantiated by documentation submitted to the OAG, as requested. If necessary, the OAG may use an alternative method of payment.

(d) An individual paid with grant funds may not receive dual compensation for the same work, even if the services performed benefit more than one entity.

(e) All grantees, including but not limited to nonprofit entities and local governmental agencies, must follow the rules and requirements as outlined in UGMS, and all duly enacted federal regulations.

(f) For budget items funded partially by the OAG, an entity must have a documented method for the allocation of direct costs consistent with the benefit received and must maintain adequate receipts and records.

(g) All budget items must be reasonable and necessary and be allocated proportionately within each budget category.

(h) The OAG is not obligated to fund budget items at the amounts requested by the applicant and is not obligated to continue to fund budget items once a grant has been awarded.

**History**
- *Source Note: The provisions of this §62.300 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.301** Personnel {#sec-62.301 omnilex-key=us-tx-regs-official--title-1--62.301}

(a) The personnel budget category may include salaries of employees only, and not compensation paid to independent contractors.

(b) Salaries for grant-funded positions must be reasonable and comply with the grantee's salary classification schedule. If a grantee does not have a classification schedule, the grantee must maintain documentation supporting that the salary is commensurate with that paid in the geographic area for positions with similar duties and qualifications. In any event, the OAG will determine whether a salary is reasonable and may limit the grant-funded portion of any salary.

(c) The OAG may set minimum restrictions on the percentage of salary that may be funded.

(d) Any changes to the job duties or employment status of a grant funded position must be reported to the OAG immediately.

(e) A grantee may not use grant funds to pay any portion of the salary or any other compensation for an elected government official.

**History**
- *Source Note: The provisions of this §62.301 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.302** Fringe Benefits {#sec-62.302 omnilex-key=us-tx-regs-official--title-1--62.302}

(a) Fringe benefits include, but are not limited to, the costs of leave, employee insurance, pensions, and unemployment benefit plans.

(b) Grant funds may be used to pay fringe benefits of an employee only if grant funds are also being used to pay for the salary of the same employee.

(c) A grantee must provide grant-funded personnel the same fringe benefits provided to all other non-grant-funded employees of the grantee.

**History**
- *Source Note: The provisions of this §62.302 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.303** Professional and Consultant Services {#sec-62.303 omnilex-key=us-tx-regs-official--title-1--62.303}

(a) Professional and consultant services include, but are not limited to, accounting services, counseling, legal services, and computer support.

(b) Any contract or agreement entered into by a grantee that obligates grant funds must be in writing and consistent with Texas contract law. Grantees must maintain adequate documentation supporting budget items for a contractor's time, services, and rates of compensation. Grantees must establish a contract administration and monitoring system to regularly and consistently ensure that contract deliverables are provided as specified in the contract.

(c) Grant funds may not be used to pay for any professional and consultant services for a person or vendor who participates directly in writing a grant application.

**History**
- *Source Note: The provisions of this §62.303 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.304** Travel {#sec-62.304 omnilex-key=us-tx-regs-official--title-1--62.304}

(a) Travel expenses may be reimbursed according to the Texas State Travel Guidelines, unless a grantee's travel policy provides a lesser reimbursement.

(b) Travel expenses must be reasonable and necessary for activities funded on the grant.

(c) Unless otherwise authorized by the Application Kit, grant funds requested in the travel category should be for grant-related travel performed by grant-funded staff and volunteers assigned to the grant only.

(d) Travel must relate directly to the delivery of services that supports the program funded by the OAG grant.

**History**
- *Source Note: The provisions of this §62.304 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.305** Equipment {#sec-62.305 omnilex-key=us-tx-regs-official--title-1--62.305}

(a) A grantee may use equipment paid for with OAG funds only for grant-related purposes and not for personal or non-grant-related purposes.

(b) Grant funds may not be used to purchase or lease vehicles.

**History**
- *Source Note: The provisions of this §62.305 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.306** Supplies {#sec-62.306 omnilex-key=us-tx-regs-official--title-1--62.306}

(a) Allowable items include, but are not limited to, office supplies, paper, postage, education resource materials, and certain computing devices described in §62.100(26) of this chapter.

(b) The OAG will not approve funds for the purchase of promotional items or recreational activities.

**History**
- *Source Note: The provisions of this §62.306 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.307** Other Direct Operating Expenses {#sec-62.307 omnilex-key=us-tx-regs-official--title-1--62.307}

(a) Funds may not be used to purchase food and beverages.

(b) Registration fees for conferences and other training sessions should be included in this category.

**History**
- *Source Note: The provisions of this §62.307 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.308** Indirect Costs {#sec-62.308 omnilex-key=us-tx-regs-official--title-1--62.308}

The OAG will not fund indirect costs for SAPCS grants.

**History**
- *Source Note: The provisions of this §62.308 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.309** Unallowable Costs {#sec-62.309 omnilex-key=us-tx-regs-official--title-1--62.309}

(a) OAG grant funds may not be used for the following:

(1) to pay for lobbying;

(2) to purchase food and beverages except as allowed under Texas State Travel Guidelines;

(3) to purchase or lease vehicles;

(4) to purchase promotional items or recreational activities;

(5) to pay for travel that is unrelated to the direct delivery of services that supports the OAG funded sexual assault program;

(6) to pay consultants or vendors who participate directly in writing a grant application; or

(7) any unallowable costs set forth in state or federal cost principles.

(b) Funds may not be used to purchase any other products or services the OAG identifies as inappropriate or unallowable within the RFA or the Application Kit.

**History**
- *Source Note: The provisions of this §62.309 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.400** Comprehensive Certification and Assurances Form {#sec-62.400 omnilex-key=us-tx-regs-official--title-1--62.400}

(a) Each Application Kit will have an Comprehensive Certification and Assurances Form. Unless otherwise directed by the RFA or the Application Kit, applicants must submit a signed Comprehensive Certification and Assurances Form with the grant application.

(b) The form includes, but is not limited to, the following certifications and assurances:

(1) Equal Employment Opportunity Program Certification;

(2) Disclosure and Certification Regarding Lobbying;

(3) Nonprocurement Debarment Certification;

(4) Drug-Free Workplace Certification;

(5) Audit Certification;

(6) UGMS Certifications;

(7) Certified Assurances;

(8) Conflict of Interest; and

(9) Other certifications and assurances required by the OAG.

**History**
- *Source Note: The provisions of this §62.400 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.401** Resolution {#sec-62.401 omnilex-key=us-tx-regs-official--title-1--62.401}

(a) The resolution permits the applicant to submit an application. Unless otherwise directed by the RFA or the Application Kit, the resolution must be submitted at the same time the grant application is submitted by the applicant.

(b) The requirements for the resolution will be stated in the Application Kit.

(c) A resolution from the applicable governing body (such as the City Council, County Commissioners' Court, or Board of Directors) must contain, at a minimum, the following:

(1) authorization for the submission of the grant application to the OAG; and

(2) a designation of the name or title of an authorized official who is given the power to apply for, accept, reject, alter, or terminate a grant on behalf of the grantee.

**History**
- *Source Note: The provisions of this §62.401 adopted to be effective April 15, 2007, 32 TexReg 1997.*

##### **1 Tex. Admin. Code § 62.402** Other Required Forms {#sec-62.402 omnilex-key=us-tx-regs-official--title-1--62.402}

An applicant must submit all other required forms as listed in the Application Kit.

**History**
- *Source Note: The provisions of this §62.402 adopted to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.500** SAPCS Grant Contract Forms {#sec-62.500 omnilex-key=us-tx-regs-official--title-1--62.500}

(a) Unless otherwise stated, all required forms will be provided by the OAG.

(b) Failure to timely submit the required forms provided by the OAG may result in sanctions as stated in §62.509.

**History**
- *Source Note: The provisions of this §62.500 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.501** Grant Contact and Authorized Signator {#sec-62.501 omnilex-key=us-tx-regs-official--title-1--62.501}

(a) A grantee must have the following designees:

(1) Grant contact must be an employee of the grantee who is responsible for operating and monitoring the project and who is able to readily answer questions about the grant project's day-to-day operations. All grant-related information will be sent to this contact person.

(2) Authorized signator is the person authorized to apply for, accept, decline, or cancel the grant for the applicant entity. This person signs all grant adjustment requests, progress reports and financial reports as well as any other official documents related to the grant. This person may be, for example, the executive director of the entity, or a county judge, mayor, city manager, assistant city manager, or designee authorized by the governing body in the resolution.

(b) Any changes in the grant contact or authorized signator must be submitted in writing to the OAG immediately.

(c) An authorized signator may designate alternate persons to sign certain grant documents.

**History**
- *Source Note: The provisions of this §62.501 adopted to be effective April 15, 2007, 32 TexReg 1997; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.502** Financial Reporting and Reimbursement {#sec-62.502 omnilex-key=us-tx-regs-official--title-1--62.502}

(a) Because grants awarded under this subchapter are reimbursement-only contracts, a grantee must submit financial status reports and invoices, as directed by the OAG.

(b) A grantee must ensure that its final invoice is received no later than the 45th calendar day after the end of the contract period (liquidation date). If this date falls on a weekend or a holiday, then the OAG will honor receipt on the following business day. On the liquidation date, if contract funds are on hold for any reason, the funds will lapse and cannot be recovered by the grantee.

(c) Invoices received after the above deadline may not be paid by the OAG.

(d) If necessary, the OAG may allow an extension beyond the established deadline.

**History**
- *Source Note: The provisions of this §62.502 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.503** Performance Reporting {#sec-62.503 omnilex-key=us-tx-regs-official--title-1--62.503}

(a) A grantee must submit monthly statistical reports in the manner and form determined by the OAG. Failure to do so may result in the OAG placing a grantee on financial hold and may affect future funding requests.

(b) The OAG, or its designee, may assess contract effectiveness through review of required statistical reports, on-site visits, and/or desk reviews. Information relating to monthly performance reporting must be maintained by the grantee and must be available for review by the OAG or its designee.

(c) The OAG will provide quarterly concurrence reports to grantees to verify reported data. A grantee must review the quarterly reports, verify the data, and submit documentation of concurrence or correction.

**History**
- *Source Note: The provisions of this §62.503 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.505** Grant Adjustments {#sec-62.505 omnilex-key=us-tx-regs-official--title-1--62.505}

(a) Within each fiscal year, a grantee may transfer funds between direct cost line items in different approved budget categories, not to exceed a cumulative total of ten percent of the approved grant budget during that year, without requesting a grant adjustment from the OAG.

(b) If it becomes necessary to move funds that are greater than ten percent of the total budget between existing budget categories, revise the scope or target of the program, add new budget categories, or alter project activities, a grantee must first request and receive approval from the OAG for a grant adjustment. The person designated to make such requests or the authorized signator must sign all grant adjustment request forms.

**History**
- *Source Note: The provisions of this §62.505 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.506** Copyrights {#sec-62.506 omnilex-key=us-tx-regs-official--title-1--62.506}

If a grantee uses any OAG funds to purchase or receive a copyright or for a subgrantee to purchase or receive a copyright, the OAG reserves a royalty-free and irrevocable license to reproduce, publish, use, or authorize others to use the copyrighted material.

**History**
- *Source Note: The provisions of this §62.506 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.507** Procurement, Property Management, and Contract Oversight Procedures {#sec-62.507 omnilex-key=us-tx-regs-official--title-1--62.507}

A grantee shall use the procurement procedures, property management procedures, and contract oversight guidelines set forth in UGMS and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as set forth in federal regulations.

**History**
- *Source Note: The provisions of this §62.507 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.508** Maintenance of Records {#sec-62.508 omnilex-key=us-tx-regs-official--title-1--62.508}

(a) The grantee shall maintain adequate records to support its charges, procedures, and performances to the OAG for all work related to the contract. The grantee also shall maintain such records as are deemed necessary by the OAG and auditors of the State of Texas, the United States, or such other persons or entities designated by the OAG, to ensure proper accounting for all costs and performances related to the contract.

(b) The grantee shall maintain and retain records as required by Texas Government Code Chapter 441, Subchapter L, and the grant contract.

(c) Records may be retained in an electronic format.

**History**
- *Source Note: The provisions of this §62.508 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.509** Sanctions {#sec-62.509 omnilex-key=us-tx-regs-official--title-1--62.509}

(a) Reimbursement for grant-related expenses is contingent upon a grantee's strict compliance with these rules, related requirements, and OAG procedures. Any failure to comply may result in the imposition of temporary or permanent sanctions or both.

(b) Sanctions may include:

(1) Placing a grantee on financial hold;

(2) Requiring repayment of grant funds;

(3) Transferring the administration of a grant project to another entity;

(4) Termination of a grant;

(5) Ineligibility for future funding from the OAG;

(6) Any other sanction or corrective action that the OAG deems necessary.

(c) The OAG will notify a grantee if grounds for sanctions exist.

(d) If the grantee receives notice of grounds for sanctions and subsequently provides satisfactory evidence that the deficient condition has been corrected, the OAG may release funds.

(e) If the grantee fails to correct the deficient condition, in the time and manner as indicated by the OAG, and the grant is terminated, the OAG may require the grantee to return any equipment purchased with grant funds, and all unexpended or unobligated funds awarded to a grantee will revert to the OAG.

(f) A grantee may request a review of the sanctions imposed, as described below:

(1) The grantee must make a written request for reconsideration no later than 10 days after the receipt of an OAG notice of sanctions.

(2) A grantee should submit any documentation necessary to support the reconsideration.

(3) The OAG will send the final determination to the grantee in writing.

(4) The OAG decision concerning sanctions is final.

**History**
- *Source Note: The provisions of this §62.509 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.600** Violations of Laws {#sec-62.600 omnilex-key=us-tx-regs-official--title-1--62.600}

A grantee must immediately provide notification to the OAG and, if applicable, the local prosecutor's office, of any knowledge, suspicion, or evidence of any violation of law that affects or is related to the contract. Such violations include misappropriation of funds, fraud, theft, embezzlement, forgery, or any serious irregularity or noncompliance with the requirements of this subchapter.

**History**
- *Source Note: The provisions of this §62.600 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.601** Conflict of Interest {#sec-62.601 omnilex-key=us-tx-regs-official--title-1--62.601}

(a) Grantee personnel, members of a grantee board or governing body, or other persons affiliated with the grant project shall not participate in any proceeding or action where grant funds personally benefit, directly or indirectly, the individuals or their relatives.

(b) Grant personnel and officials must avoid any action that results in or creates the appearance of:

(1) using their official positions for private gain;

(2) giving preferential treatment to any person;

(3) losing independent judgment or impartiality;

(4) making an official decision outside of official channels; or

(5) adversely affecting the confidence of the public in the integrity of the program or the OAG.

**History**
- *Source Note: The provisions of this §62.601 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.602** Compliance {#sec-62.602 omnilex-key=us-tx-regs-official--title-1--62.602}

(a) Compliance reviews include programmatic monitoring, financial monitoring, and financial auditing.

(b) The OAG will conduct compliance reviews throughout the existence of a contract. A grantee must make all contract-related records available to OAG representatives unless the information is sealed by law.

(c) Compliance reviews may be on-site or desk reviews and may include any information that the OAG deems relevant to the contract.

(d) The OAG, or its designee, may make unannounced visits at any time.

(e) The OAG reserves the right to conduct its own audit or contract with another entity to audit any grantee.

(f) Based on the information gathered during monitoring or auditing, the OAG will issue a compliance report.

(g) A grantee must submit documentation to the OAG responding to any findings and questioned costs contained in the report.

(h) The compliance determination of the OAG is final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §62.602 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

##### **1 Tex. Admin. Code § 62.603** Audit Standards {#sec-62.603 omnilex-key=us-tx-regs-official--title-1--62.603}

(a) Grantee will contract with an independent, licensed CPA firm to perform an annual financial audit engagement. If applicable, grantee's independent, licensed CPA firm will determine the type of annual financial audit, which may include a compliance attestation in accordance with federal audit requirements and/or Texas Single Audit Circular (Single Audit or non-Single Audit financial audit).

(b) A grantee must submit to the OAG one copy of all audit reports, including audits as required in UGMS and all other audits that a grantee undergoes, regardless of the purpose. The grantee must submit an audit report to the OAG within 30 calendar days after receipt of the audit report, or nine months after the end of the audit period.

(c) OAG contract funds may only be used for the fair and reasonable share of audit costs required by the OAG, in accordance with applicable federal and state cost principles.

**History**
- *Source Note: The provisions of this §62.603 adopted to be effective September 5, 2013, 38 TexReg 5700; amended to be effective June 10, 2019, 44 TexReg 2835.*

### **Chapter 63** PUBLIC INFORMATION

#### **Subchapter A** CONFIDENTIALITY OF INFORMATION REQUESTED FOR LEGISLATIVE PURPOSES

##### **1 Tex. Admin. Code § 63.1** Definition, Purpose, and Application {#sec-63.1 omnilex-key=us-tx-regs-official--title-1--63.1}

(a) In this subchapter, "legislative requestor" means an individual member, agency, or committee of the legislature.

(b) This subchapter governs the procedures by which the attorney general shall render a decision sought by a legislative requestor under Texas Government Code §552.008(b-2).

(c) Texas Government Code §§552.308 and 552.309 apply to all deadlines established in this subchapter.

**History**
- *Source Note: The provisions of this §63.1 adopted to be effective March 27, 2011, 36 TexReg 1815; amended to be effective June 4, 2020, 45 TexReg 3617.*

##### **1 Tex. Admin. Code § 63.2** Request for Attorney General Decision Regarding Confidentiality {#sec-63.2 omnilex-key=us-tx-regs-official--title-1--63.2}

(a) If a governmental body that receives a written request for information from a legislative requestor under Texas Government Code §552.008 determines the requested information is confidential and requires the legislative requestor to sign a confidentiality agreement, the legislative requestor may ask for an attorney general decision about whether the information covered by the confidentiality agreement is confidential under law.

(b) A request for an attorney general decision must:

(1) be in writing and signed by the legislative requestor;

(2) state the name of the governmental body to whom the original request for information was made; and

(3) state the date the original request was made.

(c) The legislative requestor must submit a copy of the original request with the request for a decision. If the legislative requestor is unable to do so, the legislative requestor must include a written description of the original request in the request for a decision.

(d) The legislative requestor may submit written comments to the attorney general stating reasons why the requested information should not be considered confidential by law. The written comments must be labeled to indicate whether any portion of the comments discloses or contains the substance of the specific information deemed confidential by the governmental body. A legislative requestor who submits written comments to the attorney general shall send a copy of those comments to the governmental body.

(e) The deadlines in §63.3 and §63.6 of this subchapter commence on the date on which the attorney general receives from the legislative requestor all of the information required by subsections (b) and (c) of this section.

**History**
- *Source Note: The provisions of this §63.2 adopted to be effective March 27, 2011, 36 TexReg 1815.*

##### **1 Tex. Admin. Code § 63.3** Notice {#sec-63.3 omnilex-key=us-tx-regs-official--title-1--63.3}

(a) The attorney general shall notify the governmental body in writing of a request for a decision and provide the governmental body a copy of the request for a decision within a reasonable time but not later than the 5th business day after the date of receiving the request for a decision.

(b) The attorney general shall provide the legislative requestor a copy of the written notice to the governmental body, excluding a copy of the request for a decision, within a reasonable time but not later than the 5th business day after the date of receiving the request for a decision.

**History**
- *Source Note: The provisions of this §63.3 adopted to be effective March 27, 2011, 36 TexReg 1815.*

##### **1 Tex. Admin. Code § 63.4** Submission of Documents and Comments {#sec-63.4 omnilex-key=us-tx-regs-official--title-1--63.4}

(a) Within a reasonable time but not later than the 10th business day after the date of receiving the attorney general's written notice of the request for a decision, a governmental body shall:

(1) submit to the attorney general:

(A) written comments stating the law that deems the requested information confidential and the reasons why the stated law applies to the information;

(B) a copy of the written request for information; and

(C) a copy of the specific information deemed confidential by the governmental body, or representative samples of the information if a voluminous amount of information was requested; and

(2) label the copy of the specific information, or the representative samples, to indicate which laws apply to which parts of the copy; and

(3) label the written comments to indicate whether any portion of the comments discloses or contains the substance of the specific information deemed confidential by the governmental body.

(b) A governmental body that submits written comments to the attorney general shall send a copy of those comments to the legislative requestor within a reasonable time but not later than the 10th business day after the date of receiving the attorney general's written notice of the request for a decision.

(c) If a governmental body determines a person may have a property interest in the requested information, the governmental body shall notify that person in accordance with Texas Government Code §552.305(d). The governmental body shall notify the affected person not later than the 10th business day after receiving written notice of the request for a decision.

(d) If a person notified in accordance with Texas Government Code §552.305 decides to submit written comments to the attorney general, the person must do so not later than the 10th business day after receiving the notice. The written comments must be labeled to indicate whether any portion of the comments discloses or contains the substance of the specific information deemed confidential by the governmental body.

(e) Any interested person may submit written comments to the attorney general stating why the requested information is or is not confidential. The written comments must be labeled to indicate whether any portion of the comments discloses or contains the substance of the specific information deemed confidential by the governmental body.

(f) A person who submits written comments under subsection (d) or (e) of this section shall send a copy of those comments to both the legislative requestor and the governmental body.

**History**
- *Source Note: The provisions of this §63.4 adopted to be effective March 27, 2011, 36 TexReg 1815.*

##### **1 Tex. Admin. Code § 63.5** Additional Information {#sec-63.5 omnilex-key=us-tx-regs-official--title-1--63.5}

(a) The attorney general may determine whether a governmental body's submission of information under §63.4(a) of this subchapter is sufficient to render a decision.

(b) If the attorney general determines that information in addition to that required by §63.4(a) of this subchapter is necessary to render a decision, the attorney general shall give written notice of that fact to the governmental body and the legislative requestor.

(c) A governmental body notified under subsection (b) of this section shall submit the necessary additional information to the attorney general not later than the seventh calendar day after the date the notice is received.

**History**
- *Source Note: The provisions of this §63.5 adopted to be effective March 27, 2011, 36 TexReg 1815.*

##### **1 Tex. Admin. Code § 63.6** Rendition of Attorney General Decision; Issuance of Written Decision {#sec-63.6 omnilex-key=us-tx-regs-official--title-1--63.6}

(a) The attorney general shall promptly render a decision requested under this subchapter, not later than the 45th business day after the date of receiving the request for a decision.

(b) The attorney general shall issue a written decision and shall provide a copy of the decision to the legislative requestor, the governmental body, and any interested person who submitted necessary information or a brief to the attorney general about the matter.

**History**
- *Source Note: The provisions of this §63.6 adopted to be effective March 27, 2011, 36 TexReg 1815.*

#### **Subchapter B** REVIEW OF PUBLIC INFORMATION REDACTIONS

##### **1 Tex. Admin. Code § 63.11** Purpose and Application {#sec-63.11 omnilex-key=us-tx-regs-official--title-1--63.11}

(a) This subchapter governs the procedures by which the attorney general shall render a decision sought by a requestor under Texas Government Code §§552.024(c-1), 552.1175(g), 552.130(d), 552.136(d), or 552.138(d).

(b) Texas Government Code §552.308 and §552.309 apply to all deadlines established in this subchapter.

**History**
- *Source Note: The provisions of this §63.11 adopted to be effective January 1, 2012, 36 TexReg 8755.*

##### **1 Tex. Admin. Code § 63.12** Request for Review by the Attorney General {#sec-63.12 omnilex-key=us-tx-regs-official--title-1--63.12}

(a) If a governmental body redacts or withholds information under Texas Government Code §§552.024(c)(2), 552.1175(f), 552.130(c), 552.136(c), or 552.138(c) without requesting a decision from the attorney general about whether the information may be redacted or withheld, the requestor may ask the attorney general to review the governmental body's determination that the information at issue is excepted from required disclosure.

(b) A request for review by the attorney general must:

(1) be in writing and signed by the requestor;

(2) state the name of the governmental body to whom the original request for information was made; and

(3) state the date the original request was made.

(c) The requestor must submit a copy of the original request with the request for review. If the requestor is unable to do so, the requestor must include a written description of the original request in the request for review.

(d) The requestor may submit written comments to the attorney general stating reasons why the information at issue should be released.

(e) The deadlines in §63.13 and §63.16 of this subchapter commence on the date on which the attorney general receives from the requestor all of the information required by subsections (b) and (c) of this section.

**History**
- *Source Note: The provisions of this §63.12 adopted to be effective January 1, 2012, 36 TexReg 8755.*

##### **1 Tex. Admin. Code § 63.13** Notice {#sec-63.13 omnilex-key=us-tx-regs-official--title-1--63.13}

(a) The attorney general shall notify the governmental body in writing of a request for review and provide the governmental body a copy of the request for review not later than the 5th business day after the date of receiving the request for review.

(b) The attorney general shall provide the requestor a copy of the written notice to the governmental body, excluding a copy of the request for review, not later than the 5th business day after the date of receiving the request for review.

**History**
- *Source Note: The provisions of this §63.13 adopted to be effective January 1, 2012, 36 TexReg 8755.*

##### **1 Tex. Admin. Code § 63.14** Submission of Documents and Comments {#sec-63.14 omnilex-key=us-tx-regs-official--title-1--63.14}

(a) A governmental body shall provide to the attorney general within a reasonable time but not later than the 10th business day after the date of receiving the attorney general's written notice of the request for review:

(1) an unredacted copy of the specific information requested, or representative samples of the information if a voluminous amount of information was requested;

(2) a copy of the specific information requested, or representative samples of the information if a voluminous amount of information was requested, illustrating the information redacted or withheld;

(3) written comments stating the reasons why the information at issue was redacted or withheld;

(4) a copy of the written request for information; and

(5) a copy of the form letter the governmental body provided to the requestor as required by Texas Government Code §§552.024(c-2), 552.1175(h), 552.130(e), 552.136(e), and 552.138(e).

(b) A governmental body that submits written comments to the attorney general shall send a copy of those comments to the requestor within a reasonable time but not later than the 10th business day after the date of receiving the attorney general's written notice of the request for review. If the written comments disclose or contain the substance of the information at issue, the copy of the comments provided to the requestor must be a redacted copy.

(c) A person may submit written comments to the attorney general stating why the information at issue in a request for review should or should not be released.

(d) A person who submits written comments under subsection (c) of this section shall send a copy of those comments to both the requestor and the governmental body. If the written comments disclose or contain the substance of the information at issue, the copy of the comments sent to the requestor must be a redacted copy.

**History**
- *Source Note: The provisions of this §63.14 adopted to be effective January 1, 2012, 36 TexReg 8755.*

##### **1 Tex. Admin. Code § 63.15** Additional Information {#sec-63.15 omnilex-key=us-tx-regs-official--title-1--63.15}

(a) The attorney general may determine whether a governmental body's submission of information under §63.14(a) of this subchapter is sufficient to render a decision.

(b) If the attorney general determines that information in addition to that required by §63.14(a) of this subchapter is necessary to render a decision, the attorney general shall give written notice of that fact to the governmental body and the requestor.

(c) A governmental body notified under subsection (b) of this section shall submit the necessary additional information to the attorney general not later than the 7th calendar day after the date the notice is received.

**History**
- *Source Note: The provisions of this §63.15 adopted to be effective January 1, 2012, 36 TexReg 8755.*

##### **1 Tex. Admin. Code § 63.16** Rendition of Attorney General Decision; Issuance of Written Decision {#sec-63.16 omnilex-key=us-tx-regs-official--title-1--63.16}

(a) The attorney general shall promptly render a decision requested under this subchapter, not later than the 45th business day after the date of receiving the request for review.

(b) The attorney general shall issue a written decision and shall provide a copy of the decision to the requestor, the governmental body, and any interested person who submitted necessary information or a brief to the attorney general about the matter.

**History**
- *Source Note: The provisions of this §63.16 adopted to be effective January 1, 2012, 36 TexReg 8755.*

#### **Subchapter C** ELECTRONIC SUBMISSION OF REQUEST FOR ATTORNEY GENERAL OPEN RECORDS DECISION

##### **1 Tex. Admin. Code § 63.21** Definitions {#sec-63.21 omnilex-key=us-tx-regs-official--title-1--63.21}

The following words and terms, when used in this subchapter, shall have the following meanings:

(1) "Governmental body" means a governmental body as defined in Texas Government Code §552.003(1).

(2) "Request for decision" means a request for an attorney general open records decision made by a governmental body pursuant to Texas Government Code §552.301 and §552.309.

(3) "Requestor" means a requestor as defined in Texas Government Code §552.003(6).

(4) "Interested third party" means any third party who wishes to submit comments, documents, or other materials for consideration in the attorney general's open records decision process under Texas Government Code §552.304 or §552.305.

(5) "Attorney general's designated electronic filing system" means the online, electronic filing system designated by the attorney general as the system for submitting documents and other materials to the attorney general under Texas Government Code §552.309.

(6) "Impractical" means:

(A) the responsive information is in a format the attorney general's designated electronic filing system cannot accept at the time of filing, and the governmental body cannot otherwise comply with its procedural submission requirements through use of a representative sample under Texas Government Code §552.301(e), or

(B) the responsive information is recorded on paper or physical material that would take more than one hour of labor to convert into an electronic format that is compatible with the attorney general's designated electronic filing system, and the governmental body cannot otherwise comply with its procedural submission requirements through use of a representative sample under Texas Government Code §552.301(e).

(7) "Impossible" means:

(A) the size of the information attachment exceeds the attorney general's designated e-filing system's capacity at time of filing, and the governmental body cannot otherwise comply with its procedural submission requirements through use of a representative sample under Texas Government Code §552.301(e), or

(B) the format of the information is not compatible the attorney general's designated e-filing system at time of filing, cannot be converted without altering the character of the information in a manner that would prevent proper review by the attorney general, and the governmental body cannot otherwise comply with its procedural submission requirements through use of a representative sample under Texas Government Code §552.301(e), or

(C) the attorney general's designated e-filing system is down at the time the governmental body attempts to submit the filing, or

(D) the governmental body is experiencing a technical outage that prevents it from e-filing at the time of the attempted submission.

**History**
- *Source Note: The provisions of this §63.21 adopted to be effective March 18, 2012, 37 TexReg 1695; amended to be effective January 26, 2017, 42 TexReg 213; amended to be effective August 13, 2024, 49 TexReg 5937.*

##### **1 Tex. Admin. Code § 63.22** Electronic Submission of Request for Attorney General Decision {#sec-63.22 omnilex-key=us-tx-regs-official--title-1--63.22}

(a) A governmental body that requests a decision from the attorney general under Texas Government Code §552.301 about whether requested public information is excepted from public disclosure may submit that request for decision to the attorney general through the attorney general's designated electronic filing system.

(b) The governmental body's request for decision must comply with the requirements of Texas Government Code §552.301.

(c) The deadlines in Texas Government Code §552.301 and §552.303 are met if the governmental body timely submits the required documents and other materials through the attorney general's designated electronic filing system within the time prescribed.

(d) The governmental body must comply with the requirements of Texas Government Code §552.301(d) and (e-1), and §552.305 regardless of whether the request for attorney general decision is submitted electronically or through another permissible method of submission.

(e) To use the attorney general's designated electronic filing system, the governmental body must agree to and comply with the terms and conditions of use as outlined on the attorney general's designated electronic filing system website.

(f) The confidentiality of Texas Government Code §552.3035 applies to information submitted under Texas Government Code §552.301(e)(1)(D) through the attorney general's designated electronic filing system.

(g) Each submission to the attorney general's designated electronic filing system must pertain to one decision request matter. A governmental body may not combine multiple unrelated decision requests into a single submission through the attorney general's designated electronic filing system. However, a governmental body may submit a single request for decision for multiple written requests for information if the written requests for information seek information that is identical, is based on some or all of the same facts or fact pattern, or is directly related.

(h) A governmental body who, pursuant to Texas Government Code §552.3031(a)(2), does not use the attorney general's designated electronic filing system because it is impractical or impossible shall provide a statement in its request for decision that explains why it was impractical or impossible to use the attorney general's designated electronic filing system, including the date and approximate time the governmental body attempted submission.

(i) If a governmental body extends into more than one county, then the governmental body shall use the population of the county in which its central administrative office is located to determine if Texas Government Code §552.3031(a)(1)(B) is applicable to the governmental body.

**History**
- *Source Note: The provisions of this §63.22 adopted to be effective March 18, 2012, 37 TexReg 1695; amended to be effective August 13, 2024, 49 TexReg 5937.*

##### **1 Tex. Admin. Code § 63.23** Electronic Submission of Documents or other Materials by Interested Third Party {#sec-63.23 omnilex-key=us-tx-regs-official--title-1--63.23}

(a) An interested third party may submit, through the attorney general's designated electronic filing system, the reasons why the requested public information should be withheld or released along with any necessary supporting documentation for consideration in the attorney general's open records decision process.

(b) The deadline in Texas Government Code §552.305(d)(2)(B) is met if the interested third party timely submits the reasons why the requested public information should be withheld or released along with any necessary supporting documentation through the attorney general's designated electronic filing system within the time prescribed.

(c) The interested third party must comply with the requirements of Texas Government Code §552.305(e) regardless of whether the interested third party submits materials electronically or through another permissible method of submission.

(d) To use the attorney general's designated electronic filing system, the interested third party must agree to and comply with the terms and conditions of use as outlined on the attorney general's designated electronic filing system website.

**History**
- *Source Note: The provisions of this §63.23 adopted to be effective March 18, 2012, 37 TexReg 1695.*

### **Chapter 64** ADDRESS CONFIDENTIALITY PROGRAM

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 64.1** Scope and Construction of Rules {#sec-64.1 omnilex-key=us-tx-regs-official--title-1--64.1}

This chapter applies to the administration of the Texas Address Confidentiality Program (ACP) created by Texas Code of Criminal Procedure chapter 58, subchapter B. The Office of the Attorney General (OAG) adopts this chapter pursuant to Texas Code of Criminal Procedure article 58.052 and consistent with chapter 58, subchapter B.

**History**
- *Source Note: The provisions of this §64.1 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.2** Definitions {#sec-64.2 omnilex-key=us-tx-regs-official--title-1--64.2}

(a) The following words and terms, when used in this chapter, have the following meanings:

(1) "Applicant" is a person who submits an application to the OAG to enroll in the ACP.

(2) "Application" is the document requesting to participate in the ACP, including all information and documents submitted by, or on behalf of, the applicant.

(3) "Certification" means OAG authorization for an applicant to participate in the ACP.

(4) "Certified mail" is any first-class letter-size or flat-size mail for which the mailer pays a surcharge to the United States Postal Service (USPS) to be provided with a receipt, and the USPS records delivery of the mail. Certified mail does not include a package regardless of size or type of mailing.

(5) "Counseling" means victim-related guidance, advice, and support with crisis intervention, obtaining information, legal advocacy, prevention of further harm, or meeting other physical, emotional, or psychological needs.

(6) "Family violence" has the same definition as in Texas Family Code §71.004.

(7) "First Class Mail" is designated by the USPS as:

(A) Letter-size mail, as defined in the USPS Domestic Mail Manual, is mail that is not less than 5 inches long or more than 11 1/2 inches long, and not less than 0.007 inches thick or more than 1/4 inch thick. Letter-size mail may not weigh more than 3.5 ounces.

(B) Flat-size mail, as defined in the USPS Domestic Mail Manual, is mail not more than 15 inches long, more than 12 inches high or more than 3/4 inches thick. Flat-size mail may not weigh more than 13 ounces.

(8) "Household" is a unit composed of persons living together in the same dwelling, without regard to whether they are related to each other, as defined in Texas Family Code §71.005.

(9) "Other entity" means an organization or group, whether for profit or nonprofit, that provides the services of a victim's assistance counselor, counseling, or shelter services to victims of family violence, sexual assault, stalking, or trafficking of persons.

(10) "Package" must have the same meaning as parcel, as defined in the USPS Domestic Mail Manual. Parcel is mail that does not meet the mail processing category of letter-size mail or flat-size mail.

(11) "Participant" is a person who has applied and been enrolled into the ACP, including all members of the applicant's household whose address is the same.

(12) "Sexual offense" includes the terms "sexual assault" as defined in Texas Penal Code §22.011, "aggravated sexual assault" as defined in Texas Penal Code §22.021, or "prohibited sexual conduct" as defined in Texas Penal Code §25.02.

(13) "Shelter services" are provided directly, by referral, or through formal arrangements with other agencies and include:

(A) 24-hour-a-day shelter;

(B) a crisis hotline available 24 hours a day;

(C) emergency medical care;

(D) intervention services, including safety planning, understanding and support, information, education, referrals, resource assistance, and individual service plans;

(E) emergency transportation;

(F) legal assistance in the civil and criminal justice systems, including identifying individual needs, legal rights, and legal options, as well as providing support and accompaniment in pursuing those options;

(G) information about educational arrangements for children;

(H) information about training for and seeking employment; or

(I) a referral system to existing community services.

(14) "Stalking" has the meaning assigned by Texas Penal Code §42.072.

(15) "State or local agency" includes, but is not limited to, a governmental agency of the State of Texas or a Texas county, city, town, or municipality.

(16) "Texas resident" is a person who has a domicile in, lives for more than a temporary period, or who can show intent to establish a domicile in Texas either at the time of the crime or during the duration of participation in the program. Documentary evidence of the applicant's Texas residency may be established by submitting the following documentation in the name of the applicant:

(A) a lease or rental agreement;

(B) utility bills;

(C) school or work records;

(D) a driver's license;

(E) postmarked mail delivered to the applicant at the Texas residence or intended Texas residence;

(F) written verification from a victim's assistance counselor; or

(G) other documentation approved by the OAG.

(17) "Trafficking of Persons" has the meaning assigned by Texas Code of Criminal Procedure Article 58.001(11).

(18) "True Address" is the physical address where the applicant actually resides, is employed, or attends school.

(19) "Victim's Assistance Counselor" is an individual authorized by a state or local agency or other for profit or nonprofit entity to meet with or assist individuals applying for participation in the ACP.

(b) The definitions in this chapter will be given their most reasonable meaning unless the content clearly indicates otherwise.

**History**
- *Source Note: The provisions of this §64.2 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.3** Address Confidentiality Program (ACP) {#sec-64.3 omnilex-key=us-tx-regs-official--title-1--64.3}

(a) The ACP assists victims of family violence, sexual offenses, stalking, and trafficking of persons by authorizing the use of an OAG-maintained confidential mailing address.

(b) The OAG will:

(1) designate a substitute post office box address for participants to use in place of the participant's true residential, business, or school address;

(2) act as agent to receive service of process and mail on behalf of the participant; or

(3) forward to the participant first-class mail.

(c) The OAG will not forward packages.

(d) A summons, writ, notice, demand, or process may be served on the OAG on behalf of the participant by delivery of two copies of the document to the OAG. The OAG will retain a copy of the summons, writ, notice, demand, or process and forward the original to the participant via first class or certified mail not later than the third day after the date of service on the OAG.

(e) The OAG may not make a copy of a participant's mail received by the OAG, except that the OAG will retain a copy of the envelope in which certified mail is received on behalf of the participant.

(f) The attorney general or an agent or employee of the attorney general is immune from liability for any act or omission by the agent or employee in administering the ACP if the agent or employee was acting in good faith and within the course and scope of assigned responsibilities and duties.

(g) An agent or employee of the attorney general who does not act in good faith and within the course and scope of assigned responsibilities and duties in disclosing a participant's true residential, business, or school address is subject to prosecution under Chapter 39, Texas Penal Code.

(h) The OAG is not responsible for updating or modifying the participant's public records regarding the substitute address. ACP participants remain personally responsible for compliance with all applicable federal, state, and local laws and regulations, including those which require a physical address.

(i) The OAG is not responsible for tracking or otherwise maintaining mail or records of mail received on behalf of a participant.

(j) The OAG is not responsible for notifying any person or entity of the expiration or cancellation of the participant's participation in the ACP.

(k) Upon a final determination of the expiration or cancellation of the participant's participation in the ACP, the OAG will return the participant's mail to sender.

**History**
- *Source Note: The provisions of this §64.3 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.4** Acceptance of Substitute Address {#sec-64.4 omnilex-key=us-tx-regs-official--title-1--64.4}

A state or local agency must accept the substitute post office box address designated by the OAG if the substitute address is presented to the agency by a participant in place of the participant's true residential, business, or school address.

**History**
- *Source Note: The provisions of this §64.4 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.5** Mail That Cannot Be Forwarded {#sec-64.5 omnilex-key=us-tx-regs-official--title-1--64.5}

The OAG will forward only first-class mail to a participant. For any non-first-class mail that OAG receives, OAG will take action in accordance with USPS laws, regulations, and guidelines, including, but not limited to, returning mail to the sender or refusing to accept delivery of such mail.

**History**
- *Source Note: The provisions of this §64.5 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.6** Destruction of Information {#sec-64.6 omnilex-key=us-tx-regs-official--title-1--64.6}

(a) The OAG will destroy all information relating to a participant on the third anniversary of the date participation in the ACP ends.

(b) The OAG will destroy all information relating to a denied application on the third anniversary of the date of the denial.

**History**
- *Source Note: The provisions of this §64.6 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.7** Voter Registration {#sec-64.7 omnilex-key=us-tx-regs-official--title-1--64.7}

A participant who desires to register to vote is responsible for compliance with the requirements of the registrar of the county in which the participant resides and all other applicable federal, state, and local laws and regulations. Instructions and forms for are published online by the Secretary of State. The rules applying to confidentiality of voting records for ACP participants are in Texas Administrative Code, Title 1, Chapter 81, §81.38(b).

**History**
- *Source Note: The provisions of this §64.7 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.8** State or Local Agency Responsibility {#sec-64.8 omnilex-key=us-tx-regs-official--title-1--64.8}

A state or local agency that accepts an ACP participant's substitute post office box address is responsible for the administration of its rules and regulations in compliance with Texas Code of Criminal Procedure Chapter 58.

**History**
- *Source Note: The provisions of this §64.8 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter B** APPLICATION FOR ADDRESS CONFIDENTIALITY PROGRAM PARTICIPATION

##### **1 Tex. Admin. Code § 64.10** Requirements {#sec-64.10 omnilex-key=us-tx-regs-official--title-1--64.10}

(a) An application must be submitted through the form published on the OAG website, and must be signed, dated, and affirm the following:

(1) the applicant fears for the safety of the applicant, the applicant's child, or another person in the applicant's household because of threat of immediate or future harm by a person alleged to have committed family violence, a sexual offense, stalking, or trafficking of persons;

(2) the applicant lives at, or will relocate to, a residential address that is, to the best of their knowledge, unknown to the person who committed the alleged family violence, sexual offense, stalking, or trafficking of persons;

(3) if there is an existing court order or a pending court case for child support or child custody or visitation that involves the applicant, the name of the legal counsel of record and each parent involved in the court order or pending case; and

(4) the applicant designates the OAG as agent to receive service of process and mail on behalf of the applicant.

(b) In addition to the application, the OAG may require an applicant to submit independent documentary evidence that family violence, a sexual offense, stalking, or trafficking of persons occurred. Independent documentary evidence may include, but is not limited to:

(1) an active or recently issued protective order;

(2) an incident report or other record maintained by a law enforcement agency or official;

(3) a statement from a physician or other health care provider regarding the applicant's medical condition as a result of the family violence, sexual offense, stalking, or trafficking of persons;

(4) a statement from a mental health professional, a member of the clergy, an attorney or other legal advocate, a trained staff member of a family violence center, or another professional who has assisted the applicant in addressing the effects of the family violence, sexual offense, stalking, or trafficking of persons; or

(5) any other information the OAG deems appropriate.

**History**
- *Source Note: The provisions of this §64.10 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.11** Certification of Address Confidentiality Program Participation {#sec-64.11 omnilex-key=us-tx-regs-official--title-1--64.11}

(a) The OAG will review and, if appropriate, approve the applicant's application and certify the applicant's participation in the ACP.

(b) Upon certification into the ACP, the OAG will issue an ACP authorization card (ACP card) to the ACP participant. The ACP card is valid as long as the ACP participant remains certified under the ACP.

(1) An ACP card is property of the OAG and must be surrendered or destroyed upon cancellation of participation in the ACP.(2) An ACP card is an official governmental record and is void if altered, sold, or damaged.

(3) Participants may request a new ACP card in the event the card is lost, stolen, or destroyed.

(4) The OAG may issue and replace ACP cards upon certification or request for a replacement ACP card.

(c) Certification for participation in the ACP expires on the third anniversary of the date of certification.

**History**
- *Source Note: The provisions of this §64.11 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter C** PROGRAM ELIGIBILITY

##### **1 Tex. Admin. Code § 64.20** Eligibility to Participate in the Address Confidentiality Program {#sec-64.20 omnilex-key=us-tx-regs-official--title-1--64.20}

(a) An applicant is eligible for participation in the ACP if:

(1) they have met with a victim's assistance counselor from an entity that is identified by the OAG as one that provides shelter housing, civil legal services, or counseling to victims of family violence, sexual assault or abuse, stalking, or trafficking of persons;

(2) they or a household member are protected under, or have filed an application for an order of protection, under:

(A) a temporary injunction issued under Subchapter F, Chapter 6, Texas Family Code;

(B) a temporary ex parte order issued under Chapter 83, Texas Family Code;

(C) an order issued under Subchapter A or B, Chapter 7B, of Texas Code of Criminal Procedure or Chapter 85, Texas Family Code; or

(D) a magistrate's order for emergency protection issued under Article 17.292, Texas Code of Criminal Procedure; or

(3) they possess other documentation as described in §64.10 of this chapter.

(b) If an applicant does not submit supporting documentation and relies upon a certification by a crime victim service provider, the applicant must:

(1) meet with a crime victim assistance counselor from a state or local agency or other entity;

(2) file the application from or through that agency; and

(3) include the name, title, and signature of the crime victim assistance counselor or advocate who met with and assisted the applicant in the preparation of the application.

**History**
- *Source Note: The provisions of this §64.20 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.21** Renewal of Participation {#sec-64.21 omnilex-key=us-tx-regs-official--title-1--64.21}

To renew a certification under Texas Code of Criminal Procedure Article 58.059(c), an ACP participant must submit a new application that complies with §64.10. An applicant may use the same incident of family violence, sexual offense, stalking, or trafficking of persons as the basis for renewal of their application for participation. An application for renewal will be treated as an original application.

**History**
- *Source Note: The provisions of this §64.21 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter D** PARTICIPATION TERMINATION

##### **1 Tex. Admin. Code § 64.30** Denial or Cancellation {#sec-64.30 omnilex-key=us-tx-regs-official--title-1--64.30}

(a) A participant may be excluded from participation in the ACP if:

(1) mail forwarded to the participant by the OAG is returned as undeliverable on at least four occasions;

(2) the participant changes the participant's true residential address as provided in the application filed by the participant, and does not submit an OAG Change of Address form notifying the OAG at least 10 business days before the date of the address change; or

(3) the participant changes the participant's name.

(b) If an application for the ACP is denied or participation in the ACP is canceled, the OAG will send the applicant or participant a written determination and reason for the denial or cancellation.

**History**
- *Source Note: The provisions of this §64.30 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.31** Participation Withdrawal {#sec-64.31 omnilex-key=us-tx-regs-official--title-1--64.31}

A participant may withdraw from participation in the ACP at any time by submitting a signed written request. A Withdrawal Form is located on the OAG website but is not required.

**History**
- *Source Note: The provisions of this §64.31 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter E** GOVERNMENTAL AGENCY EXEMPTIONS

##### **1 Tex. Admin. Code § 64.40** Request for Agency Exemption {#sec-64.40 omnilex-key=us-tx-regs-official--title-1--64.40}

(a) An agency may seek an exemption determination from the OAG under Texas Code of Criminal Procedure Article 58.053(a) to require a participant to provide the participant's true residential, business, or school address. To seek an exemption determination, the agency must file an OAG Request for Agency Exemption form that includes, but is not limited to, the following information:

(1) the name of the agency along with an explanation and supporting documentation that shows the exemption is necessary for the agency to perform a duty or function that is imposed by law or administrative requirement;

(2) the name and title of the individual authorized to make the request on behalf of the agency;

(3) verification that the requestor will maintain the confidentiality of the participant's true residential, business, or school address; and

(4) verification by the agency representative affirming that the information submitted is correct.

(b) The OAG may require additional information deemed necessary by the OAG.

(c) The OAG will issue a written determination as soon as practicable.

(d) An agency may submit a request for an exemption determination at any time even if there is no current need for the exemption at the agency.

(e) An agency previously denied an exemption may reapply in the event of new information.

**History**
- *Source Note: The provisions of this §64.40 adopted to be effective September 26, 2022, 47 TexReg 6189.*

##### **1 Tex. Admin. Code § 64.41** Request for Reconsideration of Exemption Denial {#sec-64.41 omnilex-key=us-tx-regs-official--title-1--64.41}

(a) If an agency is denied an exemption under Texas Code of Criminal Procedure Article 58.053(b), an agency has 30 days from the date of the exemption denial to submit a written request for reconsideration to the OAG, along with supporting documentation. The OAG may require additional information as deemed necessary.

(b) The OAG will issue a written determination on the agency's request for reconsideration based on the evidence submitted.

(c) The OAG's decision is final.

**History**
- *Source Note: The provisions of this §64.41 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter F** ADDRESS DISCLOSURE EXCEPTIONS

##### **1 Tex. Admin. Code § 64.50** Exceptions {#sec-64.50 omnilex-key=us-tx-regs-official--title-1--64.50}

(a) Pursuant to Texas Code of Criminal Procedure Article 58.061, the OAG will disclose a participant's true residential, business, or school address if requested by:

(1) a law enforcement agency;

(2) the Department of Family and Protective Services for the purpose of conducting a child protective services investigation under Texas Family Code Chapter 261; or

(3) the Department of State Health Services or a local health authority for the purpose of making a notification of a communicable disease described under Texas Code of Criminal Procedure Article 21.31, Texas Family Code §54.033, or Texas Health and Safety Code §81.051.

(b) Pursuant to Texas Code of Criminal Procedure Article 58.104, the OAG will disclose a participant's true residential, business, or school address if required by a court order.

(c) A request for disclosure of a participant's true residential, business, or school address from an agency pursuant to this section must be submitted to the Address Confidentiality Program via mail, fax, or email, along with any supporting documentation, such as the following information:

(1) the name of the agency requesting the disclosure and the statutory exception upon which the agency bases its request;

(2) the name and title of the individual authorized to make the request on behalf of the agency;

(3) a signed statement by the agency representative affirming that the information submitted is correct; and

(4) an original certified copy of the court order, if applicable.

(d) The OAG may require additional information as deemed necessary.

**History**
- *Source Note: The provisions of this §64.50 adopted to be effective September 26, 2022, 47 TexReg 6189.*

#### **Subchapter G** ADMINISTRATIVE REMEDIES

##### **1 Tex. Admin. Code § 64.60** Request for Reconsideration {#sec-64.60 omnilex-key=us-tx-regs-official--title-1--64.60}

(a) An ACP applicant or participant has 30 days from the date of the OAG's denial or cancellation to seek reconsideration. The OAG may require additional information as deemed necessary. If the applicant or participant fails to seek reconsideration within the 30-day time period, the decision of the OAG becomes final.

(b) The OAG will issue a written determination on the request for reconsideration based on the evidence submitted.

(c) The OAG's determination on the request for reconsideration is final.

(d) If an application for the ACP is denied or participation in the ACP is canceled, the applicant or participant may reapply in the event of a new qualifying incident.

**History**
- *Source Note: The provisions of this §64.60 adopted to be effective September 26, 2022, 47 TexReg 6189.*

### **Chapter 65** LANDOWNER COMPENSATION PROGRAM

#### **Subchapter A** SCOPE, CONSTRUCTION, AND DEFINITIONS

##### **1 Tex. Admin. Code § 65.1** Authority, Scope, and Construction of Rules {#sec-65.1 omnilex-key=us-tx-regs-official--title-1--65.1}

This chapter applies to the administration of the Landowner Compensation for Property Damage caused by Certain Criminal Activities program pursuant to Texas Code of Criminal Procedure, Chapter 56C. The Office of the Attorney General (OAG) adopts this chapter under the authority of the Texas Code of Criminal Procedure, Chapter 56C and Texas Government Code, Chapter 402.

**History**
- *Source Note: The provisions of this §65.1 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.2** Definitions {#sec-65.2 omnilex-key=us-tx-regs-official--title-1--65.2}

The following words and terms, when used in this chapter, shall have the following meanings:

(1) "Agricultural land" means any land the use of which qualifies the land for appraisal based on agricultural use as defined under Subchapter D, Chapter 23, Texas Tax Code.

(2) "Agricultural use" includes but is not limited to the following activities: cultivating the soil, producing crops for human food, animal feed, or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the production of human food or of fiber, leather, pelts, or other tangible products having a commercial value; planting cover crops or leaving land idle for the purpose of participating in a governmental program, provided the land is not used for residential purposes or a purpose inconsistent with agricultural use; and planting cover crops or leaving land idle in conjunction with normal crop or livestock rotation procedure. The term also includes the use of land to produce or harvest logs and posts for the use in constructing or repairing fences, pens, barns, or other agricultural improvements on adjacent qualified open-space land having the same owner and devoted to a different agricultural use. The term also includes the use of land for wildlife management. The term also includes the use of land to raise or keep bees for pollination or for the production of human food or other tangible products having a commercial value, defined by the Texas Tax Code §23.51(2).

(3) "Application" means a written request for compensation under the Landowner Compensation for Property Damage caused by Certain Criminal Activities program and includes all supporting documentation that is provided for claim determination as prescribed by the OAG.

(4) "Border crime" means conduct:

(A) constituting an offense under:

(i) Subchapter D, Chapter 481 (Texas Controlled Substances Act), Health and Safety Code;

(ii) Section 20.05 (Smuggling of Persons) or 38.04 (Evading Arrest or Detention), Penal Code; or

(iii) Chapter 20A (Trafficking of Persons), Penal Code; and

(B) involving transnational criminal activity.

(5) "Claimant" means any landowner applying for any benefit under this chapter.

(6) "Closed application" means an application which has been administratively closed under this chapter.

(7) "Collateral source" means financial compensation for real property damage under a state, local, or federal funding program, or an insurance contract and may include property insurance; state funding; local funding; federal funding; or foreign consulate payments.

(8) "Incident" means an occurrence of real property damage on agricultural land caused by a trespasser as a result of an offense under Chapter 28, Penal Code, in the course or furtherance of a border crime or engaged in a border crime that has been reported to law enforcement.

(9) "Landowner" means an individual or business that owns land in the State of Texas.

(10) "Law enforcement agency" means a governmental organization that employs commissioned peace officers as defined by Texas Code of Criminal Procedure Article 2.12, and shall include special rangers appointed pursuant to Texas Code of Criminal Procedure Article 2.125.

(11) "LCP" means Landowner Compensation Program.

(12) "OAG" means Office of the Attorney General.

(13) "Real Property" means agricultural land that has the meanings assigned by Texas Tax Code, §1.04(2). The term does not include crops, farm equipment, or livestock.

(14) "Report" means written documentation created or provided by a law enforcement agency in connection with an incident.

(15) "Trespasser" has the meaning assigned by Texas Civil Practice and Remedies Code §75.007.

**History**
- *Source Note: The provisions of this §65.2 adopted to be effective May 12, 2024, 49 TexReg 3003.*

#### **Subchapter B** PROGRAM GUIDELINES

##### **1 Tex. Admin. Code § 65.200** Eligibility and Administration {#sec-65.200 omnilex-key=us-tx-regs-official--title-1--65.200}

(a) The OAG shall determine the eligibility, standards, and reasonable limits on compensation for applications and payments in a manner consistent with the law and this chapter. Use of payments made under the LCP are subject to ongoing review by the OAG to ensure compliance with conditions of the awards.

(b) The following requirements must be met in order for a claimant to be eligible for compensation under the LCP:

(1) the claimant must be a landowner;

(2) the land for which the claimant submits an application for compensation under the LCP must be agricultural land;

(3) the damage for which the claimant submits an application must be real property damage caused by a trespasser as a result of an offense under Chapter 28, Texas Penal Code, that was committed in the course of or in furtherance of a border crime or a law enforcement response to a trespasser who was engaged in a border crime;

(4) the claimant must submit a written report created by a law enforcement agency stating real property damage occurred in connection with a border crime; and

(5) the landowner sought and was not eligible to receive compensation from all available collateral sources.

(c) The real property damage for which a claimant files a claim must have occurred on or after September 1, 2023.

(d) A claimant may not be eligible for compensation under the LCP if the claimant does not submit an application in accordance with this chapter.

**History**
- *Source Note: The provisions of this §65.200 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.201** Program Compensation {#sec-65.201 omnilex-key=us-tx-regs-official--title-1--65.201}

(a) The OAG may award compensation to claimants determined by the OAG to have met all eligibility requirements in §65.200 of this chapter.

(b) Compensation will be reduced for any portion of the otherwise eligible real property damage for which the claimant received compensation from a collateral source.

(c) Awarded compensation will be an amount the OAG determines is reasonable to restore the real property to equal value of the real property before the damage.

(d) The OAG may determine the fair market price of a cost to determine a reimbursable amount of compensation if a claimant does not, for a reasonable reason, submit proof of the actual cost for repair. The OAG has the discretion to determine whether the reason a claimant is not able to provide proof of actual cost for repair is reasonable.

**History**
- *Source Note: The provisions of this §65.201 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.202** Compensation Amount Guidelines {#sec-65.202 omnilex-key=us-tx-regs-official--title-1--65.202}

(a) Real property repairs are limited to the following categories:

(1) labor cost for repairs made;

(2) cost for fence repair, including materials;

(3) cost for structure repair, including materials;

(4) disposal and removal of damaged property; or

(5) any other costs the OAG determines is reasonable to restore fair market value.

(b) The OAG will set the compensation rates for costs enumerated in subsection (a) of this section in accordance with fair market value guidelines and publish the rates on the OAG's website. The OAG may periodically review and adjust the compensation rates at its discretion to ensure fair market value.

(c) The maximum amount awarded per incident will not exceed $75,000.

(d) Applications submitted by a claimant for $15 or less will not be considered.

**History**
- *Source Note: The provisions of this §65.202 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.203** Monitoring Use of Compensation {#sec-65.203 omnilex-key=us-tx-regs-official--title-1--65.203}

(a) The OAG may verify and investigate the use of compensation awarded under the LCP. Verification and investigation includes but is not limited to:

(1) verification of any documentation submitted to the OAG;

(2) review of records submitted by a claimant; or

(3) a post-award audit to verify actual charges, bills, payments, and the delivery of goods or services.

(b) The OAG may require additional supporting documentation from a claimant. The claimant must respond to the OAG's request within 30 days, unless good cause is shown.

(c) If the claimant fails to provide additional supporting documentation or the OAG determines the claimant improperly used awarded compensation, then the OAG may require a claimant to refund the awarded funds in accordance with this chapter.

**History**
- *Source Note: The provisions of this §65.203 adopted to be effective May 12, 2024, 49 TexReg 3003.*

#### **Subchapter C** APPLICATION FOR COMPENSATION

##### **1 Tex. Admin. Code § 65.300** Application for Compensation {#sec-65.300 omnilex-key=us-tx-regs-official--title-1--65.300}

(a) All communications and applications for compensation shall be submitted to the LCP in a manner and form prescribed by the OAG.

(b) An application for compensation is complete when the application:

(1) is filled out in its entirety as prescribed by the OAG;

(2) signed by the claimant or authorized agent, as determined by the OAG;

(3) contains all relevant required documentation; and

(4) contains any other information requested by the OAG to determine eligibility.

(c) The OAG will not consider an application until the application is complete as prescribed in §65.300(b).

(d) An application must include:

(1) a written report, including an incident or claim number, by a law enforcement agency that documents the real property damage occurred in connection with a border crime;

(2) photographic evidence of the real property damage;

(3) a detailed description of the real property damage;

(4) any identifying property information needed to determine eligibility; and

(5) insurance declarations or denial of coverage.

(e) The OAG may require the claimant to provide:

(1) Federal Tax Identification Number (EIN);

(2) entity formation information;

(3) the claimant's social security number;

(4) the claimant's Individual Taxpayer Number (ITIN);

(5) itemized receipts or invoices of cost for repair(s);

(6) itemized receipts or invoices of cost for labor; or

(7) any other information needed to determine eligibility.

(f) If the claimant submits an application that is not complete, the OAG will notify the claimant in writing, that the application is incomplete and request that the additional information.

(g) If the claimant does not return the completed application to the OAG within 30 days from the date generated on the OAG's request for additional information, the application may be closed in accordance with §65.303.

**History**
- *Source Note: The provisions of this §65.300 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.301** Timely Filing an Application {#sec-65.301 omnilex-key=us-tx-regs-official--title-1--65.301}

(a) An application must be submitted with the OAG no later than 90 days from the date of an incident.

(b) The OAG may extend the time for filing an application upon good cause shown by the claimant. Good cause, as determined by the OAG, may include the following circumstances:

(1) The claimant was not reasonably aware of the LCP;

(2) Extenuating circumstances prevented the claimant from filing in a timely manner; or

(3) Any other circumstance that the OAG considers significant.

**History**
- *Source Note: The provisions of this §65.301 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.302** Law Enforcement Report {#sec-65.302 omnilex-key=us-tx-regs-official--title-1--65.302}

(a) A claimant must report an incident to the appropriate law enforcement agency within a reasonable period as determined by the OAG in order to be eligible for compensation under the LCP.

(b) The OAG may extend the time for reporting an incident to law enforcement if the OAG determines that the extension is justified by extraordinary circumstances.

(c) The report must include the location of the incident.

**History**
- *Source Note: The provisions of this §65.302 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.303** Denial or Closure of an Application {#sec-65.303 omnilex-key=us-tx-regs-official--title-1--65.303}

(a) The OAG will deny compensation under this article if:

(1) real property damage was not caused by a trespasser committing a border crime on agricultural land;

(2) the claimant was eligible for reimbursement from another collateral source and failed to seek reimbursement from the collateral source prior to submitting an application; or

(3) the claimant did not meet the requirements for eligibility under this chapter; or

(4) the claimant knowingly or intentionally provides false or fraudulent information or supporting documentation to the OAG.

(b) An application for compensation may be closed at the discretion of the OAG if any of the following conditions occurs:

(1) No written report by a law enforcement agency was obtained;

(2) The claimant fails to respond within a 30-day period to a request made by the OAG for additional information as required by §65.300;

(3) The OAG is unable, within 30 days of receiving an application, to obtain information substantiating the incident; and

(4) The claimant fails to report that the claimant received or was eligible to receive compensation through a collateral source.

(c) The OAG may reopen an application that has been closed at its discretion upon written request from a claimant that establishes good cause.

(d) The OAG will not reopen an application that has been denied. A claimant may not reapply for compensation for an incident.

**History**
- *Source Note: The provisions of this §65.303 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.304** Collateral Sources {#sec-65.304 omnilex-key=us-tx-regs-official--title-1--65.304}

(a) The LCP is the payer of last resort, and the OAG will not award compensation to a claimant if the OAG determines the claimant is or was eligible for reimbursement from any available collateral source and failed to seek reimbursement from an available collateral source.

(b) The OAG may deny or reduce the compensation if the OAG notifies the claimant of a possible reimbursement amount from any available collateral source, and the claimant fails to apply or pursue the compensation within a reasonable time frame as determined by the OAG. The acceptable time frame will be determined by the OAG upon consideration of all relevant facts and circumstances.

(c) A claimant must seek compensation from any available collateral sources prior to submitting a claim to the OAG, when reasonably possible.

(d) Unless good cause is shown, if a claimant receives compensation from a collateral source, the claimant must report the compensation amount and the source to the OAG before the claimant will be eligible to receive compensation. If a claimant is awarded compensation by a collateral source after the OAG awarded compensation under the LCP, the claimant must notify the OAG of the amount and the source of the collateral source within 10 business days of becoming aware of the compensation from a collateral source.

(e) If the claimant fails to utilize any available collateral source for all or a portion for real property damage, the OAG may deny or reduce an award under the LCP.

(f) Gifts, donations, or charitable contributions made directly to a claimant are not a collateral source and may not reduce the determination of the actual real property damage incurred by the claimant.

**History**
- *Source Note: The provisions of this §65.304 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.305** Refunds from Claimants {#sec-65.305 omnilex-key=us-tx-regs-official--title-1--65.305}

(a) The OAG may require a refund from a claimant if any compensation was awarded under the LCP based on fraud or mistake or based on new information that would disqualify a claimant from being eligible for compensation.

(b) The OAG may require the claimant to refund any overpayment in full or in installments or reduce future or pending payments by the amount of the overpayment.

(c) The OAG may discontinue or suspend all current and future payments to a claimant from whom the OAG has requested a refund.

(d) The OAG may pursue available administrative or civil penalties in addition to seeking a refund upon determining that compensation was awarded based on fraud or mistake or based on new information that would disqualify a claimant from being eligible for compensation.

**History**
- *Source Note: The provisions of this §65.305 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.306** Insufficient Funds {#sec-65.306 omnilex-key=us-tx-regs-official--title-1--65.306}

The OAG will not exceed the amount of money appropriated for compensation and available funds will be awarded in a priority deemed appropriate by the OAG.

**History**
- *Source Note: The provisions of this §65.306 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.307** Use of the Electronic Communication {#sec-65.307 omnilex-key=us-tx-regs-official--title-1--65.307}

(a) The OAG may send a claimant any notices, forms, or other documentation and information by electronic means.

(b) The OAG may require a claimant to submit notices, forms, or other documentation and information be electronic means, unless good cause is shown.

(c) In accordance with the Uniform Electronic Transactions Act, Texas Business and Commerce Code, Chapter 322, a notice, form, record, or signature may not be denied legal effect or enforceability solely because it is in electronic form.

**History**
- *Source Note: The provisions of this §65.307 adopted to be effective May 12, 2024, 49 TexReg 3003.*

#### **Subchapter D** ADMINISTRATIVE PENALTIES

##### **1 Tex. Admin. Code § 65.400** Request for Reconsideration of Adverse Action {#sec-65.400 omnilex-key=us-tx-regs-official--title-1--65.400}

(a) A claimant may request a reconsideration of all or any part of the OAG's decision to make or deny an award on an application or on the amount of an award.

(b) Within 30 days from the date that the OAG's office provides the claimant with the award written decision notice, the claimant must submit a signed, written request for reconsideration stating the reasons for the request for reconsideration. If the claimant fails to file a written request for reconsideration to the OAG's adverse action within the 30-day time period, the decision of the OAG becomes binding, and the claimant waives the right to further appeal.

(c) The OAG may not grant a reconsideration if a request is not filed by the claimant within the 30-day time period, unless the claimant shows good cause for late filing. The claimant must provide to the OAG a signed, written explanation showing good cause for failing to submit a written request for reconsideration of the OAG's adverse action within the 30-day time period. If the OAG does not find that good cause exists for late filing, the decision of the OAG becomes binding, and the claimant waives the right to further appeal.

(d) The OAG will provide the claimant a written notification of its reconsideration decision. If the claimant is dissatisfied with the reconsideration of the OAG's award decision, the claimant must file a signed, written request for a hearing with the OAG within 30 days of the date of the reconsideration decision. If the claimant fails to file a written request for a hearing within the 30-day time period, the reconsideration decision becomes binding, and the claimant waives the right to a hearing.

(e) A claimant who fails to exhaust all available administrative remedies waives the right to seek judicial review.

**History**
- *Source Note: The provisions of this §65.400 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.401** Prehearing Conference {#sec-65.401 omnilex-key=us-tx-regs-official--title-1--65.401}

At any time before a hearing is conducted, the hearing officer may request a prehearing conference, either in person or by telephone, with the claimant, or his or her legal representative in order to establish whether a hearing on an application for compensation is necessary.

**History**
- *Source Note: The provisions of this §65.401 adopted to be effective May 12, 2024, 49 TexReg 3003.*

##### **1 Tex. Admin. Code § 65.402** Hearing {#sec-65.402 omnilex-key=us-tx-regs-official--title-1--65.402}

(a) If the claimant is dissatisfied with the reconsideration decision, the claimant may file a signed, written request for hearing.

(b) The OAG may not grant a request for a hearing if a request is not filed by the claimant within the 30-day time period, unless the claimant shows good cause for late filing. The claimant must provide to the OAG a signed, written explanation showing good cause for failing to submit a written request for hearing within the 30-day time period.

(c) If the OAG does not find that good cause exists for late filing, the decision of the OAG becomes binding, and the claimant waives the right to further appeal. If the OAG determines that a hearing is necessary, then the claimant will receive notice of hearing not less than 10 days before the date of the hearing, stating the time, date, and place of the hearing.

(d) The hearing shall be conducted in Texas in a manner consistent with the law and rules adopted under this chapter.

(e) Any costs for the claimant to travel to the hearing are entirely the financial responsibility of the claimant and those costs will not be reimbursed by the OAG.

(f) Failure of the claimant to appear for the hearing, may result in the entry of a final decision based upon the available record. A claimant may have the hearing rescheduled by making a request to reschedule at least two OAG business days prior to the hearing. Multiple requests for reschedule may be denied by the OAG. If a claimant fails to make a timely request to reschedule, the OAG may reschedule the hearing upon good cause shown by the claimant.

(g) The OAG will notify the claimant in writing of the final decision, including the reasons for the decision.

(h) A claimant may seek judicial review of all or any part of the final decision.

(i) In any proceeding under this subchapter, the burden of proof is upon the claimant to prove by a preponderance of the evidence that grounds for compensation exist.

(j) A claimant who fails to exhaust all available administrative remedies waives the right to seek judicial review.

(k) A final decision from the OAG may only be rendered by the OAG hearing officer after a prehearing conference, a final ruling hearing, or based on the available record.

**History**
- *Source Note: The provisions of this §65.402 adopted to be effective May 12, 2024, 49 TexReg 3003.*

### **Chapter 66** FAMILY TRUST FUND DISBURSEMENT PROCEDURES

#### **Subchapter A** GENERAL PROVISIONS AND ELIGIBILTY

##### **1 Tex. Admin. Code § 66.1** Definitions {#sec-66.1 omnilex-key=us-tx-regs-official--title-1--66.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) GAAS--Generally Accepted Auditing Standards;

(2) OAG--Office of the Attorney General;

(3) UGMS--Uniform Grant Management Standards published by the Governor's Office of Budget and Planning;

(4) FTFG--Family Trust Fund Grant;

(5) RFP--Request for Proposal;

(6) IFB--Invitation for Bid;

(7) HUB--Historically Underutilized Businesses;

(8) RFA--Request for Application.

**History**
- *Source Note: The provisions of this §66.1 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 66.2** Adoptions by Reference {#sec-66.2 omnilex-key=us-tx-regs-official--title-1--66.2}

(a) Grantees must comply with all applicable state and federal statutes, rules, regulations, and guidelines. In instances where both federal and state requirements apply to a grantee, the more restrictive requirement applies.

(b) OAG adopts by reference the rules, documents, and forms listed below that relate to the administration of Family Trust Fund grants. These requirements apply to all OAG grants, whether state or federal funds, including grants to nonprofit corporations.

(1) Uniform Grant Management Standards (UGMS) adopted pursuant to the Uniform Grant and Contract Management Act of 1981, Chapter 783, Texas Government Code. See 1 T.A.C. §§5.141 - 5.167. These requirements apply to all OAG grants, whether state or federal funds, including grants to nonprofit corporations.

(2) Texas Review and Comment System. See 1 TAC §5.191 et seq. developed in response to Presidential Executive Order 12372. These requirements apply to all grants funded by OAG.

(3) OAG forms, including the statement of grant award, grantee acceptance notice, and grantee's invoices. These requirements apply to all grants funded by OAG.

**History**
- *Source Note: The provisions of this §66.2 adopted to be effective December 12, 2002, 27 TexReg 11517.*

##### **1 Tex. Admin. Code § 66.3** Source of Funds {#sec-66.3 omnilex-key=us-tx-regs-official--title-1--66.3}

The Family Trust Fund was created by Texas Family Code §2.014 as a trust fund with the state comptroller to be administered by the OAG for the beneficiaries of the fund. Each county clerk of Texas is required to collect $30 of each marriage license issued and to remit $10 of that fee to the comptroller for deposit in the Family Trust Fund. The funds shall be deposited with the State Comptroller's Office in the Family Trust Fund.

**History**
- *Source Note: The provisions of this §66.3 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 66.5** Purpose of Funds {#sec-66.5 omnilex-key=us-tx-regs-official--title-1--66.5}

The purpose of the Family Trust Fund is to provide funds for programs that provide premarital education, strengthen families, reduce the amount of delinquent child support, and assist families.

**History**
- *Source Note: The provisions of this §66.5 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.7** Eligible Projects {#sec-66.7 omnilex-key=us-tx-regs-official--title-1--66.7}

Grants or contracts awarded under this chapter may be used to fund:

(1) projects that will assist in the development and distribution of a premarital education handbook;

(2) projects in institutions of higher education that will assist in developing programs, courses, and policies to help strengthen families and assist children whose parents are divorcing;

(3) projects in counties that will administer free or low-cost premarital education courses;

(4) programs that are intended to reduce the amount of delinquent child support; and

(5) any other program that the OAG determines will assist families in this state.

**History**
- *Source Note: The provisions of this §66.7 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.9** Eligible Applicants {#sec-66.9 omnilex-key=us-tx-regs-official--title-1--66.9}

The entities that are eligible to apply for Family Trust Fund monies are:

(1) institutions of higher education having academic departments that are capable of research on marriage and divorce that will assist in determining programs, courses, and policies to help strengthen families and assist children whose parents are divorcing;

(2) counties that are creating and administering free or low cost premarital education courses;

(3) programs that are intended to reduce the amount of delinquent child support; and

(4) any other programs that the OAG determines will assist families in this state.

**History**
- *Source Note: The provisions of this §66.9 adopted to be effective June 24, 2001, 26 TexReg 4437.*

#### **Subchapter B** GRANT APPLICATION, SCOPE OF GRANT, APPROVAL AND FUNDING

##### **1 Tex. Admin. Code § 66.15** Grant or Contract Application {#sec-66.15 omnilex-key=us-tx-regs-official--title-1--66.15}

(a) An applicant for a grant under this chapter must complete and submit a grant application package to the OAG Grant Coordinator, 300 West 15th Street, 15th Floor, P.O. Box 12548, Austin, Texas 78711-2548. An applicant may contact the OAG by telephone (512-463-0192) or in writing for information about application requirements and for application packages.

(b) The original and one copy of the application package must be received by the OAG by the first business day in May of the year in which the application is submitted. Applications received after the deadline for submission will not be considered.

(c) An applicant for a contract under this chapter must submit a request in writing to the OAG Grant Coordinator, 300 West 15th Street, 15th Floor, P.O. Box 12548, Austin, Texas 78711-2548. An applicant may contact the OAG by telephone (512-463-0192) or in writing for information about the application process.

**History**
- *Source Note: The provisions of this §66.15 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.17** Approval of Grants or Contracts {#sec-66.17 omnilex-key=us-tx-regs-official--title-1--66.17}

The OAG will review and evaluate each timely application. The OAG has full discretion in making all funding decisions. The OAG will base award decisions on an applicant's eligibility, cost effectiveness of the proposed grant or contract, and the service needs within the geographic area of an applicant. Award decisions by the OAG are final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §66.17 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.19** Grant or Contract Period {#sec-66.19 omnilex-key=us-tx-regs-official--title-1--66.19}

(a) A project will be funded for a 12-month period, beginning no earlier than September 1 of each year, and ending August 31 of each year.

(b) The maximum number of years that a grant may be funded is two years.

(c) An applicant may submit a single application for funding for a two year period. If the application is approved, the project will be funded for the first year and will receive automatic consideration for second year funding. No additional application will be required for the second year, but the OAG may require a grantee to submit updated attachments, contracts, budgets, resolutions, and other information as necessary. The OAG will base its final decision on second year funding on first year performance, including the timeliness and thoroughness of reporting, the success of the project in meeting its goals, and the outcome of OAG on-site visits.

**History**
- *Source Note: The provisions of this §66.19 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.21** Nonstandard Funding {#sec-66.21 omnilex-key=us-tx-regs-official--title-1--66.21}

The OAG may fund projects, upon application, outside of the annual grant or contract cycle or at amounts higher or lower than provided for in this chapter based on availability of funds and a particularized need, consistent with the Texas Family Code, §2.014.

**History**
- *Source Note: The provisions of this §66.21 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.23** Continuation of Funding {#sec-66.23 omnilex-key=us-tx-regs-official--title-1--66.23}

There is no commitment by the OAG that a grant, once funded, will receive subsequent funding, or that a contract, once funded, will receive subsequent renewal. To qualify for continuation of funding for existing projects, applicants must meet all requirements of this chapter and have a history of timely submission of progress and financial reports. Continuation of funding of new and existing projects is also contingent upon the availability of funds.

**History**
- *Source Note: The provisions of this §66.23 adopted to be effective June 24, 2001, 26 TexReg 4437.*

#### **Subchapter C** SPECIAL CONDITIONS AND REQUIRED DOCUMENTS

##### **1 Tex. Admin. Code § 66.33** Certification Regarding Lobbying {#sec-66.33 omnilex-key=us-tx-regs-official--title-1--66.33}

(a) An application must include a signed copy of a Certification Regarding Lobbying in which the applicant certifies that "No Family Trust Fund funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of an agency, a member of the Texas Legislature, and officer or employee of the Texas Legislature, or an employee of a member of the Texas Legislature in connection with this grant." The applicant shall complete and submit the standard form, "Disclosure Form to Report Lobbying," in accordance with its instructions.

(b) A grantee must file the most current edition of this certification and disclosure form, if applicable, with each submission that initiates agency consideration for an award of a contract or grant.

(c) The certification required by this section is a material representation of fact upon which reliance is placed when a transaction is made or entered into.

**History**
- *Source Note: The provisions of this §66.33 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.35** Nonprocurement Debarment Certification {#sec-66.35 omnilex-key=us-tx-regs-official--title-1--66.35}

An application must include a signed copy of the Nonprocurement Debarment Certification. It certifies that neither the applicant nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by a federal or state department or agency.

**History**
- *Source Note: The provisions of this §66.35 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.37** Drug-free Workplace Certification {#sec-66.37 omnilex-key=us-tx-regs-official--title-1--66.37}

An application must include a signed copy of the Drug-free Workplace Certification.

**History**
- *Source Note: The provisions of this §66.37 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.41** Certified Assurances {#sec-66.41 omnilex-key=us-tx-regs-official--title-1--66.41}

An application must include a signed copy of the Certified Assurances Certification, which includes UGMS requirements.

**History**
- *Source Note: The provisions of this §66.41 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.47** Resolutions {#sec-66.47 omnilex-key=us-tx-regs-official--title-1--66.47}

(a) Local governmental entities whose authorized official designated in the grant application is not the executive officer of the local governmental entity must submit a resolution from their governing body that gives the authorized official the power to accept, reject or amend a grant. The resolution must state that in the event of loss or misuse of OAG funds, the governing body assures that the grant funds will be returned to the OAG in full. The resolution from the governing body shall contain a statement that the governing body of the local governmental entity may not use the existence of a grant award to offset or decrease total salaries, expenses, and allowances that the applicant receives from the governing body at or after the time the grant is awarded.

(b) A nonprofit organization whose authorized official designated in the grant application is not the executive officer of the organization must submit a resolution from its governing body that gives the authorized official the power to accept, reject or amend a grant. The resolution must state that in the event of loss or misuse of OAG funds, the governing body assures that the grant funds will be returned to the OAG in full. The resolution from the governing body shall contain a statement that the governing body of the organization may not use the existence of a grant award to offset or decrease total salaries, expenses, and allowances that the applicant receives from the governing body at or after the time the grant is awarded.

**History**
- *Source Note: The provisions of this §66.47 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

#### **Subchapter D** AWARD AND GRANT ACCEPTANCE

##### **1 Tex. Admin. Code § 66.55** Application Deficiencies and Application Process {#sec-66.55 omnilex-key=us-tx-regs-official--title-1--66.55}

(a) If the OAG finds deficiencies in an application upon initial review, the OAG will send a deficiency report to the applicant. The applicant may file a response with a correction in the application. Deficiency reports are preliminary assessments only and do not represent a final action or determination by the OAG. A deficiency report is not a commitment by the OAG to fund any portion of the project. Additional deficiencies may be identified after the date of a deficiency report.

(b) An application for funding will go through many reviews and at any point during the review a process a decision to approve or deny project funding may be made by the OAG, and such decision is within the sole discretion of the OAG. Once an award is made, the OAG has discretion to determine whether or not a grantee is complying with OAG policies and may, upon a negative determination, deobligate the grant and require reimbursement to the OAG of grant funds already disbursed.

(c) The OAG will inform the applicant of its decision regarding a grant award through either a Statement of Grant Award or a denial letter signed by the Attorney General or his designee.

(d) Applicants may not contact staff members of the OAG to seek support of an application. Additionally, under no circumstances may a grantee use grant-funded equipment, supplies, personnel, or indirect costs to influence or encourage others to influence the outcome of a grant funding decision by the OAG except as allowed under the OAG review process provided in §66.59 of this title. A decision to award a grant or not will be based only on the application package and OAG records.

**History**
- *Source Note: The provisions of this §66.55 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.57** Notification of Award {#sec-66.57 omnilex-key=us-tx-regs-official--title-1--66.57}

An applicant must accept or reject a grant award in writing and forward the notice to the OAG so that the notice is received by the OAG within 45 days of the grant award. Grant funds may not be requested until the acceptance notice is executed. Each applicant who accepts a grant award must implement the grant within 60 days of the designated start date indicated on the statement of grant award. Any exception to this paragraph will require the review and written approval of the OAG Grants Coordinator.

**History**
- *Source Note: The provisions of this §66.57 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.59** Review of Denial {#sec-66.59 omnilex-key=us-tx-regs-official--title-1--66.59}

(a) If the OAG denies an application or any part of an application, an applicant may request a review of the decision by writing to the OAG, Grants Coordinator within 10 days from the date of denial notification. Review requests must be based on a verifiable error made during the review process, and the applicant must be able to show that the error actually caused the application or portion of the application not to be funded. The applicant may submit written documentation in support of the review request.

(b) Letters and phone calls of support will not be considered as part of the review. The Attorney General or his designee will consider only documentation submitted by the applicant that meets the criteria as outlined in this section. The decision concerning a review is final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §66.59 adopted to be effective June 24, 2001, 26 TexReg 4437.*

#### **Subchapter E** ADMINISTERING GRANTS

##### **1 Tex. Admin. Code § 66.67** Grant Officials {#sec-66.67 omnilex-key=us-tx-regs-official--title-1--66.67}

A grantee must have three persons designated to serve as grant officials as follows:

(1) The project director must be an employee of the grantee who will be responsible for operation or monitoring of the project and be able to readily answer questions about its day-to-day operations.

(2) The financial officer must be the chief financial officer of the grantee. Such officer might be, for example, the county auditor, city treasurer, comptroller, or treasurer of a nonprofit corporation's board. The financial officer may not serve as the project director or the authorized official.

(3) The authorized official is the person authorized to apply for, accept, decline, or cancel the grant for the applicant agency. This person may be, for example, the executive director of the state agency, county judge, mayor, city manager, assistant city manager, or designee if authorized by the governing body.

**History**
- *Source Note: The provisions of this §66.67 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.69** Obligating Funds {#sec-66.69 omnilex-key=us-tx-regs-official--title-1--66.69}

Grant funds may not, without advance written approval by the OAG Grants Coordinator, be obligated prior to the start date or after the ending date of the grant period. Obligated funds must relate only to approved budget items and purposes. Grant-funded personnel may use grant funds only for project activities stated in the approved FTFG application.

**History**
- *Source Note: The provisions of this §66.69 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.75** Inventory Reports {#sec-66.75 omnilex-key=us-tx-regs-official--title-1--66.75}

A grantee must maintain an inventory report on file at its principal office of all equipment purchased as part of the grant project.

**History**
- *Source Note: The provisions of this §66.75 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.77** Invoices {#sec-66.77 omnilex-key=us-tx-regs-official--title-1--66.77}

A grantee must ensure that its final invoice is postmarked no later than the 45th calendar day (liquidation date as defined in the application package) after the end of the grant period and mailed to: OAG Grant Coordinator, 300 West 15th Street, 15th Floor, P.O. Box 12548, Austin, TX 78711-2548. If this date falls on a weekend or federal holiday, then the OAG will honor a postmark on the next business day. On the liquidation date, if grant funds are on hold for any reason, the funds will lapse and cannot be recovered by the grantee. Under no circumstances will the OAG make payments to a grantee who submits its invoice with a postmark after the above deadlines.

**History**
- *Source Note: The provisions of this §66.77 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 66.79** Grant Adjustments {#sec-66.79 omnilex-key=us-tx-regs-official--title-1--66.79}

(a) One of the three designated grant officials must sign all requests for grant adjustments.

(b) Grant adjustments are either budget adjustments or non-budget adjustments.

(1) Grant adjustments consisting of increases in the amount of a grant or the reallocation of funds among or within budget categories are considered budget adjustments, and are allowable only with prior OAG approval.

(2) Non-budget grant adjustments are subject to the following provisions:

(A) Requests to revise the scope, target, or focus of the project, or alter project activities require advance written approval from OAG.

(B) The grantee shall notify OAG in writing of any change in the designated project director, financial officer, or authorized official within five days following the change. When the notice addresses a change of authorized official, the governing body, such as the board, city council, or commissioners' court, must submit the request.

(C) A grantee may submit a written request for a grant extension. These requests will be approved only in extraordinary circumstances.

**History**
- *Source Note: The provisions of this §66.79 adopted to be effective December 12, 2002, 27 TexReg 11517.*

##### **1 Tex. Admin. Code § 66.93** Withholding Funds {#sec-66.93 omnilex-key=us-tx-regs-official--title-1--66.93}

(a) The OAG may withhold funds from a grantee if a grantee fails to comply with established guidelines, grant conditions, or contractual agreements, or when funds are depleted or insufficient to fund allocations.

(b) The OAG will release funds if the grantee has provided evidence satisfactory to the OAG that the deficient conditions have been corrected, unless the OAG has terminated the grant as provided in §66.95 of this title.

**History**
- *Source Note: The provisions of this §66.93 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.95** Grant Termination {#sec-66.95 omnilex-key=us-tx-regs-official--title-1--66.95}

(a) A grantee shall notify the OAG, in writing, of the cancellation of any Grant funded project immediately upon the decision to cancel the project.

(b) The OAG may terminate a grant for failure to comply with applicable federal or state laws, rules, regulations, policies, or guidelines, or any OAG grant agreement with the grantee.

(c) The OAG will notify a grantee of deficient conditions and grounds for termination. When a grant is terminated all unexpended or unobligated funds awarded to a grantee will revert to the OAG. The OAG may consider a grantee ineligible for any future grant award if the OAG has terminated a grant for cause.

(d) In lieu of termination a grant project, the OAG may require the transfer of the grant project by moving the administration of the project to a different agency.

(e) A grantee may ask for a review of the termination of a grant by writing to the First Assistant of the OAG. The request for review must be received by the OAG within ten days from the date of the suspension or termination notification. A grantee may submit written documentation in support of its request. The First Assistant of the OAG will consider any documentation submitted by a grantee in support of an appeal. The decision of the First Assistant of the OAG concerning termination is final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §66.95 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.99** Payment of Outstanding Liabilities {#sec-66.99 omnilex-key=us-tx-regs-official--title-1--66.99}

A grantee must properly obligate and expend funds to satisfy all outstanding liabilities no later than 45 days after the end of the grant period. The OAG will not make any reimbursements to a grantee unless the final request for funds is postmarked by the 45th day after the end of the grant period. If the 45th day falls on a weekend or federal holiday, the OAG will honor receipt or a postmark on the next business day. All payments made after the completion of the grant period must relate to obligations encumbered prior to the end of the grant period.

**History**
- *Source Note: The provisions of this §66.99 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective March 5, 2008, 33 TexReg 1763.*

##### **1 Tex. Admin. Code § 66.101** Violations of Laws {#sec-66.101 omnilex-key=us-tx-regs-official--title-1--66.101}

A grantee and its personnel must immediately notify in writing the OAG and, if applicable, the local prosecutor's office, upon discovery of any evidence, knowledge or suspicion of a violation of the law encountered by a grantee or discovered during monitoring visits, including, but not limited to, misappropriation of funds, fraud, theft, embezzlement, forgery, or any serious irregularity or noncompliance with the requirements of this chapter.

**History**
- *Source Note: The provisions of this §66.101 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.103** Conflict of Interest {#sec-66.103 omnilex-key=us-tx-regs-official--title-1--66.103}

Failure to comply with this section may result in termination of the grant award and may affect future funding decisions. No grantee personnel, member of a grantee board or governing body, or other person affiliated with the grant project may participate in any proceeding or action where grant funds personally benefit, directly or indirectly, the individual or any relative. Grant personnel and officials must avoid any action that might result in or create the appearance of using their official positions for private gain; giving preferential treatment to any person; losing complete independence or impartiality; making an official decision outside of official channels; or affecting adversely the confidence of the public in the integrity of the program or the OAG.

**History**
- *Source Note: The provisions of this §66.103 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.105** Evaluating Project Effectiveness {#sec-66.105 omnilex-key=us-tx-regs-official--title-1--66.105}

A grantee must regularly evaluate the effectiveness of its project. This evaluation includes reassessment of individual project activities and services to determine if they remain relevant and effective. A grantee must be able to show that grant activities are well thought out and provide actual services that directly impact an identified problem statement and bring the project closer to accomplishing its goals. The OAG will assess project effectiveness through review of required progress reports, on-site visits, and desk reviews. Information relating to project evaluations must be maintained in the project's files and must be available for review by OAG staff.

**History**
- *Source Note: The provisions of this §66.105 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.107** Progress Reports {#sec-66.107 omnilex-key=us-tx-regs-official--title-1--66.107}

A grantee must submit progress reports in accordance with the instructions provided by the OAG and as outlined for each specific program area. To remain eligible for funding, a grantee must be able to show not only the number of services provided, but the impact and quality of those services.

**History**
- *Source Note: The provisions of this §66.107 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.109** Oversight of Contracts {#sec-66.109 omnilex-key=us-tx-regs-official--title-1--66.109}

A grantee that uses any portion of Grant funds to contract with a third party must maintain records in a grantee project file showing the specific steps taken to ensure that the terms of the contract are met and that the services provided are evaluated by a grantee annually.

**History**
- *Source Note: The provisions of this §66.109 adopted to be effective June 24, 2001, 26 TexReg 4437.*

##### **1 Tex. Admin. Code § 66.111** Accuracy of Grant Records {#sec-66.111 omnilex-key=us-tx-regs-official--title-1--66.111}

Providing false information, knowingly or unknowingly, on a grant application, in grantee records, or in reports to the OAG may cause an application to be denied or a grant to be terminated and the grant funds deobligated. In some circumstances, such action may also be considered tampering with government records, which is a criminal offense.

**History**
- *Source Note: The provisions of this §66.111 adopted to be effective June 24, 2001, 26 TexReg 4437.*

#### **Subchapter F** PROGRAM MONITORING AND AUDITS

##### **1 Tex. Admin. Code § 66.119** Monitoring {#sec-66.119 omnilex-key=us-tx-regs-official--title-1--66.119}

(a) The OAG will monitor grants throughout their existence. A grantee must make all grant-related records available to OAG representatives unless the information is sealed by law.

(b) The OAG will monitor both financial and program aspects of a grant project to evaluate progress and determine compliance. Monitoring may include both on-site and desk reviews and may involve any information that the OAG deems relevant to the project. The purpose of the monitoring is to ensure that a grantee is meeting performance goals and that grant funds are expended in compliance with applicable laws, rules, grant agreements and other contracts.

(c) A grantee must maintain current files. The OAG may make unannounced visits at any time.

(d) The OAG reserves the right to conduct its own audit, or contract with another to audit any grant.

(e) A grantee must provide access to project records to all OAG representatives and properly designated monitors or auditors.

(f) A grantee must, within 30 business days of the date of an audit monitoring report, submit documentation to the OAG responding to findings and questioned costs contained in an audit or monitoring report. Documentation may be submitted to the OAG, at 300 W. 15th Street, William P. Clements Building, 15th Floor, Austin, Texas 78701 or by mail to the OAG, Grants Coordinator, Post Office Box 12548, Austin, Texas 78711-2548. The OAG will review the documentation for legal, financial, and program acceptability under state, federal and OAG rules.

(g) A grantee may request a review of a decision by the OAG after submission of responses to OAG findings, by writing to the OAG, Grants Coordinator. A review board will make recommendations to the First Assistant of the OAG for approval, disapproval, or approval with modifications of audit or monitoring exceptions. The OAG will send the written determination by the First Assistant of the OAG to the grantee within 30 calendar days of a decision. A grantee must, within 30 calendar days, refund all funds due after a final determination. Failure to comply with this provision will subject a grantee to the provisions of this plan relating to the conditions for withholding funds from a grantee. The determination of the First Assistant of the OAG is final and not subject to judicial review.

**History**
- *Source Note: The provisions of this §66.119 adopted to be effective June 24, 2001, 26 TexReg 4437; amended to be effective December 12, 2002, 27 TexReg 11519.*

##### **1 Tex. Admin. Code § 66.123** Audit Standards {#sec-66.123 omnilex-key=us-tx-regs-official--title-1--66.123}

(a) A grantee must submit to the OAG copies of all audit reports, including audits as required in the Independent Annual Audit and all other audits that a grantee undergoes, regardless of the purpose.

(b) A grantee must ensure that required audits are completed and submitted to the OAG on or before 30 days after the issuance of an auditor's report.

(c) A grantee will bear its fair and reasonable share of audit costs required by the OAG in accordance with applicable federal and state cost principles governing allowability and allocation.

(d) A grantee, regardless of level of funding, is subject to random, periodic on-site reviews and audits by the OAG. These reviews are designed to complement, not duplicate, any single audit performed.

**History**
- *Source Note: The provisions of this §66.123 adopted to be effective June 24, 2001, 26 TexReg 4437.*

### **Chapter 68** NEGOTIATION AND MEDIATION OF CERTAIN CONTRACT DISPUTES

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 68.1** Purpose and Application {#sec-68.1 omnilex-key=us-tx-regs-official--title-1--68.1}

This chapter governs the negotiation and mediation of a claim of breach of contract asserted by a contractor against a unit of state government under the Government Code, Chapter 2260. This chapter is binding upon units of state government without general rulemaking authority.

**History**
- *Source Note: The provisions of this §68.1 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.3** Definitions {#sec-68.3 omnilex-key=us-tx-regs-official--title-1--68.3}

The following words and terms, when used in this chapter, shall have the following meaning, unless the context clearly indicates otherwise:

(1) Chief administrative officer - The commissioner, executive director, president or other executive officer responsible for the day to day operations of a unit of state government.

(2) Contractor - Independent contractor who has entered into a contract directly with a unit of state government. The term does not include:

(A) A contractor's subcontractor, officer, employee, agent, or other person furnishing goods or services to a contractor;

(B) An employee of a unit of state government; or

(C) A student at an institution of higher education.

(3) Day - A calendar day. If an act is required to occur on a day falling on a Saturday, Sunday, or holiday, the first working day which is not one of these day should be counted as the required day for purpose of this act.

(4) Parties - The contractor and unit of state government that have entered into a contract in connection with which a claim of breach of contract has been filed under this chapter.

(5) Unit of state government or unit - The state or an agency, department, commission, bureau, board, office, council, court, or other entity that is in any branch of state government and that is created by the constitution or a statute of this state, including a university system or institution of higher education. The term does not include a county, municipality, court of a county or municipality, special purpose district, or other political subdivision of this state.

**History**
- *Source Note: The provisions of this §68.3 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.5** Prerequisites to Suit {#sec-68.5 omnilex-key=us-tx-regs-official--title-1--68.5}

The procedures contained in this chapter are exclusive and required prerequisites to suit under the Civil Practice & Remedies Code, Chapter 107, and the Government Code, Chapter 2260.

**History**
- *Source Note: The provisions of this §68.5 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.7** Sovereign Immunity {#sec-68.7 omnilex-key=us-tx-regs-official--title-1--68.7}

This chapter does not waive a unit of state government's sovereign immunity to suit or liability.

**History**
- *Source Note: The provisions of this §68.7 adopted to be effective May 31, 2000, 25 TexReg 4719.*

#### **Subchapter B** NEGOTIATION OF CONTRACT DISPUTES

##### **1 Tex. Admin. Code § 68.21** Notice of Claim of Breach of Contract {#sec-68.21 omnilex-key=us-tx-regs-official--title-1--68.21}

(a) A contractor asserting a claim of breach of contract under the Government Code, Chapter 2260, shall file notice of the claim as provided by this section.

(b) The notice of claim shall:

(1) be in writing and signed by the contractor or the contractor's authorized representative;

(2) be delivered by hand, certified mail return receipt requested, or other verifiable delivery service, to the officer of the unit of state government designated in the contract to receive a notice of claim of breach of contract under the Government Code, Chapter 2260; if no person is designated in the contract, the notice shall be delivered to the unit's chief administrative officer; and

(3) state in detail:

(A) the nature of the alleged breach of contract, including the date of the event that the contractor asserts as the basis of the claim and each contractual provision allegedly breached;

(B) a description of damages that resulted from the alleged breach, including the amount and method used to calculate those damages; and

(C) the legal theory of recovery, i.e., breach of contract, including the relationship between the alleged breach and the damages claimed.

(c) The notice of claim shall be delivered no later than 180 calendar days after the date of the event that the contractor asserts as the basis of the claim; provided, however, that a contractor shall deliver notice of a claim that was pending before a unit of state government on August 30, 1999, to the unit no later than February 26, 2000.

**History**
- *Source Note: The provisions of this §68.21 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.23** Agency Counterclaim {#sec-68.23 omnilex-key=us-tx-regs-official--title-1--68.23}

(a) A unit of state government asserting a counterclaim under the Government Code, Chapter 2260, shall file notice of the counterclaim as provided by this section.

(b) The notice of counterclaim shall:

(1) be in writing;

(2) be delivered by hand, certified mail return receipt requested or other verifiable delivery service to the contractor or representative of the contractor who signed the notice of claim of breach of contract; and

(3) state in detail:

(A) the nature of the counterclaim;

(B) a description of damages or offsets sought, including the amount and method used to calculate those damages or offsets; and

(C) the legal theory supporting the counterclaim.

(c) The notice of counterclaim shall be delivered to the contractor no later than 90 calendar days after the unit of state government's receipt of the contractor's notice of claim.

(d) Nothing herein precludes the unit from initiating a lawsuit for damages against the contractor in a court of competent jurisdiction.

**History**
- *Source Note: The provisions of this §68.23 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.25** Duty to Negotiate {#sec-68.25 omnilex-key=us-tx-regs-official--title-1--68.25}

The parties shall negotiate in accordance with the timetable set forth in §68.27 of this title (relating to Timetable) to attempt to resolve all claims and counterclaims filed under this chapter. No party is obligated to settle with the other party as a result of the negotiation.

**History**
- *Source Note: The provisions of this §68.25 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.27** Timetable {#sec-68.27 omnilex-key=us-tx-regs-official--title-1--68.27}

(a) Following receipt of a contractor's notice of claim, the chief administrative officer of the unit of state government or other designated representative shall review the contractor's claim and the unit's counterclaim, if any, and initiate negotiations with the contractor to attempt to resolve the claim and counterclaim.

(b) Subject to subsection (c) of this section, the parties shall begin negotiations within a reasonable period of time, not to exceed 60 calendar days following the later of:

(1) the date of termination of the contract;

(2) the completion date, or substantial completion date in the case of construction projects, in the original contract; or

(3) the date the unit of state government receives the contractor's notice of claim.

(c) The unit of state government may delay negotiations until after the 180th day after the date of the event giving rise to the claim of breach of contract by:

(1) delivering written notice to the contractor that the commencement of negotiations will be delayed; and

(2) delivering written notice to the contractor when the unit is ready to begin negotiations.

(d) The parties may conduct negotiations according to an agreed schedule as long as they begin negotiations no later than the applicable deadlines set forth in subsections (b) or (c) of this section, whichever is applicable.

(e) Subject to subsection (f) of this section, the parties shall complete the negotiations that are required by this chapter as a prerequisite to a contractor's request for contested case hearing no later than 270 days after the unit of state government receives the contractor's notice of claim.

(f) The parties may agree in writing to extend the time for negotiations on or before the 270th day after the unit of state government receives the contractor's notice of claim. The agreement shall be signed by representatives of the parties with authority to bind each respective party.

(g) The contractor may request a contested case hearing before the State Office of Administrative Hearings (SOAH) pursuant to §68.37 of this title (relating to Request for Contested Case Hearing) after the 270th day after the unit receives the contractor's notice of claim, or the expiration of any extension agreed to under subsection (f) of this section.

(h) The parties may agree to mediate the dispute at any time before the 270th day after the unit of state government receives the contractor's notice of claim or before the expiration of any extension agreed to by the parties pursuant to subsection (f) of this section. The mediation shall be governed by Subchapter C of this chapter.

(i) Nothing in this section is intended to prevent the parties from commencing negotiations earlier than the deadlines established in subsections (b) and (c) of this section, or from continuing or resuming negotiations after the contractor requests a contested case hearing before SOAH.

**History**
- *Source Note: The provisions of this §68.27 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.29** Conduct of Negotiation {#sec-68.29 omnilex-key=us-tx-regs-official--title-1--68.29}

(a) Negotiation is a consensual bargaining process in which the parties attempt to resolve a claim and counterclaim. A negotiation under this subchapter may be conducted by any method, technique, or procedure authorized under the contract or agreed upon by the parties. The parties may conduct negotiations with the assistance of one or more neutral third parties. The parties may choose to mediate their dispute in accordance with Subchapter C of this chapter.

(b) To facilitate meaningful evaluation and negotiation of the claims and any counterclaims, the parties may exchange relevant documents that support their respective claims, defenses, counterclaims or positions.

**History**
- *Source Note: The provisions of this §68.29 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.31** Settlement Approval Procedures {#sec-68.31 omnilex-key=us-tx-regs-official--title-1--68.31}

The parties' settlement approval procedures shall be disclosed prior to, or at the beginning of negotiations. To the extent possible, the parties shall select negotiators who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement and who can credibly recommend approval of an agreement.

**History**
- *Source Note: The provisions of this §68.31 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.33** Settlement Agreement {#sec-68.33 omnilex-key=us-tx-regs-official--title-1--68.33}

(a) A settlement agreement may resolve an entire claim or any designated and severable portion of a claim.

(b) To be enforceable, a settlement agreement must be in writing and signed by representatives of the contractor and the unit of state government who have authority to bind each respective party.

(c) A partial settlement does not waive a contractor's rights under the Government Code, Chapter 2260, as to the parts of the claim that are not resolved.

**History**
- *Source Note: The provisions of this §68.33 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.35** Costs of Negotiation {#sec-68.35 omnilex-key=us-tx-regs-official--title-1--68.35}

Unless the parties agree otherwise, each party shall be responsible for its own costs incurred in connection with a negotiation, including, without limitation, the costs of attorneys' fees, consultant's fees and expert's fees.

**History**
- *Source Note: The provisions of this §68.35 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.37** Request for Contested Case Hearing {#sec-68.37 omnilex-key=us-tx-regs-official--title-1--68.37}

(a) If a claim of breach of contract is not resolved in its entirety through negotiation or mediation in accordance with this chapter on or before the 270th day after the unit receives the notice of claim, or after the expiration of any extension agreed to by the parties pursuant to §68.27(f) of this title (relating to Timetable), the contractor may file a request with the unit of state government for a contested case hearing before SOAH.

(b) A request for a contested case hearing shall state the legal and factual basis for the claim, and shall be delivered to the chief administrative officer of the unit of state government within a reasonable time after the 270th day or the expiration of any written extension agreed to pursuant to §68.27(f) of this title.

(c) The unit of state government shall forward the contractor's request for contested case hearing to the SOAH within a reasonable period of time, not to exceed thirty days, after receipt of the request.

(d) The parties may agree to submit the case to the SOAH before the 270th day after the notice of claim is received by the unit of state government if they have achieved a partial resolution of the claim or if an impasse has been reached in the negotiations and proceeding to a contested case hearing would serve the interests of justice.

**History**
- *Source Note: The provisions of this §68.37 adopted to be effective May 31, 2000, 25 TexReg 4719.*

#### **Subchapter C** MEDIATION OF CONTRACT DISPUTES

##### **1 Tex. Admin. Code § 68.47** Agreement to Mediate {#sec-68.47 omnilex-key=us-tx-regs-official--title-1--68.47}

The parties may agree to mediate a claim through an impartial third party. For purposes of this subchapter, "mediation" is assigned the meaning set forth in the Civil Practice and Remedies Code, §154.023. The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Government Code, Chapter 2009. The parties may be assisted in the mediation by legal counsel or other individual.

**History**
- *Source Note: The provisions of this §68.47 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.49** Qualifications and Immunity of the Mediator {#sec-68.49 omnilex-key=us-tx-regs-official--title-1--68.49}

The mediator shall possess the qualifications required under the Civil Practice and Remedies Code, §154.052, be subject to the standards and duties prescribed by the Civil Practice and Remedies Code, §154.053 and have the qualified immunity prescribed by the Civil Practice and Remedies Code §154.055, if applicable.

**History**
- *Source Note: The provisions of this §68.49 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.51** Confidentiality of Mediation and Final Settlement Agreement {#sec-68.51 omnilex-key=us-tx-regs-official--title-1--68.51}

(a) A mediation conducted under this subchapter is confidential in accordance with the Government Code, §2009.054.

(b) The confidentiality of a final settlement agreement to which a unit of state government is a signatory that is reached as a result of the mediation is governed by the Public Information Act, Government Code, Chapter 552.

**History**
- *Source Note: The provisions of this §68.51 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.53** Costs of Mediation {#sec-68.53 omnilex-key=us-tx-regs-official--title-1--68.53}

Unless the parties agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with a mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees, and the cost of the mediator shall be divided equally between the parties.

**History**
- *Source Note: The provisions of this §68.53 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.55** Settlement Approval Procedures {#sec-68.55 omnilex-key=us-tx-regs-official--title-1--68.55}

The parties' settlement approval procedures shall be disclosed by the parties prior to the mediation. To the extent possible, the parties shall select representatives who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement, and who can credibly recommend approval of an agreement.

**History**
- *Source Note: The provisions of this §68.55 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.57** Initial Settlement Agreement {#sec-68.57 omnilex-key=us-tx-regs-official--title-1--68.57}

Any settlement agreement reached during a mediation shall be signed by representatives of the contractor and the unit of state government, and shall describe any procedures that the parties must follow to obtain final and binding approval of the agreement.

**History**
- *Source Note: The provisions of this §68.57 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.59** Final Settlement Agreement {#sec-68.59 omnilex-key=us-tx-regs-official--title-1--68.59}

A final settlement agreement reached during or as a result of a mediation that resolves an entire claim or counterclaim, or any designated and severable portion of a claim or counterclaim, shall comply with §68.33 of subchapter B of this chapter (relating to Settlement Agreement).

**History**
- *Source Note: The provisions of this §68.59 adopted to be effective May 31, 2000, 25 TexReg 4719.*

##### **1 Tex. Admin. Code § 68.61** Referral to State Office of Administrative Hearings {#sec-68.61 omnilex-key=us-tx-regs-official--title-1--68.61}

If mediation does not resolve the claim to the satisfaction of the contractor, the contractor may request that the claim be referred to SOAH in accordance with §68.37 of Subchapter B of this chapter (relating to Request for Contested Case Hearing.)

**History**
- *Source Note: The provisions of this §68.61 adopted to be effective May 31, 2000, 25 TexReg 4719.*

### **Chapter 69** PROCUREMENT

#### **Subchapter A** PROCEDURES FOR VENDOR PROTESTS OF PROCUREMENTS

##### **1 Tex. Admin. Code § 69.1** Purpose and Definitions {#sec-69.1 omnilex-key=us-tx-regs-official--title-1--69.1}

(a) The purpose of this subchapter is to provide an internal protest procedure to be used by any actual or prospective bidder, offeror, proposer, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract by the Office of the Attorney General from a delegated procurement. The following procedures are available for persons or firms not awarded the contract pursuant to authority delegated to the Office of the Attorney General by the Comptroller of Public Accounts or by Government Code, Chapters 2155 - 2158. These procedures are consistent with the rules of the Comptroller of Public Accounts insofar as such rules are applicable to an internal agency review.

(b) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Attorney General--the Office of the Attorney General;

(2) Director--the Procurement and Contract Operations Division Director of the Attorney General;

(3) First Assistant--the First Assistant Attorney General;

(4) Interested party--a vendor who has submitted a bid or proposal, as applicable, for the delegated procurement involved;

(5) Delegated procurement or procurement--a procurement delegated to the Attorney General pursuant to the procedures of Government Code, Chapter 2155, Chapter 2156, Chapter 2157, or Chapter 2158; and

(6) Receive/receipt--actual receipt.

**History**
- *Source Note: The provisions of this §69.1 adopted to be effective February 25, 1999, 24 TexReg 1153; amended to be effective February 1, 2007, 32 TexReg 287; amended to be effective July 13, 2008, 33 TexReg 5275; amended to be effective December 9, 2012, 37 TexReg 9617; amended to be effective December 5, 2019, 44 TexReg 7375.*

##### **1 Tex. Admin. Code § 69.2** Filing of Protest {#sec-69.2 omnilex-key=us-tx-regs-official--title-1--69.2}

(a) An actual or prospective bidder, offeror, proposer, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract by the Attorney General may file a written protest. The protest must be addressed to the Procurement and Contract Operations Division Director and must be received in the office of the Director no later than ten working days after the aggrieved person knows, or should have known, of the occurrence of the action which is protested.

(b) The protest must be sworn and contain the following:

(1) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in the protest;

(3) a precise statement of the relevant facts;

(4) an identification of the issues or issues to be resolved;

(5) argument and authorities in support of the protest; and

(6) a statement that copies of the protest have been mailed or delivered to all other identifiable interested parties. Upon request, the Attorney General will furnish to the requestor a list of interested parties, as reflected in the records of the Procurement Division.

**History**
- *Source Note: The provisions of this §69.2 adopted to be effective February 25, 1999, 24 TexReg 1153; amended to be effective December 9, 2012, 37 TexReg 9617; amended to be effective December 5, 2019, 44 TexReg 7375.*

##### **1 Tex. Admin. Code § 69.3** Review of Protest Determination by the Procurement and Contract Operations Division Director {#sec-69.3 omnilex-key=us-tx-regs-official--title-1--69.3}

(a) Upon receipt of a timely protest that conforms with this subchapter, the Director will review the protest. The Director may request written responses to the protest from any staff of the Attorney General and may request from Attorney General staff any and all documents related to the protest. The Director may solicit written responses to the protest from other interested parties.

(b) The Director has the authority, prior to appeal to the First Assistant, to settle and resolve the dispute concerning the solicitation or award of the contract.

(c) If the protest is not resolved by mutual agreement, the Director will issue a written determination on the protest.

(1) If the Director determines that no violation of rules or statutes has occurred, the Director shall inform the protesting party and all other interested parties of that determination by letter, which shall set forth the reasons for the determination.

(2) If the Director determines that a violation of the rules or statutes has occurred in a case where a contract has not been awarded, the Director shall so inform the protesting party and all other interested parties of that determination by letter. The letter shall set forth the reasons for the determination and may set forth any appropriate remedial action.

(3) If the Director determines that a violation of the rules or statutes has occurred in a case where a contract has been awarded, the Director shall inform the protesting party and other interested parties of that determination by letter. The letter shall set forth the reasons for the determination and may set forth any appropriate remedial action, which may include canceling or voiding the contract to the extent allowed by law.

**History**
- *Source Note: The provisions of this §69.3 adopted to be effective February 25, 1999, 24 TexReg 1153; amended to be effective December 9, 2012, 37 TexReg 9617; amended to be effective December 5, 2019, 44 TexReg 7375.*

##### **1 Tex. Admin. Code § 69.4** Appeal {#sec-69.4 omnilex-key=us-tx-regs-official--title-1--69.4}

(a) A protesting party or any other interested party who is not satisfied with the determination of the Director may appeal the determination to the First Assistant. The appeal must be submitted in writing to the First Assistant and received in the office of the First Assistant no later than ten working days after the date of the Director's determination.

(b) The appealing party must mail or deliver copies of the appeal to all other interested parties. The appeal must contain an affidavit that such copies have been provided.

(c) Upon receipt of a timely appeal that conforms with this subchapter, the First Assistant may designate one or more employees of the Office of the Attorney General to review the protest, the determination of the Director, and the appeal with respect to the protest. The designee(s) will prepare and submit to the First Assistant a written recommendation regarding the appeal.

(d) The written decision of the First Assistant shall be the final administrative action of the agency regarding the protest and appeal.

**History**
- *Source Note: The provisions of this §69.4 adopted to be effective February 25, 1999, 24 TexReg 1153; amended to be effective February 1, 2007, 32 TexReg 287; amended to be effective December 9, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 69.5** Failure to File Timely {#sec-69.5 omnilex-key=us-tx-regs-official--title-1--69.5}

Protests and appeals which are not filed timely will not be considered, unless good cause for delay is shown or the First Assistant determines that a protest or appeal raises issues significant to the agency's procurement practices or procedures.

**History**
- *Source Note: The provisions of this §69.5 adopted to be effective February 25, 1999, 24 TexReg 1153.*

##### **1 Tex. Admin. Code § 69.6** Status of Procurement During Protest and Appeal {#sec-69.6 omnilex-key=us-tx-regs-official--title-1--69.6}

If the contract being protested has not been awarded, upon the timely filing of a protest or appeal under these procedures, the Attorney General shall not proceed further with the solicitation or award of the contract unless the First Assistant, in consultation with the affected division(s) of the Attorney General, makes a written determination that the award of the contract without delay is necessary to protect substantial interests of the State of Texas.

**History**
- *Source Note: The provisions of this §69.6 adopted to be effective February 25, 1999, 24 TexReg 1153.*

##### **1 Tex. Admin. Code § 69.7** Standards for Maintaining Documentation {#sec-69.7 omnilex-key=us-tx-regs-official--title-1--69.7}

The Attorney General will maintain all documentation about the purchasing process to be used in the event of a protest or appeal in accordance with the Attorney General's agency retention schedule.

**History**
- *Source Note: The provisions of this §69.7 adopted to be effective February 25, 1999, 24 TexReg 1153.*

#### **Subchapter B** HISTORICALLY UNDERUTILIZED BUSINESS PROGRAM

##### **1 Tex. Admin. Code § 69.25** Historically Underutilized Business Program {#sec-69.25 omnilex-key=us-tx-regs-official--title-1--69.25}

In accordance with Texas Government Code, §2161.003, the OAG adopts by reference the Comptroller of Public Accounts' rules found at 34 TAC, Part 1 Comptroller of Public Accounts, Chapter 20 Statewide Procurement and Support Services, Subchapter D Socio-Economic Program, Division 1 Historically Underutilized Businesses.

**History**
- *Source Note: The provisions of this §69.25 adopted to be effective June 13, 2001, 26 TexReg 4079; amended to be effective February 1, 2007, 32 TexReg 287; amended to be effective July 13, 2008, 33 TexReg 5275; amended to be effective January 26, 2012, 37 TexReg 195; amended to be effective January 28, 2019, 44 TexReg 413.*

#### **Subchapter C** MANAGEMENT OF VEHICLES

##### **1 Tex. Admin. Code § 69.35** State Vehicle Management Plan {#sec-69.35 omnilex-key=us-tx-regs-official--title-1--69.35}

To the extent applicable, the agency adopts the State Vehicle Management Plan developed by the Comptroller of Public Accounts' Office of Vehicle Fleet Management.

**History**
- *Source Note: The provisions of this §69.35 adopted to be effective July 16, 2001, 26 TexReg 5235; amended to be effective December 23, 2020, 45 TexReg 9177.*

##### **1 Tex. Admin. Code § 69.36** Restrictions on Assignment of Vehicles {#sec-69.36 omnilex-key=us-tx-regs-official--title-1--69.36}

(a) Each agency vehicle, with the exception of a vehicle assigned to a field employee or a vehicle used for undercover and/or surveillance activities, shall be assigned to the agency motor pool and be available for check-out.

(b) The agency may assign a vehicle to an individual administrative or executive employee on a regular or everyday basis only if the agency makes a written determination that the assignment is critical to the needs and mission of the agency.

**History**
- *Source Note: The provisions of this §69.36 adopted to be effective July 16, 2001, 26 TexReg 5235.*

##### **1 Tex. Admin. Code § 69.45** Exemption from Vehicle Inscription Requirement {#sec-69.45 omnilex-key=us-tx-regs-official--title-1--69.45}

(a) State-owned motor vehicles under the control and custody of the Attorney General shall be exempt from the vehicle inscription requirement set out in Texas Transportation Code §721.002 if used primarily for any of the following purposes:

(1) civil or criminal investigations; or

(2) transportation of the Attorney General.

(b) The purposes of this new section are to increase the effectiveness of civil and criminal investigations by enabling investigators to accomplish their tasks undetected, and to provide a greater degree of safety for the Attorney General and persons accompanying the Attorney General in state-owned motor vehicles.

**History**
- *Source Note: The provisions of this §69.45 adopted to be effective December 19, 2001, 26 TexReg 10277.*

#### **Subchapter D** CONTRACT MONITORING

##### **1 Tex. Admin. Code § 69.55** Identification and Escalation of Contracts that Require Enhanced Contract or Performance Monitoring {#sec-69.55 omnilex-key=us-tx-regs-official--title-1--69.55}

(a) The agency will complete a risk assessment to identify contracts that require enhanced contract or performance monitoring;

(b) Information on these contracts will be reported to the First Assistant Attorney General. The First Assistant Attorney General will be notified immediately of any serious issue or risk that is identified with respect to such a contract.

(c) This subchapter does not apply to a memorandum of understanding, interagency contract, interlocal agreement, or contract for which there is not a cost.

**History**
- *Source Note: The provisions of this §69.55 adopted to be effective May 10, 2016, 41 TexReg 3291; amended to be effective December 5, 2019, 44 TexReg 7375.*

### **Chapter 70** COST OF COPIES OF PUBLIC INFORMATION

##### **1 Tex. Admin. Code § 70.1** Purpose {#sec-70.1 omnilex-key=us-tx-regs-official--title-1--70.1}

(a) The Office of the Attorney General (the ''Attorney General'') must:

(1) Adopt rules for use by each governmental body in determining charges under Texas Government Code, Chapter 552 (Public Information) Subchapter F (Charges for Providing Copies of Public Information);

(2) Prescribe the methods for computing the charges for copies of public information in paper, electronic, and other kinds of media; and

(3) Establish costs for various components of charges for public information that shall be used by each governmental body in providing copies of public information.

(b) Governmental bodies must use the charges established by these rules, unless:

(1) Other law provides for charges for specific kinds of public information;

(2) They are a governmental body other than a state agency, and their charges are within a 25 percent variance above the charges established by the Attorney General;

(3) They request and receive an exemption because their actual costs are higher; or

(4) In accordance with Chapter 552 of the Texas Government Code (also known as the Public Information Act), the governmental body may grant a waiver or reduction for charges for providing copies of public information pursuant to §552.267 of the Texas Government Code.

(A) A governmental body shall furnish a copy of public information without charge or at a reduced charge if the governmental body determines that waiver or reduction of the fee is in the public interest because furnishing the information primarily benefits the general public; or

(B) If the cost to the governmental body of processing the collection of a charge for a copy of public information will exceed the amount of the charge, the governmental body may waive the charge.

**History**
- *Source Note: The provisions of this §70.1 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.2** Definitions {#sec-70.2 omnilex-key=us-tx-regs-official--title-1--70.2}

The following words and terms, when used in these sections, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Actual cost--The sum of all direct costs plus a proportional share of overhead or indirect costs. Actual cost should be determined in accordance with generally accepted methodologies.

(2) Client/Server System--A combination of two or more computers that serve a particular application through sharing processing, data storage, and end-user interface presentation. PCs located in a LAN environment containing file servers fall into this category as do applications running in an X-window environment where the server is a UNIX based system.

(3) Attorney General--The Office of the Attorney General of Texas.

(4) Governmental Body--An entity as defined by §552.003 of the Texas Government Code.

(5) Mainframe Computer--A computer located in a controlled environment and serving large applications and/or large numbers of users. These machines usually serve an entire organization or some group of organizations. These machines usually require an operating staff. IBM and UNISYS mainframes, and large Digital VAX 9000 and VAX Clusters fall into this category.

(6) Midsize Computer--A computer smaller than a Mainframe Computer that is not necessarily located in a controlled environment. It usually serves a smaller organization or a sub-unit of an organization. IBM AS/400 and Digital VAX/VMS multi-user single-processor systems fall into this category.

(7) Nonstandard copy--Under §70.1 through §70.11 of this title, a copy of public information that is made available to a requestor in any format other than a standard paper copy. Microfiche, microfilm, diskettes, magnetic tapes, CD-ROM are examples of nonstandard copies. Paper copies larger than 8 1/2 by 14 inches (legal size) are also considered nonstandard copies.

(8) PC--An IBM compatible PC, Macintosh or Power PC based computer system operated without a connection to a network.

(9) Standard paper copy--Under §70.1 through §70.11 of this title, a copy of public information that is a printed impression on one side of a piece of paper that measures up to 8 1/2 by 14 inches. Each side of a piece of paper on which information is recorded is counted as a single copy. A piece of paper that has information recorded on both sides is counted as two copies.

(10) Archival box--A carton box measuring approximately 12.5" width x 15.5" length x 10" height, or able to contain approximately 1.5 cubic feet in volume.

**History**
- *Source Note: The provisions of this §70.2 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective November 5, 2000, 25 TexReg 10727; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.3** Charges for Providing Copies of Public Information {#sec-70.3 omnilex-key=us-tx-regs-official--title-1--70.3}

(a) The charges in this section to recover costs associated with providing copies of public information are based on estimated average costs to governmental bodies across the state. When actual costs are 25% higher than those used in these rules, governmental bodies other than agencies of the state, may request an exemption in accordance with §70.4 of this title (relating to Requesting an Exemption).

(b) Copy charge.

(1) Standard paper copy. The charge for standard paper copies reproduced by means of an office machine copier or a computer printer is $.10 per page or part of a page. Each side that has recorded information is considered a page.

(2) Nonstandard copy. The charges in this subsection are to cover the materials onto which information is copied and do not reflect any additional charges, including labor, that may be associated with a particular request. The charges for nonstandard copies are:

(A) Diskette--$1.00;

(B) Magnetic tape--actual cost

(C) Data cartridge--actual cost;

(D) Tape cartridge--actual cost;

(E) Rewritable CD (CD-RW)--$1.00;

(F) Non-rewritable CD (CD-R)--$1.00;

(G) Digital video disc (DVD)--$3.00;

(H) JAZ drive--actual cost;

(I) Other electronic media--actual cost;

(J) VHS video cassette--$2.50;

(K) Audio cassette--$1.00;

(L) Oversize paper copy (e.g.: 11 inches by 17 inches, greenbar, bluebar, not including maps and photographs using specialty paper--See also §70.9 of this title)--$.50;

(M) Specialty paper (e.g.: Mylar, blueprint, blueline, map, photographic--actual cost.

(c) Labor charge for programming. If a particular request requires the services of a programmer in order to execute an existing program or to create a new program so that requested information may be accessed and copied, the governmental body may charge for the programmer's time.

(1) The hourly charge for a programmer is $28.50 an hour. Only programming services shall be charged at this hourly rate.

(2) Governmental bodies that do not have in-house programming capabilities shall comply with requests in accordance with §552.231 of the Texas Government Code.

(3) If the charge for providing a copy of public information includes costs of labor, a governmental body shall comply with the requirements of §552.261(b) of the Texas Government Code.

(d) Labor charge for locating, compiling, manipulating data, and reproducing public information.

(1) The charge for labor costs incurred in processing a request for public information is $15 an hour. The labor charge includes the actual time to locate, compile, manipulate data, and reproduce the requested information.

(2) A labor charge shall not be billed in connection with complying with requests that are for 50 or fewer pages of paper records, unless the documents to be copied are located in:

(A) Two or more separate buildings that are not physically connected with each other; or

(B) A remote storage facility.

(3) A labor charge shall not be recovered for any time spent by an attorney, legal assistant, or any other person who reviews the requested information:

(A) To determine whether the governmental body will raise any exceptions to disclosure of the requested information under the Texas Government Code, Subchapter C, Chapter 552; or

(B) To research or prepare a request for a ruling by the attorney general's office pursuant to §552.301 of the Texas Government Code.

(4) When confidential information pursuant to a mandatory exception of the Act is mixed with public information in the same page, a labor charge may be recovered for time spent to redact, blackout, or otherwise obscure confidential information in order to release the public information. A labor charge shall not be made for redacting confidential information for requests of 50 or fewer pages, unless the request also qualifies for a labor charge pursuant to Texas Government Code, §552.261(a)(1) or (2).

(5) If the charge for providing a copy of public information includes costs of labor, a governmental body shall comply with the requirements of Texas Government Code, Chapter 552, §552.261(b).

(6) For purposes of paragraph (2)(A) of this subsection, two buildings connected by a covered or open sidewalk, an elevated or underground passageway, or a similar facility, are not considered to be separate buildings.

(e) Overhead charge.

(1) Whenever any labor charge is applicable to a request, a governmental body may include in the charges direct and indirect costs, in addition to the specific labor charge. This overhead charge would cover such costs as depreciation of capital assets, rent, maintenance and repair, utilities, and administrative overhead. If a governmental body chooses to recover such costs, a charge shall be made in accordance with the methodology described in paragraph (3) of this subsection. Although an exact calculation of costs will vary, the use of a standard charge will avoid complication in calculating such costs and will provide uniformity for charges made statewide.

(2) An overhead charge shall not be made for requests for copies of 50 or fewer pages of standard paper records unless the request also qualifies for a labor charge pursuant to Texas Government Code, §552.261(a)(1) or (2).

(3) The overhead charge shall be computed at 20% of the charge made to cover any labor costs associated with a particular request. Example: if one hour of labor is used for a particular request, the formula would be as follows: Labor charge for locating, compiling, and reproducing, $15.00 x .20 = $3.00; or Programming labor charge, $28.50 x .20 = $5.70. If a request requires one hour of labor charge for locating, compiling, and reproducing information ($15.00 per hour); and one hour of programming labor charge ($28.50 per hour), the combined overhead would be: $15.00 + $28.50 = $43.50 x .20 = $8.70.

(f) Microfiche and microfilm charge.

(1) If a governmental body already has information that exists on microfiche or microfilm and has copies available for sale or distribution, the charge for a copy must not exceed the cost of its reproduction. If no copies of the requested microfiche or microfilm are available and the information on the microfiche or microfilm can be released in its entirety, the governmental body should make a copy of the microfiche or microfilm. The charge for a copy shall not exceed the cost of its reproduction. The Texas State Library and Archives Commission has the capacity to reproduce microfiche and microfilm for governmental bodies. Governmental bodies that do not have in-house capability to reproduce microfiche or microfilm are encouraged to contact the Texas State Library before having the reproduction made commercially.

(2) If only a master copy of information in microfilm is maintained, the charge is $.10 per page for standard size paper copies, plus any applicable labor and overhead charge for more than 50 copies.

(g) Remote document retrieval charge.

(1) Due to limited on-site capacity of storage documents, it is frequently necessary to store information that is not in current use in remote storage locations. Every effort should be made by governmental bodies to store current records on-site. State agencies are encouraged to store inactive or non-current records with the Texas State Library and Archives Commission. To the extent that the retrieval of documents results in a charge to comply with a request, it is permissible to recover costs of such services for requests that qualify for labor charges under current law.

(2) If a governmental body has a contract with a commercial records storage company, whereby the private company charges a fee to locate, retrieve, deliver, and return to storage the needed record(s), no additional labor charge shall be factored in for time spent locating documents at the storage location by the private company's personnel. If after delivery to the governmental body, the boxes must still be searched for records that are responsive to the request, a labor charge is allowed according to subsection (d)(1) of this section.

(h) Computer resource charge.

(1) The computer resource charge is a utilization charge for computers based on the amortized cost of acquisition, lease, operation, and maintenance of computer resources, which might include, but is not limited to, some or all of the following: central processing units (CPUs), servers, disk drives, local area networks (LANs), printers, tape drives, other peripheral devices, communications devices, software, and system utilities.

(2) These computer resource charges are not intended to substitute for cost recovery methodologies or charges made for purposes other than responding to public information requests.

(3) The charges in this subsection are averages based on a survey of governmental bodies with a broad range of computer capabilities. Each governmental body using this cost recovery charge shall determine which category(ies) of computer system(s) used to fulfill the public information request most closely fits its existing system(s), and set its charge accordingly. Type of System--Rate: mainframe--$10 per CPU minute; Midsize--$1.50 per CPU minute; Client/Server--$2.20 per clock hour; PC or LAN--$1.00 per clock hour.

(4) The charge made to recover the computer utilization cost is the actual time the computer takes to execute a particular program times the applicable rate. The CPU charge is not meant to apply to programming or printing time; rather it is solely to recover costs associated with the actual time required by the computer to execute a program. This time, called CPU time, can be read directly from the CPU clock, and most frequently will be a matter of seconds. If programming is required to comply with a particular request, the appropriate charge that may be recovered for programming time is set forth in subsection (d) of this section. No charge should be made for computer print-out time. Example: If a mainframe computer is used, and the processing time is 20 seconds, the charges would be as follows: $10 / 3 = $3.33; or $10 / 60 x 20 = $3.33.

(5) A governmental body that does not have in-house computer capabilities shall comply with requests in accordance with the §552.231 of the Texas Government Code.

(i) Miscellaneous supplies. The actual cost of miscellaneous supplies, such as labels, boxes, and other supplies used to produce the requested information, may be added to the total charge for public information.

(j) Postal and shipping charges. Governmental bodies may add any related postal or shipping expenses which are necessary to transmit the reproduced information to the requesting party.

(k) Sales tax. Pursuant to Office of the Comptroller of Public Accounts' rules sales tax shall not be added on charges for public information (34 TAC, Part 1, Chapter 3, Subchapter O, §3.341 and §3.342).

(l) Miscellaneous charges: A governmental body that accepts payment by credit card for copies of public information and that is charged a "transaction fee" by the credit card company may recover that fee.

(m) These charges are subject to periodic reevaluation and update.

**History**
- *Source Note: The provisions of this §70.3 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective February 20, 1997, 22 TexReg 1625; amended to be effective December 3, 1997, 22 TexReg 11651; amended to be effective December 21, 1999, 24 TexReg 11255; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.4** Requesting an Exemption {#sec-70.4 omnilex-key=us-tx-regs-official--title-1--70.4}

(a) Pursuant to §552.262(c) of the Public Information Act, a governmental body may request that it be exempt from part or all of these rules.

(b) State agencies must request an exemption if their charges to recover costs are higher than those established by these rules.

(c) Governmental bodies, other than agencies of the state, must request an exemption before seeking to recover costs that are more than 25% higher than the charges established by these rules.

(d) an exemption request must be made in writing, and must contain the following elements:

(1) A statement identifying the subsection(s) of these rules for which an exemption is sought;

(2) The reason(s) the exemption is requested;

(3) A copy of the proposed charges;

(4) The methodology and figures used to calculate/compute the proposed charges;

(5) Any supporting documentation, such as invoices, contracts, etc.; and

(6) The name, title, work address, and phone number of a contact person at the governmental body.

(e) The contact person shall provide sufficient information and answer in writing any questions necessary to process the request for exemption.

(f) If there is good cause to grant the exemption, because the request is duly documented, reasonable, and in accordance with generally accepted accounting principles, the exemption shall be granted. The name of the governmental body shall be added to a list to be published annually in the *Texas Register.*

(g) If the request is not duly documented and/or the charges are beyond cost recovery, the request for exemption shall be denied. The letter of denial shall:

(1) Explain the reason(s) the exemption cannot be granted; and

(2) Whenever possible, propose alternative charges.

(h) All determinations to grant or deny a request for exemption shall be completed promptly, but shall not exceed 90 days from receipt of the request by the Attorney General.

**History**
- *Source Note: The provisions of this §70.4 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective January 16, 2003, 28 TexReg 439; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.5** Access to Information Where Copies Are Not Requested {#sec-70.5 omnilex-key=us-tx-regs-official--title-1--70.5}

(a) Access to information in standard paper form. A governmental body shall not charge for making available for inspection information maintained in standard paper form. Charges are permitted only where the governmental body is asked to provide, for inspection, information that contains mandatory confidential information and public information. When such is the case, the governmental body may charge to make a copy of the page from which information must be edited. No other charges are allowed except as follows:

(1) The governmental body has 16 or more employees and the information requested takes more than five hours to prepare the public information for inspection; and

(A) Is older than five years; or

(B) Completely fills, or when assembled will completely fill, six or more archival boxes.

(2) The governmental body has 15 or fewer full-time employees and the information requested takes more than two hours to prepare the public information for inspection; and

(A) Is older than three years; or

(B) Completely fills, or when assembled will completely fill, three or more archival boxes.

(3) A governmental body may charge pursuant to paragraphs (1)(A) and (2)(A) of this subsection only for the production of those documents that qualify under those paragraphs.

(b) Access to information in other than standard form. In response to requests for access, for purposes of inspection only, to information that is maintained in other than standard form, a governmental body may not charge the requesting party the cost of preparing and making available such information, unless complying with the request will require programming or manipulation of data.

**History**
- *Source Note: The provisions of this §70.5 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective December 21, 1999, 24 TexReg 11255; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251.*

##### **1 Tex. Admin. Code § 70.6** Format for Copies of Public Information {#sec-70.6 omnilex-key=us-tx-regs-official--title-1--70.6}

(a) If a requesting party asks that information be provided on computer-compatible media of a particular kind, and the requested information is electronically stored and the governmental body has the capability of providing it in that format and it is able to provide it at no greater expense or time, the governmental body shall provide the information in the requested format.

(b) The extent to which a requestor can be accommodated will depend largely on the technological capability of the governmental body to which the request is made.

(c) A governmental body is not required to purchase any hardware, software or programming capabilities that it does not already possess to accommodate a particular kind of request.

(d) Provision of a copy of public information in the requested medium shall not violate the terms of any copyright agreement between the governmental body and a third party.

(e) if the governmental body does not have the required technological capabilities to comply with the request in the format preferred by the requestor, the governmental body shall proceed in accordance with §552.228(c) of the Public Information Act.

(f) If a governmental body receives a request requiring programming or manipulation of data, the governmental body should proceed in accordance with §552.231 of the Public Information Act. Manipulation of data under §552.231 applies only to information stored in electronic format.

**History**
- *Source Note: The provisions of this §70.6 adopted to be effective September 18, 1996, 21 TexReg 8587; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.7** Estimates and Waivers of Public Information Charges {#sec-70.7 omnilex-key=us-tx-regs-official--title-1--70.7}

(a) A governmental body is required to provide a requestor with an itemized statement of estimated charges if charges for copies of public information will exceed $40, or if a charge in accordance with §70.5 of this title (relating to Access to Information Where Copies Are Not Requested) will exceed $40 for making public information available for inspection. The itemized statement of estimated charges is to be provided before copies are made to enable requestors to make the choices allowed by the Act. A governmental body that fails to provide the required statement may not collect more than $40. The itemized statement must be provided free of charge and shall contain the following information:

(1) The itemized estimated charges, including any allowable charges for labor, overhead, copies, etc.;

(2) Whether a less costly or no-cost way of viewing the information is available;

(3) A statement that the requestor must respond in writing by mail, in person, by facsimile if the governmental body is capable of receiving such transmissions, or by electronic mail, if the governmental body has an electronic mail address;

(4) A statement that the request will be considered to have been automatically withdrawn by the requestor if a written response from the requestor is not received within ten business days after the date the statement was sent, in which the requestor states that the requestor:

(A) Will accept the estimated charges;

(B) Is modifying the request in response to the itemized statement; or

(C) Has sent to the Attorney General a complaint alleging that the requestor has been overcharged for being provided with a copy of the public information.

(b) If after starting the work, but before making the copies available, the governmental body determines that the initially accepted estimated statement will be exceeded by 20% or more, an updated statement must be sent. If the requestor does not respond to the updated statement, the request is considered to have been withdrawn by the requestor.

(c) If the actual charges exceed $40, the charges may not exceed:

(1) The amount estimated on the updated statement; or

(2) An amount that exceeds by more than 20% the amount in the initial statement, if an updated statement was not sent.

(d) A governmental body that provides a requestor with the statement mentioned in subsection (a) of this section, may require a deposit or bond as follows:

(1) The governmental body has 16 or more full-time employees and the estimated charges are $100 or more; or

(2) The governmental body has 15 or fewer full-time employees and the estimated charges are $50 or more.

(e) If a request for the inspection of paper records will qualify for a deposit or a bond as detailed in subsection (d) of this section, a governmental body may request:

(1) A bond for the entire estimated amount; or

(2) A deposit not to exceed 50 percent of the entire estimated amount.

(f) A governmental body may require payment of overdue and unpaid balances before preparing a copy in response to a new request if:

(1) The governmental body provided, and the requestor accepted, the required itemized statements for previous requests that remain unpaid; and

(2) The aggregated unpaid amount exceeds $100.

(g) A governmental body may not seek payment of said unpaid amounts through any other means.

(h) A governmental body that cannot produce the public information for inspection and/or duplication within 10 business days after the date the written response from the requestor has been received, shall certify to that fact in writing, and set a date and hour within a reasonable time when the information will be available.

**History**
- *Source Note: The provisions of this §70.7 adopted to be effective December 21, 1999, 24 TexReg 11255; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.8** Processing Complaints of Overcharges {#sec-70.8 omnilex-key=us-tx-regs-official--title-1--70.8}

(a) Pursuant to §552.269(a) of the Texas Government Code, requestors who believe they have been overcharged for a copy of public information may complain to the Attorney General.

(b) The complaint must be in writing, and must:

(1) Set forth the reason(s) the person believes the charges are excessive;

(2) Provide a copy of the original request and a copy of any correspondence from the governmental body stating the proposed charges; and

(3) Be received by the Attorney General within 10 business days after the person knows of the occurrence of the alleged overcharge.

(4) Failure to provide the information listed within the stated timeframe will result in the complaint being dismissed.

(c) The Attorney General shall address written questions to the governmental body, regarding the methodology and figures used in the calculation of the charges which are the subject of the complaint.

(d) The governmental body shall respond in writing to the questions within 10 business days from receipt of the questions.

(e) The Attorney General may use tests, consultations with records managers and technical personnel at the Attorney General and other agencies, and any other reasonable resources to determine appropriate charges.

(f) If the Attorney General determines that the governmental body overcharged for requested public information, the governmental body shall adjust its charges in accordance with the determination, and shall refund the difference between what was charged and what was determined to be appropriate charges.

(g) The Attorney General shall send a copy of the determination to the complainant and to the governmental body.

(h) Pursuant to §552.269(b) of the Texas Government Code, a requestor who overpays because a governmental body refuses or fails to follow the charges established by the Attorney General, is entitled to recover three times the amount of the overcharge if the governmental body did not act in good faith in computing the charges.

**History**
- *Source Note: The provisions of this §70.8 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.9** Examples of Charges for Copies of Public Information {#sec-70.9 omnilex-key=us-tx-regs-official--title-1--70.9}

The following tables present a few examples of the calculations of charges for information:

(1) TABLE 1 (Fewer than 50 pages of paper records): $.10 per copy x number of copies (standard-size paper copies); + Labor charge (if applicable); + Overhead charge (if applicable); + Document retrieval charge (if applicable); + Postage and shipping (if applicable) = $ TOTAL CHARGE.

(2) TABLE 2 (More than 50 pages of paper records or nonstandard copies): $.10 per copy x number of copies (standard-size paper copies), or cost of nonstandard copy (e.g., diskette, oversized paper, etc.); + Labor charge (if applicable); + Overhead charge (if applicable); + Document retrieval charge (if applicable); + Actual cost of miscellaneous supplies (if applicable); + Postage and shipping (if applicable) = $ TOTAL CHARGE.

(3) TABLE 3 (Information that Requires Programming or Manipulation of Data): Cost of copy (standard or nonstandard, whichever applies); + Labor charge; + Overhead charge; + Computer resource charge; + Programming time (if applicable); + Document retrieval charge (if applicable); + Actual cost of miscellaneous supplies (if applicable); + Postage and shipping (if applicable) = $ TOTAL CHARGE.

(4) TABLE 4 (Maps): Cost of paper (Cost of Roll/Avg. # of Maps); + Cost of Toner (Black or Color, # of Maps per Toner Cartridge); + Labor charge (if applicable); + Overhead charge (if applicable) + Plotter/Computer resource Charge; + Actual cost of miscellaneous supplies (if applicable); + Postage and shipping (if applicable) = $ TOTAL CHARGE.

(5) TABLE 5 (Photographs): Cost of Paper (Cost of Sheet of Photographic Paper/Avg. # of Photographs per Sheet); + Developing/Fixing Chemicals (if applicable); + Labor charge (if applicable); + Overhead charge (if applicable); + Postage and shipping (if applicable) = $ TOTAL CHARGE.

**History**
- *Source Note: The provisions of this §70.9 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251.*

##### **1 Tex. Admin. Code § 70.10** The Attorney General Charge Schedule {#sec-70.10 omnilex-key=us-tx-regs-official--title-1--70.10}

The following is a summary of the charges for copies of public information that have been adopted by the Attorney General.

(1) Standard paper copy--$.10 per page.

(2) Nonstandard-size copy:

(A) Diskette: $1.00;

(B) Magnetic tape: actual cost;

(C) Data cartridge: actual cost;

(D) Tape cartridge: actual cost;

(E) Rewritable CD (CD-RW)--$1.00;

(F) Non-rewritable CD (CD-R)--$1.00;

(G) Digital video disc (DVD)--$3.00;

(H) JAZ drive--actual cost;

(I) Other electronic media--actual cost;

(J) VHS video cassette--$2.50;

(K) Audio cassette--$1.00;

(L) Oversize paper copy (e.g.: 11 inches by 17 inches, greenbar, bluebar, not including maps and photographs using specialty paper)--$.50;

(M) Specialty paper (e.g.: Mylar, blueprint, blueline, map, photographic)--actual cost.

(3) Labor charge:

(A) For programming--$28.50 per hour;

(B) For locating, compiling, and reproducing--$15 per hour.

(4) Overhead charge-- 20% of labor charge.

(5) Microfiche or microfilm charge:

(A) Paper copy--$.10 per page;

(B) Fiche or film copy--Actual cost.

(6) Remote document retrieval charge--Actual cost.

(7) Computer resource charge:

(A) mainframe--$10 per CPU minute;

(B) Midsize--$1.50 per CPU minute;

(C) Client/Server system--$2.20 per clock hour;

(D) PC or LAN--$1.00 per clock hour.

(8) Miscellaneous supplies--Actual cost.

(9) Postage and shipping charge--Actual cost.

(10) Photographs--Actual cost as calculated in accordance with §70.9(5) of this title.

(11) Maps--Actual cost as calculated in accordance with §70.9(4) of this title.

(12) Other costs--Actual cost.

(13) Outsourced/Contracted Services--Actual cost for the copy. May not include development costs.

(14) No Sales Tax--No Sales Tax shall be applied to copies of public information.

**History**
- *Source Note: The provisions of this §70.10 adopted to be effective September 18, 1996, 21 TexReg 8587; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.11** Informing the Public of Basic Rights and Responsibilities under the Public Information Act {#sec-70.11 omnilex-key=us-tx-regs-official--title-1--70.11}

(a) Pursuant to Texas Government Code, Chapter 552, Subchapter D, §552.205, an officer for public information shall prominently display a sign in the form prescribed by the Attorney General.

(b) The sign shall contain basic information about the rights of requestors and responsibilities of governmental bodies that are subject to Chapter 552, as well as the procedures for inspecting or obtaining a copy of public information under said chapter.

(c) The sign shall have the minimum following characteristics:

(1) Be printed on plain paper.

(2) Be no less than 8 1/2 inches by 14 inches in total size, exclusive of framing.

(3) The sign may be laminated to prevent alterations.

(d) The sign will contain the following wording:

(1) The Public Information Act. Texas Government Code, Chapter 552, gives you the right to access government records; and an officer for public information and the officer's agent may not ask why you want them. All government information is presumed to be available to the public. Certain exceptions may apply to the disclosure of the information. Governmental bodies shall promptly release requested information that is not confidential by law, either constitutional, statutory, or by judicial decision, or information for which an exception to disclosure has not been sought.

(2) Rights of Requestors. You have the right to:

(A) Prompt access to information that is not confidential or otherwise protected;

(B) Receive treatment equal to all other requestors, including accommodation in accordance with the Americans with Disabilities Act (ADA) requirements;

(C) Receive certain kinds of information without exceptions, like the voting record of public officials, and other information;

(D) Receive a written itemized statement of estimated charges, when charges will exceed $40, in advance of work being started and opportunity to modify the request in response to the itemized statement;

(E) Choose whether to inspect the requested information (most often at no charge), receive copies of the information, or both;

(F) A waiver or reduction of charges if the governmental body determines that access to the information primarily benefits the general public;

(G) Receive a copy of the communication from the governmental body asking the Attorney General for a ruling on whether the information can be withheld under one of the accepted exceptions, or if the communication discloses the requested information, a redacted copy;

(H) Lodge a written complaint about overcharges for public information with the Attorney General. Complaints of other possible violations may be filed with the county or district attorney of the county where the governmental body, other than a state agency, is located. If the complaint is against the county or district attorney, the complaint must be filed with the Attorney General.

(3) Responsibilities of Governmental Bodies. All governmental bodies responding to information requests have the responsibility to:

(A) Establish reasonable procedures for inspecting or copying public information and inform requestors of these procedures;

(B) Treat all requestors uniformly and shall give to the requestor all reasonable comfort and facility, including accommodation in accordance with ADA requirement;

(C) Be informed about open records laws and educate employees on the requirements of those laws;

(D) Inform requestors of the estimated charges greater than $40 and any changes in the estimates above 20 percent of the original estimate, and confirm that the requestor accepts the charges, has amended the request, or has sent a complaint of overcharges to the Attorney General, in writing before finalizing the request;

(E) Inform the requestor if the information cannot be provided promptly and set a date and time to provide it within a reasonable time;

(F) Request a ruling from the Attorney General regarding any information the governmental body wishes to withhold, and send a copy of the request for ruling, or a redacted copy, to the requestor;

(G) Segregate public information from information that may be withheld and provide that public information promptly;

(H) Make a good faith attempt to inform third parties when their proprietary information is being requested from the governmental body;

(I) Respond in writing to all written communications from the Attorney General regarding complaints about the charges for the information and other alleged violations of the Act.

(4) Procedures to Obtain Information

(A) Submit a request by mail, fax, email or in person, according to a governmental body's reasonable procedures.

(B) Include enough description and detail about the information requested to enable the governmental body to accurately identify and locate the information requested.

(C) Cooperate with the governmental body's reasonable efforts to clarify the type or amount of information requested.

(5) Information to be released.

(A) You may review it promptly, and if it cannot be produced within 10 business days the public information officer will notify you in writing of the reasonable date and time when it will be available;

(B) Keep all appointments to inspect records and to pick up copies. Failure to keep appointments may result in losing the opportunity to inspect the information at the time requested;

(C) Cost of Records.

(i) You must respond to any written estimate of charges within 10 business days of the date the governmental body sent it or the request is considered automatically withdrawn;

(ii) If estimated costs exceed $100.00 (or $50.00 if a governmental body has fewer than 16 full time employees) the governmental body may require a bond, prepayment or deposit;

(iii) You may ask the governmental body to determine whether providing the information primarily benefits the general public, resulting in a waiver or reduction of charges;

(iv) Make timely payment for all mutually agreed charges. A governmental body can demand payment of overdue balances exceeding $100.00, or obtain a security deposit, before processing additional requests from you.

(6) Information that may be withheld due to an exception.

(A) By the 10th business day after a governmental body receives your written request, a governmental body must:

(i) Request an Attorney General Opinion and state which exception apply;

(ii) Notify the requestor of the referral to the Attorney General; and

(iii) Notify third parties if the request involves their proprietary information;

(B) Failure to request an Attorney General opinion and to notify the requestor within 10 business days will result in a presumption that the information is open unless there is a compelling reason to withhold it.

(C) Requestors may send a letter to the Attorney General arguing for release, and may review arguments made by the governmental body. If the arguments disclose the requested information, the requestor may obtain a redacted copy.

(D) The Attorney General must issue a decision no later than the 45th business day after the Attorney General received the request for a decision. The Attorney General may request an additional 10 business days extension.

(E) Governmental bodies may not ask the Attorney General to ''reconsider'' an opinion.

(7) Additional Information on Sign.

(A) The sign must contain information of the governmental body's officer for public information, or the officer's agent, as well as the mailing address, phone and fax numbers, and email address, if any, where requestors may send a request for information to the officer or the officer's agent. The sign must also contain the physical address at which requestors may request information in person.

(B) The sign must contain information of the local county attorney or district attorney where requestors may submit a complaint of alleged violations of the Act, as well as the contact information for the Attorney General.

(C) The sign must also contain contact information of the person or persons with whom a requestor may make special arrangements for accommodation pursuant to the American with Disabilities Act.

(e) A governmental body may comply with Texas Government Code, §552.205 and this rule by posting the sign provided by the Attorney General.

**History**
- *Source Note: The provisions of this §70.11 adopted to be effective February 16, 2000, 25 TexReg 1092; amended to be effective January 16, 2003, 28 TexReg 439; amended to be effective February 11, 2004, 29 TexReg 1189; transferred effective September 1, 2005, as published in the Texas Register September 29, 2006, 31 TexReg 8251; amended to be effective February 22, 2007, 32 TexReg 614.*

##### **1 Tex. Admin. Code § 70.12** Allowable Charges Under Section 552.275 of the Texas Government Code {#sec-70.12 omnilex-key=us-tx-regs-official--title-1--70.12}

(a) A governmental body shall utilize the methods established in 1 TAC §70.3(c) - (e) when calculating allowable charges under Section 552.275 of the Texas Government Code.

(b) When calculating the amount of time spent complying with an individual's public information request(s) pursuant to Section 552.275 of the Texas Government Code, a governmental body may not include time spent on:

(1) Determining the meaning and/or scope of the request(s);

(2) Requesting a clarification from the requestor;

(3) Comparing records gathered from different sources;

(4) Determining which exceptions to disclosure under Chapter 552 of the Texas Government Code, if any, may apply to information that is responsive to the request(s);

(5) Preparing the information and/or correspondence required under Sections 552.301, 552.303, and 552.305 of the Government Code;

(6) Reordering, reorganizing, or in any other way bringing information into compliance with well established and generally accepted information management practices; or

(7) Providing instruction to, or learning by, employees or agents of the governmental body of new practices, rules, and/or procedures, including the management of electronic records.

**History**
- *Source Note: The provisions of this §70.12 adopted to be effective September 5, 2007, 32 TexReg 5653.*

##### **1 Tex. Admin. Code § 70.13** Fee for Obtaining Copy of Body Worn Camera Recording {#sec-70.13 omnilex-key=us-tx-regs-official--title-1--70.13}

(a) This section provides the fee for obtaining a copy of body worn camera recording pursuant to §1701.661 of the Government Code.

(1) Section 1701.661 of the Government Code is the sole authority under which a copy of a body worn camera recording may be obtained from a law enforcement agency under the Public Information Act, Chapter 552 of the Government Code, and no fee for obtaining a copy of a body worn camera recording from a law enforcement agency may be charged unless authorized by this section.

(2) This section does not apply to a request, or portions of a request, seeking to obtain information other than a copy of a body worn camera recording. Portions of a request seeking information other than a copy of a body worn camera recording are subject to the charges listed in §70.3 of this chapter.

(b) The charge for obtaining a copy of a body worn camera recording shall be:

(1) $10.00 per recording responsive to the request for information; and

(2) $1.00 per full minute of body worn camera video or audio footage responsive to the request for information, if identical information has not already been obtained by a member of the public in response to a request for information.

(c) A law enforcement agency may provide a copy without charge, or at a reduced charge, if the agency determines waiver or reduction of the charge is in the public interest.

(d) If the requestor is not permitted to obtain a copy of a requested body worn camera recording under §1701.661 of the Government Code or an exception in the Public Information Act, Chapter 552 of the Government Code, the law enforcement agency may not charge the requestor under this section.

**History**
- *Source Note: The provisions of this §70.13 adopted to be effective November 24, 2016, 41 TexReg 9099.*

## **Part 4** OFFICE OF THE SECRETARY OF STATE

### **Chapter 71** GENERAL POLICIES AND PROCEDURES

#### **Subchapter A** PRACTICE AND PROCEDURE

##### **1 Tex. Admin. Code § 71.1** Inspection of Public Information {#sec-71.1 omnilex-key=us-tx-regs-official--title-1--71.1}

(a) Access to documents. Unless otherwise provided by constitutional provision, statutory provision, or judicial decision, all documents on file with the Office of the Secretary of State (Office) are specifically declared to be public record.

(1) Public access to documents on file and maintained on site at an office of the Secretary of State requires the approval and supervision of an authorized Office employee to ensure the security and integrity of the documents.

(2) Documents will be available for examination during regular office hours in a manner that will not interfere with the operation of the Office.

(b) Written request. Apply to review documents on forms promulgated by the Office or in a written request describing the information by name and/or number.

(1) Be prepared to provide and verify the name and address of the applicant with a valid state driver license or other photo-identification.

(2) Applications will be handled in the order in which they are received.

(c) Documents Unavailable. If a document is in active use or in storage and, therefore, not available upon request, the Office shall specify in writing the date and hour that the requested document will be available for inspection.

(d) Limited copies available at time of request. The Office may limit the number of pages, which can be copied and supplied during a person's visit if the number of copies requested is beyond the reasonable capacity of the available personnel and machines. Copies in excess of the number available during a person's visit will be made and mailed to the applicant in the order in which the request is received.

(e) Designated inspection area. Persons inspecting documents may do so only in a designated inspection area. Each division of the Office shall designate an area where an employee may assist persons inspecting documents.

**History**
- *Source Note: The provisions of this §71.1 adopted to be effective September 6, 1999, 24 TexReg 6965; amended to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.4** Receipt of Letters and Papers by FAX {#sec-71.4 omnilex-key=us-tx-regs-official--title-1--71.4}

Letters and other papers received in the Office of the Secretary of State will be stamped with the date of receipt. The time of day will not be stamped except as established by rule for specific documents. No papers are received on Saturdays, Sundays, or state holidays. Document filings submitted by transmission over a facsimile (FAX) machine to the Office of the Secretary of State on Saturdays, Sundays, state holidays, or after the business hours of 8 a.m. to 5 p.m. will be deemed to be received by the Office of the Secretary of State on the next business day or when actually received by an employee of the secretary of state.

**History**
- *Source Note: The provisions of this §71.4 adopted to be effective January 1, 1976; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.5** Electronic Submission of Documents {#sec-71.5 omnilex-key=us-tx-regs-official--title-1--71.5}

An electronically submitted document is a document meeting the requirements established by each division or section of the Office of the Secretary of State that maintains an electronic filing system.

**History**
- *Source Note: The provisions of this §71.5 adopted to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.7** Requests to Transmit Documents by FAX Machine; Fee {#sec-71.7 omnilex-key=us-tx-regs-official--title-1--71.7}

The secretary of state will transmit a form or other document by facsimile or FAX machine. The fee for this service shall be $2.00 per page. For purposes of assessing the relevant fee, the cover page or transmittal page of the form or other document will not be counted in determining the number of pages in the document. In addition to the fee specified herein, some documents may be subject to additional fees as set forth in other sections of the administrative rules governing the secretary of state.

**History**
- *Source Note: The provisions of this §71.7 adopted to be effective January 1, 1976; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.8** Fees for Copies of Public Information {#sec-71.8 omnilex-key=us-tx-regs-official--title-1--71.8}

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Actual Cost--The sum of all direct costs plus a proportional share of overhead, or indirect costs. Actual cost should be determined in accordance with generally accepted methodologies.

(2) Nonstandard copy--A copy of public information that is made available to a requestor in any format other than a standard paper copy. Microfiche, microfilm, diskettes, magnetic tapes, CD-ROM, and nonstandard paper copies are examples of nonstandard copies.

(3) Readily available information--Information that already exists in printed form, or information that is stored electronically and is ready to be printed or copied without requiring any programming, or information that already exists on microfiche or microfilm. Information that requires a substantial amount of time to locate or prepare for release is not readily available information.

(4) Standard copy--A printed impression on one side of a piece of paper that measures up to 8 1/2 by 14 inches. Each side of a piece of paper on which an impression is made is counted as a single copy. A piece of paper that is printed on both sides is counted as two copies.

(b) Certified copies of documents on file in the Office of the Secretary of State are available. Statute and not these rules establish fees for certificates and certified copies.

(c) The following is a summary of the charges for copies of public information on file in the Office of the Secretary of State. The charges conform to rules of the Office of the Attorney General. This section does not apply to charges for publications or information as authorized by statutes other than Chapter 552 of the Government Code.

(1) Standard paper copy (50 pages or fewer)--$.10 per page.

(2) Nonstandard-size copy:

(A) Diskette--$1.00 each;

(B) Compact disk (CD-RW or CD-R)--$1.00;

(C) Digital video disk (DVD)--$3.00;

(D) VHS video cassette--$2.50 each;

(E) audio cassette--$1.00 each;

(F) Oversize paper copy--$.50;

(G) Other--Actual cost.

(3) Personnel charge:

(A) Programming personnel--$28.50 per hour;

(B) Other personnel--$15 per hour.

(4) Overhead charge--20% of personnel charge.

(5) Microfiche or microfilm charge:

(A) Paper copy (50 pages or fewer)--$.10;

(B) Fiche or film copy--Actual cost.

(6) Remote document retrieval charge--Actual cost.

(7) Computer resource charge:

(A) Midsize--$1.50 per CPU minute;

(B) Client/Server--$2.20 per clock hour;

(C) PC or LAN--$1.00 per clock hour.

(8) Miscellaneous supplies--Actual cost.

(9) Postage and shipping charge--Actual cost.

(10) Other costs--Actual cost.

(d) In response to a request for public information that is not readily available or for information in excess of 50 pages of readily available information, the secretary of state will charge an amount that reasonably includes all costs related to reproducing the record, including cost of materials, labor, and overhead.

(e) In response to a request to deliver requested copies of public information by facsimile transmission or other electronic means, the secretary of state will charge an amount that reasonably includes the actual cost to transmit the requested copies as determined in accordance with generally accepted cost methodologies.

**History**
- *Source Note: The provisions of this §71.8 adopted to be effective October 1, 1994, 19 TexReg 6761; amended to be effective January 5, 1995, 19 TexReg 10221; amended to be effective January 29, 1997, 22 TexReg 841; amended to be effective October 20, 2004, 29 TexReg 9671; amended to be effective October 9, 2005, 30 TexReg 6425.*

##### **1 Tex. Admin. Code § 71.9** Fees; Payment of Money; Refunds {#sec-71.9 omnilex-key=us-tx-regs-official--title-1--71.9}

(a) Fees and charges payable to the secretary of state are required to be paid in advance, that is, at the time of presenting a document for filing or making a request for information for which a fee or charge is payable.

(b) All payments of money to the secretary of state should be made, except as may otherwise be provided in these sections, in United States specie, treasury notes, national bank notes, post office money orders, or by certified or personal check. Payment tendered in any other form will authorize the Office of the Secretary of State to delay or cancel the credit until collection is made. Money orders and checks must be made payable to the Secretary of State of Texas. Money sent by mail to the Office of the Secretary of State will be at the risk of the sender; letters containing money should be registered.

(c) Money paid by actual mistake or in excess, such as a payment not required by law, is subject to refund. A mere change of purpose after the payment of money, as when a party desires to withdraw a filing, will not entitle a party to a refund.

**History**
- *Source Note: The provisions of this §71.9 adopted to be effective January 1, 1976; amended to be effective May 12, 1978, 3 TexReg 1590; amended to be effective January 9, 1980, 4 TexReg 4717; amended to be effective June 3, 1985, 10 TexReg 1619; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective January 6, 1992, 16 TexReg 7641.*

##### **1 Tex. Admin. Code § 71.10** Corporations Section Special Services {#sec-71.10 omnilex-key=us-tx-regs-official--title-1--71.10}

(a) Upon the request of any person, the secretary of state will expedite the filing or reviewing of any document submitted to the Corporations Section, except for trademark documents which require a lengthy process of document review. The special handling fee for this service is the fee established by §405.032 of the Government Code. With respect to all documents submitted for special handling, the secretary of state will notify the sender in writing or by telephone that the document was filed or the reason why it was not filed. Generally, such notification shall occur before the close of business on the next business day following the document's date of receipt. Unless the document sender provides a telephone number where the sender may be reached between the hours of 8 a.m. and 5 p.m., the secretary of state will not be obligated to telephone the sender regarding the disposition of the filing. Requests for expedited filing or review must be sent to: Secretary of State, Corporations Section, Special Handling, P.O. Box 13697, Austin, Texas 78711-3697.

(b) Upon the request of any person, the secretary of state will expedite the handling of a request for certified copies or certificates of fact. Generally, the expedited order will be processed before the close of the next business day following the date of receipt. The fee for this service is the fee established by §405.032 of the Government Code.

**History**
- *Source Note: The provisions of this §71.10 adopted to be effective January 1, 1976; amended to be effective May 9, 1978, 3 TexReg 1541; amended to be effective May 12, 1978, 3 TexReg 1590; amended to be effective January 9, 1980, 4 TexReg 4717; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective September 7, 1993, 18 TexReg 5657; amended to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.12** Faxed Filings {#sec-71.12 omnilex-key=us-tx-regs-official--title-1--71.12}

Documents submitted to the Office of the Secretary of State for filing by transmission using a facsimile (FAX) machine must be accompanied by appropriate payment of any applicable fees. Payment of these fees may be either simultaneously transmitted with the documents or delivered to this office by the close of the same business day. Documents for which the applicable fees have not been received by the secretary of state on the same date of transmission will be returned to the sender without filing by regular mail.

**History**
- *Source Note: The provisions of this §71.12 adopted to be effective January 2, 1992, 16 TexReg 7469; amended to be effective January 10, 1994, 18 TexReg 9927; amended to be effective October 20, 2004, 29 TexReg 9671.*

##### **1 Tex. Admin. Code § 71.14** Credit Card Payment Option {#sec-71.14 omnilex-key=us-tx-regs-official--title-1--71.14}

(a) Fees payable to the Office of the Secretary of State may be paid with a valid and current American Express, Discover, MasterCard, or VISA or such other credit card specified in the contract then existing between the Office of the Secretary of State, the Comptroller of Public Accounts, and the relevant financial institution.

(b) Unless provided otherwise, fees payable to the Office of the Secretary of State may also be paid through an automated clearinghouse (ACH) debit system account established by an agreement executed between the debit system account applicant and the financial institution under contract to the Office of the Secretary of State and the Comptroller of Public Accounts.

(c) As authorized by §405.031 of the Government Code, the Office of the Secretary of State requires users of the credit card payment option via the Internet, facsimile, or telephone to pay the relevant statutory fee or fees plus a convenience fee. The amount to be collected "per credit card transaction" processed via the Internet or by telephone in connection with this payment option is currently set at 2.7% of the total fees incurred. For purposes of this rule, "per credit card transaction" processed via the Internet, facsimile or by telephone shall be defined as simultaneous payment of one or more fees using an American Express, Discover, MasterCard, or VISA or other valid and current credit/debit card designated by the contract(s) then existing between the Office of the Secretary of State, the Comptroller of Public Accounts, and the relevant financial institution. The Office of the Secretary of State shall deposit all fees, including all convenience fees collected under this payment option, in the Texas State treasury.

(d) To utilize this payment option for documents filed with the secretary of state in person or by mail, the document sender must either submit a completed credit card payment form available from the secretary of state or provide the following information in written form:

(1) the name of the credit card being used (American Express, Discover, MasterCard, or VISA or such other card as may be referred to in the contract between the Office of the Secretary of State, the Comptroller of Public Accounts, and the relevant financial institution);

(2) the account number of the credit card;

(3) the expiration date of the credit card;

(4) the signature of the card holder; and

(5) the sum of all fees to be charged.

(e) If a credit card payment is dishonored when presented by the state for payment, the secretary of state shall treat the document submitted for filing in the same manner as if no filing fee had been presented. The secretary of state will then be entitled to take all appropriate action authorized by law.

**History**
- *Source Note: The provisions of this §71.14 adopted to be effective October 20, 2004, 29 TexReg 9671; amended to be effective October 9, 2005, 30 TexReg 6425; amended to be effective October 20, 2011, 36 TexReg 6939.*

##### **1 Tex. Admin. Code § 71.16** Petition for Adoption of Rules {#sec-71.16 omnilex-key=us-tx-regs-official--title-1--71.16}

(a) Any interested person or agency may petition the Office of the Secretary of State requesting adoption of a rule. Petitions shall be in writing, should be filed with the appropriate division director, and shall comply with the following requirements.

(1) Each petition must state the name and address of the petitioner.

(2) Each petition shall include:

(A) a brief explanation of the proposed rule;

(B) the text of the proposed rule prepared in a manner to indicate the words to be added or deleted from the current text, if any;

(C) a statement of the statutory or other authority under which the rule is proposed to be promulgated; and

(D) an explanation of how the public would benefit by adoption of the proposed rule; and

(E) any information or data showing a need or justification for the proposed rule.

(b) The appropriate director shall review all petitions for compliance with this section. If the division director determines that the petition does not comply with this section, the petitioner shall be notified in writing of all deficiencies found and given an opportunity to cure the deficiencies by filing an amended or corrected petition that complies with the requirements of this section. If the petitioner fails to proved an amended petition by close of business of the 15th day following the date that the division director mailed a notice of deficiencies to the petitioner, the petition shall be deemed abandoned and no further action will be taken to process the petition in accordance with the Administrative Procedure Act (Chapter 2001 of the Government Code) and these rules.

(c) If the appropriate director receives a petition or amended petition that complies with the requirements of this section, the director shall notify the petitioner in writing that the petition has been accepted and will be processed in accordance with the Administrative Procedure Act (Chapter 2001 of the Government Code) and these rules. The appropriate division director shall present the petition to the Secretary of State with recommendation on whether a rulemaking proceeding should be initiated.

(d) The Secretary of State shall deny the petition or initiate rulemaking proceedings in accordance with the Administrative Procedure Act (Chapter 2001 of the Government Code) and these rules.

(e) The Secretary of State may modify any proposed rule to ensure that it adequately addresses the perceived problem or other subject matter, and conforms to requirements in Chapter 91 of this title (relating to the Texas Register).

**History**
- *Source Note: The provisions of this §71.16 adopted to be effective October 20, 2004, 29 TexReg 9671.*

#### **Subchapter B** SERVICE OF PROCESS

##### **1 Tex. Admin. Code § 71.21** Service of Process {#sec-71.21 omnilex-key=us-tx-regs-official--title-1--71.21}

(a) Service on the Secretary. Service of process on the Secretary of State may be accomplished under many of the existing statutory authorities by delivering to the Secretary of State or to any clerk so designated by the secretary of state, two copies of the process. The name and appropriate address of the person being named as defendant must be provided. It is the responsibility of the attorney or person seeking service of process to determine when to obtain and to secure personal service of process upon the Secretary of State.

(b) Forwarding by the Secretary. One copy of the petition and citation will be forwarded by registered or certified mail, as appropriate under the particular statute under which service is being made, to the person named at the address provided.

(c) Certificate of Service. Upon request, the Secretary of State will issue a certificate showing:

(1) That service was accomplished;

(2) That a copy of the process was forwarded to the named defendant at the specified address; and

(3) The disposition of the mailing shown on the postal return receipt.

(d) Fees. The fees due the Secretary of State for maintaining a record of service of process, forwarding the process, and for issuing a certificate of service shall be as provided in §405.031 of the Texas Government Code.

(e) In this chapter "person" includes a corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity.

**History**
- *Source Note: The provisions of this §71.21 adopted to be effective September 6, 1999, 24 TexReg 6965; amended to be effective December 9, 2001, 26 TexReg 9776; amended to be effective September 30, 2004, 29 TexReg 9173.*

#### **Subchapter C** PURCHASING PROCEDURES

##### **1 Tex. Admin. Code § 71.51** Historically Underutilized Businesses {#sec-71.51 omnilex-key=us-tx-regs-official--title-1--71.51}

(a) The Secretary of State adopts by reference the rules of the Texas Building and Procurement Commission in 1 Texas Administrative Code, Chapter 111, Subchapter B, §§111.11 - 111.28 (relating to Historically Underutilized Business Certification Program). Certification of a business as a historically underutilized business remains the responsibility of the Building and Procurement Commission.

(b) The adoption of this rule is required by Texas Government Code, §2161.003 (as added by the 76th Legislature, effective September 1, 1999).

**History**
- *Source Note: The provisions of this §71.51 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.61** Protests/Dispute Resolution {#sec-71.61 omnilex-key=us-tx-regs-official--title-1--71.61}

(a) Any actual or prospective bidder, offeror, or contractor alleging to have been aggrieved in connection with the solicitation, evaluation, or award of a contract may formally protest to the Division Director of the Administrative Services Division (the Director). Such protests must be in writing and received in the Director's office within 10 working days after the protesting party knows, or should have known, of the occurrence of the action, which is protested. Formal protests must conform to the requirements of this subsection and subsection (c) of this section, and shall be resolved in accordance with the procedure set forth in subsections (d) and (e) of this section. Copies of the protest must be mailed or delivered by the protesting party to the agency and other interested parties. For the purposes of this section, "interested parties" means all vendors who have submitted bids or proposals for the contract involved.

(b) In the event of a timely protest or appeal under this section, the Secretary of State's office shall not proceed further with the solicitation or with the award of the contract unless the Director makes a written determination that the award of contract without delay is necessary to protect substantial interests of the state.

(c) A formal protest must be sworn and contain:

(1) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in paragraph (1) of this subsection;

(3) a precise statement of the relevant facts;

(4) an identification of the issue or issues to be resolved;

(5) argument and authorities in support of the protest; and

(6) a statement that copies of the protest have been mailed to identifiable interested parties.

(d) The Director shall have the authority, prior to appeal to the Secretary of State, to settle and resolve the dispute concerning the solicitation or award of a contract. The Director may solicit written responses to the protest from other interested parties.

(e) If the protest is not resolved by mutual agreement, the Director will issue a written determination on the protest.

(1) If the Director determines that no violation of rules or statutes has occurred, he shall so inform the protesting party and other interested parties by letter which sets forth the reasons for the determination.

(2) If the Director determines that a violation of the rules or statutes has occurred in a case where a contract has not been awarded, he shall so inform the protesting party, and other interested parties by letter which sets forth the reasons for the determination and the appropriate remedial action.

(3) If the Director determines that a violation of the rules or statutes has occurred in a case where a contract has been awarded, he shall so inform the protesting party and other interested parties by letter which sets forth the reasons for the determination, which may include nullifying the contract.

(f) The Director's determination on a protest may be appealed by an interested party to the Secretary of State. An appeal of the Director's determination must be in writing and must be received in the Secretary of State's office no later than 10 working days after the date of the Director's determination. The appeal shall be limited to review of the Director's determination. Copies of the appeal must be mailed or delivered by the appealing party to other interested parties and must contain an affidavit that such copies have been provided.

(g) The general counsel shall review the protest, Director's determination, and the appeal and prepare a written opinion with recommendation to the Secretary of State. Copies of the general counsel's recommendation shall be mailed to the appealing party, and other interested parties.

(h) When a protest has been appealed to the Secretary of State under subsection (f) of this section a decision issued in writing by the Secretary of State shall be the final administrative action of the agency.

**History**
- *Source Note: The provisions of this §71.61 adopted to be effective April 9, 2002, 27 TexReg 2813.*

#### **Subchapter D** MANAGEMENT OF VEHICLES

##### **1 Tex. Admin. Code § 71.71** Management of Vehicles {#sec-71.71 omnilex-key=us-tx-regs-official--title-1--71.71}

(a) To the extent applicable, the agency adopts the State Vehicle Management Plan as adopted by the Office of Vehicle Fleet Management, under the direction of the Council on Competitive Government, on October 11, 2000.

(b) Restrictions on Assignment of Vehicles.

(1) Each agency vehicle shall be assigned to the agency motor pool and be available for checkout.

(2) The agency may assign a vehicle to an individual administrative or executive employee on a regular or everyday basis only if the agency makes a written determination that the assignment is critical to the needs and mission of the agency.

**History**
- *Source Note: The provisions of this §71.71 adopted to be effective November 20, 2001, 26 TexReg 9375.*

#### **Subchapter E** NEGOTIATION AND MEDIATION OF CERTAIN CONTRACT DISPUTES

##### **1 Tex. Admin. Code § 71.81** Purpose and Application {#sec-71.81 omnilex-key=us-tx-regs-official--title-1--71.81}

This subchapter governs the negotiation and mediation of a claim of breach of contract asserted by a contractor against a unit of state government under the Government Code, Chapter 2260. This chapter is binding upon units of state government without general rulemaking authority.

**History**
- *Source Note: The provisions of this §71.81 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.83** Definitions {#sec-71.83 omnilex-key=us-tx-regs-official--title-1--71.83}

The following words and terms, when used in this chapter, shall have the following meaning, unless the context clearly indicates otherwise:

(1) Chief administrative officer--The Secretary of State, Deputy Secretary of State or other executive officer responsible for the day to day operations of a unit of state government.

(2) Contractor--Independent contractor who has entered into a contract directly with a unit of state government. The term does not include:

(A) A contractor's subcontractor, officer, employee, agent, or other person furnishing goods or services to a contractor;

(B) An employee of a unit of state government; or

(C) A student at an institution of higher education.

(3) Day--A calendar day. If an act is required to occur on a day falling on a Saturday, Sunday, or holiday, the first working day which is not one of these day should be counted as the required day for purpose of this act.

(4) Parties--The contractor and unit of state government that have entered into a contract in connection with which a claim of breach of contract has been filed under this chapter.

(5) Unit of state government or unit--The state or an agency, department, commission, bureau, board, office, council, court, or other entity that is in any branch of state government and that is created by the constitution or a statute of this state, including a university system or institution of higher education. The term does not include a county, municipality, court of a county or municipality, special purpose district, or other political subdivision of this state.

**History**
- *Source Note: The provisions of this §71.83 adopted to be effective April 9, 2002, 27 TexReg 2813; amended to be effective October 9, 2005, 30 TexReg 6425.*

##### **1 Tex. Admin. Code § 71.85** Prerequisites to Suit {#sec-71.85 omnilex-key=us-tx-regs-official--title-1--71.85}

The procedures contained in this chapter are exclusive and required prerequisites to suit under the Civil Practice and Remedies Code, Chapter 107, and the Government Code, Chapter 2260.

**History**
- *Source Note: The provisions of this §71.85 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.87** Sovereign Immunity {#sec-71.87 omnilex-key=us-tx-regs-official--title-1--71.87}

This chapter does not waive a unit of state government's sovereign immunity to suit or liability.

**History**
- *Source Note: The provisions of this §71.87 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.91** Notice of Claim of Breach of Contract {#sec-71.91 omnilex-key=us-tx-regs-official--title-1--71.91}

(a) A contractor asserting a claim of breach of contract under the Government Code, Chapter 2260, shall file notice of the claim as provided by this section.

(b) The notice of claim shall:

(1) be in writing and signed by the contractor or the contractor's authorized representative;

(2) be delivered by hand, certified mail return receipt requested, or other verifiable delivery service, to the officer of the unit of state government designated in the contract to receive a notice of claim of breach of contract under the Government Code, Chapter 2260; if no person is designated in the contract, the notice shall be delivered to the unit's chief administrative officer; and

(3) state in detail:

(A) the nature of the alleged breach of contract, including the date of the event that the contractor asserts as the basis of the claim and each contractual provision allegedly breached;

(B) a description of damages that resulted from the alleged breach, including the amount and method used to calculate those damages; and

(C) the legal theory of recovery, i.e., breach of contract, including the relationship between the alleged breach and the damages claimed.

(c) The notice of claim shall be delivered no later than 180 calendar days after the date of the event that the contractor asserts as the basis of the claim.

**History**
- *Source Note: The provisions of this §71.91 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.93** Agency Counterclaim {#sec-71.93 omnilex-key=us-tx-regs-official--title-1--71.93}

(a) A unit of state government asserting a counterclaim under the Government Code, Chapter 2260, shall file notice of the counterclaim as provided by this section.

(b) The notice of counterclaim shall:

(1) be in writing;

(2) be delivered by hand, certified mail return receipt requested or other verifiable delivery service to the contractor or representative of the contractor who signed the notice of claim of breach of contract; and

(3) state in detail:

(A) the nature of the counterclaim;

(B) a description of damages or offsets sought, including the amount and method used to calculate those damages or offsets; and

(C) the legal theory supporting the counterclaim.

(c) The notice of counterclaim shall be delivered to the contractor no later than 90 calendar days after the unit of state government's receipt of the contractor's notice of claim.

(d) Nothing herein precludes the unit from initiating a lawsuit for damages against the contractor in a court of competent jurisdiction.

**History**
- *Source Note: The provisions of this §71.93 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.95** Duty to Negotiate {#sec-71.95 omnilex-key=us-tx-regs-official--title-1--71.95}

The parties shall negotiate in accordance with the timetable set forth in §71.97 of this subchapter (relating to Timetable) to attempt to resolve all claims and counterclaims filed under this chapter. No party is obligated to settle with the other party as a result of the negotiation.

**History**
- *Source Note: The provisions of this §71.95 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.97** Timetable {#sec-71.97 omnilex-key=us-tx-regs-official--title-1--71.97}

(a) Following receipt of a contractor's notice of claim, the chief administrative officer of the unit of state government or other designated representative shall review the contractor's claim and the unit's counterclaim, if any, and initiate negotiations with the contractor to attempt to resolve the claim and counterclaim.

(b) Subject to subsection (c) of this section, the parties shall begin negotiations within a reasonable period of time, not to exceed 60 calendar days following the later of:

(1) the date of termination of the contract;

(2) the completion date, or substantial completion date in the case of construction projects, in the original contract; or

(3) the date the unit of state government receives the contractor's notice of claim.

(c) The unit of state government may delay negotiations until after the 180th day after the date of the event giving rise to the claim of breach of contract by:

(1) delivering written notice to the contractor that the commencement of negotiations will be delayed; and

(2) delivering written notice to the contractor when the unit is ready to begin negotiations.

(d) The parties may conduct negotiations according to an agreed schedule as long as they begin negotiations no later than the applicable deadlines set forth in subsections (b) or (c) of this section, whichever is applicable.

(e) Subject to subsection (f) of this section, the parties shall complete the negotiations that are required by this chapter as a prerequisite to a contractor's request for contested case hearing no later than 270 days after the unit of state government receives the contractor's notice of claim.

(f) The parties may agree in writing to extend the time for negotiations on or before the 270th day after the unit of state government receives the contractor's notice of claim. The agreement shall be signed by representatives of the parties with authority to bind each respective party.

(g) The contractor may request a contested case hearing before the State Office of Administrative Hearings (SOAH) pursuant to §71.107 of this subchapter (relating to Request for Contested Case Hearing) after the 270th day after the unit receives the contractor's notice of claim, or the expiration of any extension agreed to under subsection (f) of this section.

(h) The parties may agree to mediate the dispute at any time before the 270th day after the unit of state government receives the contractor's notice of claim or before the expiration of any extension agreed to by the parties pursuant to subsection (f) of this section. Sections 71.111, 71.113, 71.115, 71.117, 71.119, 71.121, 71.123, and 71.125 of this subchapter shall govern the mediation.

(i) Nothing in this section is intended to prevent the parties from commencing negotiations earlier than the deadlines established in subsections (b) and (c) of this section, or from continuing or resuming negotiations after the contractor requests a contested case hearing before SOAH.

**History**
- *Source Note: The provisions of this §71.97 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.99** Conduct of Negotiation {#sec-71.99 omnilex-key=us-tx-regs-official--title-1--71.99}

(a) Negotiation is a consensual bargaining process in which the parties attempt to resolve a claim and counterclaim. A negotiation under this subchapter may be conducted by any method, technique, or procedure authorized under the contract or agreed upon by the parties. The parties may conduct negotiations with the assistance of one or more neutral third parties. The parties may choose to mediate their dispute in accordance with §§71.111, 71.113, 71.115, 71.117, 71.119, 71.121, 71.123, and 71.125 of this subchapter.

(b) To facilitate meaningful evaluation and negotiation of the claims and any counterclaims, the parties may exchange relevant documents that support their respective claims, defenses, counterclaims or positions.

**History**
- *Source Note: The provisions of this §71.99 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.101** Settlement Approval Procedures {#sec-71.101 omnilex-key=us-tx-regs-official--title-1--71.101}

The parties' settlement approval procedures shall be disclosed prior to, or at the beginning of negotiations. To the extent possible, the parties shall select negotiators who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement and who can credibly recommend approval of an agreement.

**History**
- *Source Note: The provisions of this §71.101 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.103** Settlement Agreement {#sec-71.103 omnilex-key=us-tx-regs-official--title-1--71.103}

(a) A settlement agreement may resolve an entire claim or any designated and severable portion of a claim.

(b) To be enforceable, a settlement agreement must be in writing and signed by representatives of the contractor and the unit of state government who have authority to bind each respective party.

(c) A partial settlement does not waive a contractor's rights under the Government Code, Chapter 2260, as to the parts of the claim that are not resolved.

**History**
- *Source Note: The provisions of this §71.103 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.105** Costs of Negotiation {#sec-71.105 omnilex-key=us-tx-regs-official--title-1--71.105}

Unless the parties agree otherwise, each party shall be responsible for its own costs incurred in connection with a negotiation, including, without limitation, the costs of attorneys' fees, consultant's fees and expert's fees.

**History**
- *Source Note: The provisions of this §71.105 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.107** Request for Contested Case Hearing {#sec-71.107 omnilex-key=us-tx-regs-official--title-1--71.107}

(a) If a claim of breach of contract is not resolved in its entirety through negotiation or mediation in accordance with this chapter on or before the 270th day after the unit receives the notice of claim, or after the expiration of any extension agreed to by the parties pursuant to §71.97(f) of this subchapter (relating to Timetable), the contractor may file a request with the unit of state government for a contested case hearing before SOAH.

(b) A request for a contested case hearing shall state the legal and factual basis for the claim, and shall be delivered to the chief administrative officer of the unit of state government within a reasonable time after the 270th day or the expiration of any written extension agreed to pursuant to §71.97(f) of this subchapter.

(c) The unit of state government shall forward the contractor's request for contested case hearing to the SOAH within a reasonable period of time, not to exceed thirty days, after receipt of the request.

(d) The parties may agree to submit the case to the SOAH before the 270th day after the notice of claim is received by the unit of state government if they have achieved a partial resolution of the claim or if an impasse has been reached in the negotiations and proceeding to a contested case hearing would serve the interests of justice.

**History**
- *Source Note: The provisions of this §71.107 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.111** Agreement to Mediate {#sec-71.111 omnilex-key=us-tx-regs-official--title-1--71.111}

The parties may agree to mediate a claim through an impartial third party. For purposes of this subchapter, "mediation" is assigned the meaning set forth in the Civil Practice and Remedies Code, §154.023. The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Government Code, Chapter 2009. The parties may be assisted in the mediation by legal counsel or other individual.

**History**
- *Source Note: The provisions of this §71.111 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.113** Qualifications and Immunity of the Mediator {#sec-71.113 omnilex-key=us-tx-regs-official--title-1--71.113}

The mediator shall possess the qualifications required under the Civil Practice and Remedies Code, §154.052, be subject to the standards and duties prescribed by the Civil Practice and Remedies Code, §154.053 and have the qualified immunity prescribed by the Civil Practice and Remedies Code §154.055, if applicable.

**History**
- *Source Note: The provisions of this §71.113 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.115** Confidentiality of Mediation and Final Settlement Agreement {#sec-71.115 omnilex-key=us-tx-regs-official--title-1--71.115}

(a) A mediation conducted under this subchapter is confidential in accordance with the Government Code, §2009.054.

(b) The confidentiality of a final settlement agreement to which a unit of state government is a signatory that is reached as a result of the mediation is governed by the Public Information Act, Government Code, Chapter 552.

**History**
- *Source Note: The provisions of this §71.115 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.117** Costs of Mediation {#sec-71.117 omnilex-key=us-tx-regs-official--title-1--71.117}

Unless the parties agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with a mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees. The cost of the mediator shall be divided equally between the parties.

**History**
- *Source Note: The provisions of this §71.117 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.119** Settlement Approval Procedures {#sec-71.119 omnilex-key=us-tx-regs-official--title-1--71.119}

The parties prior to the mediation shall disclose the parties' settlement approval procedures. To the extent possible, the parties shall select representatives who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement, and who can credibly recommend approval of an agreement.

**History**
- *Source Note: The provisions of this §71.119 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.121** Initial Settlement Agreement {#sec-71.121 omnilex-key=us-tx-regs-official--title-1--71.121}

Any settlement agreement reached during a mediation shall be signed by representatives of the contractor and the unit of state government, and shall describe any procedures that the parties must follow to obtain final and binding approval of the agreement.

**History**
- *Source Note: The provisions of this §71.121 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.123** Final Settlement Agreement {#sec-71.123 omnilex-key=us-tx-regs-official--title-1--71.123}

A final settlement agreement reached during or as a result of a mediation that resolves an entire claim or counterclaim, or any designated and severable portion of a claim or counterclaim, shall comply with §71.103 of this subchapter (relating to Settlement Agreement).

**History**
- *Source Note: The provisions of this §71.123 adopted to be effective April 9, 2002, 27 TexReg 2813.*

##### **1 Tex. Admin. Code § 71.125** Referral to State Office of Administrative Hearings {#sec-71.125 omnilex-key=us-tx-regs-official--title-1--71.125}

If mediation does not resolve the claim to the satisfaction of the contractor, the contractor may request that the claim be referred to SOAH in accordance with §71.107 of this subchapter (relating to Request for Contested Case Hearing.)

**History**
- *Source Note: The provisions of this §71.125 adopted to be effective April 9, 2002, 27 TexReg 2813.*

### **Chapter 72** STATE SEAL

##### **1 Tex. Admin. Code § 72.1** Definitions {#sec-72.1 omnilex-key=us-tx-regs-official--title-1--72.1}

(a) "Abuse" means any departure from reasonable use, such as immoderate or improper use; use contrary to customary or accepted practices and protocols; or use which may discredit the state or improperly suggest state endorsement or sponsorship.

(b) "Annual gross receipts" means the total amount of money or the value of benefits received from the sale of licensed products during the calendar year.

(c) "Benefit" means anything reasonably regarded as an economic gain or an economic advantage.

(d) "Commercial purpose" means a purpose that is intended to result in a profit or other tangible benefit but does not include:

(1) official use of the state seal or a representation of the state seal in a state function;

(2) use of the state seal or a representation of the state seal for a political purpose by an elected official of this state;

(3) use of the state seal or a representation of the state seal in an encyclopedia, dictionary, book, journal, pamphlet, periodical, magazine, or newspaper incident to a description or history of seals, coats of arms, heraldry, or this state;

(4) use of the state seal or a representation of the state seal in a library, museum, or educational facility incident to descriptions or exhibits relating to seals, coats of arms, heraldry, or this state;

(5) use of the state seal or a representation of the state seal in a theatrical, motion picture, television, or similar production for a historical, educational, or newsworthy purpose; or

(6) use of the state seal or a representation of the state seal for another historical, educational, or newsworthy purpose if authorized in writing by the secretary of state.

(e) "Elected official" means any individual who has been elected to an office of state government, including political subdivisions of the state, which is filled by the choice of the voters, including a member of the legislature.

(f) "Nonexact representation" means a representation of the state seal that, while not identical, incorporates many elements of the state seal, is substantially similar to the state seal, or would be recognized by most viewers as the state seal.

(g) "Official use" means the use of the state seal by an officer or employee of this state in performing a state function.

(h) "Representation of the state seal" includes a nonexact representation of the state seal that the secretary of state determines is deceptively similar to the state seal. A seal of a state agency that incorporates the state seal is a "representation" of the state seal, the use of which is subject to §17.08, Business & Commerce Code, and these sections.

(i) "State function" means a state governmental activity authorized or required by law.

(j) "User" means a person who uses the state seal for a commercial purpose; the term may include a manufacturer, vendor, or service provider.

**History**
- *Source Note: The provisions of this §72.1 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.2** State Seal Defined {#sec-72.2 omnilex-key=us-tx-regs-official--title-1--72.2}

"State seal" means the state seal, the reverse of the state seal, and the state arms as defined by Article IV, Section 19 of the Texas Constitution and §3101.001 and §3101.002, Government Code.

(1) The "state seal" is a star of five points encircled by olive and live oak branches and the words "The State of Texas." The standard design of the state seal is as follows:

Attached Graphic

(2) The "reverse of the state seal" is the reverse side of the state seal and contains a shield displaying a depiction of the Alamo; the cannon of the Battle of Gonzales; and Vince's Bridge.

(A) The shield on the reverse side of the state seal is encircled by:

(i) live oak and olive branches; and

(ii) the unfurled flags of:

(I) the Kingdom of France;

(II) the Kingdom of Spain;

(III) the United Mexican States;

(IV) the Republic of Texas;

(V) the Confederate States of America; and

(VI) the United States of America.

(B) Above the shield is emblazoned the motto, "REMEMBER THE ALAMO," and beneath the shield are the words, "TEXAS ONE AND INDIVISIBLE."

(C) A white five-pointed star hangs over the shield, centered between the flags.

(D) The standard design of the reverse of the state seal is depicted as follows:

Attached Graphic

(3) The "state arms" are a five-pointed white star, on an azure background, encircled by olive and live oak branches. The standard design of the state arms is depicted as follows:

Attached Graphic

**History**
- *Source Note: The provisions of this §72.2 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.3** Application and License {#sec-72.3 omnilex-key=us-tx-regs-official--title-1--72.3}

(a) Any person not a state public official or under the express direction of a state agency and conducting official state business must, prior to any use of the state seal in any commercial reproduction, distribution, advertisement, manufacture, promotion, replication, sale, or any such activity reasonably construed to be embraced by this description:

(1) complete and file with the Office of the Secretary of State, on a form prescribed by that office, an application for a license for the private nonofficial use of the state seal;

(2) obtain such license from the Office of the Secretary of State.

(b) An application to use the Texas state seal must:

(1) be legibly printed or typed;

(2) indicate whether it is a new application or a renewal;

(3) state the applicant's name and any assumed names;

(4) provide the applicant's business address; organizational structure; and, if the applicant is a business organization, the jurisdiction of formation;

(5) describe the goods or services with which the seal will be used;

(6) describe how the seal will be used, including the medium by which the seal will be displayed;

(7) be accompanied by an example of use as described in subsection (c) of this section; and

(8) be accompanied by the application and licensing fees set forth in Texas Business & Commerce Code §17.08(e) and §72.6 of this title (relating to Fees: Payment of Money).

(c) Example of use. If the state seal will be used on goods, examples include specifications of the product to bear the state seal, such as an architectural drawing, engineer's draft to scale, sales brochure, or photograph. Drawings and drafts must be done on standard size paper (8 1/2 inches by 11 inches). Drawings and drafts will become a permanent part of the application file. If the state seal will be used in connection with services, examples include a printers proof for advertising or a printout from a web page that has not yet been made public.

(d) Upon approval of a complete application, the secretary of state shall issue a license to the applicant. Only the applicant is licensed by the secretary of state; the license does not extend to subsidiaries or related entities.

(e) A licensee must conspicuously display the license in the licensee's place of business.

**History**
- *Source Note: The provisions of this §72.3 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.4** Exemptions {#sec-72.4 omnilex-key=us-tx-regs-official--title-1--72.4}

(a) State agencies and officials who use the state seal for official uses or state functions have no application or fee requirement; however, in an effort to achieve uniformity and continuity, state agencies and officials are encouraged to submit their intended uses and renditions of the state seal to the secretary of state.

(1) When a user solely produces for or solely sells or distributes to a state agency a product bearing the state seal for an official use or for a state function, no application or license is required.

(2) A user seeking the exemption as set forth in paragraph (1) of this subsection should provide the secretary of state's office with the following:

(A) a signed statement from that state agency or appropriate state official that the product has been or will be used by the state agency for an official use or a state function. See Form 3303-A; and

(B) a certification, on a form prescribed by the secretary of state's office, from the user that the product is not available to the general public. See Form 3303.

(3) Distribution or sale of the product to the general public by the state agency shall not preclude a user from obtaining the exemption, as set forth in paragraph (1) of this subsection.

(4) When a user produces for or sells or distributes to a state agency a product bearing the state seal that is also available to the general public, the user must file an application and obtain a license in accordance with §72.3 of this title (relating to Application and License) and pay, except as otherwise provided by these sections, all fees required by §72.6 of this title (relating to Fees: Payment of Money).

(5) Gross receipts received from the sale of licensed products to state agencies under the conditions set forth in paragraph (4) of this subsection are exempt from the royalty fee required by the statute and §72.6 of this title, provided the manufacturer or vendor of the licensed products provides the secretary of state's office with a signed statement from that state agency or appropriate state official that the products have been or will be used by the state agency for an official use or a state function.

(b) Elected officials who use the state seal for political purposes have no application or fee requirement.

(1) When a user solely produces for or solely sells or distributes to an elected official a product bearing the state seal for a political purpose, no application or license is required.

(2) A user seeking the exemption as set forth in paragraph (1) of this subsection should provide the secretary of state's office with the following:

(A) a signed statement from the elected official or designated agent that the product has been or will be used by the elected official for a political purpose. See Form 3303-A; and

(B) a certification, on a form prescribed by the secretary of state's office, from the user that the product is not available to the general public. See Form 3303.

(3) Distribution or sale of the product to the general public by the elected official shall not preclude a user from obtaining the exemption, as set forth in paragraph (1) of this subsection.

(4) When a user produces for, sells, or distributes to an elected official a product bearing the state seal that is also available to the general public, the user must file an application and obtain a license in accordance with §72.3 of this title and pay, except as otherwise provided by these sections, all fees required by §72.6 of this title.

(5) Gross receipts received from the sale of licensed products to an elected official under the conditions set forth in paragraph (4) of this subsection are exempt from the royalty fee required by the statute and §72.6 of this title, provided the user of the licensed products provides the secretary of state's office with a signed statement from the elected official or designated agent that the products have been or will be used by the elected official for a political purpose.

(c) The manufacturer of a product bearing the state seal bears the responsibility for filing the necessary application, obtaining the appropriate license, and paying all fees required by the statute and these sections.

(1) Vendors or resellers are exempt from the application, licensing, and fee requirements of the statute and these sections where the manufacturer of the product transferred has obtained the required state seal license, provided the vendor or reseller, prior to resale, obtains from the manufacturer, on a form prescribed by the secretary of state's office, a certification of the manufacturer's license.

(2) The certification shall contain the name and address of the vendor or reseller, as well as the manufacturer's name, license number, and the type and number of items purchased. See Form 3304.

(3) The certification must be kept and maintained at the vendor's or reseller's place of business for four years and made readily available for inspection by the secretary of state's office upon request.

(4) A vendor or reseller who fails to obtain, maintain, or make readily available for inspection the certifications of the manufacturer's license shall be responsible for obtaining the necessary license and the payment of all fees required by the statute and these sections.

**History**
- *Source Note: The provisions of this §72.4 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.5** Denial of Application; Suspension or Revocation of License {#sec-72.5 omnilex-key=us-tx-regs-official--title-1--72.5}

(a) An original or renewal application may be denied for any of the following reasons:

(1) failure of the application to comply with §72.3 of this title (relating to Application and License), including failure to include the required application or licensing fee; or

(2) where the secretary of state determines that the intended use is detrimental to the image of the state or otherwise not in the state's best interests.

(b) Suspension or revocation of license. A license may be suspended or revoked if the secretary of state determines that the licensee is using or has used the state seal in a manner detrimental to the image of the state or otherwise not in the state's best interests.

(c) Uses that are detrimental to the image of the state or otherwise not in the state's best interests may include the following:

(1) abuse of the state seal;

(2) criminal use of the state seal;

(3) failure to observe reporting requirements, including payment of royalty fees;

(4) failure or refusal to allow monitoring under §72.9 of this title (related to Monitoring) or §17.08(f), Texas Business & Commerce Code;

(5) use in violation of §17.08, Texas Business & Commerce Code or these sections;

(6) continuing violation after notice thereof; and

(7) such other uses as determined by the secretary of state.

(d) The denial of an application or renewal, or the suspension or revocation of a license, is subject to the right of notice, hearing, and adjudication as set out in the rules of practice and procedure before the Office of the Secretary of State, the rules of the State Office of Administrative Hearings, and the Administrative Procedure Act, Government Code, §§2001.001 - 2001.902. Any party to a contested case has the right to be represented by legal counsel. Such action will be subject to the right of appeal to a district court of Travis County.

**History**
- *Source Note: The provisions of this §72.5 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.6** Fees: Payment of Money {#sec-72.6 omnilex-key=us-tx-regs-official--title-1--72.6}

(a) Application fees are required to be paid at the time of presenting the original or renewal application for license. Licensing fees must be paid within 21 days of the approval of the original or renewal license. Royalty fees must be received with each quarterly report and in accordance with the deadlines set forth under §72.8(d) of this title (relating to Quarterly Reports). A fee shall be deemed delinquent if not received within 30 days after it is due.

(b) All fees paid to the secretary of state shall be in United States currency, cashier checks, money orders, certified checks, personal or corporate checks or by credit card as described in §71.4 of this title (relating to Credit Card Payment Option).

(c) A mere change of purpose after the payment of fees, as when an applicant desires to withdraw an application from filing, or when a licensee terminates its license, will not entitle either the applicant or the licensee to a refund of any fees paid under the statute or these sections.

(d) Fee schedule is as follows.

(1) Original or renewal application fee (nonrefundable)--$35.

(2) Original or renewal license fee--$250.

(3) Royalty fee--3.0% of annual gross license receipts in excess of $5,000.

(e) Failure to pay fees as required by this section will result in the following.

(1) Failure to pay the original or renewal application fee shall result in the denial of the application.

(2) Failure to pay the licensing fee within 21 days of the approval of the original or renewal application shall result in the denial of a license and the cancellation of the previously approved application.

(3) Failure to pay royalty fees may result in suspension or revocation of license.

(4) Appropriate enforcement action may be requested by the secretary of state under §72.10 of this title (relating to Enforcement) where a licensee has failed to pay fees when due.

**History**
- *Source Note: The provisions of this §72.6 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.7** Amendment to Application {#sec-72.7 omnilex-key=us-tx-regs-official--title-1--72.7}

(a) An application may be amended at any time to update the information contained in the original application.

(b) If information contained in the original application materially changes, the licensee must amend the application to update the information within thirty days of the change.

(c) There is no fee for amending the application.

**History**
- *Source Note: The provisions of this §72.7 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.8** Quarterly Reports {#sec-72.8 omnilex-key=us-tx-regs-official--title-1--72.8}

(a) Licensees must file with the Office of the Secretary of State a statement (i.e., quarterly report), on a form prescribed by that office, containing the following:

(1) a statement of the total quantity of licensed products sold;

(2) the total amount of gross receipts received from the sale of licensed products during the quarter;

(3) where the licensee has obtained an exemption under §72.4(a)(5) of this title (relating to Exemptions), the total amount of gross receipts received from the sale of licensed products during the quarter to state agencies;

(4) where the licensee has obtained an exemption under §72.4(b)(5) of this title, the total amount of gross receipts received from the sale of licensed products during the quarter to elected officials;

(5) the total amount of gross receipts derived by the licensee from other uses of the state seal during the quarter;

(6) the amount of any royalty fee due for the quarter;

(7) the file number issued by the secretary of state; and

(8) the licensee's name and address.

(b) The licensee shall remit with each quarterly report the amount of any royalty fee due or a statement as to the reason no royalty fee is due.

(c) Where an applicant is licensed after January 1 of a calendar year, the licensee's first quarterly report shall include the amount of gross receipts received on licensed products from the beginning of the calendar year.

(d) A quarterly report must be filed in the Office of the Secretary of State for each quarter in accordance with the following schedule:

(1) first quarter (January 1 - March 31)--quarterly report due April 15 of the current calendar year;

(2) second quarter (April 1 - June 30)--quarterly report due July 15 of the current calendar year;

(3) third quarter (July 1 - September 30)--quarterly report due October 15 of the current calendar year;

(4) fourth quarter (October 1 - December 31)--quarterly report due February 15 of the following calendar year.

**History**
- *Source Note: The provisions of this §72.8 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.9** Monitoring {#sec-72.9 omnilex-key=us-tx-regs-official--title-1--72.9}

The Office of the Secretary of State may conduct at its discretion random, unannounced examinations of the licensee's records during normal business hours (8:00 a.m. through 5:00 p.m.) to determine the licensee's compliance with the statute and these sections. All records related to the statute and these sections shall be kept in accordance with generally accepted accounting principles at the licensee's place of business or a place designated by written notification by certified mail, return receipt requested, and maintained for four years. If the licensee fails to keep and make readily available accurate records or file quarterly reports under §72.8 of this title (relating to Quarterly Reports), the secretary of state may estimate the royalty fee due based on any information available, including, but not limited to, records of vendors, resellers, or manufacturers. Information contained in quarterly reports filed with the Office of Secretary of State pursuant to §72.8 of this title will be disclosed to the state comptroller, the state auditor, or any similar state investigatory agency upon request.

**History**
- *Source Note: The provisions of this §72.9 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.10** Enforcement {#sec-72.10 omnilex-key=us-tx-regs-official--title-1--72.10}

In addition to the suspension or revocation of a state seal license, the Office of the Secretary of State may:

(1) request that the Texas attorney general bring a civil action to enjoin either a violation of the statute or these sections relating to the state seal or to collect delinquent fees;

(2) refer any criminal violations to the appropriate prosecuting authority under the statute.

**History**
- *Source Note: The provisions of this §72.10 adopted to be effective December 10, 2012, 37 TexReg 9617.*

##### **1 Tex. Admin. Code § 72.11** Abandonment of License {#sec-72.11 omnilex-key=us-tx-regs-official--title-1--72.11}

(a) A licensee who ceases to use the state seal for a commercial purpose may abandon the license by filing a statement of abandonment. Upon abandonment, the person will no longer be licensed to use the state seal for a commercial purpose, and he will no longer be required to file quarterly reports or update the information on file with the secretary of state pertaining to the license to use the state seal. Abandonment will not result in the refund of any fees paid to the secretary of state.

(b) A statement of abandonment must be in writing, signed by the licensee, and must include:

(1) the name in which the license was issued; and

(2) a statement that the licensee is abandoning the license.

**History**
- *Source Note: The provisions of this §72.11 adopted to be effective December 10, 2012, 37 TexReg 9617.*

### **Chapter 73** STATUTORY DOCUMENTS

#### **Subchapter A** LABOR ORGANIZERS

##### **1 Tex. Admin. Code § 73.1** Application {#sec-73.1 omnilex-key=us-tx-regs-official--title-1--73.1}

(a) Prior to soliciting any members for a labor union organization, any labor union organizer operating in the State of Texas shall apply for an organizer's card from the Statutory Documents Section of the Office of the Secretary of State.

(b) Texas Labor Code §101.110(b) sets forth the requirements for an application for an organizer's card, including that the application must be accompanied by a copy of the applicant's credentials. "Credentials" means either:

(1) a copy of the minutes of the union meeting showing the election of the applicant as labor union organizer; or

(2) if the labor organization is organized in a jurisdiction other than Texas, notification from the labor organization of the appointment of the applicant as labor union organizer.

**History**
- *Source Note: The provisions of this §73.1 adopted to be effective January 1, 1976; amended to be effective February 27, 2011, 36 TexReg 915.*

##### **1 Tex. Admin. Code § 73.2** Application Form {#sec-73.2 omnilex-key=us-tx-regs-official--title-1--73.2}

The application form is available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Form 2206.

**History**
- *Source Note: The provisions of this §73.2 adopted to be effective January 1, 1976; amended to be effective August 8, 1983, 8 TexReg 2805; amended to be effective August 2, 1996, 21 TexReg 7039; amended to be effective February 27, 2011, 36 TexReg 915.*

##### **1 Tex. Admin. Code § 73.3** Organizer's Card {#sec-73.3 omnilex-key=us-tx-regs-official--title-1--73.3}

Upon receipt of a complete and signed application, the secretary of state shall issue an organizer's card to the applicant. The card shall bear the following information:

(1) the applicant's name;

(2) the applicant's union affiliation;

(3) a space for the applicant's signature;

(4) the designation "labor organizer"; and

(5) the signature of the secretary of state, dated and attested by the state seal.

**History**
- *Source Note: The provisions of this §73.3 adopted to be effective January 1, 1976; amended to be effective September 11, 2008, 33 TexReg 7510.*

##### **1 Tex. Admin. Code § 73.4** Use of the Organizer's Card {#sec-73.4 omnilex-key=us-tx-regs-official--title-1--73.4}

Whenever any labor organizer is soliciting members in the State of Texas, the organizer shall carry the organizer's card issued by the secretary of state, and shall exhibit the card when requested to do so by a person being solicited for membership.

**History**
- *Source Note: The provisions of this §73.4 adopted to be effective January 1, 1976.*

#### **Subchapter D** STATEMENT OF OFFICER FORMS

##### **1 Tex. Admin. Code § 73.44** Statement of Officer Form {#sec-73.44 omnilex-key=us-tx-regs-official--title-1--73.44}

(a) A statement of officer form containing the language required by Article XVI, §1 of the Texas Constitution is available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Form 2201.

(b) A statement of officer must provide:

(1) the language required by Article XVI, §1(b) of the Texas Constitution;

(2) the specific office to which the officer has been elected or appointed; and

(3) the typed or printed name and signature of the officer.

(c) In addition to other accepted methods of delivery, the statement of officer may be submitted to the secretary of state by facsimile.

**History**
- *Source Note: The provisions of this §73.44 adopted to be effective July 24, 1992, 17 TexReg 4947; amended to be effective March 16, 2003, 28 TexReg 2303; amended to be effective February 27, 2011, 36 TexReg 915.*

#### **Subchapter E** COMMISSIONS

##### **1 Tex. Admin. Code § 73.71** Issuance of Commissions {#sec-73.71 omnilex-key=us-tx-regs-official--title-1--73.71}

A commission will be issued and forwarded to an appointed or elected state officer following receipt of an executed oath of office.

**History**
- *Source Note: The provisions of this §73.71 adopted to be effective January 1, 1976; amended to be effective August 30, 1983, 8 TexReg 3183.*

#### **Subchapter F** DISCLOSURE STATEMENT OF CONDITIONAL GIFTS

##### **1 Tex. Admin. Code § 73.91** Disclosure Statement of Conditional Gifts from Foreign Persons {#sec-73.91 omnilex-key=us-tx-regs-official--title-1--73.91}

(a) The governing board of an institution required to file a statement disclosing a conditional gift from a foreign person with the Office of the Secretary of State under Texas Education Code Annotated, §51.572, shall file such statement in the same form as that required to be filed with the Federal Department of Education pursuant to 20 United States Code 1011f.

(b) An institution shall make the filing required under subsection (a) of this section with the Office of the Secretary of State on the dates specified for the filing to be made with the Federal Department of Education pursuant to 20 United States Code 1011f.

**History**
- *Source Note: The provisions of this §73.91 adopted to be effective November 20, 1995, 20 TexReg 9273; amended to be effective June 29, 2009, 34 TexReg 4291.*

### **Chapter 74** CREDIT SERVICES ORGANIZATIONS

##### **1 Tex. Admin. Code § 74.1** Registration of Credit Services Organizations {#sec-74.1 omnilex-key=us-tx-regs-official--title-1--74.1}

(a) A registration statement will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee.

(b) The registration statement form is available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Form 2801.

(c) A registration statement must provide:

(1) the name and address of the credit services organization;

(2) the name and address of any person who directly or indirectly owns or controls 10% or more of the outstanding shares of stock in the credit services organization;

(3) a copy of the surety bond or surety account notice for each of the credit services organization's locations, or a statement explaining why §393.302, Texas Finance Code is not applicable;

(4) a full disclosure of any litigation or unresolved complaint filed with a governmental authority of this state relating to the operation of the credit services organization, or a sworn statement that states that there has been no litigation or unresolved complaint with a governmental authority of this state relating to the operation of the credit services organization.

(d) The effective date of a registration statement is the date on which the secretary of state receives the completed registration form and payment of the applicable fee.

**History**
- *Source Note: The provisions of this §74.1 adopted to be effective January 6, 2010, 35 TexReg 61.*

##### **1 Tex. Admin. Code § 74.2** Fee {#sec-74.2 omnilex-key=us-tx-regs-official--title-1--74.2}

The filing fee for registering or renewing the registration of a credit services organization is $100.

**History**
- *Source Note: The provisions of this §74.2 adopted to be effective January 6, 2010, 35 TexReg 61.*

##### **1 Tex. Admin. Code § 74.3** Surety Bond, Surety Account {#sec-74.3 omnilex-key=us-tx-regs-official--title-1--74.3}

(a) If a credit services organization is required to obtain a surety bond or establish a surety account, the surety bond or surety account shall be for an amount of $10,000. The surety bond must be issued by a surety company authorized to do business in Texas. The surety account must be established and maintained at a federally insured bank or savings and loan association located in Texas and notification of the depository, the trustee, and the account number shall be filed with the secretary of state. See Forms 2802, 2803.

(b) The surety bond or account of a credit services organization must be maintained until the second anniversary of the date on which the organization ceases operations at the location for which the surety bond was established.

(1) The surety bond or account is considered "maintained" if the credit services organization has an established surety bond or surety account in the requisite amount and has filed the required information stated in subsection (a) of this section for the established surety bond or surety account with the secretary of state.

(2) The secretary of state will authorize return of funds from a previously established surety account upon a credit services organization's filing the required information stated in subsection (a) of this section for a newly established surety account.

**History**
- *Source Note: The provisions of this §74.3 adopted to be effective January 6, 2010, 35 TexReg 61.*

### **Chapter 75** AUTOMOBILE CLUB

#### **Subchapter A** APPLICATION FOR CERTIFICATE OF AUTHORITY

##### **1 Tex. Admin. Code § 75.1** Application {#sec-75.1 omnilex-key=us-tx-regs-official--title-1--75.1}

Application for a certificate of authority to engage in business as an automobile club in the State of Texas shall be made on forms prescribed by the secretary of state entitled application for certificate of authority. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of Secretary of State, P.O. Box 12887, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §75.1 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915.*

##### **1 Tex. Admin. Code § 75.2** Annual Renewal Required {#sec-75.2 omnilex-key=us-tx-regs-official--title-1--75.2}

Every certificate of authority to act as an automobile club shall expire annually on August 31 of each year unless sooner revoked or suspended. Application for renewal of such certificate of authority shall be filed upon the form prescribed by the secretary of state. The annual license fee for renewal of such certificate of authority shall be as prescribed by Texas Transportation Code, §722.007. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of Secretary of State, P.O. Box 12887, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §75.2 adopted to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

#### **Subchapter B** REGISTRATION OF AGENTS

##### **1 Tex. Admin. Code § 75.10** Exemption from Registration {#sec-75.10 omnilex-key=us-tx-regs-official--title-1--75.10}

(a) "Agent" does not include an individual who engages in the solicitation or sale of automobile club memberships with respect to the general public only in connection with an associated consumer transaction, provided:

(1) the automobile club membership is issued by an automobile club that has obtained an automobile club certificate of authority from the Office of the Secretary of State;

(2) such individual is not compensated based primarily on the sale of the automobile club membership;

(3) such individual may not alter the terms or conditions of the automobile club membership; and

(4) the automobile club membership is not required to be purchased in order to complete the associated consumer transaction, and the consideration paid for the associated consumer transaction is not affected by the purchase of the automobile club membership.

(b) In this section, "Associated consumer transaction" means a retail exchange of goods or services, other than the automobile club membership, which is the basis of the relationship between such individual and the consumer.

**History**
- *Source Note: The provisions of this §75.10 adopted to be effective January 23, 2002, 27 TexReg 478; amended to be effective February 5, 2004, 29 TexReg 1189.*

##### **1 Tex. Admin. Code § 75.11** Notification of Appointment and Application To Act as an Automobile Club Agent {#sec-75.11 omnilex-key=us-tx-regs-official--title-1--75.11}

Within 30 days of the date of employment of an agent by an automobile club to sell memberships in the automobile club, the automobile club shall notify the secretary of state on the form prescribed by the secretary of state. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 12887, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §75.11 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

##### **1 Tex. Admin. Code § 75.12** Termination of Employment {#sec-75.12 omnilex-key=us-tx-regs-official--title-1--75.12}

Upon termination of any agent's employment by an automobile club, the club shall within 30 days thereafter notify the secretary of state of such termination. Such notification shall be made on the prescribed termination notice form. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 12887, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §75.12 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

##### **1 Tex. Admin. Code § 75.13** Fee and Renewal {#sec-75.13 omnilex-key=us-tx-regs-official--title-1--75.13}

The annual registration fee for agents of automobile clubs shall be as prescribed by Texas Transportation Code, §722.011, and the registration shall be renewed each 12 months after its issuance. The renewal shall be made on a form prescribed by the Secretary of State. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of Secretary of State, P.O. Box 12887, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §75.13 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

#### **Subchapter C** AUTOMOBILE CLUB SERVICES

##### **1 Tex. Admin. Code § 75.21** Services an Automobile Club May Provide {#sec-75.21 omnilex-key=us-tx-regs-official--title-1--75.21}

An automobile club may provide its customers or subscribers with assistance in matters relating to travel, and to the operation, use or maintenance of a motor vehicle, by supplying services such as services related to:

(1) a community traffic safety service;

(2) a travel and touring service;

(3) a theft or reward service;

(4) a map service;

(5) a towing service;

(6) an emergency road service;

(7) a bail bond service;

(8) a legal fee reimbursement in the defense of traffic offenses; and

(9) accidental injury and death benefits that are covered by a group policy issued to the club, for the benefit of its members, by a duly authorized insurance company.

**History**
- *Source Note: The provisions of this §75.21 adopted to be effective January 18, 1989, 14 TexReg 111; amended to be effective May 28, 1996, 21 TexReg 4311.*

#### **Subchapter D** REVOCATION AND SUSPENSION OF CERTIFICATE

##### **1 Tex. Admin. Code § 75.31** Revocation of Certificate of Authority {#sec-75.31 omnilex-key=us-tx-regs-official--title-1--75.31}

The secretary of state at any time for good cause shown, in accordance with the Administrative Procedure Act and the rules of practice and procedure before the Office of the Secretary of State, may revoke or suspend an automobile club's certificate of authority. Revocation and suspension will be subject to the right of notice, hearing, and adjudication pursuant to the automobile club rules, the Administrative Procedure Act, the rules of practice and procedure before the Office of the Secretary of State, and the rules of procedure for the State Office of Administrative Hearings. Such action will be subject to the right of appeal to a Travis County district court.

**History**
- *Source Note: The provisions of this §75.31 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

##### **1 Tex. Admin. Code § 75.32** Good Cause {#sec-75.32 omnilex-key=us-tx-regs-official--title-1--75.32}

Good cause as stated in §75.31 of this title (relating to Revocation of Certificate of Authority) shall include, but not be limited to, the following:

(1) a violation of a provision of Texas Transportation Code, Chapter 722;

(2) a finding that it is not operating an automobile club as defined in the Automobile Club Services Act;

(3) a finding that it is insolvent;

(4) a finding that its assets are less than its liabilities;

(5) a finding that it refuses to submit to an examination by the secretary of state;

(6) a finding that it is transacting business fraudulently; or

(7) a finding that any owner, officer, or operating manager is not of good moral character.

**History**
- *Source Note: The provisions of this §75.32 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915.*

##### **1 Tex. Admin. Code § 75.33** Notice {#sec-75.33 omnilex-key=us-tx-regs-official--title-1--75.33}

No revocation or suspension is effective unless prior to the institution of proceedings, the secretary of state gives notice pursuant to the Administrative Procedure Act.

**History**
- *Source Note: The provisions of this §75.33 adopted to be effective January 1, 1976; amended to be effective February 11, 1997, 22 TexReg 1099.*

##### **1 Tex. Admin. Code § 75.34** Hearing {#sec-75.34 omnilex-key=us-tx-regs-official--title-1--75.34}

All administrative hearings will be held in Austin. The State Office of Administrative Hearings will set the time and hearing room location.

**History**
- *Source Note: The provisions of this §75.34 adopted to be effective January 1, 1976; amended to be effective November 6, 1987, 12 TexReg 3915; amended to be effective February 11, 1997, 22 TexReg 1099.*

#### **Subchapter E** TIME PERIODS

##### **1 Tex. Admin. Code § 75.41** Processing Permits for Automobile Clubs {#sec-75.41 omnilex-key=us-tx-regs-official--title-1--75.41}

(a) Purpose. The purpose of this section is to describe the time periods by which the secretary of state processes applications for permits for automobile clubs.

(b) Processing time period. The department shall, within 15 days from the date of receipt of an application, notify the applicant in writing of the department's decision to approve or deny applicant's application. If the application is denied by the department, the forms and filing fee will be returned to the applicant. A request for a formal or informal hearing shall be made by the applicant to the program administrator in writing within 15 days from receipt of the department's denial letter.

(c) Refund of fees and security. In the event the applicant is not processed in the time period stated in subsection (b) of this section, the applicant has the right to request of the program administrator a full refund of all filing fees and security deposited with the application. The applicant shall submit his written request for a refund to the program administrator within 15 days from receipt of the certificate of authority to act as an automobile club.

(d) Contested case hearing. If at any time during the processing of the permit, an applicant wishes to contest the department's decision, the time periods in §75.42 of this title (relating to Time Periods for Conducting Contested Hearings) are applicable.

**History**
- *Source Note: The provisions of this §75.41 adopted to be effective October 25, 1988, 13 TexReg 5069.*

##### **1 Tex. Admin. Code § 75.42** Time Period for Conducting Contested Case Hearings {#sec-75.42 omnilex-key=us-tx-regs-official--title-1--75.42}

(a) Contested cases involving the processing of a permit during the time period set out in §75.41 of this title (relating to Processing Permits for Automobile Clubs) will range from four to eight months to complete all necessary hearings. The starting time for a contested case is when the department receives a written request for a hearing, and the ending time is when the decision is final and appealable.

(b) If an individual person or entity who is a party to the hearing takes action which causes an unnecessary delay in the department's conduct of the hearing, the time utilized by the person or entity is not included in the time covered by this section.

**History**
- *Source Note: The provisions of this §75.42 adopted to be effective October 25, 1988, 13 TexReg 5069.*

### **Chapter 76** USE OF A DECEASED INDIVIDUAL'S NAME, VOICE, SIGNATURE, PHOTOGRAPH, OR LIKENESS

##### **1 Tex. Admin. Code § 76.1** Registration of Claim {#sec-76.1 omnilex-key=us-tx-regs-official--title-1--76.1}

(a) A registration of claim will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee.

(b) The effective date of a registration of claim is the date on which the secretary of state receives the completed registration form and payment of the applicable fee.

(c) A registration of claim must be verified and include:

(1) the name and date of death of the deceased individual;

(2) the name and address of the claimant;

(3) a statement of the basis of the claim; and

(4) a statement of the right claimed.

(d) A registration form designed for the purpose of complying with Chapter 26, Texas Property Code is available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Form 3701.

**History**
- *Source Note: The provisions of this §76.1 adopted to be effective February 26, 1988, 13 TexReg 778; amended to be effective November 26, 2009, 34 TexReg 8311.*

### **Chapter 78** ATHLETE AGENTS

#### **Subchapter A** REGISTRATION, FORMS, AND FEES

##### **1 Tex. Admin. Code § 78.1** Registration and Renewal of Athlete Agents {#sec-78.1 omnilex-key=us-tx-regs-official--title-1--78.1}

(a) A complete application for registration or renewal is comprised of:

(1) a completed application (See Forms 2501, 2505);

(2) $50,000 surety bond required by Occupations Code, §2051.151(a), and §78.51(a) of this chapter (relating to Required Surety Bonds) (See Form 2504);

(3) $100,000 financial services bond or affidavit, as required by Occupations Code, §2051.151(a-1), and §78.51 and §78.52 of this chapter (relating to Affidavit in Lieu of Financial Service Bond) (See Forms 2502, 2503);

(4) supplement for each financially interested party (See Form 2506);

(5) payment of the filing fee stated in §78.10 of this chapter (relating to Filing Fees); and

(6) an applicant contact sheet (See Form 2507).

(b) Except as provided in §78.2 of this chapter (relating to Submission of Application from Other State), an application for registration shall be made on Form 2501. The application for registration must comply with Occupations Code, §2051.102, and also provide:

(1) any trade names or entities under which the applicant will provide athlete agent services;

(2) a list of all states in which the applicant is currently registered as an athlete agent; and

(3) copies of documentation related to any disclosures under Occupations Code, §2051.102(b)(3), including a settlement agreement or final judgment or order.

(c) A current registration may be renewed not earlier than 60 days prior to expiration. Except as provided in §78.2 of this chapter, a renewal shall be made on Form 2505. The renewal must contain:

(1) the applicant's:

(A) name;

(B) principal business address; and

(C) any trade names or entities under which the applicant will provide athlete agent services;

(2) the name, address and telephone number of each athlete for whom the athlete agent is performing professional services for compensation on the date of the renewal application;

(3) the name, address and telephone number of each athlete for whom the athlete agent has performed professional services for compensation during the three years immediately preceding the date of the renewal application but for whom the athlete agent is not performing professional services on the date of the renewal application;

(4) whether the applicant or a person described by paragraph (6) of this subsection has been subject to any of the following, if not previously disclosed to the Secretary of State on a prior application or renewal submitted by the applicant and filed by the Secretary of State, and copies of documentation related to any disclosures under this subsection, including a settlement agreement or final judgment or order:

(A) a conviction of a crime that in this state is a Class A or B misdemeanor, a felony or a crime of moral turpitude;

(B) an administrative or a judicial determination finding the applicant or other person made a false, misleading, deceptive, or fraudulent representation;

(C) a sanction or suspension related to occupational or professional conduct;

(D) a denial of an application for a certificate of registration or license as an athlete agent, in any jurisdiction other than Texas; or

(E) a denial, revocation, or suspension of a certificate of registration or license as an athlete agent, in any jurisdiction other than Texas;

(5) whether the applicant or a person described by paragraph (6) of this subsection has engaged in conduct resulting in the imposition on an athlete or educational institution of a sanction, suspension, or declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event, if not previously disclosed to the Secretary of State on a prior application or renewal submitted by the applicant and filed by the Secretary of State;

(6) except as provided by paragraph (7) of this subsection, the name and address of each person, except a bona fide employee on salary, who is financially interested as a partner, associate, or profit sharer in the applicant's business;

(7) if an applicant is a member of the State Bar of Texas, the application information required under paragraph (6) of this subsection must include the name and address of each person who is involved in the activities of the athlete agent. This subsection does not require an applicant to state the name and address of a member of a law firm or professional corporation who is not involved in the business of the athlete agent;

(8) the name and address of each national professional sports association by which the athlete agent is currently certified; and

(9) a list of all states in which the applicant is currently registered as an athlete agent.

(d) Unless surrendered, cancelled, or revoked, a certificate of registration or renewal under Occupations Code, Chapter 2051, is valid for one year from the date of issuance. Date of issuance means the date the Secretary of State finds the application for registration or renewal qualified for registration.

(e) When the application for registration or renewal is submitted but determined by the Secretary of State to be incomplete or not accompanied by any necessary supplemental application, affidavit or surety bond, the Secretary of State may issue a provisional registration or renewal certificate valid for not more than 90 days. The Secretary of State will not issue a provisional certificate if the filing fee for the application for registration or renewal has not been paid. If the deficiencies in the registration are cured within the time specified by the Secretary of State, the Secretary of State will issue a certificate of registration that relates back to the first date of receipt of the application for registration.

(f) A sanction or suspension related to occupational or professional conduct that is required to be disclosed in an application or renewal includes a sanction or suspension from a professional sports association.

(g) A crime involving moral turpitude means the commission of a crime involving dishonesty, fraud, deceit, misrepresentation, deliberate violence, or that reflects adversely on the applicant's honesty, trustworthiness, or fitness as an athlete agent. A Class C misdemeanor is not a crime involving moral turpitude.

**History**
- *Source Note: The provisions of this §78.1 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.2** Submission of Application from Other State {#sec-78.2 omnilex-key=us-tx-regs-official--title-1--78.2}

(a) An individual who holds a certificate of registration or license as an athlete agent in another state may submit a copy of the other state application and certificate or license instead of submitting the application or renewal required by this section if the application to the other state:

(1) was submitted to the other state not earlier than the 180th day before the date the application or renewal is submitted in this state and the applicant certifies that the information contained in the application is current;

(2) contains information substantially similar to or more comprehensive than the information required by Occupations Code, Chapter 2051, and this chapter; and

(3) was signed by the applicant under penalty of perjury.

(b) Unless the other state application contains the information required by Occupations Code, Chapter 2051, and this chapter for a professional athlete agent registration, the other state application will be sufficient only for a limited athlete agent registration.

**History**
- *Source Note: The provisions of this §78.2 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.3** Surrender or Cancellation of Registration {#sec-78.3 omnilex-key=us-tx-regs-official--title-1--78.3}

(a) A current athlete agent registration may be surrendered at any time by written notice to the Secretary of State signed by the surrendering athlete agent.

(b) The Secretary of State may cancel an athlete agent registration if the Secretary of State obtains information that the agent has become incapacitated or is deceased.

**History**
- *Source Note: The provisions of this §78.3 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.4** Amendment to Registration {#sec-78.4 omnilex-key=us-tx-regs-official--title-1--78.4}

(a) An athlete agent registration may be amended to update information contained in the original registration.

(b) An agent registered as a limited athlete agent who becomes certified as an agent by a national professional sports association may amend the application to reflect the national professional sports association certification and convert the limited registration to a registration as a professional athlete agent. If such an amendment is filed, the professional registration would expire on the expiration date for the limited registration.

(c) A professional registration may be converted to a limited registration as stated in §78.5(a) of this chapter (relating to Effect of Decertification by National Professional Sports Association on a Professional Athlete Agent Registration).

**History**
- *Source Note: The provisions of this §78.4 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.5** Effect of Decertification by National Professional Sports Association on a Professional Athlete Agent Registration {#sec-78.5 omnilex-key=us-tx-regs-official--title-1--78.5}

(a) A professional athlete agent who is no longer certified by any professional sports association may amend the application to reflect the lack of national professional sports association certification(s) and convert the professional registration to a limited athlete agent registration. If such an amendment is filed, the limited registration would expire on the expiration date for the professional registration.

(b) If the registration of a professional athlete agent who is no longer certified by any professional sports association is not amended to be a limited athlete agent registration, the Secretary of State shall revoke the professional registration. The registration may be amended to be a limited athlete agent registration before or after notice of an opportunity for a hearing on the revocation.

(c) An agent whose professional athlete agent registration has been revoked under subsection (b) of this section may submit a new application for a professional athlete agent registration if the agent is recertified by the national professional sports association or if the agent obtains a certification from another national professional sports association.

**History**
- *Source Note: The provisions of this §78.5 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.6** Continuing Notification Requirement {#sec-78.6 omnilex-key=us-tx-regs-official--title-1--78.6}

(a) Occupations Code, §2051.109, requires a registered athlete agent to notify the Secretary of State in writing not later than 30 days after the date of the athlete agent's:

(1) conviction of a crime, regardless of where the conviction occurred, if in this state the crime would be an offense other than a Class C misdemeanor; or

(2) decertification as an agent by a national professional sports association that has become final by the conclusion of the appeal process provided by the association. See Form 2510.

(b) Failure to notify the Secretary of State as required by Occupations Code, §2051.109, may be grounds for disciplinary action.

**History**
- *Source Note: The provisions of this §78.6 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.7** Exemptions from Registration for Certain Professional Services {#sec-78.7 omnilex-key=us-tx-regs-official--title-1--78.7}

(a) In certain circumstances, Occupations Code, §2051.005, exempts from registration a person licensed or registered by the state as:

(1) a dealer, agent, investment adviser, or investment adviser representative;

(2) a real estate broker or salesperson;

(3) an insurance agent; or

(4) another professional.

(b) For purposes of this section, "another professional" means a person holding a license or registration issued by this state that authorizes the person to perform the type of financial services that the person is performing for the athlete.

**History**
- *Source Note: The provisions of this §78.7 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.8** Background Checks {#sec-78.8 omnilex-key=us-tx-regs-official--title-1--78.8}

The Secretary of State performs criminal background checks on each applicant for registration as an athlete agent and as otherwise deemed necessary. Processing of applications or renewals may be delayed as the result of evaluating any criminal activity revealed by the criminal background check.

**History**
- *Source Note: The provisions of this §78.8 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.9** Forms {#sec-78.9 omnilex-key=us-tx-regs-official--title-1--78.9}

Registration and other forms designed for the purposes of complying with Occupations Code, Chapter 2051, and this chapter are available on the Secretary of State web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Forms 2501 - 2509.

**History**
- *Source Note: The provisions of this §78.9 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.10** Filing Fees {#sec-78.10 omnilex-key=us-tx-regs-official--title-1--78.10}

(a) The filing fee for filing an application for registration as a professional or limited athlete agent is $500.

(b) The filing fee for filing an application for renewal of registration as a professional or limited athlete agent is $500.

(c) The filing fee for an amendment to a registration or renewal is $25.

(d) There is no fee for notifying the Secretary of State of a conviction or decertification as required by Occupations Code, §2051.109.

(e) There is no fee for surrendering a current athlete agent registration.

(f) Filing fees are nonrefundable; no refund is available after a registration has been surrendered, cancelled, or revoked. Fees deposited for an application or renewal that has been finally denied will be refunded.

**History**
- *Source Note: The provisions of this §78.10 adopted to be effective October 24, 2011, 36 TexReg 7163.*

#### **Subchapter B** SURETY BONDS AND AFFIDAVITS

##### **1 Tex. Admin. Code § 78.51** Required Surety Bonds {#sec-78.51 omnilex-key=us-tx-regs-official--title-1--78.51}

(a) As a condition of registration, an athlete agent must deposit a surety bond with the Secretary of State in the amount of $50,000 as required by Occupations Code, §2051.151(a). See Form 2504.

(b) As a condition of registration, an athlete agent providing financial services must deposit a surety bond with the Secretary of State in the amount of $100,000 as required by Occupations Code, §2051.151(a-1). See Form 2503.

(c) A surety bond deposited with the Secretary of State to satisfy subsection (a) or (b) of this section must conform to the Insurance Code and be issued by a surety company authorized to do business as a surety in this state.

**History**
- *Source Note: The provisions of this §78.51 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.52** Affidavit in Lieu of Financial Service Bond {#sec-78.52 omnilex-key=us-tx-regs-official--title-1--78.52}

(a) As a condition of registration, an athlete agent who does not intend to enter into financial services contracts with athletes and chooses not to obtain the financial services bond required by Occupations Code, §2051.151(a-1), and §78.51(b) of this chapter (relating to Required Surety Bonds) must submit to the Secretary of State an affidavit affirming that the agent has not entered into a financial services contract and has not provided financial services to an athlete, nor does the agent intend to. See Form 2502.

(b) If circumstances change, and the agent chooses to enter a financial services contract with an athlete, the agent must first deposit with the Secretary of State the bond required by Occupations Code, §2051.151(a-1), and §78.51(b) of this chapter.

**History**
- *Source Note: The provisions of this §78.52 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.53** Maintenance of Bond {#sec-78.53 omnilex-key=us-tx-regs-official--title-1--78.53}

(a) A bond filed under Occupations Code, Chapter 2051, and this chapter must be maintained for the duration of the registration term plus not less than two years after the later of:

(1) the date that the athlete agent ceases to provide financial services to an athlete; or

(2) the date that the athlete agent's certificate of registration terminates through expiration, surrender, cancellation or revocation.

(b) Within thirty days of a bond being depleted, cancelled, or revoked, the agent must notify the Secretary of State in writing of the depletion, cancellation, or revocation and provide evidence that a replacement bond has been obtained or shall be subject to suspension pursuant to Occupations Code, §2051.152.

**History**
- *Source Note: The provisions of this §78.53 adopted to be effective October 24, 2011, 36 TexReg 7163.*

#### **Subchapter C** CONTRACTS

##### **1 Tex. Admin. Code § 78.101** Filing Required {#sec-78.101 omnilex-key=us-tx-regs-official--title-1--78.101}

Each registered athlete agent shall file with the Secretary of State a copy of each agent contract and/or financial services contract entered into with an athlete by the athlete agent no later than the tenth day after the date the contract is signed by the athlete. Failure to timely file a contract is a violation of Occupations Code, Chapter 2051, and may subject the agent to administrative penalties or other disciplinary actions as permitted under Occupations Code, Chapter 2051, and this chapter.

**History**
- *Source Note: The provisions of this §78.101 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.102** Time of Filing Contract {#sec-78.102 omnilex-key=us-tx-regs-official--title-1--78.102}

An athlete agent or financial services contract is deemed filed when it is properly addressed and placed in the United States Post Office or in the hands of a common or contract carrier or successfully transmitted by fax or by e-mail. The post office cancellation mark, the receipt mark of a common or contract carrier, a fax transmission report, or confirmation of receipt of e-mail is prima facie evidence of the date the contract was deposited with the post office or carrier or transmitted by fax or e-mail.

**History**
- *Source Note: The provisions of this §78.102 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.103** Contract Form {#sec-78.103 omnilex-key=us-tx-regs-official--title-1--78.103}

(a) The Secretary of State approves a contract form that meets the requirements of Occupations Code, Chapter 2051, including §2051.203 and §2051.204. To the extent practicable, the form for an agent contract or financial services contract must conform to the contract form approved by the national professional sports association for the sport in which the athlete will be represented. The Secretary of State will accept agent contracts on forms required by or approved by national professional sports associations provided that the contract meets the requirements of Occupations Code, Chapter 2051, including, as part of the body of the contract or in an addendum to the contract, the information related to fees and services required by §2051.203 and the disclosure statements required by §2051.204. The disclosure language required by §2051.204 must be reproduced in the contract without change.

(b) If a contract fails to contain the information stated in Occupations Code, §2051.203 or §2051.204, or this section, an athlete agent may be subject to administrative penalties and other disciplinary actions permitted by Occupations Code, Chapter 2051.

**History**
- *Source Note: The provisions of this §78.103 adopted to be effective October 24, 2011, 36 TexReg 7163.*

#### **Subchapter D** ADMINISTRATIVE PENALTIES

##### **1 Tex. Admin. Code § 78.151** Administrative Penalties {#sec-78.151 omnilex-key=us-tx-regs-official--title-1--78.151}

(a) If the Secretary of State determines that a violation of Occupations Code, Chapter 2051, or this chapter has occurred and an administrative penalty is to be assessed, the following factors shall be considered by the Secretary of State in calculating the amount of the penalty:

(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the prohibited act;

(2) the economic harm to the public's interest or confidence caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter future violations;

(5) efforts to correct the violation;

(6) whether the violation was intentional or unintentional; and

(7) any other matter that justice may require.

(b) For each violation, the Secretary of State may assess a penalty of not more than:

(1) $50,000 for a violation of Occupations Code, §2051.351(a)(7) or (14); or

(2) $25,000 for any other violation.

**History**
- *Source Note: The provisions of this §78.151 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.152** Prohibited Acts {#sec-78.152 omnilex-key=us-tx-regs-official--title-1--78.152}

The following acts are prohibited under Occupations Code, Chapter 2051, and this chapter. The associated penalties shown are examples only for first violations of possible penalties per violation that may be increased or decreased based on the factors listed in §78.151(a) of this chapter (relating to Administrative Penalties). This list of prohibited acts is not exclusive:

(1) Acting or representing oneself as an athlete agent without being registered in violation of §2051.101, including negotiating a contract or participating in an interview program: $2,500;

(2) Acting as a professional athlete agent while holding a registration as a limited athlete agent: $2,500;

(3) Directly contacting an athlete or entering into an agent agreement with an athlete before completion of the athlete's last intercollegiate sports contest in violation of §2051.351(a)(8): $2,500;

(4) Offering a thing of value to an athlete or individual related to an athlete within the second degree by affinity or consanguinity to induce the athlete to enter into an agent contract before the athlete completes his or her last intercollegiate sports contest in violation of §2051.351(a)(6): $2,500;

(5) Furnishing a thing of value to an athlete or individual related to an athlete within the second degree by affinity or consanguinity before the athlete completes his or her last intercollegiate sports contest in violation of §2051.351(a)(7): $5,000;

(6) Furnishing a thing of value to one other than an athlete or other registered athlete agent to induce an athlete to enter an agent contract in violation of §2051.351(a)(9): $2,500;

(7) Pre- or post-dating an agent contract in violation of §2051.351(a)(12): $2,500 per contract;

(8) Failing to notify an athlete before the athlete signs an agent contract that may make the athlete ineligible to participate in intercollegiate sports in violation of §2051.351(a)(13): $2,500;

(9) Entering into a referral contract with an employee of an institution of higher education in violation of §2051.351(a)(5): $2,000;

(10) Publishing or causing to be published false, fraudulent, or misleading information or a false, fraudulent, or misleading representation, notice, or advertisement in violation of §2051.351(a)(1): $1,500;

(11) Providing false information in violation of §2051.351(a)(2): $1,500 per violation;

(12) Making a false promise or representation relating to employment in violation of §2051.351(a)(3): $1,500;

(13) Initiating unauthorized contact in violation of §2051.351(a)(10), §2051.004: $1,500;

(14) Dividing fees with or receiving compensation from a person exempt from registration, a professional sports league or franchise (including a representative or employee), or an institution of higher education (including a representative or employee of the athletics department) in violation of §2051.351(a)(4): $1,500;

(15) Failing to retain records or permit inspection of records in violation of §2051.351(11), §2051.352: $2,500;

(16) Committing or causing a person to commit on the agent's behalf an act that causes an athlete to violate a rule of the national association for the promotion and regulation of intercollegiate athletics of which the athlete's institution of higher education is a member in violation of §2051.351(a)(14): $5,000;

(17) Failure to file bond before entering financial services contract in violation of §2051.151(a-1): $1,500 (per registration year during which the agent engages in activity requiring a financial services bond);

(18) Failure to file contract in violation of §2051.205(a): $500;

(19) Failure to disclose information required in registration in violation of §2051.102 or §78.1 of this chapter (relating to Registration and Renewal of Athlete Agents): $1,000;

(20) Failure to disclose information required in renewal in violation of §2051.108 or §78.1 of this chapter: $1,000;

(21) Failure to disclose name and address in advertising in violation of §2051.353: $500;

(22) Executing a contract with an athlete that fails to comply with Chapter 2051 or this chapter: $500;

(23) Failure to provide a copy of a contract to an institution of higher education in violation of §2051.205(a)(2): $500;

(24) Failure to notify athletic director of contact initiated by an athlete or athlete's guardian in violation of §2051.351(c): $500;

(25) Failure to notify the Secretary of State in writing not later than 30 days after the agent's conviction of a crime that is in this state an offense other than a Class C misdemeanor in violation of §2051.109: $1,000; and

(26) Failure to notify the Secretary of State in writing of bond cancellation within 30 days in violation of §78.53(b) of this chapter (relating to Maintenance of Bond): $500 per month.

**History**
- *Source Note: The provisions of this §78.152 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.153** Definition: Within the Second Degree by Affinity or Consanguinity {#sec-78.153 omnilex-key=us-tx-regs-official--title-1--78.153}

Whether a relationship is within the second degree by affinity or consanguinity is determined by the definitions found in Government Code, Chapter 573, Subchapter B.

**History**
- *Source Note: The provisions of this §78.153 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.154** Right to Hearing {#sec-78.154 omnilex-key=us-tx-regs-official--title-1--78.154}

Contested cases will be held pursuant to the right of notice, hearing, and adjudication as set out in the Administrative Procedure Act, Government Code, Chapter 2001, the rules of practice and procedure before the Office of the Secretary of State, 1 Texas Administrative Code Chapter 101, and the rules of the State Office of Administrative Hearings, 1 Texas Administrative Code Chapter 155. Any party to a contested case has the right to be represented by legal counsel. Such action will be subject to the right of appeal to a district court of Travis County.

**History**
- *Source Note: The provisions of this §78.154 adopted to be effective October 24, 2011, 36 TexReg 7163.*

#### **Subchapter E** INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 78.201** Designation of Compliance Coordinator {#sec-78.201 omnilex-key=us-tx-regs-official--title-1--78.201}

A designation of compliance coordinator submitted to the Secretary of State by an institution of higher education must include:

(1) the name of the institution of higher education;

(2) the name, address, and telephone number of the individual designated as compliance coordinator;

(3) the signature, printed name, and title of an authorized representative for the institution of higher education; and

(4) the date of execution. See Form 2508.

**History**
- *Source Note: The provisions of this §78.201 adopted to be effective October 24, 2011, 36 TexReg 7163.*

##### **1 Tex. Admin. Code § 78.202** Cover Sheet for Implementation Standards {#sec-78.202 omnilex-key=us-tx-regs-official--title-1--78.202}

The Secretary of State has developed a form that may be used as a cover sheet for the submission of implementation standards required by Occupations Code, §2051.251 and §2051.252. See Form 2509.

**History**
- *Source Note: The provisions of this §78.202 adopted to be effective October 24, 2011, 36 TexReg 7163.*

### **Chapter 79** BUSINESS ENTITY FILINGS

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 79.1** Address of Communications Intended for the Corporations Section {#sec-79.1 omnilex-key=us-tx-regs-official--title-1--79.1}

All letters and other communications intended for the Corporations Section should be addressed to the Secretary of State, Corporations Section, P.O. Box 13697, Austin, Texas 78711-3697.

**History**
- *Source Note: The provisions of this §79.1 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 2, 1992, 16 TexReg 7469.*

##### **1 Tex. Admin. Code § 79.2** Business To Be Transacted in Writing {#sec-79.2 omnilex-key=us-tx-regs-official--title-1--79.2}

Except as otherwise provided by these rules, all business with the Corporations Section shall be transacted in writing. The action of the Corporations Section will be based exclusively on the written record in the section.

**History**
- *Source Note: The provisions of this §79.2 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective February 18, 1998, 23 TexReg 1527; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.3** Receipt of Letters and Documents {#sec-79.3 omnilex-key=us-tx-regs-official--title-1--79.3}

(a) An employee of the secretary of state will stamp all letters or documents received in the Corporations Section with the date of receipt. The hour of receipt is not noted.

(b) Mail is not received in the Corporations Section until it has been brought from the post office or otherwise hand-delivered to the Office of the Secretary of State. A postmark, a date generated on a letter or document solely as a result of its electronic transmission, or a date placed on a letter, document, or envelope by some person other than an employee of the secretary of state cannot be considered as the date of receipt.

(c) Documents transmitted by fax after office hours are received the next business day or when actually received by an employee of the secretary of state.

**History**
- *Source Note: The provisions of this §79.3 adopted to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 2, 1992, 16 TexReg 7469; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.4** Documents To Be Clear and Legible {#sec-79.4 omnilex-key=us-tx-regs-official--title-1--79.4}

All documents must be clear and legible, written with black ink on white paper, so that a clear electronic image may be made.

**History**
- *Source Note: The provisions of this §79.4 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.5** Verification {#sec-79.5 omnilex-key=us-tx-regs-official--title-1--79.5}

A verification is a statement by a notary public or other officer having lawful authority to administer an oath, which states that a document was subscribed and sworn to, or affirmed by words amounting in law to an oath.

**History**
- *Source Note: The provisions of this §79.5 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675.*

##### **1 Tex. Admin. Code § 79.6** Requisites of a Verification {#sec-79.6 omnilex-key=us-tx-regs-official--title-1--79.6}

The notary's or officer's statement must contain the date signed, must be subscribed, and must be authenticated with a seal if the officer is required by law to use a seal.

**History**
- *Source Note: The provisions of this §79.6 adopted to be effective March 3, 1981, 6 TexReg 675.*

##### **1 Tex. Admin. Code § 79.7** Documents To Contain Verification; Acknowledgment Not Acceptable {#sec-79.7 omnilex-key=us-tx-regs-official--title-1--79.7}

When a document is required by law to be verified, an acknowledgment is not acceptable in lieu of the verification.

**History**
- *Source Note: The provisions of this §79.7 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675.*

##### **1 Tex. Admin. Code § 79.9** Date of Filing {#sec-79.9 omnilex-key=us-tx-regs-official--title-1--79.9}

(a) An employee of the secretary of state will stamp all documents filed in the Corporations Section with the date of filing. The hour of filing is not noted. However, documents permitted by law to contain delayed effective dates and times may designate a time of effectiveness within the contents of the document. The time of transmission generated on or appearing on a letter or document will not be regarded by the Office of the Secretary of State as its hour of filing.

(b) Except as provided in §79.10 of this title (relating to Requested Date of Filing), the date of filing of documents which conform to law and for which the filing fee has been paid will be the same date as the date of receipt. If a document does not conform to law, it will be returned to the sender. When the document is corrected and resubmitted, the date of filing of the document will be the same date as the date of the last receipt. The date of filing may not be a date prior to the date on which the document is found to conform to law.

**History**
- *Source Note: The provisions of this §79.9 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.10** Requested Date of Filing {#sec-79.10 omnilex-key=us-tx-regs-official--title-1--79.10}

At the request of the sender, a document may be filed on a date which is on or within three days after the date the document is received by the Corporations Section and found to conform to law, even if the requested date falls on a Saturday, Sunday, or holiday. A certificate of filing will not be issued before the date of filing.

**History**
- *Source Note: The provisions of this §79.10 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.12** Forms Provided {#sec-79.12 omnilex-key=us-tx-regs-official--title-1--79.12}

The secretary of state will provide forms for use in filings when required by law, or when convenient for the Office of the Secretary of State. Forms are available on the secretary of state web site at: http://www.sos.state.tx.us/corp/forms_boc.shtml and http://www.sos.state.tx.us/corp/forms_reports.shtml.

**History**
- *Source Note: The provisions of this §79.12 adopted to be effective January 1, 1976; amended to be effective March 3, 1981, 6 TexReg 675; amended to be effective January 1, 2010, 34 TexReg 9169.*

#### **Subchapter B** DOCUMENT REVIEW

##### **1 Tex. Admin. Code § 79.21** Administrative Review {#sec-79.21 omnilex-key=us-tx-regs-official--title-1--79.21}

The secretary of state will determine whether a document authorized to be filed with the secretary of state meets the minimum statutory requirements for filing. The secretary of state will not determine substantial compliance with the Texas Business Organizations Code or verify whether the entity has complied with its governing documents; whether a material misrepresentation has been made in any document submitted on behalf of an entity; or whether the person or persons signing the document on behalf of the entity were in fact authorized to do so.

**History**
- *Source Note: The provisions of this §79.21 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.22** Prioritization of Processing {#sec-79.22 omnilex-key=us-tx-regs-official--title-1--79.22}

The order of review, processing and filing of documents, other than trademark documents, is based on the manner of delivery of the document, whether expeditious review of the document was requested pursuant to §71.10 of this title (relating to Corporations Section Special Services); and its date of receipt in the Corporations Section. Consequently, a document may be rejected on the basis of the filing of a document with a later date of receipt when the subsequently received document was reviewed, processed and filed prior to the previously received document.

**History**
- *Source Note: The provisions of this §79.22 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.23** Fraudulent Filings {#sec-79.23 omnilex-key=us-tx-regs-official--title-1--79.23}

The secretary of state cannot revoke the filing of a document upon receipt of evidence that the document was fraudulently filed. A criminal proceeding may be brought for a violation of the provisions of §4.008 of the Texas Business Organizations Code by the appropriate prosecuting authority. Criminal proceedings pursuant to §4.008 are not initiated by the secretary of state.

**History**
- *Source Note: The provisions of this §79.23 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.24** Correction of Filed Documents {#sec-79.24 omnilex-key=us-tx-regs-official--title-1--79.24}

(a) Documents may be corrected to contain only those statements which lawfully could have been included in the original document. A certificate of correction may not be used to revoke a previously filed document or to alter, include or delete a statement, which by its alteration, inclusion or deletion, would have caused the secretary of state to determine that the document did not conform to law at the time of the original filing.

(b) The secretary of state will not refund any portion of a fee calculated on the basis of information required to be set forth in a document by statute upon the subsequent submission and filing of a certificate of correction correcting the information upon which the fee was based.

**History**
- *Source Note: The provisions of this §79.24 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.26** Address on Certificate of Withdrawal {#sec-79.26 omnilex-key=us-tx-regs-official--title-1--79.26}

Section 9.011 of the Texas Business Organizations Code requires a foreign filing entity or foreign limited liability partnership to designate a post office address on a certificate of withdrawal to which the secretary of state may mail a copy of any process against the entity that may be served on the secretary of state.

**History**
- *Source Note: The provisions of this §79.26 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.27** Nonprofit Corporation Periodic Reports {#sec-79.27 omnilex-key=us-tx-regs-official--title-1--79.27}

(a) Notice. Notices relating to the filing of a periodic report of a nonprofit corporation under §22.358 of the Texas Business Organizations Code shall be sent to the registered office address of record with the secretary of state. Notices relating to the forfeiture of corporation's right to conduct its affairs shall be sent to the same address specified for the original report, notwithstanding receipt of evidence by the secretary of state that the address specified was an insufficient address or that the mailing of the notice was undeliverable. The failure of the corporation to receive these notices does not relieve the corporation of the requirement to file the periodic report or extend the time within which the required report must be filed.

(b) Changes to Report Information. Changes to the name of the registered agent and to the registered office address may be made by making changes to the information contained in the periodic report. A change to the name of the corporation cannot be effected through the filing of the periodic report. In order to change the name of the corporation, the corporation must file a certificate of amendment or other document amending the certificate of formation.

(c) Failure to Comply. A nonprofit corporation that fails to file the periodic report required within 30 days from the date that the report is sent by the secretary of state will forfeit its right to conduct its affairs in Texas. The failure of a nonprofit corporation to relieve itself of the forfeiture by filing the required report within 120 days of the mailing of the notice of the forfeiture by the secretary of state will result in the involuntary termination of the corporation or revocation of its registration.

(d) Voluntary Submission of a Periodic Report. A nonprofit corporation may submit for filing by the secretary of state a report under the provisions of §22.357 of the Texas Business Organizations Code when not required to do so by the secretary of state. The voluntary submission of a report under this subsection does not relieve the corporation of the requirement to file the periodic report or extend the time within which the report must be filed when the report is specifically required from the corporation by the secretary of state.

**History**
- *Source Note: The provisions of this §79.27 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.28** Registered Agent and Office {#sec-79.28 omnilex-key=us-tx-regs-official--title-1--79.28}

(a) An entity may not serve as its own registered agent.

(b) A registered office address must include a street or building address for purposes of providing the public with notice of the physical street location at which process may be served on the registered agent. A post office box alone is not a sufficient address for the registered office, though a post office box will be accepted when accompanied by a physical address where the registered agent can be personally served with process during business hours. The address of a commercial business that provides "private mail box" services is not sufficient as a registered office address, unless the commercial enterprise is the business of the designated registered agent.

**History**
- *Source Note: The provisions of this §79.28 adopted to be effective February 18, 1998, 23 TexReg 1528; amended to be effective January 1, 2010, 34 TexReg 9169; amended to be effective August 5, 2013, 38 TexReg 4885.*

##### **1 Tex. Admin. Code § 79.29** Consent to Serve as Registered Agent {#sec-79.29 omnilex-key=us-tx-regs-official--title-1--79.29}

(a) Form. Section 5.201(b), Texas Business Organizations Code, requires the secretary of state to develop the form of consent required to be obtained from a person designated or appointed as the registered agent of a represented entity. The consent to serve as the registered agent of a represented entity may be in a written or electronic form. A written or electronic consent to serve as registered agent must contain:

(1) the name of the represented entity;

(2) an express statement of consent to serve as the entity's registered agent;

(3) the name of the registered agent;

(4) the signature of the registered agent; and

(5) the date of execution.

(b) Promulgated Form Not Mandatory. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 401-A, available at http://www.sos.state.tx.us/corp/forms_boc.shtml.

(c) Retention of Form. Filing a statement of consent to serve as registered agent with the secretary of state is not required; the represented entity should retain the consent of the person designated as registered agent in its own records.

(d) Permissive Filing with Secretary of State. A statement of consent of registered agent will be maintained in the records of the secretary of state when:

(1) the statement is submitted simultaneously with a registered agent filing; or

(2) the statement is submitted separately with the fee specified under subsection (f) of this section.

(e) Indexing a Filed Statement of Consent. A statement of consent that is submitted simultaneously with a registered agent filing will be filed and indexed as part of the registered agent filing. A statement of consent that is submitted separately for purposes of recordation with the secretary of state will be filed and indexed as a separate record.

(f) Fees. Except for statements filed pursuant to subsection (d)(1) of this section, the fee for filing a statement of consent to serve as registered agent for a domestic or foreign represented entity is the same fee imposed for the entity type under Chapter 4 of the Business Organizations Code for the filing of an instrument for which no fee is specified; namely, $15, unless the represented entity is a nonprofit corporation, cooperative association, unincorporated nonprofit association, or credit union. The fee imposed for a statement of consent submitted by a nonprofit corporation, cooperative association, unincorporated nonprofit association or credit union is $5. There is no fee for filing a statement of consent to serve as registered agent submitted pursuant to subsection (d)(1) of this section.

**History**
- *Source Note: The provisions of this §79.29 adopted to be effective January 1, 2010, 34 TexReg 9395.*

#### **Subchapter C** ENTITY NAMES

##### **1 Tex. Admin. Code § 79.30** Definitions {#sec-79.30 omnilex-key=us-tx-regs-official--title-1--79.30}

The following terms as used in this Chapter shall have the following meanings:

(1) "Consent" means written notarized consent signed by an officer or authorized agent of the consenting entity.

(2) "Key word" means a word or words that alters the proposed name sufficiently to make it distinguishable in the record. Key word does not include:

(A) an article of speech or a conjunction;

(B) a preposition, unless the addition, substitution or omission of the preposition alters the name sufficiently to make it distinguishable;

(C) the word "company" or abbreviation "Co." unless the addition or omission of the word or abbreviation alters the name sufficiently to make it distinguishable; or

(D) an organizational identifier which operates as an organizational identifier for the entity or appears after all key words in the name.

(3) "Simultaneous submission" means the submission of two or more documents at the same time under the same cover by mail, fax or delivery. The submitter must be the same for all documents being submitted simultaneously.

**History**
- *Source Note: The provisions of this §79.30 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.31** Applicability of Rules {#sec-79.31 omnilex-key=us-tx-regs-official--title-1--79.31}

(a) Except as provided by subsection (b) of this section, these rules apply to all filing instruments, which are required to be reviewed for name availability, received by the secretary of state on or after June 1, 2018.

(b) These rules apply to name reservations and name registrations processed by the Secretary on or after June 1, 2018.

(c) The Secretary may not accept for filing proposed entity names which are the same. The Secretary may only accept those proposed names which are not distinguishable if consent is granted in accordance with §79.40 of this subchapter (relating to Names that are Available with Consent).

(d) The Secretary may accept a name if the entity or person seeking acceptance of the filing instrument with the indistinguishable name delivers to the Secretary a certified copy of the final judgment of a court of competent jurisdiction that establishes the entity's or person's right to the name in this state.

**History**
- *Source Note: The provisions of this §79.31 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.32** Characters of Print Acceptable in Names {#sec-79.32 omnilex-key=us-tx-regs-official--title-1--79.32}

(a) Entity names may consist of letters of the Roman alphabet, Arabic numerals, symbols capable of being reproduced on a standard English language keyboard, and such other symbols as permitted by the secretary of state's database and as posted on the secretary of state's website, or a combination thereof.

(b) No distinction as to type face or font in the presentation of an entity name will be recognized. Subscript or superscript characters cannot be entered into the computer records of the secretary of state; consequently, such characters will not appear above or below the other characters in the entity name. Example: H2 O will appear as H2O. The secretary of state, however, will recognize the use of either upper or lower case letters in the presentation of the entity name.

(c) Arabic numerals include 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9.

(d) The symbols recognized as part of a name may include ! " $ % ' ( ) * ? # = @ [] / + & and -.

**History**
- *Source Note: The provisions of this §79.32 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.33** False Implication of Governmental Affiliation; False Implication of Purpose {#sec-79.33 omnilex-key=us-tx-regs-official--title-1--79.33}

(a) The entity name may not be one that might falsely imply governmental affiliation (example: Texas Real Estate Commission, Inc.).

(b) The entity name may not imply a purpose that would be unlawful for the entity to conduct.

(1) The words "insurance" or "surety" must be accompanied by other words that remove the implication that the entity purpose is to be an insurer. The name may include the phrase "insurance agency, "insurance agent," "surety agency," or "surety agent."

(A) Example: John Hancock Insurance Company or A-1 Surety Company would not be filed.

(B) Example: John Hancock Insurance Agency, Inc. or A-1 Surety Agents, Company would be filed.

(2) The words "bail bond" imply an unlawful purpose as entities with these powers must be organized under the Texas Insurance Code and these words may not be used in the name of a business entity. Example: Ace Bail Bonds, Inc. would not be filed.

**History**
- *Source Note: The provisions of this §79.33 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.34** Restricted Words {#sec-79.34 omnilex-key=us-tx-regs-official--title-1--79.34}

(a) Where prohibited by §16.105 of the Texas Business & Commerce Code, an entity name cannot include the words, "Olympic," "Olympiad," or "Citius Altius Fortius," or a combination or simulation of those words or use a trademark, trade name, symbol or insignia of the International Olympic Committee or the United States Olympic Committee without the authorization or permission of the United States Olympic Committee. Example: Olympic Tours, Inc. would require a letter of consent, authorization, or no objection from the United States Olympic Committee.

(b) Where prohibited by §31.005 and §181.004 of the Texas Finance Code, an entity name cannot include the words "bank," "bank and trust," "trust," "trust company" or a similar term, phrase, or foreign language word unless accompanied by a no objection letter from the Banking Commissioner.

(c) Where prohibited by §61.313 of the Texas Education Code, an entity name cannot include the words "College," "University," "School of Medicine," "Medical School," "Health Science Center," "School of Law," "Law Center," or "Law School," whether in English or in another language, unless accompanied by a no objection letter from the Texas Higher Education Coordinating Board.

(d) Where prohibited by §5.062 of the Texas Business Organizations Code, an entity name cannot include the words "Veteran," "Legion," "Foreign," "Spanish," "Disabled," "War," or "World War" if the name implies the entity is created for the benefit of war veterans and their families, without written approval issued from a veterans organization pursuant to §5.062 of the Texas Business Organizations Code.

**History**
- *Source Note: The provisions of this §79.34 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.35** Foreign Words Not Translated {#sec-79.35 omnilex-key=us-tx-regs-official--title-1--79.35}

(a) Although entity names may consist, in whole or in part, of words in a foreign language which utilize letters of the Roman alphabet, such words will not be translated for purposes of determining entity name availability.

(1) Example: "Tejas Enterprises" is distinguishable from "Texas Enterprises".

(2) Example: "Casa Blanca Productions" is distinguishable from "White House Productions".

(b) Where the difference in the names consists in the use or omission of different articles, prepositions, or conjunctions of speech, although in a foreign language, the names will be considered the same.

(1) Example: "Las Brisas" is the same as "Brisas".

(2) Example: "La Boutique" is the same as "Le Boutique".

**History**
- *Source Note: The provisions of this §79.35 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.36** Grossly Offensive Name {#sec-79.36 omnilex-key=us-tx-regs-official--title-1--79.36}

The entity name may not be one that is deemed to be so grossly offensive as to be unacceptable as an entity name.

**History**
- *Source Note: The provisions of this §79.36 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.37** Organizational Identifiers {#sec-79.37 omnilex-key=us-tx-regs-official--title-1--79.37}

(a) Acceptable organizational identifiers are set forth in §§5.054 - 5.059 of the Texas Business Organizations Code.

(b) The following words, when used alone, do not satisfy the statutory requirements for organizational identifiers:

(1) "companies," "corporations," "incorporation," and "unlimited;"

(2) "limited partnerships;" and

(3) "limited" or "company," to identify a limited liability company.

(c) A nonprofit corporation may omit an organizational identifier, but may not solely have an organizational identifier which is not consistent with §5.054 of the Texas Business Organizations Code.

(d) The words "public benefit corporation," the abbreviation "P.B.C.," or the designation "PBC" may be used as the words of organization for a domestic public benefit corporation.

**History**
- *Source Note: The provisions of this §79.37 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.38** Distinguishable Names {#sec-79.38 omnilex-key=us-tx-regs-official--title-1--79.38}

Without limiting the discretion of the Secretary of State to determine that a proposed name is the same as an existing name, entity names are distinguishable and are therefore available if a comparison of the names reveals sufficient differences, or if one or more of the following conditions exist:

(1) A difference of at least one key word.

(A) "Sunshine Community Development" is distinguishable from "Sunshine Community Properties".

(B) "United" is distinguishable from "United One".

(C) "Real Homes of Austin" is distinguishable from "Real Homes".

(D) "Texas Cowboys" is the same as "The Texas Cowboys".

(2) The key words are the same but are in a different order.

(A) "Summit Energy" is distinguishable from "Energy Summit".

(B) "Global One" is distinguishable from "One Global".

(C) "Austin Auto Parts" is distinguishable from "Auto Parts of Austin".

(3) The key words or contractions of key words are derived from the same root word.

(A) "Great Products" is distinguishable from "Great Productions".

(B) "Magic Professionals" is distinguishable from "Magical Professionals".

(4) The key words are the same but are in a different language.

(A) "Casa Blanca Productions" is distinguishable from "White House Productions".

(B) "Tejas Enterprises" is distinguishable from "Texas Enterprises".

(C) "El Rodeo" is the same as "Rodeo" or "The Rodeo".

(5) The key word or words sound the same but at least one word, on its face, has a different meaning or connotation.

(A) "Jones Tires" is distinguishable from "Joan's Tires".

(B) "Capitol Investments" is distinguishable from "Capital Investments".

(C) "Express Auto" is the same as "Xpress Auto".

(D) "One World" is the same as "1 World".

(6) The key word or words are the same except for the addition, substitution, or omission of prepositions which alter the names sufficiently to make the names distinguishable.

(A) "In the Know" is distinguishable from "Know".

(B) "Friends" is distinguishable from "Between Friends".

(C) "Books for People" is distinguishable from "Books by People".

(D) "Look to the Future" is the same as "Look toward the Future".

**History**
- *Source Note: The provisions of this §79.38 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.39** Same Defined {#sec-79.39 omnilex-key=us-tx-regs-official--title-1--79.39}

Without limiting the discretion of the Secretary of State to determine that a proposed name is the same as an existing name, entity names are considered the same and therefore not available if a comparison of the names reveals no differences or if the only difference between the proposed name and the existing names is one or more of the following conditions:

(1) The use of upper case or lower case letters, distinctive lettering or typeface, or the use of superscript or subscript letters or numerals.

(A) "ACE Woodworks" is the same as "Ace Woodworks".

(B) "H2O Supplies" is the same as "H~2~O Supplies".

(C) "NXNW" is the same as "NxNw".

(2) The addition, substitution, or omission of punctuation marks, accent marks, periods, spaces, or symbols that do not alter the name sufficiently to make the names distinguishable.

(A) "A.F.G. Consulting" is the same as "AFG Consulting".

(B) "Explore!" is the same as "Explore"

(C) "Crossroads Productions" is the same as "Cross Roads Productions".

(D) "Gotham" is distinguishable from "Got Ham".

(3) Except as provided by §79.43 of this subchapter (relating to Alphabet Names), the addition, substitution, or omission of different articles or conjunctions.

(A) "The Truck Stop" is the same as "Truck Stop".

(B) "Fair View, a Rest Home" is the same as "Fairview Rest Home".

(4) The repetition, absence, or difference in letters that does not alter the names sufficiently to make the names distinguishable.

(A) "Texxas Strong" is the same as "Texas Strong".

(B) "Going Strong" is the same as "Goin' Strong".

(C) "XX Tires" is distinguishable from "X Tires".

**History**
- *Source Note: The provisions of this §79.39 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.40** Names that are Available with Consent {#sec-79.40 omnilex-key=us-tx-regs-official--title-1--79.40}

Without limiting the discretion of the Secretary of State to determine that a proposed name is the same as an existing name, entity names that are not distinguishable are available with consent from an existing entity under one or more of the following conditions:

(1) The existence, addition, substitution, or absence of a word, phrase, or abbreviation that identifies or indicates different types of entities.

(A) "Sampson, Inc." is available with consent from "Sampson, PLLC".

(B) "Adventure Unlimited, a Limited Liability Company" is available with consent from "Adventure Unlimited, LP".

(C) "Love Foundation" is the same as "Love Foundation, Inc."

(D) "ABC, LLC" is the same as "ABC Limited Liability Company"

(E) "Wild West, Inc." is distinguishable from Wild West Companies, Ltd."

(2) The use of a common abbreviation of the same word.

(A) "Smith Brothers Plumbing" is available with consent from "Smith Bros. Plumbing".

(B) "Steel Manufacturing Supplies" is available with consent from "Steel Mfg Supplies"

(C) "Sweet Treats of Dallas Ft. Worth" is available with consent from "Sweet Treats of DFW".

(D) "United States Enterprises" is available with consent from "U.S.A. Enterprises".

(3) The use of the singular, plural, or possessive form of a word if the difference does not alter the name sufficiently to make the names distinguishable.

(A) "On the Banks" is available with consent from "On the Bank".

(B) "Child's Play" is distinguishable from "Children's Play".

(4) The addition or omission of a state to a name which already includes a city and which does not alter the name sufficiently to make the names distinguishable.

(A) "Resources of Austin, Texas" is available with consent from "Resources of Austin".

(B) "Atlanta Feed Company" is available with consent from "Atlanta, Georgia Feed Co."

(C) "Elite Realty of Athens, TX" is distinguishable from "Elite Realty of Athens, GA"

**History**
- *Source Note: The provisions of this §79.40 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.41** Administrative Review of Documents with Names Requiring Consent {#sec-79.41 omnilex-key=us-tx-regs-official--title-1--79.41}

(a) A proposed name which is deemed to require consent cannot be filed without consent. No waiver of consent will be allowed even under the following conditions:

(1) there is related management or ownership;

(2) the existing entity is not actively engaged in business;

(3) the existing entity is about to change its name, be terminated, forfeited, or merged out of existence.

(b) The consent must accompany the document to which the consent relates at the time of submission.

(c) Upon the simultaneous submission of any filing instruments relating to the formation of two or more related entities, consent for the use of a name requiring consent will be implied. Example: Consent is not required for the simultaneous formation of a Texas limited partnership named ABC Ventures, Ltd. and its general partner, ABC Ventures, LLC.

(d) If a proposed entity name conflicts with more than one entity name, the secretary of state will request that consent be obtained from the entity or name registrant, as applicable, with the longest continuous use of the entity name as determined by the records of the secretary of state.

**History**
- *Source Note: The provisions of this §79.41 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.42** Form of Consent {#sec-79.42 omnilex-key=us-tx-regs-official--title-1--79.42}

The consent must be in writing and signed by an officer or authorized agent of the consenting entity. The signature of the person providing consent must be notarized. Consent given orally cannot be accepted. Consent from more than one entity may be required in some instances. Consent must not state conditions; it must give unequivocal consent.

**History**
- *Source Note: The provisions of this §79.42 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.43** Alphabet Names {#sec-79.43 omnilex-key=us-tx-regs-official--title-1--79.43}

Where a name or a unit of names consists of initials only or letters of the alphabet, the combination of initials will be considered as one word for the purpose of applying name availability rules.

(1) Example: The following are different "words" and are distinguishable:

(A) A & A;

(B) AA;

(C) AAA;

(D) ABA;

(E) AAB.

(2) Example: A & B Supply is distinguishable when compared to A & B, Inc.

(3) Example: A+A Car Rental, Inc. is the same as A & A Car Rental, Inc. is the same as A and A Car Rental, Inc.

(4) Example: A and B Trucking, Inc. is distinguishable when compared to AB Trucking, LLC.

**History**
- *Source Note: The provisions of this §79.43 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.44** Matters Not Considered {#sec-79.44 omnilex-key=us-tx-regs-official--title-1--79.44}

Only the proposed entity name, the current names of active (not revoked, cancelled, merged, dissolved, withdrawn, terminated, or forfeited) entities, name reservations, and name registrations for entities on file are considered in determining the availability of the entity name for purposes of filing with the secretary of state. Among matters not considered are the following:

(1) whether the purpose of a proposed entity is the same as or similar to the purpose of an existing entity;

(2) whether the entities will be carrying out activities in the same or nearby locations;

(3) whether an analogous situation has previously been acted upon by the Office;

(4) whether an "opinion" as opposed to a final determination has previously been expressed by an employee of the secretary of state in response to an oral or written request;

(5) whether an existing entity is actively engaged in business, or has a telephone listing, or a location of a place of business;

(6) whether an existing entity is about to change its name, or be terminated, or merged out of existence;

(7) whether a response to an inquiry can be obtained from an existing entity;

(8) whether the applicant has ordered stationery, opened a bank account, signed a contract, or otherwise taken other actions in the expectation, hope, or belief that the proposed name would be available;

(9) whether the applicant is more or less important, extensive, widely known, or influential than an existing entity;

(10) whether a previous determination on the same name was made by an employee of the secretary of state;

(11) whether an existing entity has filed for or intends to file for bankruptcy; or

(12) whether an applicant's submission of a document relating to the entity name at issue was prior to the submission of the document effecting the conflicting existing name.

**History**
- *Source Note: The provisions of this §79.44 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.45** Final Determination of Name Availability {#sec-79.45 omnilex-key=us-tx-regs-official--title-1--79.45}

An employee of the Office may express an opinion on name availability in response to a written, telephone, or other oral request, but such an opinion is not a final determination that the name will or will not be accepted for filing and stamped filed. A final determination is made only when the document is submitted for filing.

**History**
- *Source Note: The provisions of this §79.45 adopted to be effective June 1, 2018, 43 TexReg 3341.*

##### **1 Tex. Admin. Code § 79.46** Examples Not Exclusive {#sec-79.46 omnilex-key=us-tx-regs-official--title-1--79.46}

(a) The conditions used in these sections are not meant to be exclusive, nor should they be used to limit the determination of whether a proposed name is distinguishable from the name of an existing entity.

(b) The examples used in these sections are not meant to be exclusive, nor should they be used to limit the determination of whether a proposed name is distinguishable from the name of an existing entity.

**History**
- *Source Note: The provisions of this §79.46 adopted to be effective June 1, 2018, 43 TexReg 3341.*

#### **Subchapter E** DELAYED EFFECTIVE DATES

##### **1 Tex. Admin. Code § 79.71** Determining the Date of the 90th Day after the Date of Filing {#sec-79.71 omnilex-key=us-tx-regs-official--title-1--79.71}

(a) For purposes of filing documents which will become effective upon the occurrence of events or facts that may occur in the future pursuant to §4.052 and §4.054 of the Texas Business Organizations Code, the date of the 90th day after the date of filing shall be deemed to be 90 days after the document is delivered in person or placed in the United States post office or in the hands of a common or contract carrier properly addressed to the Office of the Secretary of State. The postmark or receipt mark (if received by a common or contract carrier) will be prima facie evidence of the date that such statement was deposited with the post office or carrier. The person filing the document may show by competent evidence that the actual date of posting was to the contrary.

(b) If a document submitted with a delayed effective condition pursuant to §4.052 and §4.054 of the Texas Business Organizations Code, does not conform to law, it will be returned to sender. When the document is corrected and resubmitted, the date of the 90th day after the date of filing may be recalculated and restated in the document to be 90 days after the document is resubmitted by delivery in person or placement in the United States post office or in the hands of a common or contract carrier properly addressed to the Office of the Secretary of State. The postmark or receipt mark generated in connection with the resubmission (if received by a common or contract carrier) will be prima facie evidence of the date that such statement was deposited with the post office or carrier. The person filing the document may show by competent evidence that the actual date of posting of the resubmission was to the contrary. The secretary of state will refer to the contents of the document to determine the date of the 90th day from the date of filing or refiling.

(c) To calculate the date of the 90th day from the date of filing, refer to calendar days as set forth in §71.83(3) of this title (relating to Definitions).

**History**
- *Source Note: The provisions of this §79.71 adopted to be effective February 18, 1998, 23 TexReg 1529; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.72** Statement Regarding Delayed Effective Condition {#sec-79.72 omnilex-key=us-tx-regs-official--title-1--79.72}

(a) Contents. Pursuant to §4.055 of the Texas Business Organizations Code, when a condition triggering the effectiveness of a document filing has been satisfied or waived, a statement regarding the delayed effective condition must be submitted to the secretary of state. Such statement must contain the following information:

(1) the name of the business entity;

(2) the charter or file number of the entity;

(3) the document to which the statement applies;

(4) the date of filing of the document to which the statement applies;

(5) the date on which the condition was satisfied or waived; and

(6) the signature required by §4.001 of the Texas Business Organizations Code.

(b) Timeliness. Pursuant to §4.055 of the Texas Business Organizations Code, the statement regarding the delayed effective condition should be filed in the Office of the Secretary of State by the date of the 90th day from the date of filing as defined in §79.71 of this title (relating to Determining the Date of the 90th Day after the Date of Filing). Statements regarding the delayed effective condition received after the date of the 90th day from the date of filing will be filed for record; however, the secretary of state will not determine substantial compliance with the provisions of §4.055.

**History**
- *Source Note: The provisions of this §79.72 adopted to be effective February 18, 1998, 23 TexReg 1529; amended to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.73** Documents with Delayed Effective Dates {#sec-79.73 omnilex-key=us-tx-regs-official--title-1--79.73}

(a) Upon the filing of a document with a delayed effective date, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, the future date on which the document will be effective or a code indicating that the effectiveness is based on a future condition, and the name of the surviving entity or entities, if applicable. In addition, at the time of such filing:

(1) the status of any domestic entity on file with the secretary of state that is converting, merging out of existence, or terminating, will be changed from active to inactive, and the status of any foreign entity withdrawing or terminating its registration will be changed from active to inactive;

(2) the status of any domestic entity to be created and filed with the secretary of state by the terms of a plan of merger, plan of conversion, or certificate of formation, or the status of any foreign entity registered to transact business in Texas shall appear in the active records of the secretary of state; and

(3) any filings making amendments to a certificate of formation or application for registration will be recorded in the records of the secretary of state.

(b) Upon filing of the document:

(1) the name of any domestic entity on file with the secretary of state which is converting, merging out of existence, or terminating, or the name of any foreign entity withdrawing or terminating its registration will not appear in the active records and will not be a bar to reservation or registration of an entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to the name of the converting, merging, or terminating domestic entity or the withdrawing or terminating foreign entity;

(2) the name of any domestic entity to be created and filed with the secretary of state by the terms of a plan of merger, plan of conversion, or certificate of formation, or the name of any foreign entity registered to transact business in Texas will appear in the active records of the secretary of state and will be a bar to reservation or registration of any entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to the name of an entity to be created or authorized to transact business in Texas by one of the document filings listed in this section; and

(3) if a document filing provides for a change of name of an entity previously on file with the secretary of state, the new name of the entity will appear in the active records of the secretary of state and will be a bar to reservation or registration of any entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to any new name of the entity as provided in the document filing;

(4) if a document filing provides for an amendment to the certificate of formation or application for registration, the secretary of state will change the computer records to reflect any amendments to information which may be obtained from the computer database (e.g., authorized stock, registered agent/registered office, the name of a general partner).

**History**
- *Source Note: The provisions of this §79.73 adopted to be effective February 18, 1998, 23 TexReg 1529; amended to be effective January 1, 2010, 34 TexReg 9169.*

#### **Subchapter F** EFFECT OF FILINGS

##### **1 Tex. Admin. Code § 79.81** Conversion Filings {#sec-79.81 omnilex-key=us-tx-regs-official--title-1--79.81}

(a) Upon filing of a conversion document where the converting entity is a domestic or foreign filing entity, the computer records of the secretary of state relating to the converting entity will be changed to show the filing of the conversion document; the date of the filing; the future date on which the document will be effective or a code indicating that the effectiveness is based on a future condition, if applicable; and, for domestic converting entities, the name of the converted entity. In addition, if the converted entity is a domestic filing entity, the converted domestic entity shall appear in the active records of the secretary of state indexed under an applicable file number and type code.

(b) Upon filing of a conversion document, the status will be changed as follows:

(1) if the converting entity is a domestic filing entity, the status of the converting entity will be changed from active to inactive;

(2) if the converting entity is a foreign filing entity and the converted entity is a domestic filing entity, the status of the converting entity will be changed from active to inactive;

(3) if the converting entity is a foreign filing entity and the converted entity is not a domestic filing entity, the status of the converting entity will not be changed upon filing of a conversion document. In such a case, the converting entity may withdraw its registration prior to filing the conversion document or terminate its registration concurrently with or after filing the conversion document. If the converted entity is a foreign filing entity, the converting entity may transfer the registration to the converted entity by amendment to the registration.

**History**
- *Source Note: The provisions of this §79.81 adopted to be effective January 1, 2010, 34 TexReg 9169.*

##### **1 Tex. Admin. Code § 79.82** Abandonment of Document {#sec-79.82 omnilex-key=us-tx-regs-official--title-1--79.82}

If a document filing is abandoned in accordance with a statutory provision for abandonment, the secretary of state:

(1) will change the status of all the entities filed with the secretary of state which would have merged out of existence, terminated, or withdrawn to active on the computer records of the agency and record the filing of the abandonment. If the names of these entities are not available, the entities must file certificates of amendment or take other action to change the entity name or bring the name into compliance with applicable statutory provisions as a condition of acceptance of the abandonment;

(2) will change the status of all entities that would have been created and filed or authorized to transact business in Texas with the secretary of state by the terms of the document filing to inactive on the computer records of the agency;

(3) will change the status of a converted entity that would have been created and filed in Texas with the secretary of state by the terms of the certificate of conversion to inactive on the computer records of the agency; and

(4) will change the status of a converting domestic entity filed with the secretary of state to active on the computer records of the secretary of state. If the name of the entity is not available, the entity must file a certificate of amendment or take other action to change the entity name or bring the entity name into compliance with applicable statutory provisions as a condition of acceptance of the abandonment.

**History**
- *Source Note: The provisions of this §79.82 adopted to be effective February 18, 1998, 23 TexReg 1530; amended to be effective January 1, 2010, 34 TexReg 9169.*

### **Chapter 80** UNINCORPORATED BUSINESS ENTITIES

#### **Subchapter A** LIMITED LIABILITY PARTNERSHIPS

##### **1 Tex. Admin. Code § 80.1** Application for Registration as a Limited Liability Partnership {#sec-80.1 omnilex-key=us-tx-regs-official--title-1--80.1}

(a) Initial application. To register as a limited liability partnership, a partnership must comply with §§152.802 - 152.804 and Chapter 4 of the Texas Business Organizations Code. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 701, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. Applications submitted for filing with the secretary of state must be executed by a majority in interest of the partners or by one or more partners authorized by a majority in interest of the partners and must contain the following information:

(1) the name of the partnership;

(2) the federal tax identification number of the partnership;

(3) the street address of its principal office in this state and outside this state, as applicable;

(4) the number of partners at the date of application; and

(5) a brief statement of the business in which the partnership engages.

(b) Name of the partnership. The name of the limited liability partnership shall contain the phrase "limited liability partnership" or an abbreviation thereof. In addition to the limited liability partnership designation, names of limited liability partnerships that are organized as limited partnerships must also include the word "limited" or the phrase "limited partnership," or an abbreviation thereof. When processing a limited liability partnership registration, the secretary of state does not review the name of the partnership, or a change of name, to determine whether the name conforms with the entity name availability rules of §§79.30 - 79.54 of this title. Names of limited liability partnerships that are organized as limited partnerships, however, will be reviewed for availability when the secretary of state processes the separate limited partnership certificate of formation.

(c) Federal tax identification number. A partnership which has applied for, but not obtained, a federal tax identification number at the time of submission may provide a statement to that effect in its application for registration. Once the partnership has obtained its federal tax identification number, the partnership shall amend its application for registration to provide the identification number required under §152.802(a)(1)(B) of the Texas Business Organizations Code and subsection (a)(2) of this section.

**History**
- *Source Note: The provisions of this §80.1 adopted to be effective February 18, 1998, 23 TexReg 1532; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.2** Application for Registration of a Foreign Limited Liability Partnership {#sec-80.2 omnilex-key=us-tx-regs-official--title-1--80.2}

(a) Initial statement. To transact business in Texas, a foreign limited liability partnership must file an application for registration that complies with §152.905 and Chapters 4 and 9 of the Texas Business Organizations Code. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 307, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. Applications submitted for filing with the secretary of state must be executed by a majority in interest of the partners or by one or more partners authorized by a majority in interest of the partners and must contain the following information:

(1) the name of the partnership;

(2) the federal tax identification number of the partnership;

(3) the state of formation and the date of its initial registration as a limited liability partnership in that state;

(4) the date the limited liability partnership began or will begin to transact business in Texas;

(5) a statement that the foreign limited liability partnership validly exists as a limited liability partnership under the laws of the state of its formation;

(6) the street address of a partnership office in Texas and the street address of the partnership's chief executive office;

(7) the street address of its proposed registered office in Texas and the name of its proposed registered agent in Texas at such address;

(8) a statement that the partnership appoints the secretary of state as its agent for service of process under the circumstances set forth in §5.251 of the Texas Business Organizations Code;

(9) the number of partners in Texas at the date of application; and

(10) a brief statement of the business in which the partnership engages.

(b) Name of the partnership. The name of the limited liability partnership shall contain the phrase "limited liability partnership" or an abbreviation thereof. In addition to the limited liability partnership designation, names of limited liability partnerships that are organized as limited partnerships must also include the word "limited" or the phrase "limited partnership," or an abbreviation thereof. When processing a limited liability partnership registration, the secretary of state does not review the name of the partnership, or a change of name, to determine whether the name conforms with the entity name availability rules of §§79.30 - 79.54 of this title. Names of limited liability partnerships that are organized as limited partnerships, however, will be reviewed for availability when the secretary of state processes the separate limited partnership application for registration.

(c) Federal tax identification number. A partnership which has applied for, but not obtained, a federal tax identification number at the time of submission may provide a statement to that effect in its application for registration. Once the partnership has obtained its federal tax identification number, the partnership shall amend its application for registration to provide the identification number required under §9.007(b)(2) of the Texas Business Organizations Code and subsection (a)(2) of this section.

(d) Fee. The fee for filing a new or renewal application for registration is $200 per partner in Texas, but not less than $200 and not more than $750. In the case of a limited liability limited partnership, calculation of the filing fee would be determined by the number of general, not limited, partners in Texas at the time of submission.

(e) Partners in Texas. For purposes of this section, a partner is considered to be in Texas if:

(1) the partner is a resident of the state;

(2) the partner is domiciled or located in the state;

(3) the partner is licensed or otherwise legally authorized to perform the services of the partnership in this state; or

(4) the partner, or a representative of the partnership working under the direct supervision or control of the partner, will be providing services or otherwise transacting the business of the partnership within the state for a period of more than 30 days.

**History**
- *Source Note: The provisions of this §80.2 adopted to be effective February 18, 1998, 23 TexReg 1532; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.3** Administrative Review {#sec-80.3 omnilex-key=us-tx-regs-official--title-1--80.3}

The secretary of state will not determine substantial compliance with the provisions of the Texas Business Organizations Code, nor will the secretary of state determine whether a domestic limited liability partnership meets the insurance or financial responsibility requirements of §152.804 of the Texas Business Organizations Code.

**History**
- *Source Note: The provisions of this §80.3 adopted to be effective February 18, 1998, 23 TexReg 1532; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.4** Amendment, Change, or Correction {#sec-80.4 omnilex-key=us-tx-regs-official--title-1--80.4}

An application for registration, renewal, amendment or withdrawal may be amended or corrected by filing a certificate of amendment in duplicate, executed in the manner of an initial application, and accompanied by the required filing fee. In the case of a domestic limited liability partnership, the filing fee for an amendment is $10, plus, if the amendment increases the total number of partners, $200 for each partner added by the amendment. In the case of a foreign limited liability partnership, the filing fee for an amendment is $10, plus, if the amendment increases the total number of partners in this state, $200 for each partner added by the amendment, but not to exceed $750. The secretary of state has promulgated forms for amending the registrations of domestic and foreign limited liability partnerships; however, use of such forms is not mandatory. See Forms 722 and 407, respectively, available at http://www.sos.state.tx.us/corp/forms_boc.shtml.

**History**
- *Source Note: The provisions of this §80.4 adopted to be effective February 18, 1998, 23 TexReg 1532; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.7** Foreign Limited Liability Limited Partnerships {#sec-80.7 omnilex-key=us-tx-regs-official--title-1--80.7}

A foreign limited partnership that is subject to registration under the provisions of §9.001 of the Texas Business Organizations Code and that has the status of a limited liability partnership under the laws of a state other than Texas also must file an application for registration under §152.905 and Chapters 4 and 9 of the Texas Business Organizations Code before transacting business in Texas. Late filings fees pursuant to §9.054 of the Texas Business Organizations Code may be assessed against both the limited liability partnership application for registration and the limited partnership application for registration.

**History**
- *Source Note: The provisions of this §80.7 adopted to be effective February 18, 1998, 23 TexReg 1532; amended to be effective January 1, 2010, 34 TexReg 9173.*

#### **Subchapter B** UNINCORPORATED NONPROFIT ASSOCIATIONS

##### **1 Tex. Admin. Code § 80.21** Statement Appointing an Agent for Service of Process {#sec-80.21 omnilex-key=us-tx-regs-official--title-1--80.21}

(a) Initial appointment. An unincorporated nonprofit association may file a statement appointing an agent authorized to receive service of process. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 706, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. The statement appointing an agent must contain the following information:

(1) the name of the nonprofit association;

(2) the federal tax identification number of the nonprofit association, if applicable;

(3) the address in this state, including the street address, if any, of the nonprofit association, or its address outside this state, as applicable;

(4) the name of the person in this state authorized to receive service of process and the person's address, including street address, in this state; and

(5) a statement that the person appointed as agent for the nonprofit association accepts the appointment, as evidenced by the person's execution of the statement to be filed.

(b) Execution. The statement appointing an agent submitted for filing with the secretary of state must be executed by a person authorized to manage the affairs of the nonprofit association, or, if the person is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity. The statement appointing an agent also must be signed by the person appointed agent, or, if the person appointed agent is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity. The execution of the statement appointing an agent by the person appointed as agent constitutes an acceptance of the appointment.

(c) Fee. The fee for filing a statement appointing an agent is $25.

**History**
- *Source Note: The provisions of this §80.21 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.22** Amendment to Statement Appointing an Agent {#sec-80.22 omnilex-key=us-tx-regs-official--title-1--80.22}

(a) Amendment. A statement appointing an agent may be amended by filing an amendment to the statement appointing an agent with the secretary of state. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 707, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. An amendment to the statement appointing an agent must contain the following information:

(1) the name of the nonprofit association;

(2) the tax identification number of the nonprofit association, if applicable;

(3) the part of the statement appointing an agent being amended;

(4) the amendment; and

(5) if the amendment changes the name or address of the agent authorized to receive service of process, a statement that the address provided as the address of the appointed agent is accurately shown and that the person appointed as the agent for the nonprofit association accepts the appointment as evidenced by the person's execution of the amendment.

(b) Execution. The amendment to the statement appointing an agent submitted for filing with the secretary of state must be executed by a person authorized to manage the affairs of the nonprofit association, or, if the person is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity. An amendment to change the name or address of the agent authorized to receive service of process for the nonprofit association also must be executed by the person appointed as agent, or, if the person appointed agent is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity. An amendment changing the appointed agent need not be executed by the withdrawing agent. The execution of an amendment changing the appointed agent for the nonprofit association by the person appointed as a successor agent constitutes an acceptance of the appointment.

(c) Fee. The fee for filing an amendment to the statement appointing an agent is $5.00.

**History**
- *Source Note: The provisions of this §80.22 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.23** Cancellation of Statement Appointing an Agent {#sec-80.23 omnilex-key=us-tx-regs-official--title-1--80.23}

(a) Notice of Cancellation. A statement appointing an agent may be canceled by filing with the secretary of state a written notice of cancellation. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 709, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. A notice of cancellation must include the following information:

(1) the name of the nonprofit association;

(2) the federal tax identification number of the nonprofit association, if applicable;

(3) the date of filing of its statement appointing an agent;

(4) the statement that the nonprofit association cancels its statement appointing an agent; and

(5) the current street address of the nonprofit association, or its address outside this state, if applicable.

(b) Execution. The notice of cancellation submitted for filing with the secretary of state must be executed by a person authorized to manage the affairs of the nonprofit association, or, if the person is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity. The notice of cancellation also must be signed by the appointed agent, or, if the person appointed agent is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity.

(c) Fee. The fee for filing a notice of cancellation is $5.00.

(d) Filing. The notice of cancellation, accompanied by the filing fee, shall be delivered to the secretary of state. The secretary of state will endorse on the notice of cancellation the word "filed," and the month, day, and year of the filing, and place the document on record. A letter of acknowledgement shall be delivered to the nonprofit association, its designated representative or to its appointed agent. A duplicate "file stamped" copy of the notice of cancellation will accompany the letter of acknowledgement, provided that a duplicate copy of the document is delivered by the nonprofit association for such purpose.

**History**
- *Source Note: The provisions of this §80.23 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.24** Resignation of Person Appointed as Agent {#sec-80.24 omnilex-key=us-tx-regs-official--title-1--80.24}

(a) Notice of Resignation. A person appointed by a nonprofit association as its agent authorized to receive service of process may resign as its appointed agent by filing a written notice of resignation with the secretary of state. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. See Form 708, available at http://www.sos.state.tx.us/corp/forms_boc.shtml. The notice of resignation must include the following information:

(1) the name of the nonprofit association which appointed the person as its authorized agent for service of process;

(2) the federal tax identification number of the nonprofit association, if applicable;

(3) a statement that written notice of the resignation was given to the nonprofit association; and

(4) the last known address of the nonprofit association, and the address to which the resigning agent sent written notice to the nonprofit association, as applicable.

(b) Execution. A notice of resignation must be executed by the person resigning as the authorized agent for the nonprofit association, or, if the resigning agent is a corporation or other legal or commercial entity, by an officer or other duly authorized representative of the corporation or other legal or commercial entity.

(c) Fee. There is no fee for filing a notice of resignation.

**History**
- *Source Note: The provisions of this §80.24 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.25** Authorized Agent {#sec-80.25 omnilex-key=us-tx-regs-official--title-1--80.25}

An unincorporated nonprofit association may appoint an individual resident of this state, a domestic or foreign corporation, whether for profit or not for profit, a business trust, estate, trust, partnership, limited liability company, association, joint venture, or any other legal or commercial entity which maintains an address in this state. A nonprofit association may not serve as its own authorized agent. Only one person may be named as the authorized agent in the statement appointing an agent for service of process. The secretary of state may not be named as the nonprofit association's authorized agent for service of process in a statement appointing an agent for service of process or any amendment to such statement.

**History**
- *Source Note: The provisions of this §80.25 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

##### **1 Tex. Admin. Code § 80.26** Nonprofit Association Name {#sec-80.26 omnilex-key=us-tx-regs-official--title-1--80.26}

The name of the nonprofit association in a statement appointing an agent should be the name under which the association regularly conducts its activities in this state. The name of the nonprofit association in the statement appointing an agent should be the name as it appears in the nonprofit association's governing documents (the association's constitution, bylaws or regulations) or, if applicable, the name of the association as shown in its assumed name certificate filed pursuant to Business and Commerce Code, Chapter 71. The nonprofit association may not use the term "corporation" or "incorporated" or an abbreviation of either of those terms in its name. The secretary of state does not review the name of the nonprofit association, or a change of name, to determine whether the name conforms with the entity name availability rules of §§79.30 - 79.54 of this title.

**History**
- *Source Note: The provisions of this §80.26 adopted to be effective November 28, 1995, 20 TexReg 9405; amended to be effective January 1, 2010, 34 TexReg 9173.*

### **Chapter 81** ELECTIONS

#### **Subchapter A** VOTER REGISTRATION

##### **1 Tex. Admin. Code § 81.1** Supplementation of Voter Registration Application {#sec-81.1 omnilex-key=us-tx-regs-official--title-1--81.1}

(a) "Required information" in §13.072(e) shall mean the subsequent submission of a fully completed voter registration application.

(b) In order to proceed with the review of the application, the voter registrar must receive the required information not later than 10 days after notifying the applicant that a voter registration application is incomplete.

**History**
- *Source Note: The provisions of this §81.1 adopted to be effective October 20, 2000, 25 TexReg 10513.*

##### **1 Tex. Admin. Code § 81.2** Use of Official Voter Registration Applications for Purposes of Changing Information or Requesting a Replacement Certificate by Volunteer Deputy Registrars {#sec-81.2 omnilex-key=us-tx-regs-official--title-1--81.2}

Volunteer deputy registrars may distribute and collect official voter registration applications from registered voters in order to make a change of information or request a replacement certificate. The volunteer deputy must ensure that the voter indicated on the application which action is to be taken, change or replacement. On receipt of a completed application, the volunteer deputy registrar shall prepare a receipt in duplicate on a form supplied by the registrar. The receipt must contain the name of the person submitting the application and the date the completed application is submitted to the volunteer deputy registrar. The volunteer deputy shall sign the receipt in the presence of the person submitting the application and shall give the original to the applicant. The volunteer deputy shall deliver the duplicate receipt to the registrar with the application. The registrar shall retain the receipt on file with the application.

**History**
- *Source Note: The provisions of this §81.2 adopted to be effective June 27, 1986, 11 TexReg 2740; amended to be effective March 28, 2002, 27 TexReg 2217.*

##### **1 Tex. Admin. Code § 81.3** Effective Date of Changed Registration {#sec-81.3 omnilex-key=us-tx-regs-official--title-1--81.3}

The date of submission of a completed voter registration application form for purposes of a name or an address change to a volunteer deputy registrar is considered to be the date of submission to the volunteer deputy registrar for purposes of determining the effective date of the changed registration.

**History**
- *Source Note: The provisions of this §81.3 adopted to be effective June 27, 1986, 11 TexReg 2740; amended to be effective March 28, 2002, 27 TexReg 2217.*

##### **1 Tex. Admin. Code § 81.4** Delivery of Application by Volunteer Deputy For Purposes of Changing Registration Information or Requesting Duplicate Certificate {#sec-81.4 omnilex-key=us-tx-regs-official--title-1--81.4}

A volunteer deputy registrar shall deliver in person to the registrar each completed voter registration application submitted to the deputy for purposes of changing a voter's registration information or requesting a replacement certificate in accordance with the deadlines for delivery of voter registration applications provided for in the Texas Election Code, §13.042.

**History**
- *Source Note: The provisions of this §81.4 adopted to be effective June 27, 1986, 11 TexReg 2740; amended to be effective March 28, 2002, 27 TexReg 2217.*

##### **1 Tex. Admin. Code § 81.5** Volunteer Deputy Not To Perform Duties of Registrar {#sec-81.5 omnilex-key=us-tx-regs-official--title-1--81.5}

A volunteer deputy registrar may not perform any official duties of the voter registrar, except as expressly authorized by law or by these sections.

**History**
- *Source Note: The provisions of this §81.5 adopted to be effective June 27, 1986, 11 TexReg 2740.*

##### **1 Tex. Admin. Code § 81.6** Matching Criteria {#sec-81.6 omnilex-key=us-tx-regs-official--title-1--81.6}

(a) Deceased Matching criteria. In accordance with provisions of Texas Election Code §18.068(b), information received under Texas Election Code §16.001, shall be matched against the voter registration rolls to identify Strong Match and Weak Match records based on the following criteria:

(1) Strong Matched Deceased records are identified when the Last Name, Full Social Security Number (SSN) (9 digits), and Date of Birth (DOB) match between the voter record and the deceased record.

(2) Weak Match Deceased records are identified when one of the following combinations matches between the voter record and the deceased record are identified:

(A) First Name, Last Name, and DOB;

(B) Last Name and Full SSN (9 digits);

(C) Full SSN (9 digits) and DOB; or

(D) Last Four Digits of the SSN, DOB, and One or More Name Component(s):

(i) Last Name (in deceased file) to Last Name;

(ii) Last Name (in deceased file) to Middle Name;

(iii) First Name to First Name (excluding a Last Name included match); and/or

(iv) Middle Name or Middle Initial Match (excluding any additional name match).

(b) Duplicate Matching criteria. In accordance with provisions of Texas Election Code §18.0681(b), potential duplicate registrations shall be identified as Strong Match and Weak Match records based on the following criteria:

(1) Strong Matched Duplicate records are identified when one of the following combinations matches between voter records:

(A) Last Name, First Name, and Full Social Security Number (SSN) (9 digits);

(B) Last Name, First Name, and Texas Department of Public Safety (DPS)-Issued Driver License, Personal Identification Card, or Election Identification Certificate Number; or

(C) Last Name, First Name, Last Four Digits of the SSN, and Date of Birth.

(2) Weak Match Duplicate records are identified when one of the following combinations matches between voter records:

(A) Last Name, First Name, and Last Four Digits of the SSN; or

(B) Texas DPS-Issued Driver License, Personal Identification Card, or Election Identification Certificate Number.

(c) For all matching criteria involving a voter record, the voter's current and former Last Names are considered in the matching process where "Last Name" is designated.

**History**
- *Source Note: The provisions of this §81.6 adopted to be effective September 28, 2017, 42 TexReg 4985.*

##### **1 Tex. Admin. Code § 81.7** Directive for High School Deputy Registrars {#sec-81.7 omnilex-key=us-tx-regs-official--title-1--81.7}

(a) The directive for high school deputy registrars dated July 31, 1998 is adopted. Copies are available from the Secretary of State's Elections Division, P.O. Box 12887, Austin, Texas 78711. The Elections Division shall provide a copy of this directive to each high school deputy registrar in the state.

(b) Summary and Purpose. In accordance with the provisions of Texas Election Code Annotated, §31.003, §13.046, and the National Voter Registration Act, this directive updates the March 15, 1995 directive and sets forth requirements for public and private high school principals to act as deputy voter registrars in registering high school students and employees of the high school.

(c) Definitions.

(1) High School Principal. The administrator of a public or private high school.

(2) Designated Representative. Any person employed at a public or private high school as an administrative staff member or teacher who is designated by the principal to act in lieu of the principal as a deputy voter registrar for the high school. The principal shall provide a designated representative with a form or card that identifies the designated representative as a high school deputy registrar.

(3) High School Student. Any individual enrolled full-time or part-time at a public or private high school as a student who is engaged in the study of standard curricula offered by the high school.

(4) Employee. A person who works for wages or a salary at a public or private high school.

(5) Final Month. The final month of each semester is the last 30 day period within the semester.

(d) Duties of High School Deputy Voter Registrar

(1) Obtaining Voter Registration Applications and Materials from School Board Administrator or Secretary of State. A high school principal or designated representative acting as a deputy voter registrar shall procure from the school board administrator or Secretary of State a sufficient supply of voter registration applications and notice forms. It is essential that high school deputy voter registrars contact the Secretary of State for registration applications and not the county voter registrar; the voter registrar's applications are not coded for use by high school deputy registrars.

(2) Distributing Voter Registration Applications and Materials to Eligible Students and Employees. A high school deputy registrar shall distribute voter registration applications during the final month of each semester to high school students who are or will be 18 years of age or older during that semester. Applications may also be distributed at any time during the school year to students and employees of the high school who request them. The application form must be accompanied by a notice which informs the high school student or employee that he or she may:

(A) deliver the application form in person to the voter registrar or elections administrator of the county in which the applicant resides;

(B) mail the application form to the voter registrar or elections administrator of the county in which the applicant resides; or

(C) deliver the application form in person to the high school deputy registrar or a volunteer deputy registrar for delivery to the voter registrar or elections administrator of the county in which the applicant resides.

(i) The student or employee may request assistance from the high school deputy registrar in filling out the application. If the applicant cannot sign the application due to physical disability or illiteracy, another person may witness the applicant's mark. The witness must include an address, printed name, and signature on the application. If an applicant is physically unable to make a mark, the witness shall state this fact on the application.

(ii) On receipt of a registration application, the high school deputy registrar shall review it for completeness. The high school deputy registrar may review an application for completeness out of the applicant's presence. If the application does not contain all the required information and the required signature, the application shall be returned to the applicant for completion and resubmission.

(3) Returning Voter Registration Applications to Voter Registrar or Elections Administrator.

(A) The high school deputy registrar must deliver the completed applications to the voter registrar or elections administrator of the county in which the applicant resides as soon as possible after they are received. Completed applications shall be delivered to the county voter registrar or elections administrator by the high school deputy registrar in person, or by mail in an envelope or package. An application must be delivered to the county voter registrar or elections administrator no later than 5 p.m. of the fifth day after the date the application is submitted to the high school deputy registrar, except that an application submitted after the 34th day and before the 29th day before the date of an election in which any qualified voters of the county are eligible to vote must be delivered no later than 5 p.m. of the 29th day before election day. An application delivered by mail is considered to be delivered at the time of its receipt by the county registrar or elections administrator.

(B) Since a voter registration application will result in an effective voter registration on the 30th day after it is received by a high school deputy registrar, it is imperative that the high school deputy registrar confer with the county voter registrar or elections administrator of each county in which the students and employees of the high school reside before instituting a voter registration program in the high school in order to insure that the applications are received by the county in a timely manner.

(4) Criminal Sanctions. Inadvertent failure to deliver applications received by the high school deputy registrar by the deadline stated above is a Class C misdemeanor. Intentional failure to deliver applications is a Class A misdemeanor.

(e) Miscellaneous Provisions

(1) High Schools Serving More than One County. A high school deputy registrar shall serve as a deputy voter registrar for each county in which territory served by the high school is located without regard to the actual physical location of the high school.

(2) High School Deputy Registrar Transferring or Terminating Employment. A high school principal or designated representative who transfers from or terminates employment with a high school is immediately removed from the status of deputy registrar of that high school upon such transfer or termination. Upon the transfer or termination of a designated representative, all voter registration materials must be returned to the high school principal. Upon a principal's transfer or termination, all voter registration materials must be delivered to the new principal or newly designated representative.

(3) Removal of Designated Representative. A designated representative may be removed at any time by the high school principal, with or without cause. If a designated representative fails to implement this directive or otherwise fails in the performance of his or her duties, the high school principal shall relieve the designated representative of the role of high school deputy registrar. A removal must be in writing, and must clearly state the grounds for removal. A copy of the removal must be delivered to the designated representative. All voter registration materials, including notices and applications, must be returned to the high school principal or otherwise accounted for. The high school principal shall resume the duties of high school deputy registrar until a new representative is designated.

(4) Approval. Secretary of State approval issued this 31st day of July, 1998.

**History**
- *Source Note: The provisions of this §81.7 adopted to be effective June 27, 1986, 11 TexReg 2740.*

##### **1 Tex. Admin. Code § 81.8** Documentation Establishing Citizenship {#sec-81.8 omnilex-key=us-tx-regs-official--title-1--81.8}

(a) "Proof of citizenship" may take the form of a certified copy of the voter's passport, birth certificate, or certificate of naturalization papers.

(b) If a voter fails to provide proof of citizenship within the required 30 days, the voter registrar shall promptly send the voter a notice of cancellation that includes the date of and the reason for cancellation.

**History**
- *Source Note: The provisions of this §81.8 adopted to be effective October 20, 2000, 25 TexReg 10514.*

##### **1 Tex. Admin. Code § 81.9** Duties of Elections Administrator {#sec-81.9 omnilex-key=us-tx-regs-official--title-1--81.9}

Where a county has created the position of elections administrator and a statute outside the Texas Election Code requires a duty or function to be performed by the county clerk, the county clerk shall perform such function or duty, unless the function or duty is related to elections governed wholly or in part by the provisions of the Election Code, in which case the county elections administrator shall perform such duty or function. On request, the secretary of state shall determine, if it is unclear from the provisions of the election code and these sections, whether a duty or function required by a particular statute outside the Texas Election Code to be performed by the county clerk shall be performed by the elections administrator.

**History**
- *Source Note: The provisions of this §81.9 adopted to be effective June 27, 1986, 11 TexReg 2740.*

##### **1 Tex. Admin. Code § 81.10** Printing of Name on Voter Registration Certificate {#sec-81.10 omnilex-key=us-tx-regs-official--title-1--81.10}

(a) The phrase "(t)he voter's name in the form indicated by the voter" in Texas Election Code §15.001 shall not be read to include a former name provided by the voter on the voter registration application.

(b) The voter's name as it appears on the voter registration certificate shall reflect the information provided by the voter on the most recent application supplied by that voter to the voter registrar. The name on the voter registration certificate shall be restricted to first name, middle name (if any is supplied by the voter on the most recent application), and last name (including suffix, if any).

**History**
- *Source Note: The provisions of this §81.10 adopted to be effective September 3, 2015, 40 TexReg 5455.*

##### **1 Tex. Admin. Code § 81.11** Definitions {#sec-81.11 omnilex-key=us-tx-regs-official--title-1--81.11}

The following words and terms, when used herein, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Agency--The Office of the Secretary of State.

(2) Chapter 19--Texas Election Code Annotated, Chapter 19 (Vernon 2003 and Supplement 2004-2005).

(3) Chapter 19 funds--Funding available to a county voter registrar pursuant to Texas Election Code Annotated, §19.002 (Vernon 2003 and Supplement 2004-2005).

(4) NVRA (National Voter Registration Act)--42 U.S.C. §1973 et seq., Texas Election Code Annotated, §19.004, §31.007 (Vernon 2003).

(5) Rule--A rule adopted under Chapter 81 of the Texas Administrative Code, Title 1.

(6) Section--A section of Texas Election Code Annotated (Vernon 2003 and Supplemental 2004-2005).

(7) State Fiscal Year--September 1 through August 31.

(8) Textravel--Guide issued by the Comptroller of Public Accounts providing information on state travel laws and rules to state agencies.

**History**
- *Source Note: The provisions of this §81.11 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective October 7, 1999, 24 TexReg 8545; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.12** Applicable Sections of the Texas Election Code {#sec-81.12 omnilex-key=us-tx-regs-official--title-1--81.12}

(a) Chapter 19 provides, in pertinent part, as follows:

(1) The Commissioners Court may not consider the availability of state funds under this chapter in adopting the county budget for the office of voter registrar (§19.006);

(2) State funds disbursed under this chapter may be used only to defray expenses of the voter registrar's office in connection with voter registration (§19.004).

(b) The Secretary of State has interpreted §19.006 to mean that the county must provide for the normal operation of the voter registrar's office as defined in §81.14 of this title (relating to Normal Day-To-Day Operation--Defined). The Secretary of State has interpreted §19.004 to mean that Chapter 19 funds shall be expended on items intended to be used exclusively for voter registration. If an item purchased or service rendered is not exclusively related to voter registration, the cost must be prorated.

**History**
- *Source Note: The provisions of this §81.12 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective October 7, 1999, 24 TexReg 8545; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.13** Allowable Uses of Chapter 19 Funds {#sec-81.13 omnilex-key=us-tx-regs-official--title-1--81.13}

(a) Chapter 19 funds expenditures must comply with the criteria of "reasonable and necessary" as established by Texas Grant Management Standards (TxGMS) and may only be used for the following activities:

(1) Increase the number of registered voters in the state.

(2) Maintain and report an accurate list of the number of registered voters.

(3) Increase the efficiency of the voter registration office through the use of technological equipment.

(4) If the registrar's county has a population of less than 55,000, defray the cost to the registrar's county of keeping the polling places in the county open during the early voting period as required under Texas Election Code §§85.005(c), 85.006(e), and 85.064(d). In elections where the county clerk is the early voting clerk and the commissioners court has not created a county elections administrator under Texas Election Code §31.031, the costs must be in consultation and agreement with the county clerk or the county officer to whom election duties and functions have been transferred as defined in Texas Election Code §31.091(1).

(b) All Chapter 19 funding requests submitted to the Agency must identify which of these purposes the requested item(s) will benefit.

(c) All Chapter 19 requests must include a certification that the Commissioners Court did not consider the availability of Chapter 19 funds in adopting the county budget for the office of voter registrar.

(d) If there is a question regarding whether an item or service is payable from Chapter 19 funds, the Agency will review the eligibility prior to the purchase upon request by the county.

**History**
- *Source Note: The provisions of this §81.13 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.14** Normal Day-To-Day Operation--Defined {#sec-81.14 omnilex-key=us-tx-regs-official--title-1--81.14}

(a) Consistent with the intent of §81.12 of this title (relating to Applicable Sections of the Texas Election Code) Chapter 19 funds may not be used to fund the normal day-to-day operation of the voter registrar's office, which include statutory duties required by the Election Code and general office operating costs.

(b) The normal day-to-day operation of the voter registrar's office must be funded by the Commissioners Court when adopting the budget for voter registration in their county.

(1) Duties required to be performed by counties under the Texas Election Code include but are not limited to the following:

(A) The physical acceptance and processing of voter registration certificates and renewals under Chapter 13.

(B) Notices and corrections made under Chapter 15 and Chapter 16.

(C) The processing and cost of supplying voter lists under §18.001.

(2) General office operating costs that are considered expenses incurred in the normal day-to-day operation of voter registrars' offices and not payable with Chapter 19 funds include but are not limited to the following:

(A) Office furniture, including file cabinets.

(B) Office supplies.

(C) Any phone line not dedicated to a computer modem.

(D) Printing of voter registration cards.

(E) Normal postage costs.

(c) The Agency has the sole authority to determine whether a requested item or service is a day-to-day expense and thus not payable with Chapter 19 funds.

**History**
- *Source Note: The provisions of this §81.14 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.15** Funding Period {#sec-81.15 omnilex-key=us-tx-regs-official--title-1--81.15}

(a) After June 1 of each year funding becomes available to the counties as defined in §19.002 of the Election Code and remains available for 27 months, expiring on August 31. However, the Comptroller imposes a deadline prior to August 31 for any documents or transactions for expiring appropriations. Accordingly, counties will be notified of the deadline when the "Comptroller's Master Schedule of Fiscal Year-End Close Events" is published. Funding requests must be submitted prior to the applicable date as determined by the Secretary of State.

(b) Chapter 19 funding requests must be received within twelve (12) months of payment to vendor or prior to the deadline described in subsection (a) of this section, whichever comes first.

**History**
- *Source Note: The provisions of this §81.15 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective September 8, 1997, 22 TexReg 8389; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective June 22, 2008, 33 TexReg 4663; amended to be effective December 30, 2010, 35 TexReg 11569; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.16** Electronic Submission of Chapter 19 Purchase Request Required for Payment {#sec-81.16 omnilex-key=us-tx-regs-official--title-1--81.16}

(a) The Agency shall prescribe an electronic web-based application format for the submission of Chapter 19 Purchase Request for use by each county voter registrar.

(b) If a Chapter 19 Purchase Request is received by the Agency seeking funding which is not allowable under the Texas Election Code, Chapter 19, these rules, and Agency directives, the Agency shall so notify the voter registrar of receipt of such form via email, written notification or election response from the web-based system.

(c) All electronic requests must be submitted through the designated secured electronic web-based application designed solely for Chapter 19 purchases, located on the Office of the Secretary of State web site.

(d) All supporting documentation must be maintained in accordance with §81.21 of this title (relating to the Records Maintenance and Payment Reviews).

**History**
- *Source Note: The provisions of this §81.16 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective September 8, 1997, 22 TexReg 8389; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective June 22, 2008, 33 TexReg 4663; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.17** Competitive Bidding Required {#sec-81.17 omnilex-key=us-tx-regs-official--title-1--81.17}

Except for the purchase of voter registration advertising and temporary staff the voter registrar shall submit bids for the purchase of items or services to be paid for with Chapter 19 funds according to the following guidelines:

(1) No competitive bids for individual purchases of less than $5,000 are required. However, the voter registrar shall take the steps necessary to insure that all charges are reasonable and competitive relative to the local market. (Note: A large purchase may not be divided into small lot purchases to circumvent the dollar limits established by this section. For example, expenditures for computer equipment to a single vendor that total more than $5,000 are subject to the competitive bid requirement and may not be split between printers/scanner/computers.)

(2) For purchases of $5,000 or more, competitive bidding procedures must be followed. Generally, a county must receive a minimum of three written bids from three different vendors stating the vendor's name, complete mailing address, telephone number, and the amount of the bid. A copy of the bids as well as the selection documentation, including the solicitation and the scoring tools, must be maintained by the county and made available to the Agency upon request.

(3) If a purchase is through the Texas Procurement and Support Services (TPASS) cooperative purchasing programs for state contract purchasing for the State of Texas, bids are not required. Proper documentations must be submitted to indicate the type of procurement service used and the source for those services.

(4) Sole source vendor purchases and situations when the lowest bid is not accepted are discouraged. In rare instances when this type of purchase is required, a justification must be signed by the county purchasing authority and be made available to the Agency upon request.

**History**
- *Source Note: The provisions of this §81.17 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective September 8, 1997, 22 TexReg 8389; amended to be effective October 7, 1999, 24 TexReg 8545; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective June 22, 2008, 33 TexReg 4663; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.18** Approval Requirements for the Secretary of State {#sec-81.18 omnilex-key=us-tx-regs-official--title-1--81.18}

A Chapter 19 Purchase Request shall not be processed for payment without the written or electronic approval of the Election Funds Manager and the Director of Elections.

**History**
- *Source Note: The provisions of this §81.18 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective October 7, 1999, 24 TexReg 8545; amended to be effective October 9, 2005, 30 TexReg 6426; amended to be effective January 3, 2007, 31 TexReg 10755.*

##### **1 Tex. Admin. Code § 81.19** Method of Payment {#sec-81.19 omnilex-key=us-tx-regs-official--title-1--81.19}

(a) All payments made from Chapter 19 funds will be issued on a reimbursement basis.

(b) Payments issued by the Comptroller of Public Accounts will be payable to the county, in the form of direct deposit to a new or pre-existing bank account as directed by the voter registrar.

(1) If the county establishes a new account, the county must budget funds to cover all setup fees, check orders and/or service charges associated with opening and maintaining the new account. Chapter 19 funds will not incur any fees or service charges associated with the setting up of a new account. Please note: our office encourages the county to use an existing account and develop a separate fund. Whether a separate Chapter 19 fund is created in an existing account or a separate account is established, it will be the county's responsibility to maintain a separate bookkeeping system to identify the debits and credits relating to all activities from the receipt of Chapter 19 funds.

(2) The county voter registrar will use such account for the purpose of depositing and/or expending Chapter 19 funds.

(3) The voter registrar shall not commingle Chapter 19 fund ledger accounts with any other county fund ledger account.

(4) Except for travel expenses authorized by §81.23 of this title (relating to Travel Using Chapter 19 Funds Authorized), no cash payments may be made from Chapter 19 funds. All disbursement payments of Chapter 19 funds must be made by check or state transfer drawn on the Chapter 19 prescribed bank account as described above.

**History**
- *Source Note: The provisions of this §81.19 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective June 22, 2008, 33 TexReg 4663; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.20** Ownership of Equipment Purchased with Chapter 19 Funds {#sec-81.20 omnilex-key=us-tx-regs-official--title-1--81.20}

(a) Items and equipment purchased with Chapter 19 funds are the property of the county.

(b) The county is responsible for the upkeep and maintenance of such items and equipment through adequate property management practices.

(c) If items or equipment that were originally purchased with Chapter 19 funds are no longer needed or useful for voter registration purposes, the items or equipment may be transferred, with the voter registrar's approval, to other county uses.

(d) If the items or equipment are no longer needed by the county, they may be disposed of in the manner set by county guidelines.

(e) Proceeds received from the sale of items or equipment purchased with Chapter 19 funds may be used only for voter registration purposes in a manner consistent with these rules.

**History**
- *Source Note: The provisions of this §81.20 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.21** Records Maintenance and Payment Reviews {#sec-81.21 omnilex-key=us-tx-regs-official--title-1--81.21}

(a) All supporting documentation must be maintained at the county level and made available to the Agency upon request for three (3) state fiscal years after the fiscal year in which the funding lapses.

(b) Supporting documentation that must be maintained by the county includes but is not limited to the following documents:

(1) Invoices from the vendor and a copy of the county paid voucher, ledger or bank statement substantiating the payment. The signed timesheet required by §81.22 of this title (relating to Use of Chapter 19 Funds for Temporary Employees) will be considered a "vendor's invoice" for purposes of this rule.

(2) All procurement documentation including the solicitation, bids, scoring documents, selection criteria, sole source or best value justification, if applicable, and any other relevant records.

(3) Any documents relating to Chapter 19 requests.

(c) The Agency will develop and notify the counties of the review schedule for Chapter 19 payments.

(1) The schedule will identify the periods of review, e.g., quarterly, semiannually, or annually.

(2) A risk assessment may be developed by the Agency to determine a sampling of counties subject to review.

(3) Corrections resulting from reviews will be assessed against subsequent Chapter 19 reimbursement(s).

**History**
- *Source Note: The provisions of this §81.21 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.22** Use of Chapter 19 Funds for Temporary Employees {#sec-81.22 omnilex-key=us-tx-regs-official--title-1--81.22}

The Commissioners Court must budget for the adequate staffing of the voter registrar's office. Chapter 19 funds may be used for temporary personnel when exigent circumstance arise beyond the staffing resources budgeted by the Commissioners Court.

(1) Permanent full-time and part-time county employees may not be compensated with Chapter 19 funds. The voter registrar may have Chapter 19 funded temporary staffing a maximum of any 39 weeks out of the 52-week state fiscal year (September 1 through August 31). For example, if Employee A works one week and Employee B works the next week, the county is allowed only 37 more weeks of Chapter 19 funded temporary personnel. However, if the county employs 15 temporaries in the same week, this would count as only one week of the 39-week allowance. For tracking purposes, working one day of one week counts the same as working an entire week. For example, if Employee C works Monday only, it will count as one week of the 39-week Chapter 19 allowance.

(2) The Agency does not issue tax forms to temporary employees funded with Chapter 19 funds. For this reason, the Agency recommends that temporary employment agencies be used if available.

(3) The voter registrar should discuss the tax implications of using temporary personnel with the county auditor.

(4) The fee or rate of pay to be paid to temporary employees must reflect the fee or rate prevailing in the locale for the same or similar services.

(5) Work related injuries to temporary personnel hired with Chapter 19 funds are not the liability of the Agency.

**History**
- *Source Note: The provisions of this §81.22 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.23** Travel Using Chapter 19 Funds Authorized {#sec-81.23 omnilex-key=us-tx-regs-official--title-1--81.23}

(a) Chapter 19 funds may be used to pay travel expenses incurred by the voter registrar and full-time permanent voter registration staffers to attend voter registration and/or election administration seminars and demonstrations that directly advance voter registration efforts.

(b) All voter registrars who seek reimbursement from Chapter 19 funds should plan their travel to achieve maximum economy and efficient means of transportation.

(c) The following limitations apply to Chapter 19 travel:

(1) The lowest available rates and fares shall be utilized.

(2) Reimbursements will be made based on actual costs.

(3) Lodging, per diem, and mileage rates may not exceed those set by the Texas Comptroller of Public Accounts.

(4) Reimbursements for lodging, per diem (including partial per diem), and mileage rates may not be charged to Chapter 19 unless the employee conducts travel beyond 25 miles of his or her designated headquarters.

(5) Travel by personal car is reimbursable at the rate set by the Texas Comptroller of Public Accounts per mile with mileage computed using the originating county seat as the departure point and computing final mileage using the mapping tool on the Chapter 19 web-based application.

(6) If more than one person is traveling from the same headquarters to the same destination, the travelers are to ride together in a single automobile if practicable.

(7) The rental of luxury cars will be disallowed, except in special circumstances requiring the use of large cars, i.e., several employees are traveling together or large volumes of equipment or supplies are being transported.

(8) Chapter 19 funds will not cover expenses for first class accommodations, tips, gratuities, valet parking or alcoholic beverages.

(d) Chapter 19 travel reimbursements must be submitted for each traveler consistent with §81.15 of this title (relating to Funding Period) via the Chapter 19 web-based application.

(e) Travel reimbursement requests must include the itemized amounts for airfare, rental cars, mileage, meals, lodging, seminar registration fees, and miscellaneous expenses. All receipts must be maintained in accordance with §81.21 of this title (relating to Records Maintenance and Payment Reviews).

(f) Travel advances will be approved, on a case-by-case basis. Travel advance funding will not be made for meals, hotel taxes or miscellaneous expenses. Travel advance requests must be submitted through the web-based application in the form of a travel request and include a Chapter 19 Purchase Request for each traveler. No further Chapter 19 Purchase Request will be processed until the final accounting of any advanced travel is received.

**History**
- *Source Note: The provisions of this §81.23 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective June 22, 2008, 33 TexReg 4663; amended to be effective December 30, 2010, 35 TexReg 11569; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.24** Membership Dues Detailed {#sec-81.24 omnilex-key=us-tx-regs-official--title-1--81.24}

Membership dues to groups or associations are payable with Chapter 19 funds only if the group's or association's activities or mission directly involve voter registration.

**History**
- *Source Note: The provisions of this §81.24 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.25** Voter Registration Drives Encouraged {#sec-81.25 omnilex-key=us-tx-regs-official--title-1--81.25}

(a) Pursuant to §81.12 of this title (relating to Applicable Sections of the Texas Election Code), efforts to increase the number of registered voters in the county are payable with Chapter 19 funds.

(b) Voter registration drive efforts include but are not limited to mailouts of applications to households, insertion of applications into newspapers, distributing applications at public locations, and other forms of advertising.

(c) "Promotional items" are not payable with Chapter 19 funds. Examples of non-payable promotional items include but are not limited to memorabilia, models, gifts, souvenirs, and other such novelties or items of nominal, non-educational value. Materials with public information value, such as items that provide a website address or other information relevant to voter registration, are permissible. Items purchased with Chapter 19 funds may include only the county and title of the voter registrar's office.

(d) Names of specific individuals may not be included on such materials. Chapter 19 funded voter registration drives must not promote a particular party, candidate, or issue. Chapter 19 funds may not be used for food and drink purchases, except for travel expenses allowed under §81.23 of this title (relating to Travel Using Chapter 19 Funds Authorized).

**History**
- *Source Note: The provisions of this §81.25 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective December 30, 2010, 35 TexReg 11569; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.26** Technology Purchases Encouraged {#sec-81.26 omnilex-key=us-tx-regs-official--title-1--81.26}

(a) Chapter 19 funds may be used for the purchase and initial installation of technological improvements for the voter registration office.

(b) "Technological improvements" include but are not limited to computer hardware, printers, and computer training. Computer programs and software that are necessary for the operation of the voter registration office are payable with Chapter 19 funds.

(c) Pursuant to §81.22 of this title (relating to Chapter 19 Funds for Temporary Employees), the county may not be reimbursed for the compensation of full or part-time county employees and programmers.

(d) The cost of providing the information required by §18.063 of the Texas Election Code is specifically payable with Chapter 19 funds.

(e) Pursuant to §81.20 of this title (relating to Ownership of Equipment Purchased with Chapter 19 Funds), the upkeep and maintenance of items purchased with Chapter 19 funds is the responsibility of the county.

(f) Pursuant to §81.12 of this title (relating to Applicable Sections of the Texas Election Code), the voter registrar must prorate the cost between the county and Chapter 19 funds, if the purchased item is not entirely related to voter registration.

**History**
- *Source Note: The provisions of this §81.26 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.27** Electronic Office Equipment Purchases Encouraged {#sec-81.27 omnilex-key=us-tx-regs-official--title-1--81.27}

(a) Chapter 19 funds may be used for the purchase of electronic office equipment.

(1) Examples of "electronic office equipment" include but are not limited to copiers, fax machines, optical imaging systems, electronic retriever file systems and typewriters.

(2) Examples of office equipment that are considered general voter registration office operating expenses and not payable with Chapter 19 funds pursuant to §81.14 of this title (relating to Normal Day-To-Day Operation--Defined) include but are not limited to office furniture such as desks, chairs and file cabinets.

(b) Pursuant to §81.20 of this title (relating to Ownership of Equipment Purchased with Chapter 19 Funds), the upkeep and maintenance of items purchased with Chapter 19 funds is the responsibility of the county.

(c) Pursuant to §81.12 of this title (relating to Applicable Sections of the Texas Election Code), the voter registrar must prorate the cost between the county and Chapter 19 funds if the purchased item is not entirely related to voter registration.

**History**
- *Source Note: The provisions of this §81.27 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.28** NVRA--Expenses Payable {#sec-81.28 omnilex-key=us-tx-regs-official--title-1--81.28}

The NVRA amends the Texas Election Code, §19.004, to allow expenses incurred by the voter registrar in implementing and conducting the duties required by this act to be payable with Chapter 19 funds. Examples of payable expenses under the NVRA include but are not limited to computer programming changes required by §15.081 and the printing and mailing of confirmation notices required by §§13.146, 14.023, 16.0921.

**History**
- *Source Note: The provisions of this §81.28 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective December 30, 2010, 35 TexReg 11569.*

##### **1 Tex. Admin. Code § 81.29** Adherence to Rules Required {#sec-81.29 omnilex-key=us-tx-regs-official--title-1--81.29}

Failure to adhere to these rules may result in the denial of reimbursement from Chapter 19 funds.

**History**
- *Source Note: The provisions of this §81.29 adopted to be effective October 1, 1995, 20 TexReg 7277; amended to be effective January 3, 2007, 31 TexReg 10755.*

#### **Subchapter B** EARLY VOTING

##### **1 Tex. Admin. Code § 81.30** Machines To Be Sealed {#sec-81.30 omnilex-key=us-tx-regs-official--title-1--81.30}

Where absentee voting is conducted on voting machines, the absentee voting clerk shall seal such machines at the close of each day's voting in the presence of poll watchers, if any, and such seal shall be broken by the clerk in the presence of poll watchers, if any, the following morning when absentee voting resumes. The authority conducting the election may provide for a written record to be made by the absentee voting clerk of the numbers registered on the public counter each time the machine is sealed or unsealed.

**History**
- *Source Note: The provisions of this §81.30 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.31** List of Declared Write-in Candidates for Mail Ballots {#sec-81.31 omnilex-key=us-tx-regs-official--title-1--81.31}

A list of declared write-in candidates shall be mailed with the other balloting materials to voters voting early by mail in the general election for state and county officers and all other elections that require candidates to file a declaration of write-in candidacy in order to have a vote counted for that candidate.

**History**
- *Source Note: The provisions of this §81.31 adopted to be effective June 27, 1986, 11 TexReg 2739; amended to be effective March 28, 2002, 27 TexReg 2218.*

##### **1 Tex. Admin. Code § 81.32** Late Convening of Early-Voting Ballot Board in Elections Other than General Election for State and County Officers {#sec-81.32 omnilex-key=us-tx-regs-official--title-1--81.32}

The presiding judge of the early-voting ballot board shall convene the board between the third and fifth day after election day to count late early-voted ballots cast from outside the country and placed in delivery by 7:00 p.m. on election day, so that the governing body of the territory conducting the election can timely canvass the election returns no earlier than the third day or later than the sixth day after election day.

**History**
- *Source Note: The provisions of this §81.32 adopted to be effective October 20, 2000, 25 TexReg 10514.*

##### **1 Tex. Admin. Code § 81.33** Late Convening of Early-Voting Ballot Board in Primary Elections {#sec-81.33 omnilex-key=us-tx-regs-official--title-1--81.33}

The presiding judge of the early-voting ballot board shall convene the board to count late early-voted ballots cast from outside the country and placed in delivery by 7:00 p.m. on election day, at any time after the last mail delivery occurring two days after the election, or when the early voting clerk certifies that all early-voting ballots mailed from outside the United States have been received, whichever is earlier. The precise time for the convening of the board shall be within the discretion of the presiding judge, with a view toward allowing ample time for the board and the central counting station personnel (if applicable) to discharge its duties so that the county executive committee can timely convene at no later than 1:00 p.m. on the third day after election day.

**History**
- *Source Note: The provisions of this §81.33 adopted to be effective October 20, 2000, 25 TexReg 10514.*

##### **1 Tex. Admin. Code § 81.34** Security of Early-Voting Ballots under Election Code, §85.032(f) {#sec-81.34 omnilex-key=us-tx-regs-official--title-1--81.34}

(a) If the early-voting ballot board convenes before election day, the presiding judge shall, upon each adjournment of the board, lock and seal each ballot box prior to returning the boxes to the custodian of records. The judge shall complete a ballot-box security form showing each serial number used to seal each box. The form shall be signed by the judge and another early-voting ballot board member who have witnessed the procedure. In a general election for state and county officers, the early-voting ballot board member must be from a different political party than the judge. The custodian of records shall also sign the form.

(b) The presiding judge shall retain the key(s) used to lock the ballot box(es). In the event that the judge is unwilling to retain the key, the key shall be retained by the authority designated in accordance with §66.060(a) of the Code.

(c) Upon reconvening the ballot board, the presiding judge shall ensure that each ballot box is intact. The presiding judge shall follow these procedures each day except upon final delivery to the custodian of records or delivery to the central counting station.

(d) If it is impracticable for the ballot-board judge to deliver the ballot boxes each day upon adjournment, the authority conducting the election shall submit to the Office of the Secretary of State an alternative plan for the security of the ballots for approval.

**History**
- *Source Note: The provisions of this §81.34 adopted to be effective October 20, 2000, 25 TexReg 10515.*

##### **1 Tex. Admin. Code § 81.35** Voting from Outer Space {#sec-81.35 omnilex-key=us-tx-regs-official--title-1--81.35}

(a) A person who meets the eligibility requirements of a voter under the Texas Election Code, Chapter 101, but who will be on a space flight during the early-voting period and on election day, may vote under this chapter. In order to vote by this method, the voter must apply by a Federal Postcard Application ("FPCA") and meet the requisite deadlines under state law. The FPCA may be submitted by fax or other electronic means.

(b) The National Aeronautics and Space Administration ("NASA") shall submit in writing to the Secretary of State a method of transmitting and receiving a secret ballot for persons on a space flight during an election period. The Secretary of State shall approve, deny, or request further information from NASA on the proposed method of transmission.

(c) Proposed changes to an approved ballot transmission method shall be submitted in writing to the Secretary of State for approval.

**History**
- *Source Note: The provisions of this §81.35 adopted to be effective October 20, 2000, 25 TexReg 10515; amended to be effective March 5, 2012, 37 TexReg 1483.*

##### **1 Tex. Admin. Code § 81.36** Counting Ballots Prior to Election Day in Counties with a Population of 100,000 or More {#sec-81.36 omnilex-key=us-tx-regs-official--title-1--81.36}

(a) The following procedure to count ballots before election day that were voted by mail or early in person may be used if the following conditions in paragraphs (1) - (7) of this subsection are met:

(1) the election is conducted by the county elections officer;

(2) the election is a county election ordered by the Governor, county judge, or commissioners court, a joint election between the county and another political subdivision using the same electronic ballot, or a primary election;

(3) the county has a population of 100,000 or more;

(4) electronic system ballots are used in the election;

(5) tabulation can be completed without revealing the vote count prior to the close of polls on election day;

(6) the 2nd and 3rd logic and accuracy test required by Texas Election Code, Chapter 127 can be performed before the count and after the count;

(7) a real time audit report can be produced immediately after the count to verify the number of ballots counted with the ballot transmittal form.

(b) The central counting station is authorized to convene to count the ballots early.

(c) The manager of the central counting station will determine whether to count the early voted ballots prior to election day.

(d) The manager must notify, in writing, the presiding judge of the early voting ballot board as to the time and place where the presiding judge must deliver the ballots voted early. The notice must be given at least eight days before convening the central counting station. The early voting clerk is sent a copy of the notice.

(e) The early voting clerk must post a notice of time and place on the bulletin board used for posting open meetings where the central counting station personnel will be meeting. The notice must be posted no later than the last day for early voting in person. In the general election for state and county officers, the notice must also be sent to each county chair that has a nominee on the general election ballot.

(f) All tests of the tabulating equipment must conducted pursuant to the Texas Election Code, Chapter 127, Subchapter D. The testing authority must conduct the second test immediately prior to the count of the early voted ballots.

(g) Poll watchers are authorized to be present during the early count.

(h) The judge of the early voting ballot board must convene the ballot board after the close of early voting in person in order to qualify and prepare the ballots for counting prior to the convening of the central counting station. The presiding judge of the ballot board shall issue a notice of delivery prior to the meeting of the ballot board in the regular manner (Texas Election Code, §87.022 and §87.025). The early voting clerk must post notice of delivery of ballots to the ballot board in the regular manner (Texas Election Code, §87.023). These procedures do not supercede the regular procedures of notice, delivery, and processing of ballots voted by mail by the signature verification committee.

(i) After the count is concluded, the tabulation supervisor must store the vote tabulation on a tape or other electronic device (personal computer) without producing a printout or any other method of the vote count.

(j) The tabulation supervisor must run a report indicating the number of ballots counted for each precinct and do a comparison between those numbers and number of ballots indicated on the ballot transmittal form. This report is used to verify the number of ballots counted since a report showing vote totals is not authorized to be produced prior to election day.

(k) The tabulation supervisor must zero the votes on the tabulation device and run the 3rd test. If the 3rd test is not successful, the count is void.

(l) The counted ballots must be locked in the ballot box and delivered to the custodian. The key to the ballot box must be delivered to the custodian of the key pursuant to the Texas Election Code, §66.060.

(m) The box containing the counted ballots may not be opened unless the count of the ballots stored on tape or other electronic means is blank or appears to be incorrect when the tabulation supervisor reloads those results on the computer or accumulator on election day. In that event, the manager of the central counting station shall direct the custodian of the box and the custodian of the key to the box to deliver those items to the central counting station.

(n) The Central Counting Station personnel may convene only once prior to election day to count early votes. Any ballots received after the ballot board judge delivered the ballots to the manager shall be counted on election day.

(o) The central counting station personnel will reconvene on election day at a time determined by the manager. Prior to the start of counting any ballots, the 2nd test must be conducted to determine the tabulating equipment is tabulating correctly. After a successful test has been conducted, the results of the early voting count shall be loaded into the tabulating equipment. The tabulation supervisor must run the same report showing the number of the ballots counted. This report must be compared with the report ran after the conclusion of counting before election day.

(p) If the two reports do not match, the count of the ballots prior to election day is void. The tabulation supervisor shall zero out the votes loaded on the tabulating machine. After a 2nd test is successfully conducted, all ballots counted prior to election day must be rerun.

(q) On election day, the counting of early votes and election day votes shall be conducted in accordance with the procedures set forth in the Texas Election Code.

**History**
- *Source Note: The provisions of this §81.36 adopted to be effective March 28, 2002, 27 TexReg 2218.*

##### **1 Tex. Admin. Code § 81.37** Counting Late Ballots {#sec-81.37 omnilex-key=us-tx-regs-official--title-1--81.37}

(a) General provisions

(1) For general elections for state and county officers, the early voting ballot board shall reconvene on the 6th day after the election to count any late ballots received in accordance with the Texas Election Code, §86.007. For all other elections, the early voting ballot board may reconvene any time after the 2nd day after the election and prior to the official canvass.

(2) The presiding judge shall notify the early voting clerk of the time and place where the board will reconvene. The notice to the early voting clerk must be made in time so the early voting clerk may give proper notice of the delivery of the late ballots. The early voting clerk must post notice of delivery of jacket envelopes and any other accompanying papers to the ballot board at least twenty-four (24) hours prior to the delivery. The notice shall be posted at the main early voting polling place. For purposes of this provision, the Texas Election Code, §1.006 does not apply.

(3) The presiding judge shall send notice to the custodian of the key and the custodian of election records to redeliver the ballot box containing the counted ballots and the key to the box. After the late ballots have been counted, the presiding judge shall lock the late counted ballots in the ballot box. The presiding judge shall deliver the ballot box to the general custodian of election records and the key to the ballot box to custodian of the key.

(4) Poll watchers are entitled to be present for the late counting of ballots.

(5) If all mail ballots were received by the close of voting on election day or no ballots were received by the appropriate deadline for the election, the early voting clerk shall certify that fact and deliver the certification to the canvassing board before it convenes to canvass the votes.

(b) Provisions For Paper Ballots

(1) Once the ballots have been qualified, the presiding judge shall use the regular method of counting ballots by keeping three new tally sheets, counting the ballots by precinct, and having two members present per tally team. For purposes of this provision, the Texas Election Code, §87.1231(b) does not apply.

(2) Once the board has counted all the ballots, an original and three copies of the return sheet shall be prepared.

(3) The distribution of the tally sheets and return sheets shall be made in accordance with the Texas Election Code, Subchapter B, Chapter 66.

(4) The canvassing board shall add the returns from both early voting return sheets when canvassing the vote.

(c) Provisions for Electronic Voting Systems

(1) The manager of the central counting station shall decide whether the ballot board shall manually count the ballots and be manually added to the computer count for a canvass total or whether the central counting station shall reconvene.

(2) The manager shall send notice to the presiding judge of the ballot board prior to the reconvening the board as to whether the ballots are to be counted manually by the board or whether the ballots are merely to be prepared for delivery to the central counting station.

(3) If the ballots are to be counted by the central counting station, the manager must post notice at least twenty-four (24) hours prior to reconvening the central counting station. For purposes of this provision, Texas Election Code, §1.006 does not apply.

(4) A ballot transmittal form must be completed by the presiding judge of the ballot board. The transmittal form will accompany the qualified ballots.

(5) The manager must order a second test to be conducted prior to the count. The test must be successful.

(6) Poll watchers are entitled to be present at the central counting station.

(7) After the second successful test is conducted, the unofficial election results, preserved by electronic means, shall be loaded in the tabulating equipment.

(8) The tabulation supervisor shall print a status report before the count begins. This status report shall be compared with the report run on election night. If the two status reports do not match, the electronic ballots must be counted by hand and manually added to the returns printed on election night.

(9) If the status report matches the report run on election night, the tabulation supervisor may order the count to begin. The precinct returns from these counts may be included with the original precinct counts. The tabulation supervisor does not need to keep the precinct-by-precinct results of the late ballots separate from other early voted ballots.

(10) Once the ballots have been counted, results shall be prepared in the regular manner. The manager shall prepare a certification and attach it to the returns, then place the certification and returns in envelope #1 to be delivered to the presiding officer of the canvassing board indicating that the result supersedes any returns printed prior to the reconvening of the central counting station after election day.

(11) After the results have been prepared, a successful third test must be performed.

(12) The results, ballots, and distribution of ballots and all records shall be made in the regular manner.

**History**
- *Source Note: The provisions of this §81.37 adopted to be effective March 28, 2002, 27 TexReg 2218.*

##### **1 Tex. Admin. Code § 81.38** Administration of Voter Registration Associated with Address Confidentiality Program {#sec-81.38 omnilex-key=us-tx-regs-official--title-1--81.38}

(a) Definitions. For purposes of this section, the following words and phrases have the following meanings:

(1) Protected applicant--A certified participant or an eligible spouse or dependent of a certified participant in an address confidentiality program administered by the Office of the Attorney General as authorized by Chapter 56, Subchapter C, Texas Code of Criminal Procedure.

(2) Eligible household member--A person who is living in the same household or dwelling of a certified participant in an address confidentiality program administered by the Office of the Attorney General as authorized by Chapter 56, Texas Code of Criminal Procedure, and who is otherwise eligible to vote using a confidential ballot application, without regard to whether they are related to the certified participant.

(3) Early Voting Clerk--The election officer for a county, and any other local political subdivision, who bears responsibility for the administration of early voting, as specified in Chapter 83, Texas Election Code.

(4) Confidential application for ballot by mail--An application for a confidential ballot by mail completed and signed by a protected applicant. The confidential application for ballot by mail also acts as a temporary voter registration application while the applicant is in the address confidentiality program.

(5) Confidential roster of protected applicants--A list of voters who have voted by means of a confidential ballot by mail.

(6) Substitute post office box address--A post office box address supplied to a certified participant in an address confidentiality program administered by the Office of the Attorney General.

(7) True residence address--The address of the permanent fixed place of habitation of a certified participant in an address confidentiality program administered by the Office of the Attorney General.

(8) Confidential ballot--A ballot marked and voted by a protected applicant or any eligible household member of an applicant.

(b) Process for Completing the Confidential Application for Ballot by Mail. As required by §13.002(e) of the Texas Election Code, a protected applicant is not eligible to vote early by mail unless:

(1) the person submits by personal delivery a Confidential application for ballot by mail to the early voting clerk.

(2) To complete the application process and qualify to receive confidential ballots by mail, a protected applicant must point to a specific location on an official map of the political subdivision if able to do so, or may orally describe the location in sufficient detail to permit identification of the political subdivisions in which the protected applicant resides. The protected applicant must then swear or affirm to the early voting clerk that the protected applicant's place of residence as defined in §1.015 of the Texas Election Code is located within that specifically identified location.

(3) Upon the protected applicant's indication or description of the geographic location of the voter's residence, the early voting clerk must record the jurisdictional codes for every political subdivision in which the protected applicant resides on the protected applicant's confidential application for ballot by mail.

(4) Components of a confidential application for ballot by mail.

(A) A confidential ballot application must include:

(i) the protected applicant's full name and former name, if any;

(ii) the month, day, and year of the applicant's birth;

(iii) a statement that the protected applicant is a United States citizen;

(iv) a statement that the protected applicant is a resident of the county;

(v) a statement that the protected applicant has not been determined by a final judgment of a court exercising probate jurisdiction to be mentally incapacitated or partially incapacitated without the right to vote;

(vi) a statement that the protected applicant has not been finally convicted of a felony, or if convicted, that the protected applicant is eligible to register to vote as authorized by §13.001, Texas Election Code;

(vii) a protected applicant's substitute post office box address (which for uniformity's sake may be pre-printed on an application form);

(viii) the protected applicant's Texas driver's license number, personal identification number, or last four digits of the protected applicant's social security number, or a statement that the protected applicant has not been issued either number; and

(ix) an affidavit of confidentiality stating, "I swear or affirm that I am a certified participant or eligible household member of a certified participant in an address confidentiality program administered by the Texas Attorney General as described in Chapter 56, Texas Code of Criminal Procedure. I understand that by completing this application, it is my responsibility to cancel my voter registration in any county in which I may have been registered to vote, if my voter registration was not previously canceled. It is also my responsibility to cancel any confidential application for ballot by mail that was filed in a county of previous residence. I understand that I am requesting a ballot by mail for every election conducted by the early voting clerk within the boundaries of the territories in which I reside until my address confidential certificate expires (three (3) years after the application is submitted) or your office receives notice that I am no longer in the program or my ballot by mail has been returned as undeliverable, whichever occurs first."

(B) The early voting clerk may not transcribe, copy, or otherwise record a confidential application for a ballot by mail. The application is not a public record, and must be stored in a secure manner that does not compromise the privacy of the information therein.

(C) Upon notification in writing from the Texas Attorney General that a particular protected applicant has not been re-certified for participation in the address confidentiality program or upon return of a protected applicant's ballot by mail as undeliverable, the early voting clerk may not mail additional mail ballots to the protected applicant until receipt of a new application filed by the applicant in person. Any confidential applications shall be preserved for the 22-month period following the expiration or cancellation of the confidential application in the same manner as precinct election records pursuant to §66.058, Texas Election Code. After the preservation period expires, the early voting clerk will destroy the application and any written reference to the jurisdictional codes assigned to the applicant.

(c) Confidential Status of Protected Applicant's Identity. In compliance with §56.88, Texas Code of Criminal Procedure, the true residence address of a protected applicant shall not be solicited and is not required as part of the application process. No record may be made of any accidental revelation of the true residence address (whether implied by the protected applicant's oral description of his or her residence within the county, revealed by the applicant's silent indication of residence location on a county map or as the result of some other disclosure furnished on a confidential application), and the applicant's true residence address is confidential and does not constitute public information for purposes of Chapter 552, Texas Government Code, or §1.012, Texas Election Code.

(d) Restriction on Voting by Personal Appearance. The confidential application for ballot by mail shall constitute the protected applicant's application to register to vote for so long as the protected applicant remains in the program, or until such time as the protected applicant's application for ballot by mail remains valid. A protected applicant shall not be permitted to vote by personal appearance either during early voting or on Election Day in any election for so long as the applicant's application for ballot by mail remains valid.

(e) Local Election Ballots. The county early voting clerk is responsible for providing ballots to the protected applicant for any elections conducted by the county. In order to receive a ballot for an election conducted by a local political subdivision other than a county, the protected applicant must appear in person at the office of the local political subdivision's early voting clerk and submit a confidential application for ballot by mail.

(f) Voting Procedure for Protected Applicant.

(1) On the later of either 45 days before any election conducted in the protected applicant's territory or as soon as ballots are available and ready to be mailed to any by mail, overseas citizen, or military voters, the early voting clerk shall mail a ballot for that election to the protected applicant at the substitute post office box address provided.

(2) The ballot, carrier envelope, and other by mail voting materials supplied to a protected applicant shall be the same as provided to voters who vote by mail due to absence from the county during early voting, except that the county early voting clerk shall number the carrier envelope with the number representing the protected applicant's place on the confidential roster of protected applicants.

(3) The early voting clerk shall also mark and initial the carrier envelope to indicate that the ballot is voted under this administrative rule.

(4) The protected applicant must mark and seal the ballot in the same manner as any voter voting by mail. The protected applicant completes the carrier envelope in the regular manner.

(g) Confidential Roster of Protected Applicants. Upon acceptance of a confidential application for ballot by mail, the early voting clerk shall list the applicant's name on the early voting roster of protected applicants, the date the ballot was mailed out, and the date the voted ballot was received by the early voting clerk. A protected applicant to whom a ballot is provided is not included on the regular early voting roster.

(h) Confidential Roster Not Subject to Disclosure. In compliance with §56.88, Texas Code of Criminal Procedure, the names of protected applicants listed on the confidential roster of protected applicants are not available for public inspection or copying, and are categorized as confidential records that are not subject to public disclosure in reply to requests under the Texas Public Information Act.

(i) Processing Confidential Ballots Voted by Protected Applicants. Upon receipt of a carrier envelope containing a ballot from a protected applicant, the early voting clerk shall make a note on the confidential roster of protected applicants showing the date of receipt. The results shall be processed in accordance with the procedures applicable to processing early voting ballots voted by mail, except that the comparison of the signatures on the confidential ballot application and the carrier envelope shall be conducted by the early voting clerk. The early voting clerk shall record on the confidential roster all ballots accepted for counting after the signature review is completed. If the signature on the carrier envelope and signature on the confidential application are determined not to have been made by the same person, the clerk shall treat the ballot as not timely returned in accordance with §86.011, Texas Election Code and indicate this reason on the confidential roster. The carrier envelopes from voters in the Address Confidentiality Program shall be delivered to the early voting ballot board in an envelope designated as "Envelopes for Confidential Ballots" together with the Early Voting Roster of Protected Voters. The confidential applications for ballot by mail are not delivered to the board but are kept by the county early voting clerk. The early voting ballot board shall verify the carrier envelopes received with the early voting roster of Protected Applicants to ensure that the number of carrier envelopes do not exceed the number of names on the roster. If there is no date of receipt indicated on the roster, there will not be a carrier envelope for that person.

(j) Early Voting Ballot Board Review. Notwithstanding the absence of comparing signatures, the early voting ballot board shall treat as valid all carrier envelopes marked as containing confidential ballots voted pursuant to this section that were received in the envelope for confidential ballots. The carrier envelopes shall be opened and set aside, and the security envelopes containing the voted confidential ballots shall be set aside with all other accepted ballots by mail. The ballots shall be counted with the other accepted ballots by mail. The number of ballots voted and counted under this section would have already been recorded on the Confidential Roster of Protected Applicants pursuant to subsection (i) of this section.

**History**
- *Source Note: The provisions of this §81.38 adopted to be effective September 11, 2008, 33 TexReg 7511.*

##### **1 Tex. Admin. Code § 81.39** E-mailing and Tracking Balloting Materials Required by the Federal Military and Overseas Voter Empowerment Act (MOVE) {#sec-81.39 omnilex-key=us-tx-regs-official--title-1--81.39}

(a) Authorization for e-mailing of unmarked ballots to absent uniformed services voters, including their spouse and dependents (collectively "uniformed services voters"), absent from their county of residence and overseas voters in elections for federal office.

(1) Pursuant to §578(a) of the MOVE Act, uniformed services voters, temporarily residing outside their county of residence and United States citizens currently residing overseas ("overseas citizen") may request by e-mail the e-mail transmission of blank balloting materials from the appropriate county early voting clerk for an election in which a federal office is on the ballot. The request may be submitted to the early voting clerk by e-mail or, if the e-mail is different from the one shown on the federal postcard application (FPCA) on file, on a newly-submitted FPCA.

(2) If no preference for ballot transmittal is indicated, the early voting clerk shall send the balloting materials to the applicant via regular mail.

(3) E-mail addresses are not subject to public disclosure to the extent provided by §552.337 of the Texas Government Code. Early voting clerks shall ensure that the applicant's e-mail address is excluded from public disclosure.

(4) The e-mail transmission of ballots shall be limited to elections in which an office of the federal government is on the ballot. Ballots for other elections shall be mailed to the applicant in the usual manner, unless the election is part of a joint election ballot containing a federal office.

(b) Voter's are eligible to request ballots via e-mail if the following conditions in paragraphs (1) - (8) of this subsection are met:

(1) The voter meets the eligibility requirements of voting by mail pursuant to §101.001 of the Texas Election Code (hereinafter referred to as applicant);

(2) The applicant has submitted a valid FPCA;

(3) If the applicant is an overseas citizen, he/she must provide a current mailing address that is located outside of the United States, and the applicant must be voting from outside of the United States;

(4) If the applicant is an absent uniform services voter, he/she must provide a mailing address that is located outside his or her county of residence, and he/she must be voting from outside the county of residence;

(5) The applicant must provide an e-mail address to which the unmarked ballot shall be transmitted that corresponds to the e-mail address provided on his or her previously filed FPCA. If the applicant wishes the unmarked e-mail ballot to be transmitted to an e-mail address other than the one provided on his or her FPCA on file at the time of the request, the applicant must submit a new, signed FPCA which contains that e-mail address;

(6) The applicant submits the request that his or her ballot be e-mailed on or before the 7th day before election day;

(7) A marked voted ballot for the requested election has not yet been received from the applicant by the early voting clerk; and

(8) The request is received on or after October 28, 2009, the effective date of the MOVE Act.

(c) Balloting materials which must be transmitted via e-mail include:

(1) the appropriate ballot;

(2) ballot instructions, including instructions that informs applicants that their ballots must be returned by mail in order to be counted;

(3) Office of the Secretary of State instructions on about how to print a return envelope from the Federal Voting Assistance Program (FVAP) website;

(4) Office of the Secretary of State instructions explaining how to create a carrier envelope for the ballot; and

(5) the list of certified write-in candidates, if applicable.

(d) Approved methods of e-mailing the ballot and accompanying materials include the following:

(1) an attached copy of the ballot in PDF format and accompanying materials;

(2) a scanned copy of the ballot and accompanying materials; or

(3) any other method of transmitting the ballot and accompanying materials approved in writing by the Office of the Secretary of State.

(4) The Office of the Secretary of State recommends that the ballot be transmitted in an 8 1/2 x 11 format, if possible.

(e) If the initial e-mail transmission is unsuccessful, the clerk should print out the bounced e-mail and file it with the applicant's original FPCA form. The early voting clerk then shall at least twice attempt to send the applicant a notice without the ballot attachment to notify the applicant the ballot was not successfully transmitted. In forwarding the notice, the early voting clerk shall take additional care to re-review the applicant's indicated e-mail address on the original FPCA document. If the early voting clerk is able to verify a mistake on his or her part in the original e-mail transmission, or receives an acknowledgement from the applicant that the e-mail address is correct, the clerk shall attempt to re-send the ballot to the correct address. If the early voting clerk is ultimately unable to forward the ballot e-mail to the applicant, the clerk shall submit a notice by mail to the applicant's FPCA mailing address or contact the applicant by phone if the applicant has provided a telephone number. The notice shall apprise the applicant of his or her ability to submit a new FPCA either with a valid e-mail address or requesting the ballot to be sent by mail. The early voting clerk must provide a uniform level of contact with FPCA applicants. A failed e-mail transmission does not by itself authorize the clerk to forward the ballot to the applicant by mail. To change the transmission method to mail, the applicant would have to submit a new FPCA to the clerk by the appropriate deadline.

(f) Permissible method of returning ballot sent to applicant via e-mail.

(1) Applicants who receive balloting materials from the early voting clerk via e-mail must return their marked ballots by regular mail, unless eligible to return the ballot by facsimile under Chapter 105, Texas Election Code, which is limited to military voters in war zones and/or receiving hostile fire pay.

(2) Marked ballots may not be returned via e-mail. Any ballot returned via e-mail must be treated as a ballot not timely returned and is not forwarded to the early voting ballot board for processing.

(3) The deadline for a ballot to be received by the early voting clerk is the same as set out in §86.007, Texas Election Code.

(g) Processing and qualifying ballots.

(1) Upon receipt of a voted ballot provided to the applicant via e-mail, the early voting clerk shall place the carrier envelope containing the marked ballot into a jacket envelope, in which the applicant's FPCA should already be included. If the applicant's ballot was returned by facsimile under Chapter 105, Texas Election Code, the signature sheet shall also be included in the jacket envelope.

(2) The early voting clerk shall note on the early voting by mail roster any ballots e-mailed to absent uniformed services voters and overseas citizens under this rule.

(3) All jacket envelopes containing marked ballots voted in compliance with this rule must be delivered to the early voting ballot board.

(4) The board should make sure that each jacket envelope contains:

(A) a copy of the applicant's FPCA;

(B) the envelope in which the applicant returned their ballot; and

(C) the carrier envelope containing the marked ballot.

(5) The board must compare the applicant's signature as it appears on the carrier envelope (or the signature sheet if the ballot was returned by facsimile under Chapter 105, Texas Election Code) with the applicant's signature as it appears on the FPCA. If the board determines that the signatures could have been written by the same person, the ballot shall be accepted.

(6) The early voting clerk must allow all applicable deadlines to expire before sending either an original mail ballot or an e-mailed ballot to the early voting ballot board. If within the applicable deadlines, an applicant returns both an original mail ballot and an e-mailed ballot, only the e-mail ballot may be accepted. The original mail ballot is not forwarded to the early voting ballot board, but instead treated as a ballot not timely returned, and but is retained for the elections retention period.

(7) If the applicant returned only the mail ballot by the applicable deadline, the mail ballot may be accepted.

(h) Counting ballots. The qualified, accepted ballot is handled in the following manner:

(1) Open the carrier envelope and remove the ballot envelope.

(2) Place the unopened ballot envelope in a ballot box.

(3) Enter the applicant's name on the poll list for early voters.

(4) Place the copy of the applicant's FPCA, the carrier envelope, the signature sheet, and any accompanying papers back in the jacket envelope.

(5) Count the ballot(s), either by hand counting or electronically, in the manner established for the election by the early voting clerk.

(i) Duplicating e-mailed ballots. At the discretion of the central counting station manager, after acceptance by the early voting ballot board, an e-mailed ballot may be duplicated under procedures set out in §127.126, Texas Election Code.

(j) Rejecting ballots.

(1) If the applicant's FPCA and carrier envelope do not meet all the requirements outlined in subsection (f) of this section, the ballot must be rejected and may not be counted.

(2) The rejected ballot should be processed by:

(A) Writing the word "Rejected" on the carrier envelope;

(B) Writing the word "Rejected" on the corresponding jacket envelope;

(C) Placing the unopened carrier envelope containing the rejected ballot in the large envelope or container marked "Rejected Early Ballots";

(D) Having the presiding judge sign and seal the "Rejected Early Ballot" envelope.

(3) The presiding judge must also write the date and nature of the election on the envelope.

(4) A record must be kept of the number of rejected ballots placed in the "Rejected Early Ballot" envelope.

(5) A notation must be made on the carrier envelope of any ballot which was rejected after the carrier envelope was opened, stating the reason the carrier envelope was opened and rejected.

(6) The applicant's FPCA, signature sheet, and any other accompanying papers and affidavits must be placed in the jacket envelope.

(7) The presiding judge of the board must forward a notice of the reason for the rejection to the e-mail address to which the ballot was originally transmitted in addition to the mailed notice of rejection to the applicant's residence address required under §87.0431, Texas Election Code.

(k) Tracking balloting materials. MOVE requires each state to develop a tracking system FPCA applicants may access to determine if their voted ballot has been received back by the early voting clerk. The Office of the Secretary of State will create a military and overseas voter ballot tracking website, and each county will be required to submit specific FPCA application and ballot status data, which will populate the FPCA tracking website.

(1) Submission of FPCA records. The early voting clerk must submit to the Office of the Secretary of State a voter record for each FPCA that is timely received for the November 2, 2010 general election. The three approved submission methods for submitting FPCA data are:

(A) Voter Import Method. The voter import is a prescribed, standard format issued and supported by the Office of the Secretary of State in which data may be submitted in mass to update the Texas Election Administration Management System ("TEAM"). The early voting clerk may submit the voter import or may work in cooperation with the county voter registrar to submit the voter import.

(B) TEAM Data Entry Method. The early voting clerk may directly input FPCA voters into the TEAM application.

(C) Spreadsheet Submission Method. The early voting clerk may submit a spreadsheet which contains required data for all effective FPCA applicants. The spreadsheet format will be prescribed by the Office of the Secretary of State and sent to all counties by July 31, 2010, and will contain the following fields:

(i) County name;

(ii) Election name;

(iii) Voter last name;

(iv) Voter first name;

(v) Voter former name, if any;

(vi) Voter date of birth;

(vii) Voter residential zip code; and

(viii) FPCA status (military or spouse or dependent of military, U.S. citizen temporarily residing outside of U.S., or U.S. citizen indefinitely residing outside of U.S.).

(2) Deadline to submit FPCA voter record.

(A) Records for all FPCAs on file as of September 1, 2010 must be submitted to the Office of the Secretary of State no later than September 7, 2010.

(B) Records for FPCAs that are submitted to the early voting clerk after September 1, 2010, must be submitted to the Office of the Secretary of State within 3 working days of receipt by the early voting clerk.

(3) Submission of voted ballot status. The early voting clerk must submit to the Office of the Secretary of State the following information concerning the ballot status for each FPCA record:

(A) Date ballot mailed, e-mailed or both;

(B) Date ballot(s) received; if applicable;

(C) Date ballot returned by the post office, if applicable;

(D) Whether the ballot(s) received was accepted or rejected.

(4) The early voting clerk may submit the ballot status data by one of the following three methods:

(A) Voting History Import to TEAM.

(B) Data entry directly into TEAM.

(C) Updates to FPCA Spreadsheet.

(5) Deadline to submit ballot status data. The early voting clerk must submit the ballot status information required under paragraph (3) of this subsection within 3 business days of the status change.

**History**
- *Source Note: The provisions of this §81.39 adopted to be effective August 1, 2010, 35 TexReg 6507.*

##### **1 Tex. Admin. Code § 81.40** Federal Postcard Application as Application for Permanent Registration and FPCA Eligibility for Electronic Transmission of Image {#sec-81.40 omnilex-key=us-tx-regs-official--title-1--81.40}

(a) Eligibility. Pursuant to §101.001 and §101.006 of the Texas Election Code, a person is eligible to submit a Federal Postcard Application (an "FPCA") as an application for permanent registration if:

(1) the person is qualified to vote in this state or, if not registered to vote in this state, would be qualified if registered; and

(2) the person is:

(A) a member of the armed forces of the United States, or the spouse or a dependent of a member;

(B) a member of the merchant marine of the United States, or the spouse or a dependent of a member; or

(C) domiciled in this state but temporarily living outside the territorial limits of the United States and the District of Columbia who is qualified to submit an FPCA.

(b) General Conduct of Voting. The FPCA serves simultaneously:

(1) as a request for a mail ballot from the early voting clerk for a period of two federal elections; and

(2) as a request for permanent registration in the county in which the voter resides, unless the voter states that he or she resides indefinitely outside the United States.

(c) Action on original FPCA by early voting clerk.

(1) The FPCA must be submitted to the early voting clerk for the election who serves the election precinct of the applicant's residence. The FPCA may be submitted by mail, telephonic facsimile (fax), or an electronic transmission of the image to an authorized recipient (for example, scanning and attaching to an email) to the address of the early voting clerk.

(2) The early voting clerk shall make a notation of the name of the office and date and time of receipt, then make a complete copy (front and back, and any accompanying envelopes or fax cover sheets) of the FPCA to retain for mail balloting purposes. The early voting clerk shall then forward the original FPCA (and any accompanying envelopes or fax cover sheets) to the county voter registrar for the county, in which the applicant's Texas residence address is located, as soon as practicable, but no later than within five days, so that the FPCA may be processed as an application for permanent voter registration, even if the FPCA is insufficient as a mail ballot request. This deadline does not supersede the deadlines to mail out ballots pursuant to §86.004, Election Code. The early voting clerk's copy functions as the official FPCA for all mail balloting purposes for elections, including purposes necessary during the early voting ballot board meeting, and the copy shall be maintained as an election record for 22 months after the last election in which the FPCA is processed for mail balloting purposes, pursuant to §66.058, Election Code. Once the early voting clerk makes a copy for early voting purposes, that copy is considered the "original" for purposes of public information requests made of the early voting clerk, including the rules concerning originals at §86.014, Election Code.

(3) The authorized recipient will notate the name of the office receiving the FPCA and the date and time of receipt on the face of the FPCA, before taking any action on the original FPCA. Failure to make these notations will not affect the overall validity of the FPCA, even if the calculation of the date of receipt is affected.

(4) Processing defective FPCAs.

(A) Incorrect territory. If the Texas residence address provided on the FPCA indicates an address outside the early voting clerk's territory, the clerk shall make a copy for his or her records, and immediately forward the original FPCA to the correct jurisdiction's early voting clerk not later than the day after it is received, pursuant to §101.004(d), Election Code. The (incorrect) early voting clerk shall send the voter a notice of rejection on behalf of his or her jurisdiction pursuant to §86.001(f), Election Code, and include a statement that the FPCA has been forwarded to the correct early voting clerk. If the early voting clerk cannot determine the correct jurisdiction based on the residence address, the early voting clerk shall seek assistance from the office of the county voter registrar or the secretary of state. Regardless of whether the early voting clerk's territory is incorrect, the early voting clerk shall forward a courtesy copy of the FPCA to the voter registrar for that clerk's territory (so that the voter registrar may provide a second review of the voter's address).

(B) Mail balloting errors other than voter registration. For any other voter errors resulting in an insufficient mail ballot request, the early voting clerk shall send the voter a notice of rejection pursuant to §86.001, Election Code, even though the FPCA is still forwarded to the voter registrar for purposes of an application for permanent voter registration.

(d) Action on FPCA by county voter registrar.

(1) Upon receipt of the original FPCA from the early voting clerk, the county voter registrar shall immediately review the FPCA to see if the voter's permanent residence address places the voter in their Texas county. The voter registrar shall process the FPCA in the same manner as a regular voter registration application. For any errors that make the FPCA insufficient for voter registration, the voter registrar shall send the voter a notice of rejection or notice of incomplete, whichever is appropriate in accordance to §13.073, Election Code. The original shall be kept by the county voter registrar for the retention period applicable to applications for permanent voter registration.

(2) If the applicant states on the FPCA that he or she resides outside the United States indefinitely, the voter registrar shall not treat any such FPCA (which was incorrectly forwarded to the registrar) as an application for permanent voter registration and shall notify the early voting clerk that the FPCA was forwarded to the voter registration office in error.

(3) If the FPCA was sent to the wrong Texas county, the registrar shall make a notation of the date received by his or her office, notify immediately the early voting clerk in their county of the error so that a ballot is not sent for their county, then immediately forward the original FPCA to the correct early voting clerk so that the clerk can process the FPCA in accordance with subsection (c) of this section (unless the early voting clerk has already determined that his or her county is incorrect in accordance with subsection (c)(4)(A) of this section).

(4) Request for Return of Original FPCA. A voter registrar who records voter registration data for storage purposes on optical disk or other computer storage medium, shall, upon request of the early voting clerk, deliver the original FPCA to the early voting clerk before destroying the original FPCA.

(5) If the voter registrar receives a courtesy copy of an FPCA from an early voting clerk (based on initial determination of incorrect territory by the clerk), and the voter registrar has information that confirms that their county is the correct county, the voter registrar shall contact the original early voting clerk immediately to begin the processing of the FPCA in subsection (c) of this section. The early voting clerk shall notify the early voting clerk to whom the FPCA was forwarded of the mistake.

(e) Timeliness of FPCA for mail ballot request purposes.

(1) The FPCA is considered received for mail ballot request purposes on the date of actual receipt by the early voting clerk, pursuant to §§101.002, 101.004, 84.007(d), Election Code.

(2) If the FPCA is first received by the county voter registrar's office, the FPCA is considered received as a request for mail ballot for purposes of an election when the county voter registrar receives the FPCA on behalf of the county.

(3) Pursuant to §101.004(d), Election Code, a timely FPCA addressed to the wrong early voting clerk shall be forwarded to the correct early voting clerk not later than the day after it is received by the wrong early voting clerk.

(4) Pursuant to §101.004, Election Code, if an otherwise compliant FPCA is postmarked, or received without postmark within the prescribed dates, the applicant, who:

(A) is not otherwise permanently registered; and

(B) has not stated that he or she is residing outside the United States indefinitely, will receive a full ballot based on the temporary registration status obtained by using the FPCA; otherwise, the applicant will only receive a "federal ballot" (federal offices only) pursuant to §101.004(f), Election Code. If the applicant states that he or she is residing outside the United States indefinitely, the early voting clerk does not forward the FPCA to the voter registrar since the FPCA will not constitute a permanent voter registration application, and the FPCA will be treated as a temporary registration and request for mail ballot for a period of two federal elections in accordance with §101.005 and §101.006(a), Election Code.

(5) The statutes governing the method of transmission of a mail ballot request shall govern the method of transmission of an FPCA generally as provided by §101.002, Election Code and additionally as provided by §101.004, Election Code as amended.

(A) A scanned FPCA may be submitted to an early voting clerk whose office has e-mail available via an electronic transmission of an image, pursuant to §101.004, Election Code. The date of submission of the scanned FPCA is determined by the date and time the electronic transmission of an image (e.g., e-mail) was sent by the applicant.

(B) If the FPCA is submitted by telephonic facsimile (fax) pursuant to §84.007, Election Code, the date of submission is determined by the date and time of receipt as reflected by the time of receipt on the faxed document (unless the authorized recipient can verify that the fax machine is in error and the receipt is personally witnessed as being timely).

(f) Timeliness of FPCA for voter registration purposes.

(1) The FPCA is considered submitted for purposes of an application for permanent voter registration for any FPCA received by an authorized recipient on or after September 1, 2009, pursuant to §13.002, Election Code as amended by House Bill 536 (2009).

(2) The FPCA is considered submitted for purposes of an application for permanent voter registration based on the "date of submission" to the first authorized recipient (e.g., an early voting clerk or county voter registrar), regardless of whether the FPCA was received in the correct county, pursuant to §13.072, Election Code.

(3) The date of submission of the FPCA for purposes of an application for permanent voter registration is defined as:

(A) the date of the postmark, if any, in accordance with §13.143(d), Election Code; or

(B) indicia of the time and date the voter deposited the FPCA with the common or contract carrier; or

(C) if the FPCA submitted by mail or common or contract carrier has no postmark or other indicia of the time and date the voter deposited the FPCA with the common or contract carrier, the date of submission is then determined by the date of actual receipt by the first authorized recipient; or

(D) if the FPCA is submitted by electronic transmission of an image (e.g., e-mail), the date of submission of the scanned signed FPCA is determined by the date and time the electronic transmission of an image (e.g., e-mail) was sent by the applicant; or

(E) if the FPCA is submitted by telefacsimile (fax), the date of receipt as reflected by the time of receipt on the faxed document (unless the authorized recipient can verify that the fax machine is in error and the receipt is personally witnessed as being timely).

(4) This rule does not authorize the e-mailing, faxing, or other electronic transmission of an image of a regular (non-FPCA) voter registration application.

(g) Jury Lists. Voters whose temporary registrations are based on an FPCA will not form the basis for the jury lists. Voters whose permanent registrations are based on an FPCA will not form the basis for the jury lists until the FPCA ceases to function as a basis for sending the voter a ballot by mail (either because of expiration or cancellation of the mail ballot request by the voter). When an FPCA voter later renews or otherwise creates a registration status based on a regular voter registration application, that registration status will be the basis for the jury lists.

(h) Petition Signatures. The FPCA voters with temporary or permanent registration status are not included in the number of registered voters of a territory when calculating the number of signatures needed for a petition. This does not bar an FPCA voter with permanent registration status (who is otherwise eligible to sign a petition) from signing a petition.

(i) Definitions.

(1) ABBM--Application for Ballot by Mail.

(2) Authorized recipient--An early voting clerk or county voter registrar. A volunteer deputy registrar is not an authorized recipient of a Federal Postcard Application.

(3) Early voting clerk--The early voting clerk for a county election or a non-county election in which the county early voting clerk is the early voting clerk by joint election agreement or election services contract; or, the early voting clerk for a local political subdivision election (Example: city, school district, water district).

(4) E-mail--For purposes of these rules refers to a signed hardcopy FPCA which is scanned and attached to an e-mail.

(5) FPCA--Federal Postcard Application.

(6) Permanent voter registration--The registration status equivalent to a voter who applies with a regular application for voter registration.

(7) Temporary voter registration--The type or types of registration status based on the FPCA alone under the Texas Election Code and Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), before the permanent voter registration is effective.

**History**
- *Source Note: The provisions of this §81.40 adopted to be effective November 22, 2009, 34 TexReg 8025.*

#### **Subchapter C** VOTING SYSTEMS

##### **1 Tex. Admin. Code § 81.42** Paper Ballots for Precinct Chairman {#sec-81.42 omnilex-key=us-tx-regs-official--title-1--81.42}

In primary elections where voting for precinct chairman is to be conducted on separate paper ballots pursuant to the Texas Election Code, §172.090, the form of the paper ballot used must conform to the requirements of the Texas Election Code, Chapter 52, for paper ballots. Where voting for the party office of precinct chairman is to be conducted on separate paper ballots at polling places using electronic voting systems, pursuant to the Texas Election Code §172.090, the form of the separate paper ballot used must conform to the requirements of the Texas Election Code, Chapter 52, for paper ballots.

**History**
- *Source Note: The provisions of this §81.42 adopted to be effective June 27, 1986, 11 TexReg 2739; amended to be effective March 28, 2002, 27 TexReg 2218.*

##### **1 Tex. Admin. Code § 81.43** Optical Scanner Ballots {#sec-81.43 omnilex-key=us-tx-regs-official--title-1--81.43}

Optical scanner ballots may be divided into parts and printed upon two or more pages. When party columns appear on the ballot, there shall be printed at the head of the ballot the names of the parties and spaces for voting a straight party ticket, so that a voter may cast a straight ticket vote for all of a party's nominees on the ballot by making a single mark on the first page of the ballot. Where all candidates for the same office cannot be placed on the same face of the same page, the candidates may be carried on more than one page, but in such event the first page of the sequence shall contain a statement that the names of other candidates appear on the following page or pages. If the ballot is printed on more than one page, different tints of paper other than yellow, or some other suitable means may be used to facilitate the sorting of ballots. Each page shall bear the same ballot number, and other appropriate provision may be made for identifying the related parts of the ballot. For a mark-sense optical scanner voting system to be in compliance with the requirement of the Texas Election Code, §1.005(20) and §122.001(a)(10), it must provide for a single ballot card capable of containing all the candidates in an election in which candidates run by party, or alternatively, be programmed to permit straight party voting by means of a single mark, regardless of the number of ballot cards utilized. A system providing for straight party voting by means of a single mark on each of two or more separate ballot cards is not in compliance with the Election Code.

**History**
- *Source Note: The provisions of this §81.43 adopted to be effective June 27, 1986, 11 TexReg 2739; amended to be effective March 28, 2002, 27 TexReg 2219.*

##### **1 Tex. Admin. Code § 81.45** Inspection of Voting System Equipment {#sec-81.45 omnilex-key=us-tx-regs-official--title-1--81.45}

(a) Before voting machines are delivered to polling places for use in an election, they must be inspected, and a written record made of the inspection, pursuant to the Texas Election Code, §125.031.

(b) Other voting or tabulating equipment to be delivered to polling places must be inspected by the authority responsible for delivering supplies for the election and put in proper working order prior to delivery. A punch-card device must be tested by such authority to ensure that the device permits the accurate recording of votes for each race and/or proposition on the ballot. Test ballot cards should be used for this purpose.

(c) Electronic tabulating equipment which is to be used at polling places must be tested by the authority to ensure that the equipment accurately counts ballots, distinguishes and separates ballots which require manual tabulation, and otherwise functions properly. Such test must be conducted in accordance with the provision of the Texas Election Code, §127.094(b) and (c).

**History**
- *Source Note: The provisions of this §81.45 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.46** Delivery of Voting System Equipment {#sec-81.46 omnilex-key=us-tx-regs-official--title-1--81.46}

The authority responsible for distributing election supplies for an election shall arrange for the delivery of voting systems equipment to the polling places. Delivery of such equipment must be made by such authority, by the presiding judge of the polling place, by the sheriff or constable for an election ordered by the governor or a county authority, or by the sheriff or constable or a police officer having jurisdiction over the territory in which the polling place is located for an election ordered by other authority. Mechanical voting machines must be delivered in a locked and secured condition. The keys to such voting machines shall be delivered to the presiding judge at least 30 minutes before the polls open, in a sealed envelope on which there is recorded the number on the protective counter, the seal number, and the serial number of the voting machine the key is for.

**History**
- *Source Note: The provisions of this §81.46 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.47** Installation of Voting System Equipment {#sec-81.47 omnilex-key=us-tx-regs-official--title-1--81.47}

Voting systems equipment shall be installed at the polling place in accordance with the instructions of the authority responsible for distributing election supplies for the election. During the absence of election officers or the custodian of the premises, polling places to which voting systems equipment has been delivered must remain locked and secured.

**History**
- *Source Note: The provisions of this §81.47 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.49** Irregularities in Seals or Serial Numbers {#sec-81.49 omnilex-key=us-tx-regs-official--title-1--81.49}

If irregularities are discovered in the seals or the serial numbers of containers of voted ballots received at the central counting station, pursuant to the Texas Election Code, §127.038(d) or §127.068(c), the presiding judge of the central counting station shall make and sign a memorandum in duplicate setting forth the nature of the irregularities. One copy of the memorandum shall be attached to the copy of the returns delivered in envelope number one for the presiding officer of the canvassing authority. The presiding judge shall deliver the other copy of the memorandum to the district attorney of the county in which the voted ballots placed in such box were voted. The district attorney shall investigate the irregularities and take further action as appropriate. If more than one container of voted ballots was delivered to the central counting station from the election precinct from which the container in which irregularities were discovered was delivered, the judge shall include in the memorandum a record of the total number of ballots in the container in which irregularities were discovered, and such container shall be returned to the custodian of election records after the ballots are counted containing only the ballots delivered to the central counting station in that container. In all cases, the ballots in a container in which irregularities are discovered shall be counted and returns made as for the other ballots received at the central counting station.

**History**
- *Source Note: The provisions of this §81.49 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.50** Test Program {#sec-81.50 omnilex-key=us-tx-regs-official--title-1--81.50}

Where a program is prepared for the automatic tabulating equipment to be used for counting ballots at a central counting station, the program shall be used in the tests of such tabulating equipment provided for in the Texas Election Code, Chapter 127, Subchapter D. After the completion of the first test provided for in the Texas Election Code, §127.096, the program shall be sealed with the test materials in the container provided for by the Texas Election Code, § 127.099. After the completion of the second test, as provided for in the Texas Election Code, §127.097, the program shall be used for the count of ballots voted in the election. The program shall then be used in the third test, provided for in the Texas Election Code, §127.098, and then sealed with the test materials in the container provided for in the Texas Election Code, § 127.099.

**History**
- *Source Note: The provisions of this §81.50 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.51** Malfunction in Tabulating Equipment {#sec-81.51 omnilex-key=us-tx-regs-official--title-1--81.51}

After the discovery of a malfunction in the tabulating equipment at a central counting station, which malfunction caused the results to be incorrect as provided for in the Texas Election Code, §127.129, the presiding judge of the central counting station shall follow the procedures set out in §127. 098(c) and (d). If the presiding judge determines that obtaining a valid automatic count is impracticable, the ballots shall be counted manually, and the presiding judge shall execute and attach a certificate to the returns stating that the ballots were counted manually and stating the nature of the equipment malfunction which led him to the determination that the ballots would be counted manually.

**History**
- *Source Note: The provisions of this §81.51 adopted to be effective June 27, 1986, 11 TexReg 2739.*

##### **1 Tex. Admin. Code § 81.52** Precinct Ballot Counters {#sec-81.52 omnilex-key=us-tx-regs-official--title-1--81.52}

(a) Where an electronic voting system that does not entail the counting of ballots at central locations established under the Texas Election Code, Chapter 127, Subchapter A, is to be used at an election, the election results shall be processed in accordance with this section.

(b) If the tabulating equipment is capable of separating damaged ballots, irregularly marked ballots, and write-in ballots for manual processing, the equipment may be arranged so that voters deposit their marked ballots directly into the tabulator. The tabulator must be provided with a sealed container such that ballots deposited by voters are counted by the tabulator or separated for manual counting, as the case may be, and then placed by the device directly into the sealed container.

(c) In addition to the procedures provided herein and in §127.157 of the Texas Election Code (the "Code"), compliance with the following voting procedures is required for the proper processing of ballots to be tabulated by voting systems specifically designed as electronic precinct ballot counters ("precinct counters").

(1) The voter may deposit a ballot directly into a precinct counter. If the machine returns the ballot to the voter because the ballot is blank, mismarked, damaged, or otherwise spoiled, the voter may either attempt to correct the ballot, request another ballot once the spoiled ballot is returned to the election officer, or request the election official to override the rejection so that the precinct counter accepts the ballot, and outstacks the write-in, if necessary.

(2) The voter is not entitled to receive more than three ballots. The procedures for handling a spoiled ballot provided by §64.007 of the Code must be followed.

(3) The precinct counter must be set up to reject and return the ballot to the voter rather than outstack the ballot if it is blank, mismarked, undervoted, or overvoted.

(4) If the precinct counter rejects the ballot for any reason and the voter has received the maximum number of ballots or does not wish to make further changes to the ballot, the election official must override the rejection so that the precinct counter accepts the ballot and outstacks the write-in, if necessary.

(5) While the polls are open or as soon as practicable after the polls close, the counted ballots shall be removed from the ballot box and examined for irregularly marked ballots for processing in accordance with §127.157(b) - (e) of the Code.

(d) If the tabulating equipment is not capable of separating damaged, irregularly marked, and write-in ballots for manual counting, a container meeting the specifications of the Code for ballots boxes number one and number two must be provided for the deposit of ballots by voters after the ballots have been marked. At the direction of the presiding judge, the election officials shall unlock the ballot container and process the ballots in accordance with the provisions of the Texas Election Code, §127.034(b) and (c), and then pass the ballots to be counted electronically through the tabulator for counting.

(e) In either case, the damaged and irregularly marked ballots shall be counted manually or duplicated for automatic tabulation pursuant to §127.126 of the Code. Write-in ballots shall be counted manually, and the results added to those for ballots counted by the tabulating equipment. The results entered on the returns shall reflect the totals obtained from the count of the ballots tabulated on the tabulating equipment and from the manual count of damaged, irregularly marked, and write-in ballots.

(f) In this section, "damaged ballot" means a ballot that is damaged such that it may not be accurately counted by the tabulating equipment.

(g) The returns, ballots, and other records of the election shall then be distributed in accordance with the provisions of Chapter 66 of the Code. Ballots must be returned to the appropriate authority in a container meeting the specifications of the Code for ballot box number three.

(h) If a precinct ballot counter is to be used during early voting by personal appearance, it must have a real-time audit log. In addition, the counter must be secured to prevent tampering by the following procedure.

(1) Immediately prior to the opening of the polls on the first day of early voting by personal appearance, a zero tape shall be run. If the tape properly reads "0" for all candidates and propositions, voting may begin.

(2) At the close of each day's voting, the precinct counter's doors must be locked and sealed with a numbered paper seal. The precinct counter must be unplugged and secured for the evening.

(3) Prior to voting on each day of the period, the precinct counter must be plugged back in and a tape run to indicate that the counter has not been disturbed since the previous day's voting and that voting may continue.

(4) At the conclusion of early voting by personal appearance, the precinct counter shall be locked, sealed, and secured by the Early Voting Clerk until Election Day.

(5) At the proper time designated for tabulation, the paper seal must be inspected to determine that it is intact. The audit log must also be inspected to determine that there has been no unauthorized access to the precinct counter.

(6) If the seal is intact and the log appears in order, the seal should be broken and the ballots removed to a separate container. The polls are closed on the counter and a "totals" printout is printed. The electronic media should be removed and transferred to the accumulator.

(7) If the seal is not intact, the early voting results may not be used and the early voting ballots must be re-counted using the standard election day procedure.

(8) If the audit log indicates unauthorized activity, the early voting results may not be used and the early voting ballots must be re-counted using the standard election day procedure.

(9) The Early Voting Clerk shall place a notice on the bulletin board of the hour and location of the seal breaks and running of totals.

(10) The audit log shall be preserved for 60 days after election day, or 22 months following election day in an election involving a federal office.

(11) Any deviation from this procedure must be approved in writing by the Secretary of State.

**History**
- *Source Note: The provisions of this §81.52 adopted to be effective June 27, 1986, 11 TexReg 2739; amended to be effective March 5, 1996, 21 TexReg 1526; amended to be effective October 16, 2002, 27 TexReg 9565; amended to be effective September 28, 2017, 42 TexReg 4985.*

##### **1 Tex. Admin. Code § 81.55** Adoption of Accessible Voting Systems {#sec-81.55 omnilex-key=us-tx-regs-official--title-1--81.55}

A political subdivision may use more than one type of voting system in a single polling place in order to provide a person with physical disabilities with a method of casting a secret ballot.

**History**
- *Source Note: The provisions of this §81.55 adopted to be effective September 17, 2000, 25 TexReg 8843; amended to be effective April 9, 2006, 31 TexReg 3019.*

##### **1 Tex. Admin. Code § 81.57** Requirements for Voting System Accessibility {#sec-81.57 omnilex-key=us-tx-regs-official--title-1--81.57}

(a) A voting system shall be accessible to voters with physical disabilities including no vision, low vision (visual acuity between 20/70 and 20/200, and/or 30 degree or greater visual-field loss), no hearing, low hearing, limited manual dexterity, limited reach, limited strength, no mobility, low mobility, or any combination of the foregoing (except the combination of no hearing and no vision, see subsection (b) of this section), by providing voters with physical disabilities with a practical and effective means to cast an independent and secret ballot in accordance with each of the following, assessed independently and collectively:

(1) The voting system shall provide a tactile-input or speech-input device, or both; and

(2) The voting system shall provide a method by which voters can confirm any tactile or audio input by having the capability of audio output using synthetic or recorded human speech, which is reasonably phonetically accurate; and

(3) The voting system shall provide a means for a voter to change the voter's selection prior to the voter casting the ballot; and

(4) Any operable controls on the input device that are needed for voters without vision shall be discernable tactilely without actuating the keys. (Note: All the buttons on the device would not have to be discernable tactilely, only those buttons that are actually required for the individual to use the "operation without vision" mode.); and

(5) Any audio and non-audio access approaches shall be able to work both separately and simultaneously; and

(6) If a non-audio access approach is provided, the system shall not require color perception; the system shall use black text or graphics, or both, on white background or white text or graphics, or both, on black background, unless the office of the Secretary of State approves other high-contrast color combinations that do not require color perception; and

(7) Any voting system that requires any visual perception shall offer the election official who programs the system, prior to its being sent to the polling place, the capability to set the font size to a level that can be read by voters with low vision. (Note: Although there is no standard font size for this situation, a san-serif font of 18 points as printed on a standard 8.5 x 11 piece of paper will allow the most universal access.); and

(8) The voting system shall provide audio information, including any audio output using synthetic or recorded human speech or any auditory feedback tones that are important for the use of the audio approach, through at least one mode (e.g., by handset or headset) in enhanced auditory fashion (i.e., increased amplification), and shall provide incremental volume control with output amplification up to a level of at least 97 dB SPL, with at least one intermediate step of 89 dB SPL; and

(9) For transmitted voice signals, the voting system shall provide a gain adjustable up to a minimum of 20 dB with at least one intermediate step of 12 dB of gain; and

(10) For the safety of others, if the voting system has the possibility of exceeding 120 dB SPL, then a mechanism shall be included to reset the volume automatically to a safe level after every use (e.g., when handset is replaced) but not before; and

(11) If sound cues and audible information, such as "beeps" are used, there shall be simultaneous corresponding visual cues and information; and

(12) If a non-audio approach is used in conjunction with an audio counterpart, any spoken text shall also be presented on screen, with the exception that any auditory confirmation of a voter's selection as required by subsection (b) of this section shall not be printed in text on the screen (Note: A graphic representation of a ballot with a check, "X," etc. beside a candidate or proposition is allowed.); and

(13) All controls and operable mechanisms shall be operable with one hand, including with a closed fist, and operable without tight grasping, pinching, or twisting of the wrist; and

(14) The force required to operate or activate the controls shall be no greater than 5 lbf (pounds per square foot); and

(15) If a forward approach by a person in a wheelchair to a voting system is necessary, the maximum high-forward reach allowed shall be 48 inches (1220 mm) and the minimum low-forward reach shall be 15 inches (380 mm). If the high-forward reach is over an obstruction, reach and clearances shall be as shown in the figure below or otherwise in accordance with the ADAAG, as written at the time the system is certified for use in the state of Texas; and

Attached Graphic

(16) If a side or parallel approach by a person in a wheelchair to a voting system is necessary, the maximum side reach allowed shall be 54 inches (1370 mm) and the low side reach shall be no less than 9 inches (230 mm) above the floor. If the side reach is over an obstruction, reach and clearances shall be as shown in the figure below or otherwise in accordance with the ADAAG, as written at the time the system is certified for use in the state of Texas; and

Attached Graphic

(17) The highest operable part of controls, dispensers, receptacles, and other operable equipment shall be placed within at least one of the reach ranges outlined in paragraphs (15) and (16) of this subsection.

(b) Although we strongly encourage voting system vendors to strive to develop systems that will provide a secret ballot for all individuals, this office recognizes that the technology available at the time of the adoption of this section will not accommodate voters who have a combination of no hearing and no vision. A voting system may be considered accessible and in compliance with state law without allowing voters with a combination of no hearing and no vision to cast a secret ballot.

**History**
- *Source Note: The provisions of this §81.57 adopted to be effective September 17, 2000, 25 TexReg 8843.*

##### **1 Tex. Admin. Code § 81.58** Use of Electronic Signature Capture Device for Signature Roster {#sec-81.58 omnilex-key=us-tx-regs-official--title-1--81.58}

(a) Pursuant to §63.002(d), Election Code, a voter's signature may be captured by an electronic device for the signature roster.

(b) An "Electronic Signature" is defined as a digitized image of a handwritten signature. An "Electronic Signature Device" is defined as a device that permits a voter to make an electronic signature.

(c) To be used in an election in the State of Texas, electronic signature devices must be approved by the Secretary of State.

(1) A vendor who wishes to seek approval of an electronic signature capture device used in conjunction with a particular software must submit the request in writing to the Secretary of State.

(2) The request must include information regarding:

(A) type of device;

(B) name of device;

(C) any associated model numbers;

(D) the software it will be used with; and

(E) the information the device can display with respect to subsection (d)(3) and (4) of this section.

(3) Upon reviewing the request, the Secretary of State may request a demonstration of the electronic signature capture device.

(4) After completing the review, the Secretary of State will issue either an approval or a rejection in writing within 30 days of receiving initial request.

(5) The Secretary of State will maintain a list of approved electronic signature capture devices on their website.

(d) To be used in an election in the State of Texas, electronic signature capture devices must meet the following standards.

(1) The name of the voter must appear on the electronic signature device at the same time in which the voter is marking a signature, pursuant to §63.002(d), Texas Election Code.

(2) After marking signature, voter must be able to:

(A) indicate they are accepting the digitized image; or

(B) reject the digitized image, and be given another opportunity to mark their signature.

(3) If the electronic signature device only displays the voter's name and a place for the voter's signature, then the entity using the device must print out a copy of the signature and affix the printed signature to a hard copy of the signature roster.

(4) If the electronic signature device displays the voter's name, a place for the voter's signature, and a way for a voter to accept and initial any required affidavits on the device screen, the entity using the device may maintain their signature roster electronically.

(A) If an entity maintains their signature roster electronically, the entity must be able to produce a hard copy of the signature roster that contains the electronic signature of the voters on that list.

(B) If the signature roster used by an entity is not one of the official forms prescribed by the Secretary of State, then the alternative form must be submitted to the Secretary of State for approval.

(e) Entities using electronic signatures must retain the electronic signature file in accordance with the preservation period for the election records of that election.

**History**
- *Source Note: The provisions of this §81.58 adopted to be effective March 19, 2014, 39 TexReg 1925.*

#### **Subchapter D** VOTING SYSTEM CERTIFICATION

##### **1 Tex. Admin. Code § 81.60** Voting System Certification Procedures {#sec-81.60 omnilex-key=us-tx-regs-official--title-1--81.60}

In addition to the procedures prescribed by the Texas Election Code, Chapter 122, compliance with the following procedures is required for certification of a voting system.

(1) Application for Certification.

(2) The entity applying for certification must deliver seven copies of their completed application forms (Form 100, Form 101, and if applicable, Form 100 Schedule A), user operating and maintenance manuals, training material, nationally accredited voting system test laboratory reports, and a change log detailing changes from any previously certified system or component, to the Secretary of State no later than 45 days prior to examination. At least, six of the seven copies must be in electronic form.

Attached Graphic

Attached Graphic

Attached Graphic

(3) The applicant must have the nationally accredited voting system test laboratory (VSTL) deliver a copy of all nationally qualified software/firmware and source codes for the system and/or system components requested for Texas certification, directly to the Secretary of State no later than 45 days prior to examination.

(4) The applicant must authorize the nationally accredited voting system test laboratory to deliver all the applicable executable and installation files to the National Software Reference Library (NSRL) within 30 days after receiving federal certification.

(5) The certification fee for a new election management system, tabulation device, electronic ballot marker, and other complex component of a system is $3,000 each and must be received by the Secretary of State 45 days prior to examination. The certification fee for a modification of a voting system shall be determined by the Secretary of State according to the complexity of the modification, and must be received by the Secretary of State 45 days prior to the examination.

(6) Each application shall include authorizations for release of information along with the application for certification in the form of the following set of letters:

(A) a blanket letter addressed to the Secretary of State authorizing the release of information about the system being tested from any local, state or federal official or from any VSTL that has tested their system, upon request;

(B) a copy of a specific letter sent to the VSTL and to the federal Elections Assistance Commission (EAC) or equivalent federal commission or agency which authorizes the organizations to release information about the system being tested to the Texas Secretary of State upon the Secretary of State's request; and

(C) a list, by state, of users of their voting systems, especially those similar or identical to the system being submitted and copies of letters sent to each user which authorizes them to release any information requested to the Secretary of State.

(7) Examination Dates and Location.

(A) Certification examinations will be scheduled by the Secretary of State three times a year during the months of January, June, and September, unless extenuating circumstances provide otherwise.

(B) The time and date of each examination will not be scheduled until after the entity applying for certification has delivered all required documentation and fees to the Secretary of State.

(C) All physical examinations of voting systems will take place at the Office of the Secretary of State, Elections Division, in Austin, unless extenuating circumstances provide otherwise.

(8) Procedures.

(A) The applicant must demonstrate that the voting system meets the applicable standards outlined in the Texas Election Code and the Texas Administrative Code.

(B) The applicant must demonstrate an installation and configuration of the software/firmware on each system and system component using the Secretary of State's copy of the software/firmware received from the nationally accredited voting system test laboratory.

(C) The applicant shall furnish a sufficient number of sample ballots, designed from the templates provided by the Secretary of State, at least two weeks prior to the examination for use during the certification process.

(D) At the completion of the in-person examination period, if the Secretary of State determines that additional information is needed for the examiners to complete their examination report, the Secretary of State may:

(i) Request additional written information from the applicant; or

(ii) Request additional demonstrations of the voting system or voting system equipment submitted for examination.

(9) Voting System Examiners.

(A) Examiners must submit a written report to the Secretary of State stating his or her findings for each voting system no later than the 30th day after examination, unless written notice provided by the Secretary of State in accordance with subparagraph (C) of this paragraph provides an extended deadline.

(B) Examiner reports shall be posted on the Secretary of State's website before the public hearing held in accordance with paragraph (10) of this section.

(C) If the Secretary of State determines that due to extenuating circumstances, the examiners need more than 30 days to complete their examiner reports, the Secretary of State will provide written notice of the extended deadline to the examiners and the vendor.

(D) The Secretary of State must also post notice of the extended deadline on the Secretary of State's website from the date the extension is issued until the examiner reports are posted on the Secretary of State's website.

(E) An examiner appointed by the Secretary of State will be compensated after he or she files his or her written report.

(10) Public Hearing.

(A) A public hearing shall be held no later than 60 days from the date the examiners submit a written report to the Secretary of State.

(B) The notice for the public hearing shall be posted in accordance with Chapter 551, Government Code.

(C) Those wishing to participate in the public hearing will be required to sign in with a representative of the Secretary of State.

(D) Each person desiring to speak will be allotted 5 minutes to make their public comments.

(E) Each person desiring to provide comments in writing shall provide those written comments to the Secretary of State's representative.

(11) Written Comment Period.

(A) The Secretary of State shall accept written public comments on the voting system for a period of 10 days after the date of the public hearing.

(B) Comments shall be accepted by email at elections@sos.texas.gov, or by regular mail at: Elections Division, Secretary of State, P.O. Box 12060, Austin, Texas 78711-2060.

(12) The Secretary of State must approve or disapprove the voting system(s) within 30 days of the required public hearing, unless there are extenuating circumstances. If the Secretary of State determines that due to extenuating circumstances, the Secretary of State needs more than 30 days, the Secretary of State will provide written notice of the extended deadline to the examiners and the vendor.

**History**
- *Source Note: The provisions of this §81.60 adopted to be effective January 8, 2007, 32 TexReg 41; amended to be effective March 5, 2012, 37 TexReg 1483; amended to be effective May 25, 2015, 40 TexReg 2745.*

##### **1 Tex. Admin. Code § 81.61** Condition for Approval of Electronic Voting Systems {#sec-81.61 omnilex-key=us-tx-regs-official--title-1--81.61}

For any voting machine, voting device, voting tabulation device and any software used for each, including the programs and procedures for vote tabulation and testing, or any modification to any of the above, to be certified for use in Texas elections, the system shall have been certified, if applicable, by means of qualification testing by a Nationally Recognized Test Laboratory (NRTL) and shall meet or exceed the minimum requirements set forth in the Performance and Test Standards for Punch Card, Mark Sense, and Direct Recording Electronic Voting Systems, or in any successor voluntary standard document developed and promulgated by the Federal Election Commission. This section applies only to systems and modifications to previously certified systems submitted after the effective date of this rule.

**History**
- *Source Note: The provisions of this §81.61 adopted to be effective July 27, 1998, 23 TexReg 7549; amended to be effective January 9, 2001, 26 TexReg 89.*

##### **1 Tex. Admin. Code § 81.62** Audit Logs for an Election Management System's Central Accumulator {#sec-81.62 omnilex-key=us-tx-regs-official--title-1--81.62}

(a) For any Election Management System's central accumulator to be certified for use in Texas elections, the central accumulator shall include a real-time audit log. All significant election events and their date and time stamps shall be maintained in the audit log.

(b) The definition of "significant election events" in subsection (a) of this rule includes but is not limited to:

(1) error and/or warning messages and operator response to those messages;

(2) number of ballots read for a given precinct;

(3) completion of reading ballots for a given precinct;

(4) identity of the input ports used for modem transfers from precincts;

(5) users logging in and out from election system;

(6) precincts being zeroed;

(7) reports being generated;

(8) diagnostics of any type being run; and

(9) change to printer status.

(c) The audit logs for an election shall be retained by the custodian of election records for the appropriate preservation period.

(d) The "Election Management System" as used in this rule is defined as a system that consists of any or all of the following elements: functions and databases within a voting system that define, develop and maintain election databases, perform election definition and setup functions, format ballots, count votes, consolidate and report results, and maintain audit trails.

(e) The "central accumulator" as used in this rule is the part of an Election Management System that tabulates and/or consolidates the vote totals for multiple precincts/devices.

(f) An Election Management System that uses a central accumulator may not be used in an election unless the central accumulator creates in real time an audit log that includes a date and time stamp of each significant election event.

(g) An audit log produced by a central accumulator is considered part of the election records.

(h) A poll watcher may request a printed copy of an audit log produced by a central accumulator:

(1) before any votes are tabulated;

(2) after early voting results are tabulated; and

(3) immediately following the completion of the vote tabulation.

(i) After the automatic counting of ballots for each precinct is completed, the manager of a central counting station shall print a copy of the entire audit log to retain with other election records.

**History**
- *Source Note: The provisions of this §81.62 adopted to be effective January 31, 1999, 24 TexReg 553; amended to be effective March 25, 2003, 28 TexReg 2303; amended to be effective January 9, 2008, 33 TexReg 75; amended to be effective November 7, 2017, 42 TexReg 6129.*

##### **1 Tex. Admin. Code § 81.64** Notice of Voting System Malfunction Required; Submission of Explanatory Report by Vendor Required Upon Request of Secretary of State {#sec-81.64 omnilex-key=us-tx-regs-official--title-1--81.64}

(a) A vendor (or the political subdivision, if no private vendor supports their system) must give notice to the Secretary of State within 24 hours of a malfunction of its voting system software or equipment in an election held in this state. The notice may be verbal or in writing.

(b) Following the notice, the Secretary of State shall determine whether further information on the malfunction is required. At the request of the Secretary of State, a vendor (or the political subdivision, if no private vendor supports their system) must submit a report to the Secretary of State's office detailing the reprogramming (or any other actions) necessary to redress a voting system malfunction in an election held using the vendor's system. The report shall address whether permanent changes are necessary to prevent similar malfunctions in the future.

(c) The report shall be submitted within 30 days after the date of the request by the Secretary of State.

(d) Failure to submit a report within the required period shall be grounds to decertify the system.

(e) The authority holding the election in which the voting system malfunction occurred may submit the report in lieu of a report from the system's vendor.

(f) A copy of this report will be attached to the system's most recent certification on file in the Secretary of State's Office.

(g) The Secretary of State's Office will distribute a copy of this report to all counties using the voting system in question.

**History**
- *Source Note: The provisions of this §81.64 adopted to be effective February 23, 2003, 28 TexReg 1377.*

##### **1 Tex. Admin. Code § 81.65** Procedure for Administrative Certification of Minor Modifications to Previously-Certified Voting Systems {#sec-81.65 omnilex-key=us-tx-regs-official--title-1--81.65}

(a) A voting system vendor who wishes to request administrative certification of minor modifications to a previously certified voting system shall submit the request to the Secretary of State in writing. The request also may be submitted by e-mail. The submission must contain sufficient information to identify the changes to the system's most recently certified version. The submission must contain either a statement from an independent testing authority (ITA) approving the proposed minor modifications or that the proposed minor modifications do not warrant examination by the ITA. The Secretary of State shall retain sole discretion in making the determination if the proposed minor modification qualifies for the administrative certification process described herein.

(b) In the event that the Secretary of State deems the proposed minor modification qualifies for the administrative certification process described herein, the Secretary of State shall forward a copy of the submitted materials to its employee voting systems examiner and one of the non-employee voting systems examiners, requesting an opinion on whether the proposed minor modifications warrant additional examination. The response from the two examiners must be in writing.

(c) Upon receipt of the two voting system examiners' responses, the Secretary of State shall make a prompt determination of whether or not to certify the proposed minor modifications without further examination. If the Secretary of State determines the proposed minor modifications may be certified without further examination, a letter to that effect shall be forwarded to the vendor. If the Secretary of State determines that the proposed minor modifications warrant further examination, the vendor shall be notified in writing or by e-mail.

(d) The Secretary of State shall forward a copy of the vendor's original request and the Secretary of State's final determination with respect to the vendor's request for administrative certification pursuant to the terms of this rule to the remaining voting systems examiners.

(e) A copy of the vendor's request for administrative certification shall be posted on the agency website immediately upon receipt. The Secretary of State shall accept written public comment on applications for administrative certification submitted in accordance with this rule. Comments shall be accepted by e-mail at elections@sos.state.tx.us or by regular mail at: Elections Division, Secretary of State, P.O. Box 12060, Austin, Texas 78711-2060.

(f) Copies of the examiners' reports related administrative certification shall be posted on the agency's website immediately upon receipt.

(g) A copy of the Secretary of State's final determination with respect to the vendor's request for administrative certification shall be posted on the agency's website within 5 business days after it is signed.

**History**
- *Source Note: The provisions of this §81.65 adopted to be effective September 29, 2005, 30 TexReg 6039.*

#### **Subchapter E** ELECTION DAY PROCEDURES

##### **1 Tex. Admin. Code § 81.70** Approval of Voting Booths by Secretary of State {#sec-81.70 omnilex-key=us-tx-regs-official--title-1--81.70}

(a) The secretary of state has determined that a voting booth designed to be placed on a table top that meets or exceeds the following specifications may be used without individual approval by the secretary of state.

(1) The booth must be constructed of opaque material and have three sides.

(2) The top of the booth must reach at least 54 inches from the floor or 24 inches from the table top, whichever is less.

(3) The booth must be at least 22 inches wide and 19 inches deep at the writing surface.

(4) At the highest point, the booth may be no more than two inches shallower than the depth of the booth at the writing surface.

(5) The booth must be so constructed as to be reasonably sturdy and to withstand expected use.

(b) A table on which such a booth is placed must meet the following specifications:

(1) The table must have a clear knee space underneath that is at least 27 inches high, 30 inches wide, and 19 inches deep; and

(2) The table top must be between 28 and 30 inches above the floor.

(c) A booth designed for table top use that does not meet or exceed each of the specifications in subsection (a) of this section must be submitted for individual approval by the secretary of state.

(d) Variances from statutory standards for voting booths designed to be used by a standing voter will be considered on a case-by-case basis.

(e) A voting booth that is free-standing (i.e., not placed on a table top), but is designed for use by a voter in a wheelchair or otherwise in a sitting position must meet the following specifications:

(1) The writing surface of the booth must have a clear knee space underneath that is at least 27 inches high, 30 inches wide, and 19 inches deep; and

(2) The writing surface of the voting booth must be between 28 and 30 inches above the floor.

(f) All booths designed for use with punch-card voting systems that have been approved by the secretary of state for use in Texas may be used as voting booths for punch-card voting, regular paper ballot voting, optical scan ballot voting, or direct recording electronic voting devices without further approval by the secretary of state.

(g) Vendors wishing to sell voting booths which do not comply with the Texas Election Code, §51.032, or with subsections (a) or (e) of this section to political subdivisions for use in elections must obtain approval in writing for such booths pursuant to the Texas Election Code, §51.031, before offering the booths for sale.

**History**
- *Source Note: The provisions of this §81.70 adopted to be effective June 27, 1986, 11 TexReg 2739; amended to be effective March 28, 2002, 27 TexReg 2219.*

##### **1 Tex. Admin. Code § 81.71** Substantially Similar Name Standards and Identity Verification {#sec-81.71 omnilex-key=us-tx-regs-official--title-1--81.71}

(a) When a voter offers to vote at a polling place using a form of identification described by §63.0101 of the Texas Election Code ("presented ID document") and the voter's name on the presented ID document does not match exactly the voter's name as it appears on the official list of registered voters, the voter's name on the presented ID document must be "substantially similar" to the voter's name as it appears on the official list of registered voters.

(b) In determining whether a voter's name on the presented ID document is substantially similar to the voter's name as it appears on the official list of registered voters, the reviewing early voting clerk, deputy early voting clerk, election judge or election clerk (collectively included in the term "election worker") shall refer to the standards in subsection (c) of this section.

(c) A voter's name on the presented ID document is considered substantially similar to the name on the official list of registered voters and a voter's name on the official list of registered voters is considered substantially similar to the name on the presented ID document if one or more of the circumstances in paragraphs (1) - (4) of this subsection are present. In determining whether one or more of those circumstances are present, election workers should consider whether information on the presented ID document matches elements of the voter's information on the official list of registered voters such as the voter's residence address or date of birth, which may be strong indicators that the name on the presented ID document is substantially similar to the name on the official list of registered voters and vice versa if:

(1) The name on the presented ID document is slightly different from one or more of the name fields on the official list of registered voters or one or more of the name fields on the official list of registered voters is slightly different from the name on the presented ID document;

(2) The name on the presented ID document or on the official list of registered voters is a customary variation of the formal name such as, for illustrative purposes only, Bill for William, or Beto for Alberto, that is on the document or list that must match, as the case may be;

(3) The voter's name on the presented ID document contains an initial, a middle name, or a former name that is not on the official list of registered voters or the official list of registered voters contains an initial, a middle name, or a former name that is not on the presented ID document; or

(4) A first name, middle name, former name, or initial of the voter's name that occupies a different field on the presented ID document than a first name, middle name, former name, or initial of the voter's name on the official list of registered voters.

(d) If the reviewing election worker makes a determination that the voter's name on the presented ID document and the official list of registered voters are substantially similar, the voter shall be accepted for voting if the voter accepts the "Similar Name Affidavit" prescribed by the Secretary of State stating that the voter offering the presented ID document is the same person on the official list of registered voters.

(e) After the determination is complete, the presented ID document must be returned to the voter immediately.

(f) The completed Similar Name Affidavit, included in the signature roster or combination form, shall be placed in Envelope No. 4 (or other designated container) to be delivered to the county voter registrar.

(g) If the reviewing election worker makes a determination that the voter's names on the presented ID document and the official list of registered voters are not substantially similar, the voter shall be offered a provisional ballot. The voter shall be processed as a provisional voter in accordance with the provisional voter process established under Texas law, at the time of voting.

(h) If the voter casts a provisional ballot due to a determination by the election worker that the name on the presented ID document was not substantially similar to the name on the official list of registered voters, the voter is eligible to submit a form of identification described by §63.0101 of the Texas Election Code, including the presented ID document that the voter presented at the polling place, in person to the voter registrar's office within six days of election day pursuant to Texas law. The voter shall be informed of this procedure at the time the voter casts his or her provisional ballot.

(i) In addition to the procedure described under subsection (h) of this section, if the voter casts a provisional ballot due to a determination by the election worker that the name on the presented ID document was not substantially similar to the name on the official list of registered voters, or the voter's identity cannot be verified from the provided identification, the voter is eligible to submit official documentation to the voter registrar to verify their identity. Official documentation includes:

(1) a marriage license;

(2) a court order reflecting change of name;

(3) a letter from licensed physician; or

(4) affidavit stating that the person is the same person named on the identification provided.

(j) In determining whether an ID document presented to the voter registrar under subsection (h) of this section is substantially similar to the voter's name on the official list of registered voters, the voter registrar shall utilize the processes outlined in subsections (c) and (d) of this section.

**History**
- *Source Note: The provisions of this §81.71 adopted to be effective November 20, 2011, 36 TexReg 7655; amended to be effective April 3, 2014, 39 TexReg 2263.*

#### **Subchapter F** PRIMARY ELECTIONS

##### **1 Tex. Admin. Code § 81.101** Primary and Runoff Election Cost Reporting; Receipt of State Funds {#sec-81.101 omnilex-key=us-tx-regs-official--title-1--81.101}

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) SOS--Office of the Secretary of State.

(2) Primary--An election held by a political party under Chapter 172 of the Texas Election Code to select its nominees for public office, and, unless the context indicates otherwise, the term includes a presidential primary election.

(3) Runoff--An election held to determine the nomination if no candidate for nomination to a particular office receives the vote required for nomination in the general primary election.

(4) County election officer--County election administrator, county clerk, or county tax assessor-collector, depending on the county, responsible for election duties in the county.

(5) Vendor--Any company with a voting system certified for use in Texas by the SOS.

(b) This subchapter applies to the use and management of all primary funds.

(c) Approval by the Secretary of State (SOS) of a primary cost estimate does not relieve the recipient of primary funds including, but not limited to, the state chair of a political party, the county chair of a political party, the county election officer, or a voting system vendor, of their responsibility to comply with administrative rules issued by the SOS, or with any statute governing the use of primary funds.

(d) The SOS shall provide a primary cost estimate for each county political party broken into three categories, as applicable:

(1) The SOS will provide an estimate for each expense incurred by the county chair based on 75% of the final approved "non-contracted" costs less non-state appropriated financing sources (e.g., filing fees) for the most recent comparable election for which data is available as determined by the SOS. In order to receive the primary estimate payment, the chair must submit to the SOS a primary cost estimate via the online primary finance system prescribed by the SOS. If data is not available to create a pre-populated cost estimate or if the chair wishes to amend the pre-populated estimate, the chair may enter the appropriate data in the SOS online primary finance system.

(2) The SOS will provide an estimate for each expense incurred by the county election officer based on 75% of the final approved "contracted" costs for the most recent comparable election for which data is available as determined by the SOS. In order to receive the primary estimate payment, the county election officer must submit to the SOS a primary cost estimate via the online primary finance system prescribed by the SOS. If data is not available to create a pre-populated cost estimate or if the county election officer wishes to amend the pre-populated estimate, the county election officer may enter the appropriate data in the SOS online primary finance system.

(e) If a runoff election is conducted, the estimate payments will be calculated and paid following the same process prescribed in subsection (d) of this section with the following exceptions:

(1) Filing fees are not factored into the calculation.

(2) The vendor must provide the estimated runoff costs in the electronic format prescribed by the SOS within five (5) days after the date of the canvass of the primary election results.

(f) After the primary or runoff election, as applicable, the actual expenditures must be reported to SOS as follows:

(1) The vendors must submit data in the electronic format prescribed by the SOS that identifies the final costs and includes all applicable fields prescribed by the SOS.

(A) Only expenses that are billable to the primary fund may be included. Expenses including, but not limited to, early voting kits and supplies, "I Voted Stickers", and party convention supplies, must appear on a separate invoice billed to the county election officer or the party, as appropriate.

(B) If a cost is to be split between both parties, the split costs must be reported separately.

(C) The vendor must identify whether the county chair or the county election officer is ordering the service. The county chair earns five (5) percent calculated against the cost of the services ordered by the chair, and the county election officer earns ten (10) percent of the cost of the services ordered by the county election officer.

(D) The SOS will not make final payments to the county chairs or the county election officers until the SOS receives the vendor submission described in this section.

(2) The county chair and the county election officer, if an election service contract is executed between the county executive committee and the county election officer, must submit actual expenditures in the electronic format prescribed by the SOS.

(A) Costs incurred by the county chair shall be reported to the SOS by the county chair. Those costs will be calculated consistent with §81.119 of this chapter (relating to County Chair's Compensation).

(B) Costs incurred by the county election officer shall be reported to the SOS by the county election officer. Those costs will be calculated consistent with §81.131 of this chapter (relating to Contracting with the County Election Officer).

(g) Section 173.0832 of the Texas Election Code provides for direct payment from the SOS to a county election officer who conducts a primary election under an election services contract. The SOS requires all county election officers conducting election services for a primary election to receive direct payment from the SOS.

(h) Pursuant to §173.0341 of the Texas Election Code, a state chair, or the designee of a state chair, may enter into an agreement with a county chair, utilizing a form prescribed by the SOS, under which the state chair will act as a fiscal agent for the county party.

**History**
- *Source Note: The provisions of this §81.101 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853; amended to be effective December 29, 2019, 44 TexReg 7884; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.102** Primary Funds Defined {#sec-81.102 omnilex-key=us-tx-regs-official--title-1--81.102}

(a) Pursuant to §173.031 and §173.032 of the Texas Election Code, a primary fund is created for each executive committee of a political party holding a primary election. The primary fund consists of:

(1) all filing fees accompanying an application for a place on the ballot filed with the chair ;

(2) state funds paid to the chair;

(3) contributions made to the executive committee for the purpose of defraying primary election expenses; and

(4) the income earned by the fund.

(b) Any refund of money expended from a primary fund is considered part of the primary fund.

**History**
- *Source Note: The provisions of this §81.102 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.103** Bank Account for Primary-Fund Deposits and Expenditures {#sec-81.103 omnilex-key=us-tx-regs-official--title-1--81.103}

(a) The county chair shall establish and maintain a bank account for the sole purpose of depositing and expending primary funds; any interest earned in such an account becomes part of the primary fund.

(b) Payments issued by the Comptroller of Public Accounts will be payable to the county party chair, not the individual's name, preferably in the form of direct deposit. Direct deposit forms may be obtained from the Comptroller of Public Accounts.

(c) The county chair, or any employee paid from the primary fund, shall not commingle primary funds with any other fund or account.

(d) Each payment issued from a primary-funds account must include a statement regarding the payment being void after a period of time, such as "VOID AFTER 180 DAYS."

(e) The county chair shall complete bank reconciliations on a monthly basis.

(f) After all primary expenditures have been paid, the primary bank account may be retained with a sufficient minimum balance, generally $50. All bank account information must be transferred to the incoming county chair in accordance with §81.108 of this chapter (relating to Transfer of Records to New County Chair).

(g) Revenue received for a primary may not be used to pay expenses for a previous primary.

**History**
- *Source Note: The provisions of this §81.103 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.104** Signature on Checks; Authorization of Primary-Fund Expenditures {#sec-81.104 omnilex-key=us-tx-regs-official--title-1--81.104}

(a) Except as provided by this section, the county chair, or an authorized agent of the county chair, shall sign all checks drafted on the primary-fund account.

(b) The county chair must authorize all primary-fund expenditures.

(c) The county chair or an authorized agent shall not sign a check drawn on a primary-fund account with a rubber stamp or other facsimile of the signature.

**History**
- *Source Note: The provisions of this §81.104 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective December 29, 2019, 44 TexReg 7884.*

##### **1 Tex. Admin. Code § 81.105** Payee of Checks from Primary-Fund Account Restricted {#sec-81.105 omnilex-key=us-tx-regs-official--title-1--81.105}

(a) Except as provided by this section, an individual, who is authorized to draft primary-fund checks, shall make checks payable to an entity or a person. An individual, who is authorized to draft primary-fund checks, may draft a check payable to "cash" or "bearer" only to establish a petty-cash fund, for county chair seminar travel reimbursement, personal loans to the primary fund to cover eligible expenses approved by the SOS, and county chair compensation consistent with §81.119 of this chapter (relating to County Chair's Compensation).

(b) An individual authorized to draft primary-fund checks shall not make checks payable to the county party as contributions or to election judges for reimbursement for payments to election clerks.

**History**
- *Source Note: The provisions of this §81.105 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.106** Deposits {#sec-81.106 omnilex-key=us-tx-regs-official--title-1--81.106}

(a) The county chair, or an authorized agent of the county chair, shall:

(1) deposit all filing fees, contributions, and miscellaneous receipts into the primary fund; and

(2) maintain an itemized list detailing the source of all funds deposited into the primary fund including, but not limited to, all candidate filings.

(b) The SOS will verify the itemized list of candidate filings against the data reported pursuant to §172.029 of the Texas Election Code and §81.112 of this chapter (relating to List of Candidates and Filing Fees).

**History**
- *Source Note: The provisions of this §81.106 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.107** Primary-Fund Records {#sec-81.107 omnilex-key=us-tx-regs-official--title-1--81.107}

(a) The county chair shall preserve all records relating to primary-election expenses until the later of:

(1) 22 months following the primary elections; or

(2) the conclusion of any relevant litigation or official investigation.

(b) In order to receive approval of a final cost report, the county chair shall transmit copies of receipts, bills, invoices, contracts, competitive bids, petty-cash receipts for items and services and copies of all monthly bank statements, electronic bookkeeping records (i.e., Quicken or Quickbooks) or check register, and any other related materials documenting primary-fund expenditures. Purchase requisitions are not considered receipts and may not be remitted as such. The SOS reserves the right to request all receipts and related documentation.

(1) The SOS primary finance system will not permit final cost reports to be submitted if any required documentation has not been uploaded to the system.

(2) If the county chair or county election officer indicates that the required documents will be submitted in hardcopy form, the submitter will have thirty (30) days to submit such documents to the SOS. If the SOS does not receive the required documents within that time period, the SOS will reject the final cost report.

(c) Unless otherwise provided by the SOS, not later than August 31 of the year in which the primary elections occur, the county chair shall:

(1) comply with all final cost reporting requirements;

(2) return all unexpended and uncommitted primary funds upon SOS approval of the final cost report.

(d) If the SOS determines that a final cost report needs remediation, the SOS will return the report to the submitter with instructions for resubmission.

(e) Failure to comply with subsection (c) or (d) of this section may result in forfeiture of county chair compensation as stipulated in §81.119 of this chapter (relating to County Chair's Compensation).

(f) If the chair does not file a final cost report, the matter may be reported to the Attorney General's Office for misappropriation of funds in accordance with §81.113 of this chapter (relating to Misuse of State Funds).

**History**
- *Source Note: The provisions of this §81.107 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective October 29, 2017, 42 TexReg 5853; amended to be effective December 29, 2019, 44 TexReg 7884; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.108** Transfer of Records to New County Chair {#sec-81.108 omnilex-key=us-tx-regs-official--title-1--81.108}

(a) The chair shall transfer in an orderly manner to his or her successor or the appropriate county committee all primary-election records, including financial records listed under §81.107 of this chapter (relating to Primary-Fund Records), required by law to be maintained or within the 30th day after the date the term of office of a new county chair begins, whichever comes first (in accordance with Texas Election Code §171.028).

(b) Texas Election Code §171.028 provides a criminal penalty for failure to transfer records to the new county chair.

(c) If a vacancy occurs in the office of county chair, the county executive committee shall appoint an individual to serve as the custodian of primary-election records until a new county chair is appointed or elected.

(d) If the final cost report has not been finalized at the time the records are transferred or a vacancy occurs, it is the responsibility of the incoming chair or the appointed custodian and the outgoing chair to determine how best to complete the primary finance process, including the disbursement of the county chair compensation.

(e) Payments issued by the Comptroller of Public Accounts will be payable to the county party chair, not the individual's name, as described in §81.103(b) of this chapter (relating to Bank Account for Primary-Fund Deposits and Expenditures). Therefore, it is the responsibility of the individual with access to the primary fund established pursuant to §81.102 of this chapter (relating to Primary Funds Defined) and §81.103 of this chapter to ensure final payment(s) from the primary fund are issued properly to close-out the financing of the Primary.

**History**
- *Source Note: The provisions of this §81.108 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective December 9, 2007, 32 TexReg 9105; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811.*

##### **1 Tex. Admin. Code § 81.109** Costs not Payable with Primary Funds {#sec-81.109 omnilex-key=us-tx-regs-official--title-1--81.109}

(a) Pursuant to §173.001 of the Texas Election Code, only expenses necessary for and directly related to the conduct of primary elections are payable from primary funds.

(b) Political expenses and expenses for any activity forbidden by statute or rule are not payable from the primary fund. Examples of non-payable expenses include, but are not limited to, the following:

(1) expenses incurred in connection with a convention of a political party;

(2) any food or drink items;

(3) stationery not related to the conduct of the primary election;

(4) costs associated with voter-registration drives or get-out-the-vote campaigns;

(5) election notices, except for public testing announcements;

(6) early voting costs, except for ballots and early voting ballot board costs;

(7) a public building used as a polling place or central counting station if the building is normally open the day of the election, including a charge for personnel, utilities, or other expenses incurred before or after regular business hours;

(8) election worker compensation to attend training;

(9) costs for training material available through the SOS;

(10) duties a county election officer is statutorily required to perform as well as salaries of county personnel during regular business hours;

(11) voting by mail kits and postage related to mail ballots;

(12) purchases of MBBs/PEBs or other voting system items transferable to other elections;

(13) voting booths and ballot boxes owned by the county and other county-owned equipment where there is no statutory authority to charge for said equipment including, but not limited to, electronic poll books, removable voting system components, vehicles, etc;

(14) a sign that is used to indicate a location of a polling place for a primary election or primary runoff election that violates any of the following criteria:

(A) a sign that refers to a candidate or measure on the ballot;

(B) a sign in which the size and format is not coordinated between the political parties holding a primary election or primary runoff election in the same county.

**History**
- *Source Note: The provisions of this §81.109 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.110** Fidelity Bond Purchase {#sec-81.110 omnilex-key=us-tx-regs-official--title-1--81.110}

(a) An individual with responsibilities that include the receipt or expenditure of primary funds may purchase a fidelity bond with money from the primary fund.

(b) An individual purchasing a bond under this section shall base the amount of the bond on the anticipated total amount of primary funds that the individual will collect and disburse from November 1 immediately preceding the primary elections to the last day of the month in which the final primary election occurs. The amount used for the purpose of determining the amount of the bond shall not exceed $50,000, unless a higher amount is approved by the SOS.

**History**
- *Source Note: The provisions of this §81.110 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811.*

##### **1 Tex. Admin. Code § 81.111** Interest on Start-up Loan to Open Primary Fund is Not Reimbursable {#sec-81.111 omnilex-key=us-tx-regs-official--title-1--81.111}

A county chair may acquire a start-up loan to defray the cost of the primary elections, prior to receiving reimbursement from the state. A county chair may not use primary funds, which are subsequently approved by the SOS, to pay interest on loans used to defray operating expenses incurred prior to the receipt of such funds.

**History**
- *Source Note: The provisions of this §81.111 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.112** List of Candidates and Filing Fees {#sec-81.112 omnilex-key=us-tx-regs-official--title-1--81.112}

(a) Submission of information.

(1) Submission of filed application. Pursuant to §§172.029, 172.117, and 172.122 of the Texas Election Code, for each general primary election, all state and county chairs shall electronically submit information about each candidate who files with the chair an application for a place on the ballot, including an application for the office of a political party, and shall certify the returns and the final list of candidates by electronic affidavit through the electronic submission service prescribed by SOS referenced in paragraph (2) of this subsection.

(2) Method of submission. The chair shall submit candidate information through an electronic submission service prescribed by the SOS. The SOS shall maintain the submitted information in an online database, in accordance with §172.029(b) of the Texas Election Code. The SOS is not responsible for the accuracy of the information submitted by the chair; the SOS is responsible only for providing the electronic submission service, displaying the information publicly on its website, and maintaining the online database.

(3) Information required for submission. The electronic submission service will notate the types of information that must be inputted for a complete submission of candidate information. However, the chair must submit any and all information on the candidate's application for which there is an applicable entry field on the electronic submission service.

(4) Submission deadline. A chair shall submit a candidate's information and a notation of each candidate's status not later than 24 hours after the chair completes the review of the candidate's application, in accordance with §172.029 of the Texas Election Code. By not later than the 8th day after the regular filing deadline, the chair shall submit a candidate's information and a notation concerning the candidate's status for all candidates who filed, in accordance with §172.029 of the Texas Election Code. The county chair will not be able to make modifications to the submitted information or notations on or after the 9th day after the regular filing deadline. If modifications to a candidate's information or notation are required on or after the 9th day after the regular filing deadline, such changes must be made by the state chair after notifying the SOS.

(5) Submission of nominee by executive committee. If a candidate is nominated by the appropriate executive committee for a place on the general election ballot in accordance with §145.036 or §202.006 of the Texas Election Code, the appropriate county chair shall notify the state chair who shall submit the candidate's information and notation through the electronic submission service prescribed by the SOS, in accordance with §172.029 of the Texas Election Code. The submission of the candidate's information and notation shall be completed not later than 5 p.m. on the 71st day before general election day to allow for the preparation of the general election ballot by the authority printing the ballots.

(6) Time for notations. For candidates not updated automatically after the canvass results are recorded in the electronic submission service prescribed by the SOS, the county chair will be able to update notations to describe the status of each candidate after the canvass. If modification to the notation is needed, the appropriate chair will update the candidate information to reflect the candidate's status from the list of notations available. The notations must be complete and accurate not later than 5 p.m. on the 71st day before general election day to allow for the preparation of the general election ballot by the authority printing the ballots.

(b) Notification of filing.

(1) County chair: delivery of candidate list. Upon submission of information for all candidates who filed and whose applications have been reviewed and accepted for a place on the ballot, the county chair shall notify the applicable county election officer that candidate information has been submitted for all candidates, in accordance with §172.029 of the Texas Election Code. Notification may be sent by email, regular mail, or personal delivery, so long as it is delivered by no later than the 9th day after the regular filing deadline.

(2) State chair: notification of submission. Upon submission of information for all candidates who filed and whose applications have been reviewed and accepted for a place on the ballot, the state chair shall notify the applicable county chairs that candidate information has been submitted for all candidates, in accordance with §172.028 and §172.029 of the Texas Election Code. Notification may be sent by email, regular mail, or personal delivery, so long as it is delivered by no later than the ninth day after the regular filing deadline.

(3) Extended Filing Notification. Pursuant to §172.055 of the Texas Election Code, the applicable filing authority shall provide the necessary extended filing notifications, including sending the notice to post on the county's website or the Secretary of State's website, as applicable. Pursuant to §172.056(b) of the Texas Election Code, for races in which the state chair is the filing authority, the state chair shall notify the applicable county chairs and the applicable county election officers that a candidate filed an application that complied with the applicable requirements during the extended filing period, and the candidate information has been submitted in accordance with §172.029 of the Texas Election Code. For races in which the county chair is the filing authority, the county chair shall notify the applicable state chair and the applicable county election officer that a candidate filed an application that complied with the applicable requirements during the extended filing period, and the candidate information has been submitted in accordance with §172.029 of the Texas Election Code. Notification shall be made by email, regular mail, or personal delivery.

(4) Court order. If a court orders a candidate's name to be placed on the ballot or removed from the ballot, the chair shall immediately notify the state chair.

(c) Public display and failure to submit.

(1) Public display of information. The SOS will publicly display on its website a limited portion of the information submitted by the chair. For candidates for public office, the SOS will publicly display, via its website, the candidate's name, any public mailing address and any electronic mail address at which the candidate receives correspondence relating to the candidate's campaign provided by the candidate pursuant to §141.031(a)(4)(M) of the Texas Election Code, and office sought, along with the office's corresponding precinct, district or place. For candidates for the office of a political party, the website will publicly display the name of the chair and, if applicable, the corresponding numeric identifier.

(2) Failure to submit information. If a county chair fails to electronically submit candidate information for all candidates who filed and whose applications have been reviewed and accepted for a place on the ballot, the chair is directly responsible for delivering a certified list of all candidates to the state chair to comply with the electronic submission requirements of §172.029 of the Texas Election Code on behalf of the county chair.

(d) County executive committee. In the case of a vacancy on a county executive committee, the county chair shall submit the replacement member's name through the electronic submission service prescribed by the SOS pursuant to §171.024 of the Texas Election Code.

**History**
- *Source Note: The provisions of this §81.112 adopted to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853; amended to be effective December 29, 2019, 44 TexReg 7884.*

##### **1 Tex. Admin. Code § 81.113** Misuse of State Funds {#sec-81.113 omnilex-key=us-tx-regs-official--title-1--81.113}

The SOS shall refer any misuse or misappropriation of primary funds to the appropriate prosecuting authority for the enforcement of all civil and/or criminal penalties. Prosecuting authority includes but is not limited to Office of the Attorney General. Misuse of funds includes not complying with reporting requirements prescribed by the Texas Election Code or this title.

**History**
- *Source Note: The provisions of this §81.113 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.114** Conflicts of Interest {#sec-81.114 omnilex-key=us-tx-regs-official--title-1--81.114}

(a) No disbursements may be made from the primary fund to the county chair personally, or to an entity or business in which the party, the county chair, the county chair's spouse, or the county chair's family has a financial interest, except for payments for:

(1) election day workers;

(2) incidental administrative costs; or

(3) the county chair's compensation.

(b) For the purposes of this section, "family" is defined as individuals related within the third degree of consanguinity (blood) or the second degree of affinity (marriage).

Attached Graphic

(c) Discounted expenditures, such as a reduced rate for leasing space, does not exempt the cost from this section.

**History**
- *Source Note: The provisions of this §81.114 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.115** Requirement for Competitive Bids for Services or Products {#sec-81.115 omnilex-key=us-tx-regs-official--title-1--81.115}

(a) This section does not apply to expenditures of $2,000 or less. (Note: A large purchase may not be divided into small lot purchases to circumvent the dollar limits established by this section. For example, expenditures for computer equipment to a single vendor that total more than $2,000 are subject to the competitive bid requirement and may not be split between printers/scanner/computers.)

(b) The county chair must purchase all services and products using competitive bids from no less than three sources. Proper documentation must be submitted with the final cost report to indicate the type of procurement service used and the source for those services.

(c) The county chair must document or otherwise provide an explanation regarding the lack of available bids from vendors (sole source). This documentation or explanation must be submitted with the final primary election cost report.

(d) If the county chair contracts with the county election officer who has a term contract for election supplies or services or utilizes the Texas Cooperative Purchasing Program, then competitive bids are not required.

**History**
- *Source Note: The provisions of this §81.115 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.116** Estimating Voter Turnout {#sec-81.116 omnilex-key=us-tx-regs-official--title-1--81.116}

(a) The county chair shall use the formula set out in the following figure, with necessary modifications as determined by the chair, to determine the estimated voter turnout for each precinct for the primary elections. This formula is a guideline and must be adjusted if the local political situation indicates a higher voter turnout than that derived by the formula.

Attached Graphic

(b) After estimating the voter turnout for each precinct, the county chair shall use the guidelines set forth in §§81.117, 81.124, and 81.125 of this chapter (relating to the Number of Election Workers per Polling Place, Number of Ballots per Voting Precinct, and Number of Direct Record Electronic (DRE) Units or Precinct Ballot Counters per Voting Precinct) to determine the necessary personnel, supplies, and equipment for each precinct (i.e., ballots, election judges and clerks, voting devices, or machines).

(c) After estimating the need for personnel, supplies, and equipment for each precinct, the county chair shall combine all precinct data to determine the total countywide estimate.

(d) The county chair may use the estimate calculated under subsection (c) of this section to determine the estimated cost of the election.

**History**
- *Source Note: The provisions of this §81.116 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.117** Number of Election Workers per Polling Place {#sec-81.117 omnilex-key=us-tx-regs-official--title-1--81.117}

The county chair shall use the formula set out in the following figure to determine the number of election workers allowable for each polling place.

Attached Graphic

**History**
- *Source Note: The provisions of this §81.117 adopted to be effective December 13, 2009, 34 TexReg 8665.*

##### **1 Tex. Admin. Code § 81.118** Flex Scheduling of Precinct Workers {#sec-81.118 omnilex-key=us-tx-regs-official--title-1--81.118}

The presiding judge may hire individuals to work in shifts. The county chair may assign clerks to work in shifts that end before the examination or counting of the ballots begins.

**History**
- *Source Note: The provisions of this §81.118 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.119** County Chair's Compensation {#sec-81.119 omnilex-key=us-tx-regs-official--title-1--81.119}

(a) Pursuant to §173.004 of the Texas Election Code, a county chair may receive compensation for administering primary elections.

(b) The SOS shall not authorize payment under this section until the county party's final cost report has been received, including the necessary supporting documentation required in §81.107 of this chapter (relating to Primary-Fund Records), and approved by the SOS. The SOS shall notify the county chair of the approval via email. The chair may view the approved costs by line item in the online primary finance system prescribed by SOS.

(c) After all other expenses have been paid and the final cost report has been approved by SOS, the county chair shall be paid with a check drawn on the county's primary-fund account.

(d) The SOS may deny compensation to county chairs who file delinquent final-cost reports.

(e) Legal fees and county election service contract costs incurred and reported to SOS by the county election officer will not be included in the formula for determining the county chair's compensation.

**History**
- *Source Note: The provisions of this §81.119 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.120** Compensation for Election-Day Workers {#sec-81.120 omnilex-key=us-tx-regs-official--title-1--81.120}

(a) Except as provided by subsection (b) of this section, the compensation paid to polling-place judges, clerks, early-voting-ballot board members, or persons working at the central counting station for the general-primary and primary-runoff elections shall be equal to the hourly rate paid by the county for such workers in county elections up to not exceed $12 per hour from the primary fund. All workers must attend a training class certified by the SOS. Online pollworker training classes are available on the SOS website.

(b) The county chair may pay technical support personnel at the central counting station (appointed under Texas Election Code §§127.002, 127.003, or 127.004) compensation which is more than $12 per hour, but costs may not exceed those paid to county staff for comparable work.

(c) Except as provided by this section, a judge or clerk may be paid only for the actual time spent on election duties performed in the polling place or central counting station, including up to two hours of work before the polls open. If an election worker elects to donate his or her compensation to the county party, signed documentation referencing that fact, by the election worker and chair, must be placed in the primary records.

(d) The county chair may allow one election worker from each polling place up to one hour before election day to annotate the precinct list of registered voters.

(e) The county chair is authorized to pay members of the early voting ballot board.

(1) Members of the early voting ballot board may only be compensated for the actual number of hours worked up to $12 per hour from the primary fund.

(2) Additionally, members may reconvene to process provisional or late ballots. The provisional ballot/late counting process must be completed not later than the 7th day after the primary or runoff primary elections.

(f) Compensation for the election judge or clerk who delivers and picks up the election supplies on election day may not exceed $25 per polling place location.

(g) Except as provided by subsection (f) of this section the county chair may not pay an election-day worker for travel time, delivery of supplies, or attendance at the precinct convention.

**History**
- *Source Note: The provisions of this §81.120 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective December 29, 2019, 44 TexReg 7884; amended to be effective January 17, 2024, 49 TexReg 133.*

##### **1 Tex. Admin. Code § 81.121** No Compensation for Attending Election Schools for Judges or Clerks {#sec-81.121 omnilex-key=us-tx-regs-official--title-1--81.121}

(a) Training materials may be ordered free of charge from the SOS.

(b) The county chair may not be reimbursed for materials published and provided by the SOS.

(c) Costs associated with attending an election school are not an allowable cost subject to primary reimbursement.

**History**
- *Source Note: The provisions of this §81.121 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483.*

##### **1 Tex. Admin. Code § 81.122** Personnel Payroll Taxes and Benefits {#sec-81.122 omnilex-key=us-tx-regs-official--title-1--81.122}

(a) The county chair shall follow all applicable federal and state laws with respect to payroll taxes, including election day judges and clerks.

(b) The county chair may not use primary funds to pay penalties or interest resulting from a failure to file required tax returns or from failure to pay the employer's portion of employment taxes.

(c) The county chair shall maintain copies of all federal and state payroll tax returns and forms, and keep such copies with the primary records. (The county chair shall also transmit copies of these records to the SOS at the SOS's request.)

(d) The county chair may not pay for group medical, dental, life insurance or retirement benefits with primary funds.

**History**
- *Source Note: The provisions of this §81.122 adopted to be effective November 18, 2003, 28 TexReg 10201; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.123** Administrative Personnel and Overall Administrative Costs Limited {#sec-81.123 omnilex-key=us-tx-regs-official--title-1--81.123}

(a) "Administrative Personnel" means a non-election-day worker.

(b) The employment of administrative personnel is not required for the conduct of the primary elections.

(c) Pursuant to §81.114 of this chapter (relating to Conflicts of Interest), no member of the county chair's family may be paid an administrative salary from primary funds.

(d) If administrative personnel are utilized, salaries or wages for such personnel are payable from the primary fund for a period beginning no earlier than November 1 immediately preceding the primary election and ending no later than the last day of the month in which the primary election or runoff primary election, if applicable, is held.

(e) If the county chair contracts with third parties or the county election officer for election services, the overall administrative personnel costs to be submitted to the SOS for reimbursement cannot include administrative expenses provided by third parties or a county election officer. (Administrative personnel costs include, but are not limited to, polling location services, ballot ordering, and secretarial services.)

(f) The SOS may disallow full payment for administrative personnel if it is determined that the contracting county election officer substantially performed the conduct of the election.

(g) Other administrative costs chargeable to the primary fund include office rental, telephone and utilities, office furniture and equipment rental, computer purchase, office supplies, and bank fees.

(h) In addition to the limitations set forth in the Texas statutes and Subchapters F and G of this chapter of the Texas Administrative Code, including but not limited to §§81.127, 81.128, and 81.129 of this chapter (relating to Office Equipment and Supplies, Telephone and Postage Charges, and Office Rental), the funding caps illustrated in Figure: 1 TAC §81.123(h) apply to the total administrative expenses a county chair may charge to the primary fund.

Attached Graphic

**History**
- *Source Note: The provisions of this §81.123 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853; amended to be effective December 29, 2019, 44 TexReg 7884.*

##### **1 Tex. Admin. Code § 81.124** Number of Ballots per Voting Precinct {#sec-81.124 omnilex-key=us-tx-regs-official--title-1--81.124}

(a) The county chair shall determine the minimum number of ballots to be furnished to each polling place based on the estimated voter turnout formula established pursuant to §81.116 of this chapter (relating to Estimating Voter Turnout). The county chair shall not distribute to a polling place fewer ballots than the amount indicated by the formula provided by §81.116 of this chapter.

(b) If the chair determines that more ballots than the minimum are necessary, he or she may order a maximum number of ballots up to an amount that is equal to the number of registered voters in the precinct.

(c) In no event should a polling place ballot supply be limited so as to impede the voting process or jeopardize voting rights.

**History**
- *Source Note: The provisions of this §81.124 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.125** Number of Direct Record Electronic (DRE) Units or Precinct Ballot Counters per Voting Precinct {#sec-81.125 omnilex-key=us-tx-regs-official--title-1--81.125}

(a) The county chair shall use the table set out in the following figure to determine the number of precinct ballot counters and DRE units allowable for each precinct.

Attached Graphic

(b) If a county chair determines that the number of precinct ballot counters and/or DRE units authorized under the formula is inadequate, he or she must acquire permission from the SOS to obtain additional machines, counters, or devices.

(c) Pursuant to federal and state law, there must be at least one accessible voting unit in each precinct. If the county has insufficient accessible voting units to allow each party to conduct a separate primary in all county election precincts, then each party will need to consolidate county election precincts in accordance with §42.009 of the Texas Election Code in order to accommodate the number of accessible voting units that can be allocated to each party by the county election officer in accordance with §51.035 of the Texas Election Code. Alternatively, the parties, with the agreement of a majority of the full membership of county commissioners court and the county election officer, may conduct a joint primary under §172.126 of the Texas Election Code.

(d) In precincts that are conducting a limited joint election for purposes of sharing a polling place and an accessible voting unit, the presiding election judge from the party whose candidate for governor received the highest number of votes in the precinct or consolidated precinct in the most recent gubernatorial general election shall deliver the device(s) containing the vote totals to the general custodian. The presiding judge of the party whose candidate for governor received the highest number of votes in the precinct or consolidated precinct in the most recent gubernatorial general election may designate the presiding judge or clerk of the other party to deliver the device(s) containing the vote totals to the general custodian.

**History**
- *Source Note: The provisions of this §81.125 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.126** Training Reimbursement to Attend County Chairs Election Law Seminar {#sec-81.126 omnilex-key=us-tx-regs-official--title-1--81.126}

(a) Except as provided by this section, the SOS shall reimburse from the state primary fund, the actual travel expenses for the county chair or the county chair's designee who will be responsible for the primary finance bookkeeping to attend the SOS Election Law Seminar for County Chairs. (The SOS shall provide travel reimbursement forms at the seminar.)

(b) The SOS shall reimburse the county chair or the county chair's designee for:

(1) mileage (if driving personal vehicle);

(2) airfare (coach only);

(3) airport transfers;

(4) airport parking;

(5) lodging; and

(6) any other reasonable expenses related to an individual's attendance at the Election Law Seminar for County Chairs.

(c) The SOS shall use an electronic mapping tool available on the internet (including, but not limited to, Mapquest, Google Maps, or Bing Maps) to determine distances traveled to attend the Election Law Seminar for County Chairs. The SOS shall reimburse mileage claims from the county seat to and from Austin using the mileage rate approved by the State Comptroller at the time of the seminar.

(d) The SOS shall reimburse actual lodging expenses in an amount not to exceed the rates approved by the state, plus applicable taxes.

(e) As provided by the Texas General Appropriations Act, the SOS shall not make reimbursements for gratuities or tips. In addition, the SOS will not reimburse for meals.

(f) The county chair or the chair's designee must submit actual receipts to the SOS in order to be reimbursed for airfare, lodging, parking, or airport transfers.

(g) The county chair shall submit request for reimbursement no later than 60 days after the seminar. If a request for reimbursement is submitted after this date, the SOS may deny the request.

(h) Overnight lodging for two nights is approved for counties that are more than 200 miles distance from Austin; otherwise, prior approval for more than one night of lodging must be obtained from SOS.

**History**
- *Source Note: The provisions of this §81.126 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.127** Office Equipment and Supplies {#sec-81.127 omnilex-key=us-tx-regs-official--title-1--81.127}

(a) Rental of office equipment is not required in order to conduct primary elections.

(b) The county chair may lease office equipment necessary for the administration of the primary elections for a period beginning November 1 immediately preceding the primary election and ending not later than the last day of the month in which the primary election or runoff election primary, if applicable, is held.

(c) The county party may not rent or lease equipment in which the party, the county chair, or a member of the county chair's family has a financial interest. (See definition of "family" at §81.114(b) of this chapter (relating to Conflicts of Interest).)

(d) The county chair or party shall rent equipment from an entity that has been in business for at least 18 months and has at least three other bona fide clients and is on file with the corporation department of the SOS or locally.

(e) The purchase of office supplies must be reasonable and/or necessary for the administration of the primary election to be payable from the primary fund.

(f) The county chair or party may be reimbursed for the cost of incidental supplies used in connection with the primary election. (Examples of reasonable incidental supplies include paper, toner, and staples.)

(g) The county chair may not use primary funds to purchase any single office-supply item or equipment valued at over $1,500. These items are not considered the property of the party chair, rather the property of the county party, and must be transferred to the incoming party chair when a new chair takes office.

(h) The county chair may not pay notary public expenses from the primary fund.

(i) Computer serial numbers must be reported to SOS to ensure the asset can be tracked from one election to the next.

(j) Any computer purchased with primary funds is to be used for primary related functions. It is not considered the property of the party chair, rather the property of the county party, and must be transferred to the incoming party chair when a new chair takes office.

(k) A computer purchased with primary funds shall be used for two primary election cycles before a new computer may be purchased using primary funds.

**History**
- *Source Note: The provisions of this §81.127 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.128** Telephone and Postage Charges {#sec-81.128 omnilex-key=us-tx-regs-official--title-1--81.128}

(a) The SOS shall reimburse necessary telephone and postage costs incurred with respect to the administration of the primary elections beginning no earlier than November 1 immediately preceding the primary election and ending no later than the last day of the month in which the primary election or runoff primary election, if applicable, is held.

(b) Personal landline and cellular phone charges will not be reimbursed with primary funds.

**History**
- *Source Note: The provisions of this §81.128 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.129** Office Rental {#sec-81.129 omnilex-key=us-tx-regs-official--title-1--81.129}

(a) The rental of office space is not required for the conduct of the primary elections.

(b) The SOS shall reimburse necessary office space rental expenses incurred with respect to the administration of the primary elections for a period beginning no earlier than November immediately preceding the primary election and ending not later than the last day of the month in which the primary election or runoff primary election, if applicable, is held.

(c) If the rental of office space is necessary, the county party shall rent office space in a regularly rented commercial building. Office rent shall not exceed the fair market rate for comparable office space in the same area.

(d) Unless such services are required in accordance with the lease agreement, no payment may be made with primary funds for janitorial services, parking, or signage.

(e) The county party may not rent or lease office space in which the party, the county chair, the county chair's spouse, or the county chair's family has a financial interest. (See definition of "family" at §81.114(b) of this chapter (relating to Conflicts of Interest).) Discounted office space does not exempt the cost from §81.114 of this chapter, Conflicts of Interest.

(f) If the party leases space for the purpose of the primary only, the county chair shall transmit a copy of the three competitive bids obtained as well as the lease agreement to the SOS, along with a copy of the final cost report.

(g) If the party maintains a lease, unrelated to the conduct of the primary, the cost of that lease will not be reimbursed in excess of 30% of the monthly rental cost by the state as a primary expense, including utilities. In addition, if the party maintains a lease unrelated to the primary, the SOS will not reimburse the party for a second lease without prior approval from the SOS.

**History**
- *Source Note: The provisions of this §81.129 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.130** Payment for Use of County-Owned and Non-County-Owned Equipment {#sec-81.130 omnilex-key=us-tx-regs-official--title-1--81.130}

(a) Section 123.033 of the Texas Election Code provides for the rental rate that a county may charge for the use of its equipment. (The rental rates are $5 for each unit of tabulating equipment and $5 for each unit of electronic voting system equipment installed at a polling location.) Removable components, such as a flash drive or accessibility component, may not be charged separately.

(b) In addition to subsection (a) of this section, the primary fund may be used to pay the actual expenses incurred by the county in transporting, preparing, programming, and testing the necessary equipment, as well as for staffing the central counting station.

(c) The county chair shall submit all calculations for amounts charged for the use of county-owned and non-county-owned equipment to the SOS for review with the final cost report.

(d) The county chair shall not use primary funds to pay expenses related to the use of non-county-owned equipment, including, but not limited to, ballot boxes and voting booths pursuant to §51.035 of the Texas Election Code, without approval from the SOS.

(e) Pursuant to §51.035 of the Texas Election Code, counties may not charge the county parties for use of county-owned voting booths or ballot boxes and other county-owned equipment where there is no statutory authority to charge for said equipment; however, the primary fund may pay the actual expenses incurred by the county in transporting the equipment to and from the polling places if the county provides that service.

(f) Pursuant to the General Appropriations Act, 86th Texas Legislature, primary funds shall not be used to pay the costs of leasing non-county-owned equipment that is needed to conduct non-joint primary elections.

**History**
- *Source Note: The provisions of this §81.130 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853; amended to be effective December 29, 2019, 44 TexReg 7884.*

##### **1 Tex. Admin. Code § 81.131** Contracting with the County Election Officer {#sec-81.131 omnilex-key=us-tx-regs-official--title-1--81.131}

(a) The SOS has prepared a Primary Election Services Contract and a Joint Primary Election Service Contract (the "Model Contract"). Copies of the appropriate Model Contract may be obtained from the SOS.

(b) The county chair may use the Model Contract when executing an agreement for election services between the county executive committee and the county elections officer. (Contractible election services are listed in Subchapter B of Chapter 31 of the Texas Election Code.)

(c) The Model Contract may be revised as necessary to accommodate the specific agreement between the county chair and county election officer; however, activities not required by law are not payable with primary funds. Accordingly, those activities should be identified in the contract, including a stipulation as to whether the county chair or the county election officer will be responsible for the cost. Each contracting entity shall report the costs for which it is responsible via the online primary finance system prescribed by SOS. The entity that reports said expense(s) will receive direct payment from SOS for those expense(s). Costs reported by the county election officer qualify for the ten percent "general supervision fee" authorized under §31.100 of the Texas Code. Expenses reported by the county chair qualify for the county chair compensation (see §81.119 of this chapter (relating to County Chair's Compensation)).

(d) The county election officer must submit to the county chair an accounting of the actual costs incurred in the performance of the election services contract. In addition, the county election officer shall report the primary-eligible expenses to SOS via the online primary finance system prescribed by SOS.

(e) The SOS may only pay actual costs incurred by the county and payable under provisions of the Texas Election Code, an election-services contract, or these administrative rules. Costs prohibited by this chapter that appear in the election service contract are not reimbursable with primary funds and must be articulated as such in the contract. Counties may not charge a flat fee for services unless the county can produce a methodology that demonstrates the fee is equal to or less than the actual costs incurred by the county, except when authorized by statute. Charges may be set at a rate of up to ten (10) percent of the annual license and maintenance fees for the software used to create the ballot style and program the electronic voting equipment.

(f) Salaries of personnel regularly employed by the county may not be paid from or reimbursed to the county from the primary fund even if the employee used their vacation time to perform the duties.

(g) A county election officer may not contract for the performance of any duty or service that he or she is statutorily obligated to perform.

(h) Section 31.100 of the Texas Election Code authorizes the election officer to assess a "general supervision fee" of up to 10 percent against the amount of the contract. The general supervision fee will not be applied to any services in which the county election officer subcontracts with another vendor that assesses a surcharge or administrative fee.

**History**
- *Source Note: The provisions of this §81.131 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.132** Cost of Early Voting to Be Paid by the County {#sec-81.132 omnilex-key=us-tx-regs-official--title-1--81.132}

(a) Pursuant to §173.003 of the Texas Election Code, the only expense to be paid from primary funds for early voting is ballot costs and the early voting ballot board.

(b) The county shall pay for voting-by-mail kits including, but not limited to, postage, early-voting workers, and all other costs incurred that are related to early voting.

(c) The county chair shall not include non-eligible expenses related to early voting in a primary-election-services joint resolution, county election services contract or a primary cost report.

**History**
- *Source Note: The provisions of this §81.132 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811.*

##### **1 Tex. Admin. Code § 81.133** No Charge for Use of a Public Building as Polling Place; Political Conventions {#sec-81.133 omnilex-key=us-tx-regs-official--title-1--81.133}

(a) Pursuant to §43.033 of the Texas Election Code, no charge may be made for the use of a public building as a polling place if that building is normally open for business on election day.

(b) A central counting station is subject to subsection (a) of this section.

(c) Primary funds may not be used to pay any charge for the use of a building for a state or county political convention.

**History**
- *Source Note: The provisions of this §81.133 adopted to be effective November 18, 2003, 28 TexReg 10201.*

##### **1 Tex. Admin. Code § 81.134** Legal Expenses {#sec-81.134 omnilex-key=us-tx-regs-official--title-1--81.134}

(a) The party chair (all references to "party chair" in this section refer to both the state chair and the county chair) may contact the SOS Elections Division for advice and assistance in election matters in accordance with §31.004 of the Texas Election Code. (Attorneys with the Elections Division may be reached toll-free by calling 1-800-252-2216. There is no charge for this service.)

(b) The SOS shall not provide primary-fund reimbursement for legal expenses arising as a result of the negligent or wrongful acts of the party chair or a member of the state or county executive committee, or the failure of the party chair or a member of the state or county executive committee to comply with the Texas Election Code, the Texas Administrative Code, or advice provided by the Elections Division in accordance with §31.004.

(c) In addition to any other requirements or limitations under this section and Chapter 173 of the Texas Election Code, the SOS shall not provide primary-fund reimbursement for legal expenses unless the party chair complies with the following preconditions before any legal expenses are incurred subject to appropriation by the Texas Legislature:

(1) The party chair requests in writing by mail, fax, or email to the Director of the Elections Division of the SOS to retain legal counsel the cost of which shall may be paid for with primary funds and the Director approves such request for the expenditure of primary funds in writing.

(2) The request shall include the style and cause number of the lawsuit for which the party chair seeks to retain legal counsel, the name of the attorney he or she wishes to retain, a brief summary of the facts that are the subject of the lawsuit, the attorney's hourly rate, and an estimate of the legal expenses necessary for legal services rendered in defense of the party chair, on behalf of the chair, the executive committee, and the party.

(3) The SOS shall not reimburse legal expenses if the county chair fails to notify the SOS of litigation within thirty (30) business days following the receipt of service of process.

(d) By failing to obtain prior written approval as provided in subsection (c) of this section, the party chair, on behalf of the chair, the executive committee, and the party, waives any right to primary-fund reimbursement for any legal costs or expenses incurred.

(e) Subject to appropriation by the Texas Legislature, notwithstanding anything to the contrary in this chapter, and only if prior written approval is obtained as set forth in subsection (c) of this section, the SOS may provide primary-fund reimbursement for legal fees and expenses incurred by the party chair only for a lawsuit commenced against the chair which seeks to include a candidate's name on the Primary Election ballot after the chair either rejected the candidate's application or declared the candidate ineligible or which seeks to exclude a candidate's name from the Primary Election ballot after the chair declined to do so.

(f) The party chair seeking reimbursement for legal expenses shall provide to the SOS copies of all invoices related to legal expenses, along with all relevant pleadings, docket sheets, judgments and orders in the case, and any additional information requested by the SOS prior to approval or rejection of legal fee reimbursement from the primary fund.

(g) The SOS shall review all submitted documentation and invoices for legal expenses and make a determination as to the compensability and reasonableness of the legal fees and expenses. Upon SOS approval and subject to appropriation by the Texas Legislature, the SOS shall reimburse legal expenses the lesser of the hourly rate submitted or the hourly rate reflected in the State Bar of Texas--Hourly Rates Report at the time the final invoice for reimbursement of legal expenses is submitted.

(h) All legal invoices, pleadings, correspondence, and any additional information requested by the SOS submitted to the SOS for reimbursement are subject to the Public Information Act (Chapter 552, Texas Government Code), and the party chair is advised not to submit any documents that are subject to attorney-client or work product privilege.

**History**
- *Source Note: The provisions of this §81.134 adopted to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.135** Primary Procedure for Counties without County Party Leadership {#sec-81.135 omnilex-key=us-tx-regs-official--title-1--81.135}

(a) The county election officer of a county where the county chair is vacant shall contract with the state chair of a political party under the following circumstances:

(1) There is an insufficient number of members serving on the county executive committee to fill a vacancy on the committee;

(2) The party is unable to establish a temporary executive committee under §171.027 of the Texas Election Code; and

(3) The election is required for the nomination of a political party to a statewide office, a multicounty district office, or a presidential primary election.

(b) The county election officer and the state chair shall enter into an election services contract consistent with §81.131 of this chapter (relating to Contracting with the County Election Officer), which, in accordance with §172.128 of the Texas Election Code, also provides that the county election officer shall be eligible to be reimbursed for primary election expenses in the same manner a county chair would be reimbursed under Subchapter D, Chapter 173.

(c) The state party shall report costs incurred consistent with this section to the SOS and receive funding consistent with this chapter.

**History**
- *Source Note: The provisions of this §81.135 adopted to be effective November 9, 2015, 40 TexReg 7811; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.136** Primary Procedure Upon County Chair Request or Failure to Comply with Certain Duties {#sec-81.136 omnilex-key=us-tx-regs-official--title-1--81.136}

(a) The state chair may, with the consent of the secretary of state and the county executive committee, if one exists for the county, accept money into the state primary fund on behalf of a county party. The state chair must keep records to track the money that is attributable to a county.

(b) The state chair of a party, or the state chair's designee, may submit cost reports prescribed under this chapter on behalf of a county chair if the county chair:

(1) requests the state chair to submit the statement on the county chair's behalf; or

(2) fails to submit the statement by the deadline.

(c) The state chair shall conduct the ballot drawing in accordance with §172.082 of the Texas Election Code if the county chair:

(1) requests that the state chair conduct the drawing; or

(2) fails to conduct the drawing by the deadline set in this section.

**History**
- *Source Note: The provisions of this §81.136 adopted to be effective October 29, 2017, 42 TexReg 5853.*

#### **Subchapter G** JOINT PRIMARY ELECTIONS

##### **1 Tex. Admin. Code § 81.146** Applicability of Other Rules {#sec-81.146 omnilex-key=us-tx-regs-official--title-1--81.146}

Except for areas of conflict, the general-primary-finance rules of Subchapter F of this chapter (relating to Primary Elections) apply to the conduct of joint primaries.

**History**
- *Source Note: The provisions of this §81.146 adopted to be effective November 18, 2003, 28 TexReg 10202.*

##### **1 Tex. Admin. Code § 81.147** County Election Officer to Conduct Joint Primary {#sec-81.147 omnilex-key=us-tx-regs-official--title-1--81.147}

(a) Pursuant to §172.126(a) of the Texas Election Code, the county election officer shall supervise the overall conduct of joint primary elections.

(b) The county election officer is responsible for:

(1) appointing election judges and clerks;

(2) determining the ballot format and type of voting system for each precinct; and

(3) procuring election equipment and supplies.

(c) The decision to conduct a joint general primary election or runoff primary election, as applicable, must be made by majority vote of the full membership of the commissioners court and with the unanimous approval of the county election officer and the county chair of each political party required to nominate candidates by primary election.

**History**
- *Source Note: The provisions of this §81.147 adopted to be effective November 18, 2003, 28 TexReg 10202; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective November 9, 2015, 40 TexReg 7811.*

##### **1 Tex. Admin. Code § 81.148** Appointment of Various Election Officials {#sec-81.148 omnilex-key=us-tx-regs-official--title-1--81.148}

(a) Upon receipt of the lists of names of election judges and clerks from each county chair not later than the second Monday in December, the county election officer shall select co-judges, co-alternate judges, and appoint clerks (if applicable) for each precinct. (These selections are made in accordance with §172.126(c) of the Texas Election Code and §81.152 of this title (relating to Estimating Voter Turnout for Joint Primaries).)

(b) The county election officer shall determine the total number of election workers required and select from the party chairs' lists the individuals to be appointed as co-judges, members of the early voting ballot board, and presiding judge and clerks of central counting station. The county election officer shall ensure party balance in these selections.

(c) If the total number of individuals (presiding judge plus election clerks) serving on the early voting ballot board or at the central counting station is an odd number, the county election officer shall appoint an additional member from the party whose candidate for governor received the highest number of votes in the county in the most recent gubernatorial general election.

**History**
- *Source Note: The provisions of this §81.148 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.149** Number of Election Workers per Joint Polling Place {#sec-81.149 omnilex-key=us-tx-regs-official--title-1--81.149}

(a) The county election officer shall use the table set out in the following figure, to determine the number of election workers allowable for each joint polling place.

(b) Each polling place shall have no less than one co-judge from each party and one clerk from each party.

(c) If the total number of workers is an odd number, the county election officer shall appoint an additional worker from the list of the party whose candidate for governor received the highest number of votes in the precinct in the most recent gubernatorial general election. (If precincts have been consolidated or combined for the joint primary, then the highest number of votes is determined by adding together the votes from the consolidated or combined precincts.)

Attached Graphic

**History**
- *Source Note: The provisions of this §81.149 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483.*

##### **1 Tex. Admin. Code § 81.150** Qualifications of Co-judges and Alternates Co-judges {#sec-81.150 omnilex-key=us-tx-regs-official--title-1--81.150}

The presiding co-judge and alternate co-judge must be a qualified voter of a precinct that is included in the consolidated or combined precincts in which they are serving.

**History**
- *Source Note: The provisions of this §81.150 adopted to be effective November 18, 2003, 28 TexReg 10202.*

##### **1 Tex. Admin. Code § 81.151** Authority of Co-Judge for Joint Primary Polling Places, Joint Primary Central Counting Station, and Joint Primary Early Voting Ballot Board {#sec-81.151 omnilex-key=us-tx-regs-official--title-1--81.151}

(a) A co-judge may only process provisional voters from the judge's own party. (This applies to the provisional process at the polling place.)

(b) A co-judge may only determine a voter's intent on an irregularly marked ballot cast by a voter from the co-judge's own party. (This limitation applies to individuals serving in a co-judge capacity at the polling place, early-voting-ballot board, or central counting station.)

**History**
- *Source Note: The provisions of this §81.151 adopted to be effective December 13, 2009, 34 TexReg 8665.*

##### **1 Tex. Admin. Code § 81.152** Estimating Voter Turnout for Joint Primaries {#sec-81.152 omnilex-key=us-tx-regs-official--title-1--81.152}

(a) Each county chair shall estimate voter turnout for each precinct using the formula set out in the following figure.

Attached Graphic

(b) The county election officer shall combine the turnout estimates provided by each party chair for each joint-primary precinct.

(c) The county election officer shall enter this information in Section B of the Joint Primary Resolution.

**History**
- *Source Note: The provisions of this §81.152 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective November 9, 2015, 40 TexReg 7811.*

##### **1 Tex. Admin. Code § 81.153** Delivery of Election Records and Supplies {#sec-81.153 omnilex-key=us-tx-regs-official--title-1--81.153}

(a) In joint precincts using an electronic voting system in which only one ballot box or only one voting unit is used, the co-judge from the party whose candidate for governor received the highest number of votes in the precinct or consolidated precinct in the most recent gubernatorial general election shall deliver the election supplies, including the voting unit containing the vote totals. (Note: A county election officer may use separate ballot boxes for each party when using electronic voting systems, if applicable.)

(b) The co-judge of the party whose candidate for governor received the highest number of votes in the precinct or consolidated precinct in the most recent gubernatorial general election may designate the other co-judge or a clerk to deliver the ballot box and/or device containing the vote totals.

(c) In a jurisdiction using paper ballots, each co-judge shall deliver their party's ballot box and election returns.

**History**
- *Source Note: The provisions of this §81.153 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209.*

##### **1 Tex. Admin. Code § 81.154** Ballots for Joint Primary Elections {#sec-81.154 omnilex-key=us-tx-regs-official--title-1--81.154}

The county election officer shall prepare ballots in a joint primary so that each party's ballots are easily distinguishable. The county election officer may use different colors of paper in order to achieve this distinction. (Note: Yellow paper may not be used. Only sample ballots may be printed on yellow paper.)

**History**
- *Source Note: The provisions of this §81.154 adopted to be effective November 18, 2003, 28 TexReg 10202; amended to be effective March 7, 2012, 37 TexReg 1483.*

##### **1 Tex. Admin. Code § 81.155** Returning Surplus Funds {#sec-81.155 omnilex-key=us-tx-regs-official--title-1--81.155}

Following final payment of necessary expenses for conducting the joint primary elections, not later than August 31 of the year in which the primary elections occur, and upon the SOS approval of all final costs, surplus primary funds shall be remitted to the SOS. If a final cost report is not filed with the SOS, the matter may be reported to the Attorney General's Office in accordance with §81.113 of this chapter (relating to Misuse of State Funds).

**History**
- *Source Note: The provisions of this §81.155 adopted to be effective December 13, 2009, 34 TexReg 8665; amended to be effective March 7, 2012, 37 TexReg 1483; amended to be effective January 9, 2014, 39 TexReg 209; amended to be effective October 29, 2017, 42 TexReg 5853.*

##### **1 Tex. Admin. Code § 81.156** Liability of County Election Officer {#sec-81.156 omnilex-key=us-tx-regs-official--title-1--81.156}

The county election officer is not liable, in his or her official or individual capacity, for debts related to the conduct of a joint primary incurred by the county executive committee or county chairs resulting from an insufficient legislative appropriation.

**History**
- *Source Note: The provisions of this §81.156 adopted to be effective November 18, 2003, 28 TexReg 10202; amended to be effective March 7, 2012, 37 TexReg 1483.*

##### **1 Tex. Admin. Code § 81.157** Joint-Primary Contract with the County Election Officer {#sec-81.157 omnilex-key=us-tx-regs-official--title-1--81.157}

(a) If a joint primary is approved, the county election officer shall supervise the primary and runoff elections, as applicable, in accordance with §172.126 of the Texas Election Code.

(b) The county chair of each political party and election officer shall enter into an election services contract.

(c) The rules set forth in §81.131 of this chapter (relating to Contracting with the County Election Officer) apply to the contract.

**History**
- *Source Note: The provisions of this §81.157 adopted to be effective November 9, 2015, 40 TexReg 7811.*

#### **Subchapter H** SURPLUS ELECTION CONTRACT FUNDS

##### **1 Tex. Admin. Code § 81.161** Disbursement of Surplus Funds from Election Service Contracts under the Texas Election Code, §31.003 {#sec-81.161 omnilex-key=us-tx-regs-official--title-1--81.161}

(a) The Election Code, §31.100(g), states that the commissioners court may not consider the availability of the election services contract fund in adopting the budget for the office of the county election officer. Pursuant to the above section, surplus election contract funds may not be used to fund the day to day operation of the office of the county election officer. Examples of day to day expenses include, but are not limited to, duties required by statute, such as the necessary administrative personnel, office space and equipment, ballots, election kits, poll lists, and early voting and election day workers.

(b) The Election Code, §31.100(f), requires that a surplus in the county election services contract fund may be used only to defray expenses of the county election officer's office in connection with election-related duties or functions. Examples of expense that may be paid with surplus contract funds include, but are not limited to, any duty which is election-related but not specifically required by statute, such as polling location mailouts, travel to election seminars, purchase of voting equipment changes or upgrades, and technology upgrades for the election office (computers).

(c) If the county election officer determines that a funding request qualifies under subsection (b) of this section and should be paid from surplus election service contract funds, said request shall be made in writing to the county commissioners court. The commissioners court shall handle the county election officer's request following normal county purchasing policies and guidelines and may either approve or deny the request. In no instance may the commissioners court approve the use of surplus election contract funds without the written approval of the county election officer.

**History**
- *Source Note: The provisions of this §81.161 adopted to be effective July 29, 1993, 18 TexReg 4639.*

#### **Subchapter I** IMPLEMENTATION OF THE HELP AMERICA VOTE ACT OF 2002

##### **1 Tex. Admin. Code § 81.171** Administrative Complaint Procedures for Violations of Title III of the Help America Vote Act of 2002 {#sec-81.171 omnilex-key=us-tx-regs-official--title-1--81.171}

(a) Definitions. In this section:

(1) "HAVA" means the federal Help America Vote Act.

(2) "Party or Parties" means the person making the complaint and any political subdivisions, officer-holders, or individuals against whom the complaint is being alleged.

(3) "Secretary of State" means the currently appointed Secretary of State or his or her designee.

(b) A person who believes that a violation of Title III of the Help America Vote Act of 2002 has occurred , is occurring, or is about to occur may file a complaint with the secretary of state. Violations of Title III include but are not limited to:

(1) failure to comply with federal voting system standards, as set out in Section 301(a) of HAVA, including standards for accessibility for individuals with disabilities and alternate language accessibility;

(2) failure to comply with provisional voting procedures in an election as required by Section 302(a) of HAVA;

(3) failure to create statewide voter registration system in the manner set out in HAVA; and

(4) failure to post required voter information at the polling place as required by Section 302(b).

(c) All complaints must:

(1) be in writing, signed and notarized by the complainant.

(2) include the full name, telephone number, and mailing address of the complainant.

(3) include a description of the alleged violation of Title III sufficient to apprise the Secretary of State of the nature and specifics of the complaint.

(4) include a statement requesting a hearing on the record it desired.

(d) The complaint shall be reviewed by an employee of the Secretary of State to determine if the complaint meets the requirements as to form and content and identifies a violation of Title III of HAVA. The complaint shall also be reviewed to determine whether it alleges a Title III violation that falls within the direct authority of the Secretary of State or a Title III violation that falls within the authority of another jurisdiction. If the complaint does not meet the requirements as to form and content, it shall be returned to the complainant with an explanation as to its insufficiency. If the complaint meets the requirements, it shall be assigned a unique number and receipt date. Notice that the complaint has been accepted shall be mailed to all parties.

(e) Within 60 days of the receipt of the complaint by the Secretary of State, the Secretary of State shall review the alleged violation and make an initial determination as to whether there is a violation of Title III of HAVA.

(f) If the Secretary of State determines that there is a violation of a provision of Title III of HAVA, the Secretary of State shall inform the complainant in writing and provide the appropriate remedy. The remedy may not include any award of monetary damages, costs or attorney fees, and may not include the invalidation of any election or a determination of the validity of any ballot or vote.

(g) If the Secretary of State determines that no violation of a provision of Title III of HAVA has occurred, the Secretary of State shall inform the complainant in writing. The notice to the complainant shall inform the complainant of his or her right to a hearing.

(h) Upon the initial determination of the Secretary of State, whether or not a violation was found, the complainant may exercise his or her right to a hearing by making a written request for a hearing on the record, which shall be held at the Secretary of State's offices in Austin, unless otherwise determined by the Secretary of State. If the nature of the complaint concerns a matter over which the Secretary of State has direct authority, the hearing shall be conducted by the Secretary of State. The hearing shall proceed as follows:

(1) The hearing shall be tape recorded, and the tape shall constitute the official record of the hearing.

(2) Written notice of the hearing shall be given to all parties including the date, time, and place of the hearing, and notice shall be sent to the mailing addresses set out in the complaint. Notice must be sent at least seven (7) days prior to the date of the hearing.

(3) If, in the discretion of the Secretary of State, the hearing is held via conference telephone call or video teleconferencing, the notice shall so state and further provide for the mechanics of the teleconference.

(4) The hearing may only be continued to a new date upon a determination of the Secretary of State that finds good cause, and in no event may it be continued more than once, or in no event may it be continued so as to make it difficult to issue a final determination within ninety (90) days of the filing of the complaint.

(5) At the hearing, each party shall be given an opportunity to explain their positions, and present evidence to support their position. At the sole discretion of the Secretary of State, this presentation may include documents, witnesses, oral argument, and tangible items relevant to the determination of the complaint. The record of the hearing shall consist of the written complaint, the written response(s), the tape of the hearing, and any documents/exhibits introduced at the hearing.

(6) If the Secretary of State permits witnesses to testify, they must be sworn in prior to their testimony being given.

(7) If a complainant fails to appear at the hearing, the complaint shall be dismissed with prejudice.

(i) If the Secretary of State fails to make a final determination within 90 days, which begins on the date the complaint is filed, unless the complainant consents to a longer period for making such determination, the complaint shall be resolved within 60 days under alternative dispute resolution procedures established for purposes of this section. The record and other materials from any proceedings conducted under the complaint procedures established under this section shall be made available for use under the alternative dispute resolution procedures.

(j) The Secretary of State may consolidate complaints filed under this rule if the Secretary of State determines that the complaints concern the same violation.

(k) Complaints, information filed with the Secretary of State in connection with complaints, and the Secretary of State's response to the complaint are public records.

**History**
- *Source Note: The provisions of this §81.171 adopted to be effective November 13, 2003, 28 TexReg 9801; amended to be effective July 1, 2004, 29 TexReg 6085.*

##### **1 Tex. Admin. Code § 81.172** Eligibility to Vote a Provisional Ballot at the Early Voting or the Election Day Polling Place {#sec-81.172 omnilex-key=us-tx-regs-official--title-1--81.172}

(a) At all elections, the following individuals shall be eligible to cast a provisional ballot.

(1) A voter who does not provide an acceptable form of identification described by §63.0101 of the Texas Election Code (the "Code"), regardless of whether the voter presents a valid voter registration certificate.

(2) A voter whose name on the acceptable form of identification is determined by the polling place official to not exactly match or be substantially similar to the name as it appears on the official list of registered voters.

(3) A voter whose identity cannot be verified by the identification presented by the voter, as determined by the polling place official per §63.001(d) of the Code.

(4) A voter who has received a disability exemption under §13.002(i) of the Code, but does not have or otherwise fails to present the voter's voter registration certificate indicating such exemption.

(5) Under §63.009 of the Code, a voter who claims to be properly registered and eligible to vote at the election precinct where the voter presents himself or herself to vote, but the voter's name does not appear on the precinct list of registered voters and the voter does not present a voter registration certificate indicating that the voter is currently registered (as described in §63.006 of the Code).

(6) A voter who has applied for a ballot by mail, but has not yet properly cancelled the mail ballot application.

(7) A voter who votes during the polling hours that are extended by a state or federal court as described in §63.011(e) of the Code.

(8) A voter who is registered to vote but attempting to vote in a precinct other than the one in which the voter is registered.

(9) A voter who is on the election precinct list of registered voters, but whose registered residence address is outside the political subdivision in which the voter is presenting himself or herself to vote.

(10) Other _________________(with an explanation).

(b) A voter is not required to vote provisionally and may vote a regular ballot if the voter's name does not appear on the precinct list of registered voters, but the voter presents an acceptable form of identification described by §63.0101 of the Code and, in accordance with §63.006 of the Code:

(1) presents a current registration certificate indicating the voter is registered in the precinct; or

(2) presents a current registration certificate indicating the voter is a resident of a precinct other than the one in which the voter is offering to vote and completes an affidavit stating the voter is:

(A) a resident of the precinct in which the voter is offering to vote or otherwise entitled by law to vote in the precinct;

(B) was a resident of the precinct in which the voter is offering to vote at the time the information on the voter's residence address was last offered to the voter registrar;

(C) did not deliberately provide false information to secure registration in a precinct in which the voter does not reside; and

(D) is voting only once in the election.

(c) A person voting by mail may not vote a provisional ballot.

**History**
- *Source Note: The provisions of this §81.172 adopted to be effective April 3, 2014, 39 TexReg 2264.*

##### **1 Tex. Admin. Code § 81.173** Provisional Voting Procedures at the Polling Place {#sec-81.173 omnilex-key=us-tx-regs-official--title-1--81.173}

(a) Polling Place Preparation.

(1) If using optical scan or regular paper ballots, the election judge shall set aside a sufficient number of regular ballots from the supply of official ballots and write or stamp "provisional" on the back of the ballot (referred to as "provisional ballots").

(2) The election judge shall keep the provisional ballots separate from the regular ballots.

(3) Provisional ballots may be cast electronically on a Direct Record Electronic (DRE) voting system if:

(A) the system is one approved by the Secretary of State under Chapter 122 of the Code;

(B) the system is adopted by the governing body of the political subdivision under §123.001 of the Code;

(C) the system segregates provisional votes from regularly-cast votes on the precinct returns; and

(D) the system provides a method for the cast provisional ballots to be accepted and added to the election results by the Early Voting Ballot Board or central counting station personnel, as applicable.

(4) The election judge shall prepare the DRE voting system for provisional voting in accordance with instructions provided by the general custodian of election records, which may include the instructions of the vendor of the system.

(b) Polling Place Procedures for Provisional Voting.

(1) If a voter is eligible to cast a provisional ballot under the provisions set forth in §81.172(a) of this subchapter (relating to Eligibility to Vote a Provisional Ballot at the Early Voting or the Election Day Polling Place) and §63.011 of the Code, the election judge shall immediately inform the voter of this right.

(2) The election judge shall advise the provisional voter that in order to have the voter's provisional ballot accepted, the provisional voter must be voting in the election precinct to which the voter is assigned.

(3) If the voter is not on the precinct list of registered voters, the election judge may assist the voter in determining the voter's correct precinct.

(4) If the provisional voter has no acceptable form of identification, the voter may still be permitted to vote a provisional ballot, but will be advised by the election judge that in order to have the provisional ballot accepted, no later than the sixth calendar day after the election date, the voter must:

(A) present an acceptable form of identification described by §63.0101 of the Code to the voter registrar;

(B) execute an affidavit for a temporary exemption in the presence of the voter registrar; or

(C) submit a complete application for a permanent disability exemption to the voter registrar in person or through acceptable means of transmission under the Code.

(5) The election judge must inform the voter that in order to vote a provisional ballot, a provisional voter must complete and sign the Provisional Ballot Affidavit Envelope. The Provisional Ballot Affidavit Envelope, a form prescribed by the Secretary of State in accordance with §31.002 and §63.011 of the Code, shall include the following:

(A) A statement that the provisional voter is a registered voter in the election precinct in which the voter seeks to vote and that the voter is eligible to vote in the election; and

(B) A space for disclosure of any information necessary to enable the person to register to vote under Chapter 13 of the Code if the voter proves to be unregistered.

(6) The election judge shall complete the appropriate judge's portion of the reverse side of the Provisional Ballot Affidavit Envelope.

(7) The election judge shall check the appropriate box, "yes" or "no," as to whether the voter presented an acceptable form of identification described by §63.0101 of the Code.

(8) The election judge shall check the reason for which the voter voted provisionally on the Provisional Ballot Affidavit Envelope. The reasons include:

(A) Failed to present acceptable form of identification described by §63.0101 of the Code or the voter registration certificate with exemption;

(B) Voter not on list of registered voters;

(C) Voter not on list, registered in another precinct;

(D) Voter on list of people who voted early by mail, and voter has not cancelled mail ballot application;

(E) Voting after 7:00 p.m. due to court order;

(F) Voter on list, but registered residence address outside the ___________political subdivision; or

(G) Other _________________ (Please explain).

(9) The election judge shall then sign the Provisional Ballot Affidavit Envelope.

(10) After the provisional voter and the election judge complete the Provisional Ballot Affidavit Envelope, the election judge shall enter the provisional voter's name on the Early Voting List of Provisional Voters form or the List of Provisional Voters form, as applicable, prescribed by the Secretary of State.

(11) The election judge shall add the name of the provisional voter to the poll list or combination form and mark the voter as "Provisional."

(12) The provisional voter shall sign the regular signature roster or combination form in the appropriate place.

(13) The election judge shall provide to the voter a Notice to Provisional Voter. This form must inform the provisional voter that the voter will receive notice in the mail about whether the voter's provisional ballot was counted. The form may also provide the voter with information explaining that the Provisional Ballot Affidavit Envelope will be used by the voter registrar to register the voter or update the voter's registration, as applicable.

(14) The Notice to Provisional Voter for Voters Voting Provisional due to lack of ID is a form prescribed by the Secretary of State and must also contain the following information:

(A) The list of acceptable forms of identification described by §63.0101 of the Code, as well as the available exemptions;

(B) The procedure for presenting identification to the voter registrar, executing an affidavit for a temporary exemption in the presence of the voter registrar, and applying for a permanent disability exemption, not later than the sixth day after the election date;

(C) A map showing the location of the voter registrar (attached by administrator of election);

(D) Notice that if all procedures are followed and the provisional voter is found to be eligible to vote and is voting in the correct election precinct, the voter's provisional ballot will be accepted by the Early Voting Ballot Board after the election; and

(E) A place for the election official to enter the voter's name, voter unique identifier (VUID) number (if available), and the precinct polling place at which the provisional ballot was voted.

(15) If provisional voting is being conducted with paper or optical scan ballots, the election judge and provisional voter must adhere to the following steps.

(A) The election judge shall direct the provisional voter to choose a ballot from a disarranged (random numerical order) supply of pre-designated "provisional" ballots that are separate from regular ballots, in accordance with §62.009 of the Code.

(B) After marking the provisional ballot, the voter must place the ballot in the provided secrecy envelope, and then place the secrecy envelope (with ballot inside) inside the Provisional Ballot Affidavit Envelope. The Provisional Ballot Affidavit Envelope must be sealed.

(C) The provisional voter must deposit the Provisional Ballot Affidavit Envelope in the secure container for completed Provisional Ballot Affidavit Envelopes provided at the polling place.

(16) If provisional voting is being conducted on DRE voting machines, the election judge shall prepare the DRE voting machine for provisional voting in accordance with instructions provided by the general custodian of election records, which may include the instructions of the vendor of the system. After the provisional voter completes the voting process, the completed Provisional Ballot Affidavit Envelope will be deposited in the secure container for completed Provisional Ballot Affidavit Envelopes provided at the polling place.

(c) Early Voting by Personal Appearance Provisional Ballot Procedures.

(1) To the extent practicable, the early voting clerk or deputy early voting clerk shall follow election day provisional ballot procedures during the early voting period.

(2) The provisional voter's precinct number shall be added to the Early Voting List of Provisional Voters.

(3) The early voting clerk may deliver the provisional ballot envelopes cast during early voting to the voter registrar. The early voting clerk must sign the List of Provisional Ballots before transfer to the voter registrar. The voter registrar shall sign the List of Early Voting Provisional Voters to verify receipt of the provisional ballot envelopes.

(4) The voter registrar shall review the Provisional Ballot Affidavit Envelopes as set out in §81.175 of this subchapter (relating to Voter Registrar Review of Provisional Ballot Affidavit Envelopes).

**History**
- *Source Note: The provisions of this §81.173 adopted to be effective April 3, 2014, 39 TexReg 2264.*

##### **1 Tex. Admin. Code § 81.174** Provisional Ballot Affidavit Envelope Transfer Procedures {#sec-81.174 omnilex-key=us-tx-regs-official--title-1--81.174}

(a) Transfer of Early Voting Provisional Ballot Affidavit Envelopes during Early Voting Period.

(1) During the early-voting-by-personal-appearance period, upon the request of the voter registrar, the general custodian of election records may request that the early voting clerk, as well as the deputy early voting clerk at branch locations, deliver to the general custodian of election records the early voting Provisional Ballot Affidavit Envelopes.

(2) In an election where the early voting clerk is not designated as the general custodian of election records, the general custodian of election records may permit the early voting clerk to deliver the Provisional Ballot Affidavit Envelopes.

(3) The delivery must occur at a place designated by the general custodian of election records.

(4) The Provisional Ballot Affidavit Envelopes must be stored and transferred in a closed and sealed transfer case provided by the general custodian of election records.

(5) The early voting clerk and the deputy early voting clerk shall accompany such delivery with the Early Voting List of Provisional Voters specific to such Provisional Ballot Affidavit Envelopes.

(6) The general custodian of election records shall unseal and open the transfer case and verify that the number of provisional voters on the Early Voting List of Provisional Voters matches the number of Provisional Ballot Affidavit Envelopes contained in the transfer case.

(7) The general custodian of election records shall sign the Early Voting List of Provisional Voters evidencing the number of provisional voters per precinct and the number of Provisional Ballot Affidavit Envelopes to be forwarded to the voter registrar.

(8) The general custodian of election records shall prepare a Summary of Provisional Ballots listing each precinct and the number of Provisional Ballot Affidavit Envelopes for each precinct.

(9) The custodian shall place the following items in a transfer case:

(A) the Provisional Ballot Affidavit Envelopes;

(B) the Early Voting List of Provisional Voters;

(C) blank Verification of Provisional Ballots and Serial Numbers forms; and

(D) seals sufficient to secure the transfer case(s) when the voter registrar returns the Provisional Ballot Affidavit Envelopes to the custodian.

(10) The custodian shall seal the transfer case. The seal number shall be placed on the Summary of Provisional Ballots.

(11) If the general custodian of election records does not request delivery of the Provisional Ballot Affidavit Envelopes during the early voting period, the early voting clerk and the deputy early voting clerk shall deliver the closed and sealed container for completed Provisional Ballot Affidavit Envelopes and the Early Voting List of Provisional Voters to the custodian upon completion of the early-voting-by-personal-appearance period. Upon delivery, the general custodian shall complete steps outlined in paragraphs (6) - (10) of this subsection.

(b) Transfer to Voter Registrar of Early Voting Provisional Ballot Affidavit Envelopes.

(1) The general custodian of election records shall post a Notice of Delivery of Provisional Ballots of the early voting Provisional Ballot Affidavit Envelopes at least 24 hours before the first such delivery to the voter registrar.

(2) If the voter registrar requests delivery of the Provisional Ballot Affidavit Envelopes during the early voting period, the custodian may deliver, at one or more times during regular business hours, the Provisional Ballot Affidavit Envelopes cast during early voting to the voter registrar in a closed and sealed transfer case accompanied by the Summary of Provisional Ballots, after following the procedures set forth in subsection (a)(5) - (10) of this section.

(3) If the voter registrar does not request delivery of the Provisional Ballot Affidavit Envelopes during the early voting period, the custodian shall deliver the Provisional Ballot Affidavit Envelopes cast during early voting to the voter registrar in a closed and sealed transfer case no later than the first business day after the completion of early voting and after following the procedures set forth in subsection (a)(5) - (10) of this section.

(4) The voter registrar shall sign the Early Voting List of Provisional Voters, the Summary of Provisional Ballots, and the Verification of Provisional Ballots and Serial Numbers to verify receipt of the Provisional Ballot Affidavit Envelopes.

(c) Transfer of Election Day Provisional Ballot Affidavit Envelopes to General Custodian of Election Records.

(1) After the election day polls have closed, the election judge shall enter the number of Provisional Ballot Affidavit Envelopes cast on the Register of Official Ballots and on the List of Provisional Voters.

(2) The election judge shall place a copy of the List of Provisional Voters form inside Envelope No. 2.

(3) In an election in which a precinct tabulator is utilized, any ballots stamped "provisional" that are not contained in a Provisional Ballot Affidavit Envelope may not be counted and are not transferred to the voter registrar. The ballots shall be treated as irregularly marked ballots under the procedure set out in §127.157 of the Texas Election Code.

(4) The closed and sealed container for completed Provisional Ballot Affidavit Envelopes shall be delivered by the election judge or the judge's designee to the general custodian of election records.

(5) The general custodian of election records shall unseal and open the secure container with the Provisional Ballot Affidavit Envelopes.

(6) The general custodian of election records or central counting station personnel, if applicable under §127.157 of the Code, shall verify that the number of Provisional Voters on the List of Provisional Voters matches the number of Provisional Ballot Affidavit Envelopes recorded on the ballot register.

(7) The general custodian of election records shall sign the List of Provisional Voters evidencing the number of provisional voters per precinct and the number of Provisional Ballot Affidavit Envelopes to be forwarded to the voter registrar.

(8) The general custodian of election records shall prepare a Summary of Provisional Ballots listing each precinct and the number of Provisional Ballot Affidavit Envelopes received by that precinct.

(9) The general custodian of election records shall place the following items in a closed transfer case:

(A) the Provisional Ballot Affidavit Envelopes;

(B) the corresponding List of Provisional Voters; and

(C) blank Verification of Provisional Ballots and Serial Numbers forms, and seals sufficient to secure the transfer case(s) when the voter registrar returns the Provisional Ballot Affidavit Envelopes to the custodian.

(10) The general custodian of election records shall seal each transfer case that contains Provisional Ballot Affidavit Envelopes and their corresponding List of Provisional Voters prior to delivery to the voter registrar. The numbers on the seal shall be recorded on the Summary of Provisional Ballots.

(11) A poll watcher, if available, may sign the Summary of Provisional Ballots.

(d) Transfer to Voter Registrar of Election Day Provisional Ballot Affidavit Envelopes.

(1) The general custodian of election records shall deliver the transfer case(s) containing the Provisional Ballot Affidavit Envelopes and the List of Provisional Voters for each precinct, along with the Summary of Provisional Ballots, on the next business day after the election.

(2) The general custodian of election records must also include with the delivery blank Verification of Provisional Ballots and Serial Numbers forms and seals sufficient to secure the transfer case(s) for when the voter registrar returns the Provisional Ballot Affidavit Envelopes to the custodian after the voter registrar's review.

(3) If the voter registrar wishes to take possession of the transfer case(s) containing the Provisional Ballot Affidavit Envelopes from the general custodian of election records on election night, the voter registrar must inform the custodian and post a Notice of Delivery of Provisional Ballots no later than 24 hours before election day. If the voter registrar makes this determination, the voter registrar must go to the custodian's office and take possession on election night.

(4) Upon receipt of the transfer case(s) containing the Provisional Ballot Affidavit Envelopes, the voter registrar shall sign the Summary of Provisional Ballots and the Verification of Provisional Ballots and Serial Numbers to verify such receipt, that the box was intact, and that the seal was not broken.

(5) The voter registrar shall break the seal of the transfer case(s) containing the Provisional Ballot Affidavit Envelopes and remove the Provisional Ballot Affidavit Envelopes in order to begin the voter registrar's review.

**History**
- *Source Note: The provisions of this §81.174 adopted to be effective April 3, 2014, 39 TexReg 2264.*

##### **1 Tex. Admin. Code § 81.175** Voter Registrar Review of Provisional Ballot Affidavit Envelopes {#sec-81.175 omnilex-key=us-tx-regs-official--title-1--81.175}

(a) Deadline to Complete Review.

(1) Except as provided in paragraph (2) of this subsection, the voter registrar shall complete the review of the Provisional Ballot Affidavit Envelopes no later than the sixth calendar day after election day.

(2) For an election held on the date of the general election for state and county officers, the voter registrar shall complete the review of the Provisional Ballot Affidavit Envelopes no later than the seventh calendar day after election day.

(b) Post-Election Submission of Identification to Voter Registrar under §65.0541 of the Code.

(1) A voter who cast a provisional ballot due to the voter's failure to present an acceptable form of identification at the polling place may correct the problem by:

(A) presenting an acceptable form of identification as set forth in §63.0101 of the Code to the voter registrar;

(B) applying for and receiving a disability exemption under §13.002(i) of the Code; or

(C) completing one of the affidavits set out in §65.054(b)(2)(B) (religious objection) or

(C) (natural disaster) of the Code in the presence of the registrar not later than the sixth day after the date of the election.

(2) If the sixth day falls on a Saturday, Sunday, or legal state or national holiday, the deadline is extended to the next business day in accordance with §1.006 of the Code.

(3) At a minimum, the voter registrar's office shall remain open and available for provisional voters to present an acceptable form of identification described by §63.0101 of the Code to the registrar or apply for an exemption under this rule during regular business hours on regular business days.

(4) After the provisional voter submits an acceptable form of identification described by §63.0101 of the Code, applies for the disability exemption under §13.002(i) of the Code, or completes one of the affidavits set out in §65.054(b)(2)(B) (religious objection) or (C) (natural disaster) of the Code in the presence of the voter registrar, the voter registrar shall review the form of identification or exemption request and follow the applicable procedure.

(A) For voters presenting one of the acceptable forms of identification described by §63.0101 of the Code, the photo identification must meet the same standards as required on election day. Therefore, the voter registrar must:

(i) Review the photo identification's expiration date (if applicable), and ensure that it is valid and has not expired earlier than 60 days before the date of presentation;

(ii) Determine if the provisional voter's name, as listed on the acceptable form of identification, is identical to or substantially similar to the provisional voter's name as it appears on the official list of registered voters; and

(iii) Verify the voter's identity through the acceptable identification provided.

(B) The disability exemption form prescribed by the Secretary of State must be completed and signed by the provisional voter and must be accompanied by written documentation from the United States Social Security Administration evidencing that the provisional voter has been determined to have a disability, or from the United States Department of Veterans Affairs evidencing that the provisional voter has at least a 50 percent disability rating. The documentation must be maintained by the voter registrar with other records pertaining to the provisional voter's voter registration.

(C) A request for a temporary exemption under §65.054(b)(2)(B) (religious objection) or (C) (natural disaster) of the Code need not be accompanied by any supporting documentation other than the affidavit, and the voter registrar will rely on the sworn statement of the provisional voter on the affidavit to support the truth of the statements therein.

(5) The voter registrar will enter the provisional voter's information on the Provisional Voters Appearing to Voter Registrar During Cure Period form.

(6) The provisional voter will sign the Provisional Voters Appearing to Voter Registrar During Cure Period form.

(7) If the voter's name on the acceptable form of identification does not exactly match, but is substantially similar to the name as it appears on the official list of registered voters, the voter must complete the similar name affidavit located on the Provisional Voters Appearing to Voter Registrar During Cure Period form.

(8) If the voter registrar has possession of the Provisional Ballot Affidavit Envelopes, the voter registrar shall mark the voter's Provisional Ballot Affidavit Envelope to reflect that the voter:

(A) presented an acceptable form of identification; or

(B) applied for and received the disability exemption under §13.002(i) of the Code, with documentation evidencing receipt of the exemption; or

(C) completed one of the affidavits set out in §65.054(b)(2)(B) (religious objection) or (C) (natural disaster) of the Code in the presence of the voter registrar; or

(D) failed to satisfy the identification or affidavit requirements.

(9) If the provisional voter submitted an application for the disability exemption, the voter registrar shall attach the completed application to the provisional voter's original voter registration application and issue the voter a new certificate containing the indication required under §15.001(c) of the Code.

(10) If the provisional voter submitted an application for one of the temporary exemptions under §65.054(b)(2)(B) (religious objection) or (C) (natural disaster) of the Code, the voter registrar will attach the temporary exemption affidavit to the voter's Provisional Ballot Affidavit Envelope.

(11) Poll watchers are not entitled to be present during the voter registrar's review.

(c) Review of Provisional Ballot Affidavit Envelopes by Voter Registrar.

(1) The voter registrar shall review information from the following sources to attempt to determine a provisional voter's registration status:

(A) The voter registrar's own county voter registration files and records;

(B) The Department of Public Safety;

(C) Volunteer Deputy Registrars; and

(D) Other records that may establish the provisional voter's eligibility.

(2) The voter registrar must examine each Provisional Ballot Affidavit Envelope, determine the provisional voter's registration status from the sources described in paragraph (1)(A) - (D) of this subsection, and mark the appropriate status on the Provisional Ballot Affidavit Envelope.

(3) For provisional voters who did not present an acceptable form of identification at the polling place, the voter registrar must mark one of the following on the Provisional Ballot Affidavit Envelope.

(A) Voter presented acceptable form of identification described by §63.0101 of the Code within six days of election day.

(B) Voter met disability exemption within six days of election day.

(C) Voter executed religious objection affidavit within six days of election day.

(D) Voter executed natural disaster affidavit within six days of election day.

(E) Voter did not satisfy identification or affidavit requirements, listed in subparagraphs (A) - (D) of this paragraph, within six days of election day.

(4) For provisional voters who voted provisionally for other reasons, the voter registrar must mark one of the following on the Provisional Ballot Affidavit Envelope.

(A) Not a registered voter or registration not effective in time for this election.

(B) Registered to vote, erroneously listed in wrong precinct.

(C) Registered to vote in a different precinct within the county.

(D) Information on file indicating applicant completed a voter registration application, but it was never received in the voter registrar's office.

(E) Voter erroneously removed from the list.

(F) Voter is not registered to vote in ____________ political subdivision.

(G) Other _________________ (Please explain).

(5) The voter registrar shall sign and date each Provisional Ballot Affidavit Envelope after the registrar completes the review.

(6) The voter registrar shall copy the Provisional Ballot Affidavit Envelope of each provisional voter who was not registered to vote, who was registered but whose information contained updated voter registration information, who was erroneously cancelled, who was listed in the wrong precinct, or for any other reason the voter registrar deems necessary.

(7) For purposes of voter registration, the copied Provisional Ballot Affidavit Envelope serves as an original voter registration application or change form; the effective date will be calculated as 30 days from the election date for the election for which the Provisional Ballot Affidavit Envelope was submitted.

(8) If the residence address provided on the Provisional Ballot Affidavit Envelope falls outside the voter registrar's jurisdiction, the voter registrar shall forward a copy of the Provisional Ballot Affidavit Envelope to the appropriate voter registrar. The effective date of the transferred copy shall be calculated as 30 days from the election date for the election for which the Provisional Ballot Affidavit Envelope was originally submitted. The original Provisional Ballot Affidavit Envelope shall be transferred by the general custodian of election records to the appropriate voter registrar after the preservation period upon the voter registrar's request.

(9) Poll watchers are not entitled to be present during the voter registrar's review.

(d) Return of Provisional Ballot Affidavit Envelopes by the Voter Registrar.

(1) The voter registrar shall replace the Provisional Ballot Affidavit Envelopes in a closed and sealed transfer case provided by the general custodian of election records along with copies of the List of Provisional Voters and the copy of the Summary of Provisional Ballots. The container must be closed and sealed. The serial number of the seal shall be recorded on the Verification of Provisional Ballots and Serial Number form.

(2) The general custodian of the election records or the Early Voting Ballot Board presiding judge shall pick up the closed and sealed transfer cases and all other materials at the time, date, and location designated by the voter registrar. The voter register may designate more than one time and date for delivery and there may be multiple deliveries.

(3) The voter registrar's final designated time of delivery may in no event be later than the time the Early Voting Ballot Board convenes on the seventh day after election day to count provisional ballots in accordance with §65.051(a) of the Code.

(4) The voter registrar shall sign the Verification of Provisional Ballots and Serial Numbers form verifying the transfer, and the presiding judge of the Early Voting Ballot Board or general custodian of election records shall sign indicating receipt of the Provisional Ballot Affidavit Envelopes and that the container(s) were properly closed and sealed.

**History**
- *Source Note: The provisions of this §81.175 adopted to be effective April 3, 2014, 39 TexReg 2264.*

##### **1 Tex. Admin. Code § 81.176** Early Voting Ballot Board Provisional Ballot Review {#sec-81.176 omnilex-key=us-tx-regs-official--title-1--81.176}

(a) Early Voting Ballot Board defined for purposes of provisional ballot review. The authority appointing the Early Voting Ballot Board may determine which members of the board will review and count the provisional ballots. The entire Early Voting Ballot Board is not required to be present. A minimum of three members of the board is required to conduct the review.

(b) Delivery of Ballots to the Early Voting Ballot Board.

(1) The presiding judge of the Early Voting Ballot Board shall take receipt of the Provisional Ballot Affidavit Envelopes from the voter registrar directly or via the general custodian of election records at a time and place to be determined by the presiding judge.

(2) The voter registrar may review and transfer Provisional Ballot Affidavit Envelopes to the presiding judge of the Early Voting Ballot Board on a rolling basis. The voter registrar and presiding judge of the Early Voting Ballot Board must coordinate transfer times.

(3) The time of delivery may in no event be later than the time the Early Voting Ballot Board convenes on the seventh day after election day to count provisional ballots pursuant to §65.051(a) of the Code.

(4) The presiding judge of the Early Voting Ballot Board may convene the board as soon as practicable after the voter registrar has begun delivery of the applicable provisional ballots.

(5) The judge must post a notice on the bulletin board used for posting notices of meetings of the governing body ordering the election no later than 24 hours before the board is scheduled to meet. The board may also convene while the voter registrar continues the review.

(c) Review of Provisional Ballot Affidavit Envelopes by Early Voting Ballot Board.

(1) The Early Voting Ballot Board shall review both the election judge's and the voter registrar's notation on each Provisional Ballot Affidavit Envelope to determine whether or not the ballot should be counted.

(2) A Provisional Ballot shall not be counted for the following reasons:

(A) If the election judge indicated that the voter did not provide an acceptable form of identification described by §63.0101 of the Code and the voter registrar noted that the voter did not present an acceptable form of identification to the voter registrar, complete one of the curing affidavits set out in §65.054(b)(2)(B), or apply for and receive a disability exemption by the sixth day after election day, then the ballot shall not be counted.

(B) If the election judge indicated that a voter with a permanent disability exemption to the identification requirements did not submit the registration certificate at the polling place, and the voter registrar notes that the voter failed to present their registration certificate with exemption, present another form of acceptable identification described by §63.0101 of the Code, or apply for and receive a permanent disability exemption by the sixth day after election day, the ballot shall not be counted.

(C) If a voter voted provisionally due to having an outstanding mail ballot that has not yet been cancelled, the provisional ballot shall not be counted if the provisional voter has already voted.

(D) If the voter registrar indicated that the provisional voter is not registered to vote in the territory holding the election or the registration was not effective in time for the election, the ballot shall not be counted.

(E) If the voter registrar indicated that the provisional voter is registered to vote at a different precinct other than the one the voter voted in, the ballot shall not be counted.

(F) If the election judge indicated that the voter was on the list of registered voters, but the voter's registered residence address is outside the political subdivision, the ballot shall not be counted.

(G) If the voter registrar indicated that an incomplete application was received from the provisional voter but the required additional information was not returned, the ballot shall not be counted.

(3) The Provisional Ballot shall be counted for the following reasons:

(A) The ballot shall be counted if the voter failed to submit identification at the polling place, but the voter registrar indicated the voter presented an acceptable form of identification in person at the registrar's office within six calendar days after the date of the election and the voter was otherwise eligible to vote in the election.

(B) The ballot shall be counted if the voter failed to submit identification at the polling place, but the voter registrar indicated on the Provisional Ballot Affidavit Envelope that the voter applied for and received the disability exemption under §13.002(i) of the Election Code by the sixth day after election day and the voter was otherwise eligible to vote in the election.

(C) The ballot shall be counted if the voter failed to submit identification at the polling place, but the voter registrar indicated the voter completed one of the two curing affidavits set out in §65.054(b)(2)(B) (consistent religious objection to photographs) or §65.054(b)(2)(C) (identification unavailable due to declared natural disaster) no later than the sixth day after election day.

(D) If the election judge indicated that the reason for casting a provisional ballot was that the voter appeared on the list of registered voters as having cast a ballot by mail, and the voter claimed that he never received the mail ballot, or would like to cancel his or her mail ballot, the provisional ballot shall be counted if the voter's mail ballot has not already been received.

(E) If the voter registrar indicated that the provisional voter is registered to vote in the territory holding the election, the ballot shall be counted.

(F) If the voter registrar indicated that the provisional voter is registered to vote, but was erroneously listed in the wrong precinct, the ballot shall be counted.

(G) If the voter was erroneously removed from the voter registration list and is otherwise qualified to vote, the ballot shall be counted.

(H) The voter registrar has information in the office that the voter did complete an application, and the voter is otherwise qualified, the ballot shall be counted.

(4) The presiding judge of the Early Voting Ballot Board shall indicate the disposition of each provisional ballot on the appropriate space of the Provisional Ballot Affidavit Envelope.

(5) The presiding judge of the Early Voting Ballot Board shall indicate the disposition of each Provisional Ballot Affidavit Envelope on the List of Provisional Voters for that precinct.

(6) The ballots to be counted shall be removed from their Provisional Ballot Affidavit Envelopes and counted under the normal procedure for counting ballots by mail in the election, unless the presiding judge of the Early Voting Ballot Board decides to count the ballots by hand. If counted by hand, the ballots shall be tallied by precinct in the regular manner. The board shall prepare the returns and submit the returns to the general custodian of election records.

(7) The Provisional Ballot Affidavit Envelopes for accepted provisional ballots shall be placed in an envelope or container for Provisional Ballot Affidavit Envelopes marked "Accepted," and the Provisional Ballot Affidavit Envelopes and the rejected provisional ballots shall be placed in an envelope or container for Provisional Ballot Envelopes marked "Rejected."

(8) If using optical scan ballots:

(A) The manager of the central counting station shall decide whether the Early Voting Ballot Board shall manually count the ballots and manually add to the computer count for a canvass total or whether the central counting station shall reconvene.

(B) The manager shall send notice to the presiding judge of the Early Voting Ballot Board prior to reconvening the board as to whether the ballots are to be counted manually by the board or whether the ballots are merely to be prepared for delivery to the central counting station.

(C) Prior to the beginning of the count at a central counting station, the manager shall run the required second logic and accuracy test using the same test deck as on Election Day. The test must be successful.

(D) After the second successful test is conducted, the unofficial election results, preserved by electronic means, shall be loaded in the tabulating equipment.

(E) Once the ballots have been counted, the results shall be prepared in the regular manner. The manager shall prepare a certification and attach it to the returns, then place the certification and returns in envelope #1 to be delivered to the presiding officer of the canvassing board indicating that the result supersedes any returns printed prior to the reconvening of the central counting station after election day.

(F) After the count is complete, the manager shall run the required third logic and accuracy test. If the test is not successful, the count is void.

(9) If using a Direct Record Electronic (DRE) system, the central counting station manager shall prepare the DRE voting system for reviewing and accepting provisional ballots in accordance with instructions provided by the general custodian of election records, which may include the instructions of the vendor of the system.

(10) Once counted, the Provisional Ballot Affidavit Envelopes, along with any corresponding paperwork shall be re-sealed in the container and returned to the general custodian of election records.

(11) The List of Provisional Voters for each precinct, along with any copies of the List forms, shall be delivered to the general custodian of election records in the envelope or container for accepted Provisional Ballot Affidavit Envelopes.

(12) The provisional ballots and Provisional Ballot Affidavit Envelopes shall be retained for the appropriate preservation period for the election.

(13) All Provisional Ballot Affidavit Envelopes and the List of Provisional Voters are public records after the Early Voting Ballot Board has completed their review and the Provisional Ballot Affidavit Envelopes and the List of Provisional Voters have been returned to the General Custodian of Election Records.

(14) Rejected Provisional Ballot Affidavit Envelopes may not be opened except by court order.

(15) Poll watchers are entitled to be present at the meeting of Early Voting Ballot Board pursuant to §33.054 of the Texas Election Code.

(d) Request for Return of Original Envelopes. Upon request of the voter registrar, the general custodian of election records shall deliver the original Provisional Ballot Affidavit Envelopes to the voter registrar after the preservation period.

(e) Notice of Outcome to Provisional Voters. Not later than the tenth day after the local canvass, the presiding judge of the Early Voting Ballot Board shall deliver written notice to the provisional voter regarding whether the provisional ballot was counted, and if the ballot was not counted, the reason the ballot was not counted. The presiding judge shall use the information provided on the Provisional Ballot Affidavit Envelope to obtain the proper mailing address for the voter and the final resolution of the provisional ballot.

**History**
- *Source Note: The provisions of this §81.176 adopted to be effective April 3, 2014, 39 TexReg 2264.*

#### **Subchapter J** VOTER EDUCATION

##### **1 Tex. Admin. Code § 81.301** Ordered Student Mock Elections {#sec-81.301 omnilex-key=us-tx-regs-official--title-1--81.301}

The secretary of state shall prescribe any procedures necessary to implement this section and ensure that the conduct of a student mock election does not affect the proper and efficient conduct of a general, special, or primary election.

(1) A student mock election may be ordered by:

(A) the commissioners court, for a student mock election held in conjunction with an election ordered by the governor or a county authority;

(B) the governing body of a political subdivision, for a student mock election held in conjunction with an election of the political subdivision;

(C) the county executive committee, for a student mock election held in conjunction with a primary election.

(2) If a student mock election is ordered by the commissioners court, governing body of a political subdivision, or the county executive committee to be held in the adult polling place, it may only be held on election day or the day before the election, pursuant to the Election Code, §276.007. The restrictions set forth in §276.007 only apply to student mock elections held in conjunction with a general, special, or primary election.

(3) The authority ordering a student mock election shall specify in the order each grade that may participate in the election. A student in a specified grade may enter a designated polling place or specified locale for the purpose of casting an unofficial ballot in the student election on the same offices and measures that appear on the official ballot.

(4) The student mock election, if held in conjunction with a general, special, or primary election, shall not be disruptive nor infringe upon any rights provided a legal registered voter.

(A) The student mock election shall be implemented and conducted in accordance with the Election Code and laws of the State of Texas (whether or not conducted in the adult polling place), insofar as they are applicable, except as otherwise provided by these rules, or any directive from the secretary of state's office.

(B) An official polling place may be used to conduct a student mock election by an entity, provided that the entity has submitted an application to the secretary of state's office pursuant to the rules and guidelines hereby prescribed and has secured final approval from the local authority and the secretary of state before the 60th day before the day of the student election. (The application is available through the secretary of state's office.)

(C) A student mock election voting booth (or other voting system) shall not be within 50 feet of an adult voting booth that is located in the same room. The regular election judge may exercise his or her statutory authority to maintain order in the polling place to ensure that the mock election is not disruptive. Nothing in these rules shall be construed to lessen the authority of the regular election judge. Note: an exception to the distance requirement may be obtained with written permission from the secretary of state's office no later than 60 days before the day of the student election.

(5) If it is not feasible to hold the student mock election in the same polling area as the regular election, an alternate location may be selected. The authority ordering the election shall determine the polling locations. The alternate sites should be selected to serve the convenience of the students and accompanying adults, without disrupting the adult voters. Recommended sites include the schools or other locations within the same building as the regular polling place.

(A) The student mock election may be held at any time during the hours of 7 a.m. to 7 p.m., but the mock election is not required to remain open the entire time.

(B) The student mock election is not required to use the same number of polling places or the same locations as the regular election.

(6) As practicable, the student mock election should adopt the voting system most prevalent in the students' community. If such a voting system is not available, any other voting system authorized by the election code may be used.

(7) Regardless of the location of the student mock election polling area, no unauthorized persons, telephones, or any type of mechanical or electronic recording equipment are allowed within the mock polling area.

(8) The election officers serving in the official election may not serve in the student mock election. The authority ordering the election shall appoint a separate set of election officers to conduct the student mock election. All student mock election officers and organizers must be community volunteers. No county or state funds may be used for payment of election judges and clerks.

(9) Tabulation of the results may begin at the time specified by the Election Code for the voting system used. Student mock election results may not be announced until after the adult polling places are closed on election day (7 p.m.).

**History**
- *Source Note: The provisions of this §81.301 adopted to be effective June 25, 1992, 17 TexReg 4249.*

#### **Subchapter K** IMPLEMENTATION OF THE NATIONAL VOTER REGISTRATION ACT

##### **1 Tex. Admin. Code § 81.402** Agency Based Registration and Review of Citizenship {#sec-81.402 omnilex-key=us-tx-regs-official--title-1--81.402}

(a) Only voter registration agencies which require clients to update citizenship status at each renewal of service, change of address, or other contact may use the updated file information on citizenship to make determinations of eligibility under the Texas Election Code (the "Code"), §20.006(b).

(b) "Voter Registration Agency" refers to those state and local agencies defined in the Code, §20.001.

**History**
- *Source Note: The provisions of this §81.402 adopted to be effective March 24, 1997, 22 TexReg 2607.*

#### **Subchapter L** ELECTRONIC STORAGE MEDIUM STANDARDS

##### **1 Tex. Admin. Code § 81.412** Optional Storage Method {#sec-81.412 omnilex-key=us-tx-regs-official--title-1--81.412}

A voter registrar who records voter registration data for storage purposes on optical disk or other computer storage medium, shall follow the procedures for such storage as set forth in the rules of the Texas State Library and Archives Commission under Title 13 Texas Administrative Code, Chapter 7, Subchapter C, concerning Standards and Procedures for Management of Electronic Records. This rule is authorized and is pursuant to Chapter 205 of the Texas Local Government Code.

**History**
- *Source Note: The provisions of this §81.412 adopted to be effective May 9, 2002, 27 TexReg 3753.*

#### **Subchapter M** IMPLEMENTATION OF THE MILITARY AND OVERSEAS VOTER EMPOWERMENT ACT

##### **1 Tex. Admin. Code § 81.420** Modifications of Election Dates and Procedures under Senate Bill 100 and the MOVE Act {#sec-81.420 omnilex-key=us-tx-regs-official--title-1--81.420}

The Office of Secretary of State issues the following clarifications and adjustments to election procedures and deadlines pursuant to Act of May 31, 2011, 82nd Leg., R.S., Chapter 1318, §50.

(1) Notwithstanding §41.001(c), Texas Election Code, upon the approval of the Office of the Secretary of State, a runoff election under §2.025 may be ordered no earlier than twenty (20) days after the runoff primary held the fourth Tuesday in May under §41.007(b).

(2) Notwithstanding §202.006(a), Texas Election Code, if a vacancy in an office of the state or county government occurs after the 5th day before the date of the regular primary filing deadline, the political party's state, district, county or precinct executive committee, as appropriate, may nominate a candidate for the unexpired term.

**History**
- *Source Note: The provisions of this §81.420 adopted to be effective September 29, 2011, 36 TexReg 6253; amended to be effective May 27, 2014, 39 TexReg 3981.*

### **Chapter 83** LIMITED PARTNERSHIPS

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 83.1** Partnership Agreement May Be Filed {#sec-83.1 omnilex-key=us-tx-regs-official--title-1--83.1}

A partnership agreement may be filed as a certificate of formation, if it meets the requirements for filing a certificate of formation under §§3.005, 3.011 of the Texas Business Organizations Code.

**History**
- *Source Note: The provisions of this §83.1 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

##### **1 Tex. Admin. Code § 83.3** Administrative Review {#sec-83.3 omnilex-key=us-tx-regs-official--title-1--83.3}

The secretary of state will not reject the filing of a certificate of formation or an application for registration by a limited partnership that identifies as one of its general partners an unqualified foreign filing entity. Acceptance of the document does not constitute a determination by the secretary of state that the foreign corporation or limited liability company identified as a general partner has substantially complied with the statutes governing that type of entity.

**History**
- *Source Note: The provisions of this §83.3 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

#### **Subchapter B** PERIODIC REPORTS

##### **1 Tex. Admin. Code § 83.21** Content {#sec-83.21 omnilex-key=us-tx-regs-official--title-1--83.21}

(a) The periodic report required by the secretary of state under §153.301 of the Texas Business Organizations Code includes information on the registered agent and office, principal office, and the names and addresses of the general partners of the partnership. To the extent possible, the secretary of state will print the information previously recorded by the partnership and request the partnership to mark changes to the preprinted information. Changes to the name of the registered agent and changes to the registered office address, principal office address, and the address of a general partner will be recorded in the secretary of state's database.

(b) Changes to the name of the partnership or to the names of general partners cannot be effected through the filing of the periodic report. Although a periodic report which purports to change the name of the limited partnership or that makes changes, additions, and deletions to the names of general partners will be filed by the secretary of state, the secretary of state will not update the record of the limited partnership to evidence the change of name or change in partners. In order to change the name of the partnership or change, add, or delete the name of a general partner, the partnership must file a certificate of amendment to the certificate of formation or application for registration pursuant to §§3.051 - 3.053, 9.009 of the Texas Business Organizations Code, as applicable.

**History**
- *Source Note: The provisions of this §83.21 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

##### **1 Tex. Admin. Code § 83.22** Notices {#sec-83.22 omnilex-key=us-tx-regs-official--title-1--83.22}

(a) Notices relating to the filing of a periodic report of a limited partnership under §153.305 of the Texas Business Organizations Code shall be sent to the registered office address of record with the secretary of state, or in the case of a limited partnership which does not indicate a registered office address, to the last known address or place of business of the limited partnership as it appears on record with the secretary of state.

(b) Notices relating to the forfeiture of right to do business under §153.308 of the Texas Business Organizations Code shall be sent to the same address specified for the original report, notwithstanding receipt of evidence by the secretary of state that the address specified was an insufficient address or that the mailing of the notice was undeliverable.

(c) The failure of the limited partnership to receive the notices referenced in subsections (a) and (b) of this section does not relieve the limited partnership of the need to file the periodic report pursuant to §153.301 of the Texas Business Organizations Code or extend the time within which the report must be filed.

**History**
- *Source Note: The provisions of this §83.22 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

##### **1 Tex. Admin. Code § 83.23** Forfeiture of Right To Transact Business {#sec-83.23 omnilex-key=us-tx-regs-official--title-1--83.23}

A limited partnership that fails to file the periodic report required under §153.301 of the Texas Business Organizations Code within 30 days from the date that the report is sent by the secretary of state will forfeit its right to transact business in Texas.

**History**
- *Source Note: The provisions of this §83.23 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

##### **1 Tex. Admin. Code § 83.24** Voluntary Submission of a Periodic Report {#sec-83.24 omnilex-key=us-tx-regs-official--title-1--83.24}

A limited partnership may submit for filing by the secretary of state a periodic report under §153.301 of the Texas Business Organizations Code when not required to do so by the secretary of state. The voluntary submission of a report under this section does not relieve the limited partnership of the need to file the periodic report or extend the time within which the report must be filed when the report is specifically required from the limited partnership by the secretary of state.

**History**
- *Source Note: The provisions of this §83.24 adopted to be effective February 18, 1998, 23 TexReg 1534; amended to be effective January 1, 2010, 34 TexReg 9175.*

### **Chapter 87** NOTARY PUBLIC

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 87.1** Definitions {#sec-87.1 omnilex-key=us-tx-regs-official--title-1--87.1}

Words and terms defined in the Texas Government Code, Chapter 406, shall have the same meaning in this chapter. For the purposes of this chapter the following words and terms shall have the following meanings, unless the context clearly indicates otherwise.

(1) Credential means a valid, unexpired identification card or other document issued by the federal government or any state government, as defined by §311.05 of the Government Code, that contains the photograph and signature of the principal. With respect to a deed or other instrument relating to a residential real estate transaction, credential also includes a current passport issued by a foreign country.

(2) Credential Analysis means the process which complies with Subchapter H of this chapter by which the validity of a government-issued identification credential is affirmed by a third party through review of public and proprietary data sources.

(3) Digital Certificate means a computer-based record or electronic file issued to a notary public or applicant for appointment as a notary public for the purpose of creating an official electronic signature. The digital certificate shall be kept in the exclusive control of the notary public.

(4) Identity Proofing means the process which complies with Subchapter H of this chapter by which the identity of an individual is affirmed by a third party through review of public and proprietary data sources.

(5) Online Notary Public means an individual commissioned by the secretary of state as an online notary. An online notary has authority:

(A) as a traditional notary public; and

(B) to perform an online notarization as provided by Subchapter C, Chapter 406 of the Government Code and this chapter.

(6) Personal appearance or personally appear means:

(A) when performing a notarization other than an online notarization, the principal for whom the notarization is being performed physically appeared before the notary public at the time of the notarization in a manner permitting the notary public and the principal to see, hear, communicate and give identification credentials to each other; and

(B) for an online notarization, the principal for whom the notarization is being performed appears by an interactive two-way audio and video communication that meets the online notarization requirements as provided by Subchapter C, Chapter 406 of the Government Code and this chapter.

(7) Principal means an individual:

(A) whose signature is notarized in a traditional or online notarization; or

(B) taking an oath or affirmation from a notary public but not in the capacity of a witness for the online notarization.

(8) Notary Public means an individual commissioned by the secretary of state under both Subchapters A and C, Chapter 406 of the Government Code.

(9) Traditional Notary Public means an individual commissioned by the secretary of state under Subchapter A, Chapter 406 of the Government Code. A traditional notary public does not have the authority to perform an online notarization unless also commissioned as an online notary public.

**History**
- *Source Note: The provisions of this §87.1 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.2** Application for Commission as a Traditional Notary Public {#sec-87.2 omnilex-key=us-tx-regs-official--title-1--87.2}

(a) The secretary of state appoints notaries public under the provisions of article IV, §26 of the Texas Constitution and Chapter 406, Government Code.

(b) An individual applying for a traditional notary public commission shall use the application form prescribed by the secretary of state. The application shall include:

(1) the applicant's name to be used in acting as a traditional notary public;

(2) the applicant's mailing address;

(3) the applicant's county of residence;

(4) the applicant's date of birth;

(5) the applicant's driver's license number or the number of other official state-issued identification; and

(6) the applicant's social security number.

(c) An applicant must secure a bond if required to do so by §406.010 of the Government Code. To evidence the bond, the application shall include the signature of a person authorized by the surety company providing the bond.

(d) The applicant shall execute, in the name under which the commission is sought, the statement of officer as required by article XVI, §1 of the Texas Constitution.

(e) The application form is available on the secretary of state web site or may be obtained by writing the Office of the Secretary of State, Notary Public Unit, P.O. Box 13375, Austin, Texas 78711. See Form 2301. The application form for a notary who is an officer or employee of a state agency is Form 2301-NB, available on the web site maintained by the State Office of Risk Management.

**History**
- *Source Note: The provisions of this §87.2 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.3** Electronic Submission of Traditional Notary Public Application {#sec-87.3 omnilex-key=us-tx-regs-official--title-1--87.3}

(a) The secretary of state has developed a system for electronic submission of the application for a traditional notary public commission, the bond required under §406.010 of the Government Code, and the statement of officer. The secretary of state authorizes the submission of these documents electronically on behalf of a traditional notary public under the following terms and conditions:

(1) the submitter must comply with the technical specifications contained in the eNotary Web Service Consumer's Guide available through the Information Technology Division of the Office of the Secretary of State;

(2) the traditional notary public application and the statement of officer signed by the applicant and the surety bond signed by an officer or attorney-in-fact for the surety must be attached to the electronic submission as an image in the format specified in the eNotary Web Service Consumer's Guide; and

(3) all fees must be paid by prepaid account, LegalEase® or credit card.

(b) If the applicant is qualified, the secretary of state shall cause the commission to be issued and the educational materials to be sent to the traditional notary public. On commission, the applicable fees will be charged to the prepaid account, LegalEase® or the credit card.

(c) If the application is rejected, the secretary of state will return a notice of the rejection to the submitter electronically. On rejection, no fees are charged to the account, LegalEase® or to the credit card.

(d) Status of a traditional notary public application submission may be checked through use of a web service interface.

(e) If the submitter is not able to consistently comply with the technical specifications and the submissions are failing as a result, the secretary of state may revoke the privilege of the submitter to submit electronically until all technical issues are resolved to the satisfaction of the secretary of state.

(f) As part of the electronic submission, the submitter is responsible for accurately entering the data elements related to the application. Repeated and consistent entry errors may result in a revocation of the privilege of the submitter to submit electronically.

(g) The submitter shall retain the original signed application, surety bond and statement of officer until the commission is issued by the secretary of state.

(h) The secretary of state will not accept electronic applications on behalf of an applicant who has been convicted of a felony or a crime of moral turpitude. The application under these circumstances (along with the statement of officer, the bond, the explanation of the criminal conviction and the applicable fees) must be delivered to the secretary of state by mail, courier or personal delivery.

**History**
- *Source Note: The provisions of this §87.3 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.4** Submission of Online Notary Public Application {#sec-87.4 omnilex-key=us-tx-regs-official--title-1--87.4}

(a) An individual applying for an online notary public commission shall use the electronic submission platform developed by the secretary of state.

(b) The application shall include:

(1) the applicant's name to be used in acting as an online notary public, which shall match the name on the applicant's traditional notary public commission;

(2) the applicant's email address;

(3) the applicant's digital certificate;

(4) a copy of applicant's electronic seal in an acceptable file format;

(5) the applicant's notary public identification number, as assigned by the secretary of state;

(6) an executed statement of officer, as required by article XVI, §1 of the Texas Constitution; and

(7) a statement certifying that the applicant:

(A) will comply with the standards set forth in this chapter relating to identity proofing and credential analysis;

(B) will use a third party provider who has provided the notary with evidence of its ability to provide an electronic technology standard that utilizes Public Key Infrastructure (PKI) technology from a PKI service provider that is X.509 compliant when attaching or logically associating the notary's electronic seal and digital certificate to an electronic document;

(C) will, upon request by the secretary of state, promptly provide any necessary instructions or techniques supplied by a vendor that allow the online notary public's digital certificate and seal to be read and authenticated; and

(D) is at least 18 years of age, a resident of the State of Texas, and has not been convicted of a felony or a crime involving moral turpitude.

**History**
- *Source Note: The provisions of this §87.4 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.5** Notary Education Fees {#sec-87.5 omnilex-key=us-tx-regs-official--title-1--87.5}

(a) The nonrefundable fee for the notary education course is $20.00.

(b) The nonrefundable fee for the notary continuing education course is $20.00.

(c) An applicant must pay a separate notary education course fee or notary continuing education course fee each time the applicant takes a course.

**History**
- *Source Note: The provisions of this §87.5 adopted to be
effective January 1, 2026, 50 TexReg 8541.*

#### **Subchapter B** ELIGIBILITY AND QUALIFICATION

##### **1 Tex. Admin. Code § 87.8** Notary Education {#sec-87.8 omnilex-key=us-tx-regs-official--title-1--87.8}

(a) An applicant must fulfill the education requirement under Texas Government Code §406.006 before the applicant may apply for appointment as a Texas notary public.

(b) To fulfill the education requirement, an applicant must first pay the notary education course fee specified in §87.5(a) of this title (relating to Notary Education Fees).

(c) After payment of the required notary education course fee, an applicant must take a notary education course that does not exceed two hours and has been established and offered by the secretary of state. The applicant must successfully answer a minimum of 70% of questions presented to the applicant during the education course.

(1) If an applicant is applying for a traditional notary public commission, the applicant fulfills the education requirement by taking a notary education course and successfully answering questions on traditional notary subject matter.

(2) If an applicant is also applying for an online notary public commission, the applicant fulfills the education requirement by taking a notary education course and successfully answering questions on online notary public subject matter.

(d) An applicant must take the notary education course on or before the 90th day after the date on which the secretary of state receives the course fee from the applicant. Failure to take the education course within 90 days will result in forfeiture of the course fee, and any completion of the course after the 90-day period has expired will not fulfill the education requirement. The applicant must pay a new fee to reattempt the notary education course.

(e) An applicant may not complete a notary education course more than 3 times in a 3-month period to fulfill the education requirement.

**History**
- *Source Note: The provisions of this §87.8 adopted to be
effective January 1, 2026, 50 TexReg 8541.*

##### **1 Tex. Admin. Code § 87.9** Continuing Education {#sec-87.9 omnilex-key=us-tx-regs-official--title-1--87.9}

(a) A Texas notary public must fulfill the continuing education requirement under Texas Government Code §406.011 before the notary public may apply for reappointment as a Texas notary public.

(b) To fulfill the continuing education requirement, a notary public must first pay the notary continuing education course fee specified in §87.5(b) of this title (relating to Notary Education Fees).

(c) After payment of the required notary continuing education course fee, a notary public must take a continuing education course that does not exceed two hours and has been established and offered by the secretary of state. The notary public must successfully answer a minimum of 70% of questions presented to the notary during the continuing education course.

(1) If an applicant is applying for the renewal of a traditional notary public commission, the applicant fulfills the continuing education requirement by taking a notary continuing education course and successfully answering questions on traditional notary subject matter.

(2) If an applicant is also applying for the renewal of an online notary public commission, the applicant fulfills the continuing education requirement by taking a notary continuing education course and successfully answering questions on online notary public subject matter.

(d) A notary public must take the notary continuing education course on or before the 90th day after the date on which the secretary of state receives the course fee from the notary. Failure to take the continuing education course within 90 days will result in forfeiture of the course fee, and any completion of the course after the 90-day period has expired will not fulfill the continuing education requirement. The notary public must pay a new fee to reattempt the notary continuing education course.

(e) A notary public may not complete a notary continuing education course more than 3 times in a 3-month period to fulfill the continuing education requirement.

**History**
- *Source Note: The provisions of this §87.9 adopted to be
effective January 1, 2026, 50 TexReg 8541.*

##### **1 Tex. Admin. Code § 87.10** Eligibility to Hold the Office of Notary Public {#sec-87.10 omnilex-key=us-tx-regs-official--title-1--87.10}

(a) Subject to the provision in subsection (b) of this section and §87.12 of this title (relating to Qualification by an Escrow Officer Residing in an Adjacent State), a person is eligible to be a notary public if the person is 18 years of age or older and a resident of Texas.

(b) A person is not eligible to be a notary public if the person was convicted of a crime involving moral turpitude or a felony and the conviction has become final, has not been set aside, and no pardon or certificate of restoration of citizenship rights has been granted.

(c) A crime involving moral turpitude includes the commission of a crime involving dishonesty, fraud, deceit, misrepresentation, deliberate violence, moral depravity, or that reflects adversely on the applicant's honesty, trustworthiness, or fitness as a notary public, which may include, but not be limited to:

(1) Class A and B type misdemeanors which have not been set aside, or for which no pardon or certificate of restoration of citizenship rights have been granted; and

(2) felony convictions which have not been set aside, or for which no pardon or certificate of restoration of citizenship rights have been granted.

(d) Class C type misdemeanor convictions shall not be considered in determining eligibility.

(e) If the secretary of state discovers, at any time, that an applicant or commissioned notary public is not eligible, the secretary of state will reject the notary public application or revoke the notary public commission.

**History**
- *Source Note: The provisions of this §87.10 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.11** Eligibility to be Commissioned as an Online Notary Public {#sec-87.11 omnilex-key=us-tx-regs-official--title-1--87.11}

In addition to the eligibility requirements in §87.10 of this title (relating to Eligibility to Hold the Office of Notary Public), an applicant must hold a commission as a traditional notary public before being eligible for appointment as an online notary public.

**History**
- *Source Note: The provisions of this §87.11 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.12** Qualification by an Escrow Officer Residing in an Adjacent State {#sec-87.12 omnilex-key=us-tx-regs-official--title-1--87.12}

(a) An applicant who is qualified as an escrow officer within the meaning assigned by §2652.051, Insurance Code, is not required to be a resident of Texas if the applicant is a resident of New Mexico, Oklahoma, Arkansas or Louisiana.

(b) The secretary of state shall commission the applicant if, notwithstanding the residency requirements, the applicant satisfies the conditions of subsection (a) of this section and §87.13 and §87.14 of this title (relating to Issuance of the Traditional Notary Public Commission by the Secretary of State and Issuance of the Online Notary Public Commission by the Secretary of State).

(c) A notary public, appointed under this section, who ceases to be qualified under this section, must voluntarily surrender the notary public commission.

**History**
- *Source Note: The provisions of this §87.12 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.13** Issuance of the Traditional Notary Public Commission by the Secretary of State {#sec-87.13 omnilex-key=us-tx-regs-official--title-1--87.13}

(a) The secretary of state shall issue a traditional notary public commission to a qualified applicant. An applicant is qualified if:

(1) the applicant meets the eligibility requirements stated in §87.10 of this title (relating to Eligibility to Hold the Office of Notary Public);

(2) the applicant submits:

(A) a properly completed and executed application;

(B) the bond as provided in §406.010, Government Code, if required;

(C) the statement of officer required by article XVI, §1 Texas Constitution;

(D) payment to the secretary of state of fees required by §406.007, Government Code; and

(E) proof that the applicant has successfully completed the notary education course required by §406.006(6), Government Code, within one year preceding the date on which the applicant submits the application; and

(F) proof of payment of the notary education course fee under §87.5 of this title (relating to Notary Education Fees); and

(3) no good cause exists for rejecting the application.

(b) The secretary of state shall not commission an applicant if the applicant had a prior application rejected or a commission revoked due to a finding of ineligibility or good cause and the reason for ineligibility or grounds for good cause continues to exist.

(c) When all conditions for qualification have been met, the application shall be approved and filed. The secretary of state shall cause a commission to be issued and sent to each traditional notary public who has qualified. A commission is effective as of the date of qualification.

**History**
- *Source Note: The provisions of this §87.13 adopted to be
effective August 19, 2018, 43 TexReg 5355; amended to be effective
January 1, 2026, 50 TexReg 8541.*

##### **1 Tex. Admin. Code § 87.14** Issuance of the Online Notary Public Commission by the Secretary of State {#sec-87.14 omnilex-key=us-tx-regs-official--title-1--87.14}

(a) The secretary of state shall issue an online notary public commission to a qualified applicant. An applicant is qualified if:

(1) the applicant meets the eligibility requirements stated in §87.11 of this title (relating to Eligibility to be Commissioned as an Online Notary Public);

(2) the applicant submits:

(A) a properly completed and executed application;

(B) the statement of officer required by article XVI, §1 Texas Constitution;

(C) payment to the secretary of state the application fee of $50; and

(D) proof that the applicant has successfully completed the notary education course required by §406.006(6), Government Code, within one year preceding the date on which the applicant submits the application; and

(E) proof of payment of the notary education course fee under §87.5 of this title (relating to Notary Education Fees); and

(3) no good cause exists for rejecting the application.

(b) The secretary of state shall not commission an applicant if the applicant had a prior application rejected or a commission revoked due to a finding of ineligibility or good cause and the reason for ineligibility or grounds for good cause continues to exist.

(c) When all conditions for qualification have been met, the application shall be approved and filed. The secretary of state shall cause a commission to be issued and sent to each online notary public who has qualified. A commission is effective as of the date of qualification and shall expire on the same date as applicant's corresponding traditional notary public commission.

**History**
- *Source Note: The provisions of this §87.14 adopted to be
effective August 19, 2018, 43 TexReg 5355; amended to be effective
January 1, 2026, 50 TexReg 8541.*

##### **1 Tex. Admin. Code § 87.15** Renewal of Commission {#sec-87.15 omnilex-key=us-tx-regs-official--title-1--87.15}

(a) A notary public seeking to renew either a traditional commission or both a traditional and online commission shall file an application for renewal in the same manner and on the same form as if filing an original application for commission. The secretary of state will accept applications for renewal not sooner than 90 days before the expiration of the notary public's current commission. The renewal must be received by the secretary of state no later than the expiration date of the notary public's current commission.

(b) The secretary of state shall determine eligibility for renewals according to the same standards as initial applicants, in accordance with this chapter and §406.004, Government Code. The secretary of state is not bound by prior determinations of eligibility.

**History**
- *Source Note: The provisions of this §87.15 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter C** NOTARIES WITHOUT BOND

##### **1 Tex. Admin. Code § 87.20** Qualification by an Officer or Employee of a State Agency {#sec-87.20 omnilex-key=us-tx-regs-official--title-1--87.20}

(a) An applicant who is an officer or employee of a state agency is not required to provide a surety bond. For the purpose of this chapter, "state agency" has the meaning assigned by §2052.101, Government Code.

(b) An applicant who is an officer or employee of a state agency and does not provide a surety bond must complete the traditional notary public application entitled "Application for Appointment as a Notary Public Without Bond" (Form 2301-NB).

(c) The State Agency employing the applicant must submit the completed application to the State Office of Risk Management.

(d) The State Office of Risk Management shall complete the verification certificate on the application and forward the completed application to the Office of the Secretary of State for processing.

(e) The secretary of state shall commission the applicant if:

(1) the applicant meets the eligibility requirements stated in §87.10 of this title (relating to Eligibility to Hold the Office of Notary Public);

(2) the applicant submits:

(A) a properly completed and executed application verified by the State Office of Risk Management;

(B) the statement of officer required by article XVI, §1 Texas Constitution;

(C) the payment of fees required by §406.007(a)(2) and§406.007(b), Government Code; and

(D) proof that the applicant has successfully completed the notary education course required by §406.006(6), Government Code, within one year preceding the date on which the applicant submits the application; and

(E) proof of payment of the notary education course fee under §87.5 of this title (relating to Notary Education Fees); and

(3) no good cause exists for rejecting the application.

**History**
- *Source Note: The provisions of this §87.20 adopted
to be effective August 19, 2018, 43 TexReg 5355; amended to be effective
January 1, 2026, 50 TexReg 8541.*

##### **1 Tex. Admin. Code § 87.21** Change in Employment Status by an Officer or Employee of a State Agency Who Has Qualified Without a Surety Bond {#sec-87.21 omnilex-key=us-tx-regs-official--title-1--87.21}

(a) If a notary public who has qualified without a surety bond transfers to another state agency, the agency to which the notary public transfers shall notify the State Office of Risk Management and the Office of the Secretary of State of the transfer.

(b) If a notary public terminates state employment, the notary public shall:

(1) voluntarily surrender the notary public commission;

(2) purchase and provide evidence to the secretary of state of the purchase of a notary public bond for the time period remaining on the notary's current term of office; or

(3) voluntarily surrender the notary public commission and apply for a new term of office, provide a notary public bond, and pay the applicable fees.

(c) Failure to take one of the actions set forth in subsection (b) of this section within 30 days of termination of state employment is good cause for revocation of the notary public's commission.

**History**
- *Source Note: The provisions of this §87.21 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.22** Special Requirements for Notaries Without Bond {#sec-87.22 omnilex-key=us-tx-regs-official--title-1--87.22}

(a) A notary public commissioned as a notary public without bond shall obtain a seal which complies with the requirements of §406.013, Government Code and §87.44 of this title (relating to Notary Seal) and which contains an additional line reading "Notary without Bond".

(b) A state employee is not prohibited from purchasing a notary bond at personal expense. However, an individual commissioned as a notary without bond shall only notarize documents pursuant to their official state duties.

(c) Agencies shall require notaries without bond to attend a notary training class, either provided internally or externally.

(d) Notaries without bond who notarize documents outside of their official state duties or who fail to use the "Notary without Bond" seal shall be subject to disciplinary action by their respective agencies and such action may constitute good cause under §87.31 of this title (relating to Good Cause).

**History**
- *Source Note: The provisions of this §87.22 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter D** ADMINISTRATIVE ACTION

##### **1 Tex. Admin. Code § 87.30** Rejection of Application and Revocation of Commission {#sec-87.30 omnilex-key=us-tx-regs-official--title-1--87.30}

The secretary of state shall, for ineligibility or good cause, reject any application, revoke the commission of any notary public, or take other disciplinary action, as outlined in §87.34 of this title (relating to Disciplinary Action), against a notary public as the secretary of state deems appropriate. Rejection, revocation, and suspension proceedings will be held pursuant to the right of notice, hearing, and adjudication as set out in the rules of practice and procedure before the Office of the Secretary of State, the rules of the State Office of Administrative Hearings and the Administrative Procedure Act, Government Code, §§2001.001 - 2001.902. Any party to a contested case has the right to be represented by legal counsel. Such action will be subject to the right of appeal to a district court of Travis County.

**History**
- *Source Note: The provisions of this §87.30 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.31** Good Cause {#sec-87.31 omnilex-key=us-tx-regs-official--title-1--87.31}

Good cause may include the following:

(1) a false statement knowingly made in a notary public application;

(2) a final conviction for the violation of any law concerning the regulation of the conduct of notaries public in this state or any other state;

(3) use of the phrase "notario" or "notario publico" in connection with advertising or offering the services of a notary public;

(4) false representation as an attorney as specified in §406.017, Government Code;

(5) a failure to fully and faithfully discharge any of the duties or responsibilities required of a notary public;

(6) the unauthorized practice of law;

(7) a failure to utilize a correct notary seal as described in §406.013 and §406.101(5), Government Code and this chapter;

(8) a failure to administer an oath or affirmation as required by law;

(9) the collection of a fee in excess of the fees authorized by §406.024 and §406.111, Government Code;

(10) the execution of any certificate as a notary public containing a statement known to the notary public to be false;

(11) a failure to complete the notarial certificate at the time the notary public's signature and seal are affixed to the document;

(12) the advertising or holding out in any manner that the notary public is an immigration specialist, immigration consultant, or any other title or description reflecting an expertise in immigration matters;

(13) the use of false or misleading advertising of either an oral or written nature, whereby the notary public has represented or indicated that he or she has duties, rights, powers, or privileges that are not possessed by law;

(14) performing a notarization when the purported principal did not personally appear before the notary public at the time the notarization is executed;

(15) previous disciplinary action against the notary public in accordance with these sections;

(16) a failure to comply with, or violation of, a previous disciplinary action taken pursuant to §87.34 of this title (relating to Disciplinary Action);

(17) a failure to promptly respond to a request for public information in accordance with §87.52 of this title (relating to Public Information);

(18) a failure to properly identify the individual whose signature is being notarized;

(19) a failure to keep a notary record as described in §406.014 and §406.108, Government Code, and Chapter 87 of this title;

(20) a failure to include in the notarial certificate for an online notarization a notation that the notarization is an online notarization;

(21) a failure to take reasonable steps to ensure that the two-way audio-visual communication used during an online notarization is secure from unauthorized interception;

(22) a failure to safely and securely maintain notary materials;

(23) performing a notarial act that the notary public is not authorized to perform;

(24) use of a digital certificate or electronic seal that has expired or is no longer valid;

(25) a failure to report a new digital certificate or electronic seal as required by §87.63 of this title (relating to Changes to Digital Certificate and Electronic Seal for Online Notary);

(26) notarizing one's own signature;

(27) a failure to pay the filing fee required by §406.007, Government Code, and §87.13 and §87.14 of this title (relating to Issuance of the Traditional Notary Public Commission by the Secretary of State and Issuance of the Online Notary Public Commission by the Secretary of State) or when such payment was made by an instrument that was dishonored when presented by the state for payment;

(28) a failure to timely respond to a request for information from the secretary of state; and

(29) a failure to maintain a current address as required by §406.019, Government Code.

**History**
- *Source Note: The provisions of this §87.31 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.32** Submitting a Complaint {#sec-87.32 omnilex-key=us-tx-regs-official--title-1--87.32}

(a) The jurisdiction of the secretary of state to investigate a complaint is limited to individuals who are commissioned or have applied for commission or renewal of a commission as a Texas notary public. The jurisdiction of the secretary of state to investigate a complaint ceases upon the expiration, revocation or surrender of a notary public commission, except as provided in §87.35 of this title (relating to Time for Action).

(b) A person harmed by the actions of a notary public may file a complaint with the secretary of state on a form prescribed by the secretary of state. The complaint shall include:

(1) the name of the notary public who is the subject of the complaint;

(2) the expiration date of the notary public's current commission;

(3) the name, mailing address, and email address of the individual filing the complaint;

(4) whether the notary was performing an online notarization;

(5) a recitation of the facts, within the personal knowledge of the complainant, relating to the alleged misconduct by the notary public; and

(6) copies of the notarized documents that are the subject of the complaint.

(c) The complaint shall be signed and verified by the person alleging misconduct on the part of the notary public.

(d) The secretary of state may, for good cause, as defined in §87.31 of this title (relating to Good Cause), and/or as otherwise referenced in this title, initiate its own complaint against a notary public.

**History**
- *Source Note: The provisions of this §87.32 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.33** Complaint Procedures {#sec-87.33 omnilex-key=us-tx-regs-official--title-1--87.33}

(a) The secretary of state may determine that the allegations in the complaint are not sufficient to warrant formal disciplinary action. In such case, the secretary of state may:

(1) take no action on the complaint;

(2) informally advise the notary public of the appropriate conduct and the applicable statutes and rules governing the conduct; or

(3) request further information from the complainant or the notary public prior to taking action.

(b) If the secretary of state determines that the complaint alleges sufficient facts to constitute good cause for disciplinary action against the notary public, and the complaint complies with §87.32 of this title (relating to Submitting a Complaint), the secretary of state shall send a copy of the complaint, with any attachments the secretary of state deems to be relevant, to the notary public with a request to the notary to respond to the statements in the complaint.

(c) The notary public must respond to the complaint in writing. The response must:

(1) specify any disputed facts and provide such additional information as the notary public shall desire;

(2) be signed and sworn to by the notary public before a person authorized to administer oaths;

(3) include copies of the pages of the notary record book referencing the notarization that is the subject of the complaint; and

(4) be received by the secretary of state within 21 days of the date of the secretary of state's notice of the complaint to the notary public.

(d) The secretary of state shall review the response and determine whether further administrative action is appropriate. If the secretary determines that no further action is appropriate, the secretary shall notify the notary public and the complainant of the determination in writing.

(e) If the secretary determines that further administrative action is appropriate, the secretary shall follow the procedures set forth in this §87.34 of this title (relating to Disciplinary Action).

**History**
- *Source Note: The provisions of this §87.33 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.34** Disciplinary Action {#sec-87.34 omnilex-key=us-tx-regs-official--title-1--87.34}

(a) The secretary of state has discretion to determine that the conduct that forms the basis of a complaint against a notary public does not warrant disciplinary action against the notary public and take no further action on the complaint. If the secretary of state determines that disciplinary action should be taken, the secretary of state may pursue the following disciplinary actions against individuals commissioned pursuant to Subchapter A or C, Chapter 406, Government Code:

(1) issue a written reprimand to the notary public; or

(2) require the notary public to enter into an agreement to:

(A) not engage in any further misconduct;

(B) agree to voluntarily surrender the notary public commission;

(C) accept a suspension of the notary public commission for a set period of time;

(D) complete a course of study relating to the powers, duties, and responsibilities of a notary public;

(E) not seek renewal of the notary public commission for a specified period of time; or

(F) take such other action as the secretary deems appropriate; or

(3) take action to revoke the notary public commission.

(b) If an individual has been commissioned as a notary public under both Subchapters A and C of Chapter 406, Government Code, the office has the discretion to pursue revocation of either the online notary public commission alone or both the traditional and online notary public commission.

(c) If no agreement can be reached, before taking action to suspend or revoke the notary public commission, the secretary of state shall give written notice to the notary of a right to a hearing in accordance with the rules of practice and procedure before the secretary of state. If a hearing is timely requested, the secretary of state shall follow the provisions of the Administrative Procedure Act, Chapter 2001, Texas Government Code governing the initiation and conduct of a contested case proceeding.

(d) It is within the secretary of state's discretion to determine that no action should be taken or to enter into an agreement with the notary public regarding the appropriate action. The secretary of state shall close a complaint file upon a determination that no further action is necessary or conclusion of an agreement with the notary public. After a complaint file is closed, the secretary of state will take no further action on the complaint and will not accept an additional complaint with the same or substantially similar allegations.

**History**
- *Source Note: The provisions of this §87.34 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.35** Time for Action {#sec-87.35 omnilex-key=us-tx-regs-official--title-1--87.35}

The secretary of state may take disciplinary action for an act or omission which occurred during a prior term of office. The secretary may also require any pending complaints against a notary public that remain at the expiration of the notary public's prior commission to be resolved prior to accepting a renewal or new application for appointment as a notary public. Failure to reach a resolution on an unresolved complaint may result in the rejection of an application for appointment or renewal.

**History**
- *Source Note: The provisions of this §87.35 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter E** NOTARY PROCEDURES

##### **1 Tex. Admin. Code § 87.40** Traditional Notarization Procedures {#sec-87.40 omnilex-key=us-tx-regs-official--title-1--87.40}

(a) A traditional notary public shall not perform a notarization if the principal does not personally appear before the notary at the time of notarization in accordance with §87.1 of this title (relating to Definitions).

(b) The methods by which a traditional notary public identifies a principal are as follows:

(1) Traditional notary public personally knows the principal; or

(2) Principal is introduced by oath of credible witness who personally knows the principal and either is personally known to the traditional notary public or provides qualifying identification in accordance with paragraph (3) of this subsection; or

(3) Identification by a credential.

(c) For all notarial acts that require a notarial certificate, the traditional notary public shall attach a notarial certificate that names the principal, the date of the notarization, the state and county in which the notarization is performed, and language evidencing the type of notarial act performed. The notarial certificate shall be signed and include an impression of the notary's seal.

(d) The traditional notary public shall keep a record of all notarial acts in accordance with §406.014, Government Code, and this chapter.

(e) This section shall apply to a traditional notary public who performs notarizations on tangible or electronic records.

**History**
- *Source Note: The provisions of this §87.40 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.41** Online Notarization Procedures {#sec-87.41 omnilex-key=us-tx-regs-official--title-1--87.41}

(a) An online notarization may only be performed by a notary who is commissioned as an online notary public.

(b) An online notary public shall not perform an online notarization if the online notary public is not physically in Texas at the time of the notarization.

(c) An online notary public shall not perform an online notarization if the principal does not personally appear before the notary public at the time of notarization in accordance with §87.1 of this title (relating to Definitions).

(d) The methods by which an online notary public identifies a principal are as follows:

(1) Online notary public personally knows the principal; or

(2) Principal is introduced by oath of credible witness who personally knows the principal and either is personally known to the online notary public or provides qualifying identification in accordance with paragraph (3) of this subsection; or

(3) Principal or credible witness is identified using the identity proofing and credential analysis standards in accordance with subchapter H of this chapter.

(e) For all notarial acts that require a notarial certificate, the online notary public shall attach an electronic notarial certificate that identifies the principal, the date of the notarization, the state and county in which the notarization was performed, that the notarial act was an online notarization, and language evidencing the type of the notarial act performed. The notarial certificate shall be signed by affixing the online notary public's digital certificate and include an attachment of the online notary public's electronic seal.

(f) The liability, sanctions, and remedies for the improper performance of online notarial acts are the same as described and provided by law for the improper performance of traditional notarial acts.

(g) An online notary public shall keep a record of all notarial acts in accordance with §406.108, Government Code, and Chapter 87 of this title. The record shall include a recording of the audio-visual conference that is the basis for satisfactory evidence of identity and a notation of the type of identification presented as evidence by the principal, if the principal is not personally known to the online notary public. The recording shall include, at minimum:

(1) confirmation by the notary public that the principal has successfully completed identity proofing and credential analysis;

(2) visual confirmation of the identity of the principal through visual inspection of the credential used during credential analysis; and

(3) the actual notarial act performed.

(h) If the principal is personally known to the online notary public, the audio-visual conference shall include a statement to that effect and a recording of the actual notarial act performed.

(i) The online notary public shall not disclose any access information used to affix the notary's digital certificate and seal except when requested by the secretary of state, law enforcement, the courts, and with reasonable precautions, electronic document preparation and transmission vendors.

(j) Online notaries public shall attach their digital certificate and seal to the electronic notarial certificate of an electronic document in a manner that is capable of independent verification and renders any subsequent change or modification to the electronic document evident.

**History**
- *Source Note: The provisions of this §87.41 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.42** Refusal of Requests for Notarial Services {#sec-87.42 omnilex-key=us-tx-regs-official--title-1--87.42}

(a) A notary public is authorized to refuse to perform a notarial act if:

(1) the notary public has reasonable grounds to believe that the principal is acting under coercion or undue influence;

(2) the notary public has reasonable grounds to believe that the document in connection with which the notarial act is requested may be used for an unlawful or improper purpose;

(3) the notary public has reasonable grounds to believe the signing party does not have the capacity to understand the contents of the document; or

(4) the notary public is not familiar with the type of notarization requested.

(b) A notary public who is employed by a governmental body shall not perform notarial services that interfere with the notary's discharge of the notary's duties as a public employee.

(c) An employer may limit or prohibit an employee who is a notary public from notarizing during work hours.

(d) A notary public may not refuse a request for notarial services on the basis of the sex, age, religion, race, ethnicity or national origin of the requesting party.

(e) A notary public should refuse a request for notarial services only after careful deliberation.

**History**
- *Source Note: The provisions of this §87.42 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.43** Reasons to Refuse Online Notarization {#sec-87.43 omnilex-key=us-tx-regs-official--title-1--87.43}

In addition to those in §87.42 of this title (relating to Refusal of Requests for Notarial Services) in which a notary public is authorized to refuse a notarization, an online notary shall refuse to perform an online notarization if:

(1) The online notary public is unable to verify the identity of the principal using an acceptable means of identification in accordance with Subchapter H;

(2) The online notary public is unable to verify the security of the two way audio visual transmission;

(3) The signature of the principal cannot be attached to the electronic document; or

(4) The digital certificate or electronic seal of the online notary public cannot be attached to the electronic document in a manner that renders any subsequent change or modification to the document evident.

**History**
- *Source Note: The provisions of this §87.43 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.44** Notary Seal {#sec-87.44 omnilex-key=us-tx-regs-official--title-1--87.44}

(a) The name on the notary public seal must match the name, as stated on the application, under which the notary public is commissioned and performs all notarial acts.

(b) For all applicants commissioned or recommissioned on or after January 1, 2016, the notary public seal must contain the identifying number issued by the secretary of state.

(c) For notaries public who were commissioned or recommissioned prior to January 1, 2016, the seal of such notaries is not required to contain the identifying number issued by the secretary of state until the notary is recommissioned in accordance with the procedures specified in §406.011, Texas Government Code, and §87.15 of this title (relating to Renewal of Commission). The seal of notaries who were commissioned or recommissioned prior to January 1, 2016, may, however, contain the identifying number issued by the secretary of state prior to the notary being recommissioned in accordance with the procedures specified in §406.011, Texas Government Code, and §87.15 of this title.

(d) The notary seal shall remain within the exclusive control of the notary public at all times.

**History**
- *Source Note: The provisions of this §87.44 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter F** NOTARY RECORDS

##### **1 Tex. Admin. Code § 87.50** Prohibition Against Entering Personal Information in a Notary Record Book {#sec-87.50 omnilex-key=us-tx-regs-official--title-1--87.50}

(a) A notary public (other than a court clerk notarizing instruments for the court) shall not record in the notary's record book:

(1) an identification number that was assigned by a governmental agency or by the United States to the principal and that is set forth on the identification card or passport presented as identification;

(2) any other number that could be used to identify the principal of the document; or

(3) a biometric identifier, including a fingerprint, voice print, and retina or iris image.

(b) This section does not prohibit a notary public from recording a number related to the mailing address of the principal of the document or the instrument.

(c) This section does not apply to the audio-visual recording required by an online notary public performing an online notarization.

(d) A notary public who inadvertently records information prohibited under subsection (a) of this section shall redact such information prior to providing public access to or copies of the notary record book.

**History**
- *Source Note: The provisions of this §87.50 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.51** Form of Record Book {#sec-87.51 omnilex-key=us-tx-regs-official--title-1--87.51}

(a) Notary records, other than records of online notarizations, may be maintained either in a book or electronically in a computer or other storage device so long as the records are adequately backed-up and are capable of being printed in a tangible medium when requested.

(b) Records of an online notarization shall be maintained electronically in computers or other storage devices that are capable of recording the information required by §406.108, Government Code, including a recording of any video and audio conference that is the basis for identifying the principal. An online notary public may contract with a third party to provide such storage if the third party:

(1) has provided reasonable evidence to the online notary public that it is capable of providing such services; and

(2) provides complete access to the online notary public of all the notary's records for an agreed period of time, which at minimum, complies with the retention requirements in §87.54 of this title (relating to Records Retention) even if such a contract is terminated. If the contract between the online notary public and the third party is terminated, all records must be transferred to the online notary public.

(c) The records of a notary public shall remain within the exclusive control of the notary public at all times.

(d) A notary public who performs multiple notarizations for the same principal within a single document may abbreviate the entry of those notarizations in the notary record book, except that a separate entry must be made for each type of notarial act. The abbreviated entry must contain all the information required by §406.014, Government Code, and must include the number of notarizations performed within the specified document.

**History**
- *Source Note: The provisions of this §87.51 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.52** Public Information {#sec-87.52 omnilex-key=us-tx-regs-official--title-1--87.52}

(a) Subject to subsection (b) of this section, records regarding notarial acts performed are public information. On payment of all fees, the notary public shall promptly provide a certified copy of any entries in the notary public's records to any person requesting the copy. The notary shall provide the certified copy no later than 10 business days from the date of receipt of the fees, unless the notary cannot produce the certified copy within 10 business days from the date of receipt of the fees, in which case the notary shall certify that fact in writing to the person requesting the copy on or before the 10th business day from the date of receipt of the fees, and set a date and hour within a reasonable time when the certified copy will be provided, and shall provide the information by that date and hour. If the notary has inadvertently included personal identifiable information in the record contrary to §87.50 of this title (relating to Prohibition Against Recording Personal Information), the notary must redact that personal information prior to release of the information.

(b) If any portion of the audio visual recording of an online notarization includes biometric information or includes an image of the identification card used to identify the principal, that portion of the recording is confidential and shall not be released without consent of the individual(s) whose identity is being established, unless ordered by a court of competent jurisdiction or upon request by the secretary of state.

**History**
- *Source Note: The provisions of this §87.52 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.53** Failure to Provide Public Information {#sec-87.53 omnilex-key=us-tx-regs-official--title-1--87.53}

Failure of a notary public to promptly and adequately respond to a request for public information in accordance with §87.52 of this title (relating to Public Information) may be good cause for suspension or revocation of a notary commission or other disciplinary action against the notary.

**History**
- *Source Note: The provisions of this §87.53 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.54** Records Retention {#sec-87.54 omnilex-key=us-tx-regs-official--title-1--87.54}

(a) Records of a notarization other than an online notarization shall be retained, in a safe and secure manner, for the longer of the term of the commission in which the notarization occurred or three years following the date of notarization.

(b) Records of an online notarization shall be retained, in a safe and secure manner, for five years following the date of the notarization. An online notary public must also maintain a back-up of the electronic records for the same period of time. Both the original records and the back-up shall be protected from unauthorized use.

**History**
- *Source Note: The provisions of this §87.54 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter G** CHANGES AFTER COMMISSIONING

##### **1 Tex. Admin. Code § 87.60** Change of Address {#sec-87.60 omnilex-key=us-tx-regs-official--title-1--87.60}

(a) A notary public must notify the secretary of state in writing of a change in address within 10 days of the change. To notify the secretary of state of a change of address, the notary public should complete and submit Form 2302 (Notary Public Change of Address Form). This form is available on the secretary of state web site.

(b) The secretary of state sends all official notices, including notices of complaints and requests to respond to complaints, to the notary public at the address on file with the secretary's office. Failure to change the address may, consequently, result in a revocation of the notary commission if, for example, the notary fails to timely respond to a complaint or to a request for public information.

(c) A notary public who removes his or her residence from Texas or no longer qualifies under the residency exceptions provided under §87.12 of this title (relating to Qualification by an Escrow Officer Residing in an Adjacent State) vacates the office of notary public and must surrender the notary commission to the secretary of state.

**History**
- *Source Note: The provisions of this §87.60 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.61** Qualification Under New Name {#sec-87.61 omnilex-key=us-tx-regs-official--title-1--87.61}

(a) During the four-year term of office, a notary public may change the name on the notary commission by submitting the following to the secretary of state:

(1) an Application for Change of Name as a Texas Notary Public (Form 2305 available on the secretary of state web site);

(2) for traditional notaries public, a rider or endorsement to the bond on file with the secretary of state from the surety company or its agent or representative specifying the change of name;

(3) the current certificate of commission or a signed and notarized statement that the notary public will perform all future notarial acts under the name specified on the amended commission; and

(4) the statutory fee equal to the sum of the fee for the issuance of a commission and the fee for filing of a bond.

(b) An online notary public shall check the appropriate box on Form 2305 to update the name on both the traditional and online notary commission and shall pay the fee for issuance of two commissions and the bond.

**History**
- *Source Note: The provisions of this §87.61 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.62** Issuance of Amended Commission {#sec-87.62 omnilex-key=us-tx-regs-official--title-1--87.62}

(a) If the submission of the change of name complies with §87.61 of this title (relating to Qualification Under New Name), the secretary of state shall issue an amended commission to the notary public in the name requested. Upon issuance of the amended commission, the notary public must perform all notarial acts using the name on the amended commission.

(b) Upon qualifying under a new name, a notary public must obtain a new seal that contains the name, as specified on the amended commission, under which the notary will perform all future notarial acts.

(c) If the notary public who qualifies under a new name is commissioned as both a traditional and online notary, the notary shall obtain both a new traditional seal and new electronic seal and digital certificate that contains the name, as specified on the amended commission, under which the notary will perform all future notarial acts.

**History**
- *Source Note: The provisions of this §87.62 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.63** Changes to Digital Certificate and Electronic Seal for Online Notary {#sec-87.63 omnilex-key=us-tx-regs-official--title-1--87.63}

(a) An online notary public shall at all times maintain an electronic seal and a digital certificate that includes the online notary's electronic signature. Both the electronic seal and digital certificate must comply with the provisions of Chapter 406, Government Code, and this chapter.

(b) An online notary public shall replace an electronic seal or digital certificate under the following circumstances:

(1) the electronic seal or digital certificate has expired;

(2) the electronic seal or digital certificate has been revoked or terminated by the device's issuing or registering authority; or

(3) the electronic seal or digital certificate is for any reason no longer valid or capable of authentication.

(c) An online notary public who replaces an electronic seal or digital certificate shall provide the following to the secretary of state within 10 days of the replacement:

(1) the electronic technology or technologies to be used in attaching or logically associating the new electronic seal or digital certificate to an electronic document;

(2) applicant's new digital certificate, if applicable;

(3) a copy of applicant's new electronic seal, if applicable; and

(4) any necessary instructions or techniques supplied by the vendor that allow the notary's electronic seal or digital certificate to be read and authenticated.

**History**
- *Source Note: The provisions of this §87.63 adopted to be effective August 19, 2018, 43 TexReg 5355.*

#### **Subchapter H** MINIMUM REQUIREMENTS FOR ONLINE NOTARIZATIONS

##### **1 Tex. Admin. Code § 87.70** Identity Proofing and Credential Analysis Standards {#sec-87.70 omnilex-key=us-tx-regs-official--title-1--87.70}

(a) Identity proofing and credential analysis must be performed by a reputable third party who has provided evidence to the online notary public of the ability to satisfy the requirements of this chapter.

(b) Identity proofing is performed through dynamic knowledge based authentication which meets the following requirements:

(1) principal must answer a quiz consisting of a minimum of five questions related to the principal's personal history or identity, formulated from public and proprietary data sources;

(2) each question must have a minimum of five possible answer choices;

(3) at least 80% of the questions must be answered correctly;

(4) all questions must be answered within two minutes;

(5) if the principal fails their first attempt, they may retake the quiz one time within 24 hours;

(6) during the retake, a minimum of 60% of the prior questions must be replaced; and

(7) if the principal fails their second attempt, they are not permitted to retry with the same online notary public for 24 hours.

(c) Credential analysis is performed utilizing public and proprietary data sources to verify the credential presented by the principal.

(d) Credential analysis shall, at a minimum:

(1) use automated software processes to aid the online notary public in verifying the identity of a principal or any credible witness;

(2) ensure that the credential passes an authenticity test, consistent with sound commercial practices that:

(A) Use appropriate technologies to confirm the integrity of visual, physical or cryptographic security features;

(B) Use appropriate technologies to confirm that the credential is not fraudulent or inappropriately modified;

(C) Use information held or published by the issuing source or authoritative source(s), as available, to confirm the validity of personal details and credential details; and

(D) Provide output of the authenticity test to the notary public.

(3) Enable the online notary public to visually compare the following for consistency: the information and photo presented on the credential itself and the principal as viewed by the online notary public in real time through audio-visual transmission.

(e) If the principal must exit the workflow, the principal must meet the criteria outlined in this section and must restart the identity proofing and credential analysis from the beginning.

**History**
- *Source Note: The provisions of this §87.70 adopted to be effective August 19, 2018, 43 TexReg 5355.*

##### **1 Tex. Admin. Code § 87.71** Online Notarization System {#sec-87.71 omnilex-key=us-tx-regs-official--title-1--87.71}

An online system used to perform online notarial acts by means of audio-video communication shall:

(1) provide for continuous, synchronous audio-visual feeds;

(2) provide sufficient video resolution and audio clarity to enable the online notary public and the principal to see and speak to each other simultaneously through live, real time transmission;

(3) provide sufficient captured image resolution for credential analysis to be performed in accordance with subchapter H of this chapter.

(4) include a means of authentication that reasonably ensures only the proper parties have access to the audio-video communication;

(5) provide some manner of ensuring that the electronic record that is presented for online notarization is the same record electronically signed by the principal;

(6) be capable of securely creating and storing or transmitting securely to be stored an electronic recording of the audio-video communication, keeping confidential the questions asked as part of any identity proofing quiz, and the means and methods used to generate the credential analysis output; and

(7) provide reasonable security measures to prevent unauthorized access to:

(A) the live transmission of the audio-video communication;

(B) a recording of the audio-video communication;

(C) the verification methods and credentials used to verify the identity of the principal; and

(D) the electronic documents presented for electronic notarization.

**History**
- *Source Note: The provisions of this §87.71 adopted to be effective August 19, 2018, 43 TexReg 5355.*

### **Chapter 90** HUMAN TRAFFICKING PREVENTION BUSINESS PARTNERSHIP

##### **1 Tex. Admin. Code § 90.1** Definitions {#sec-90.1 omnilex-key=us-tx-regs-official--title-1--90.1}

The following terms as used in this Chapter shall have the following meanings:

(1) Commercial sex industry--A commercial enterprise the primary business of which is the offering of a service or the selling, renting, or exhibiting of devices or any other items intended to provide sexual stimulation or sexual gratification to the customer.

(2) Corporation--A domestic or foreign for-profit corporation, limited partnership, limited liability company, professional association, or cooperative association which is governed under the Texas Business Organizations Code, federal law, or the law of another state or nation.

(3) Human Trafficking--All offenses referred to in Chapter 20A of the Texas Penal Code.

(4) Partnership--The Human Trafficking Prevention Business Partnership, as established by §405.023 of the Texas Government Code.

(5) Private Entity--Bank, trust company, savings and loan association or company, insurance company, reciprocal or interinsurance exchange, railroad company, cemetery company, government-regulated cooperative, stock company, abstract and title insurance company, or other organization that engages in for-profit activities through the use of employees.

(6) Sexual conduct--Sexual contact, actual or simulated sexual intercourse, deviate sexual intercourse, sexual bestiality, masturbation, or sadomasochistic abuse.

(7) Zero Tolerance Policy--A zero tolerance policy towards human trafficking includes, at minimum:

(A) Complying with applicable federal and state human trafficking laws and regulations;

(B) Reviewing the business's supply lines, supplies, agents, subcontractors, other inputs, and business related facilities to assess areas that might be vulnerable to human trafficking and taking appropriate action to address negative findings, including but not limited to adopting language in supplier contracts regarding the corporation or private entity's human trafficking policies, and encouraging the supplier to abide by these same policies;

(C) Prohibiting employees from withholding identity or immigration documents, such as a passport or driver's license, from a worker, and encouraging agents and subcontractors to adopt similar policies; and

(D) Prohibiting the expenditure of any business funds for the purpose of patronizing a business that is part of the commercial sex industry or use of business resources to:

(i) engage in sexual conduct that violates state or federal law, or

(ii) operate a business that is part of the commercial sex industry.

**History**
- *Source Note: The provisions of this §90.1 adopted to be effective January 31, 2019, 44 TexReg 413.*

##### **1 Tex. Admin. Code § 90.2** Certificates and Terms of Registration {#sec-90.2 omnilex-key=us-tx-regs-official--title-1--90.2}

(a) Corporations and private entities can become involved in the partnership at two different levels.

(1) Corporations and private entities that meet the requirements of §90.3 of this title (relating to Procedure for Filing an Application for a Certificate of Association) may be involved as associates of the partnership.

(2) Corporations and private entities that meet the requirements of §90.4 of this title (relating to Procedure for Filing an Application for a Certificate of Recognition) may be involved as partners of the partnership.

(b) Each certificate issued under this chapter (including certificates of recognition or association) is valid for three years, and may be renewed for additional terms of three years, upon application by the recipient in accordance with this chapter.

**History**
- *Source Note: The provisions of this §90.2 adopted to be effective January 31, 2019, 44 TexReg 413.*

##### **1 Tex. Admin. Code § 90.3** Procedure for Filing an Application for a Certificate of Association {#sec-90.3 omnilex-key=us-tx-regs-official--title-1--90.3}

(a) A corporation or private entity that applies to be an associate of the partnership must submit to the secretary of state, on a form provided by the secretary and supported by additional documentation, if required, information demonstrating that the applicant:

(1) prohibits the expenditure of any business funds for the purpose of patronizing a business that is part of the commercial sex industry or use of business resources to:

(A) engage in sexual conduct that violates state or federal law, or

(B) operate a business that is part of the commercial sex industry;

(2) has adopted a policy aimed at reducing human trafficking and includes information about this policy in new hire materials or training programs;

(3) has made training resources about recognizing and addressing human trafficking available to its employees and references the resources in new hire or employee training programs;

(4) has included language in supplier contracts regarding the corporation or private entity's human trafficking policies, and encourages suppliers to abide by these same policies;

(5) agrees to participate in at least one public awareness or education campaign involving human trafficking within 36 months of receipt of the certificate of association;

(6) agrees to share with the secretary of state best practices that the entity uses in combatting human trafficking, if any; and

(7) agrees to assist the secretary of state in enhancing awareness of the partnership.

(b) Each application for certificate of association must be signed by or on behalf of the applicant and sworn to before a notary public or other person authorized to administer oaths.

(c) If, after review of the corporation's or private entity's application, and any additional documentation requested by the secretary of state, the secretary determines that all requirements set forth in subsections (a) and (b) of this section have been met, the secretary will issue a certificate of association to the applicant and the applicant will be named an associate.

**History**
- *Source Note: The provisions of this §90.3 adopted to be effective January 31, 2019, 44 TexReg 413.*

##### **1 Tex. Admin. Code § 90.4** Procedure for Filing an Application for a Certificate of Recognition {#sec-90.4 omnilex-key=us-tx-regs-official--title-1--90.4}

(a) A corporation or private entity that applies for a certificate of recognition must submit to the secretary of state, on a form provided by the secretary and supported by additional documentation, if required, information demonstrating that the applicant:

(1) has adopted a Zero Tolerance Policy towards human trafficking;

(2) has taken measures to ensure that the corporation's or private entity's employees comply with the Zero Tolerance Policy. Measures must include, at a minimum:

(A) implementing a mandatory training for all employees aimed at recognizing and addressing human trafficking; and

(B) providing information about applicant's Zero Tolerance Policy to employees and informing employees about possible consequences for not complying with policy.

(3) has participated in a minimum of one public awareness or education campaign in the 12 months prior to submission of the application and plans to participate in at least one public awareness or education campaign each year for the duration of their participation in the partnership;

(4) has enhanced awareness of and encouraged participation in the partnership, or agrees to do so in the future; and

(5) agrees to share with the secretary of state best practices that the applicant uses in combatting human trafficking.

(b) Each application for certificate of recognition must be signed and sworn to before a notary public or other person authorized to administer oaths by or on behalf of the applicant.

(c) If, after review of the corporation's or private entity's application, and any additional documentation requested by the secretary of state, the secretary determines that all requirements set forth in subsections (a) and (b) of this section have been met, the secretary will issue a certificate of recognition to the applicant and the applicant will be named a partner.

**History**
- *Source Note: The provisions of this §90.4 adopted to be effective January 31, 2019, 44 TexReg 413.*

##### **1 Tex. Admin. Code § 90.5** Renewal of Certificate {#sec-90.5 omnilex-key=us-tx-regs-official--title-1--90.5}

(a) A certificate of recognition or association may be renewed by filing an application for renewal in the same manner and on the same form as if submitting an original application for each type of certificate. The secretary of state will accept applications for renewal not sooner than 90 days before the expiration of the current certificate of recognition.

(b) An application for renewal may only be submitted during the renewal period. An application for renewal submitted before the renewal period begins will be rejected. An application for renewal submitted after the current term of certificate of recognition expires will be treated as a new application.

**History**
- *Source Note: The provisions of this §90.5 adopted to be effective January 31, 2019, 44 TexReg 413.*

### **Chapter 91** TEXAS REGISTER

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 91.1** Purpose {#sec-91.1 omnilex-key=us-tx-regs-official--title-1--91.1}

(a) The *Texas Register* is the official bulletin for:

(1) notices of state agency rulemaking;

(2) other notices defined in the Government Code, §2002.011;

(3) open meeting notices defined in the Government Code, Chapter 551; and

(4) notices of major consulting services contracts defined in the Government Code, Chapter 2254.

(b) The Secretary of State publishes the *Texas Register* in print and on the Internet and provides an electronic bulletin board for open meeting notices posted by state agencies and certain regional authorities. The Secretary of State also publishes the Texas Administrative Code, a compilation of current state agency rules, on the Internet.

(c) The Secretary of State's role in agency rulemaking is to prescribe the requirements for document format and style, administrative filing procedures, and publication. The Secretary of State is not responsible for rule content and legal authority.

(d) The Texas Register office is located at 1019 Brazos, Room 245, in Austin. Our mailing address is P.O. Box 13824, Austin, TX 78711-3824. Contact us by telephone at (512) 463-5561, by fax at (512) 463-5569, or by e-mail at subadmin@sos.state.tx.us. Our web site address is www.sos.state.tx.us.

**History**
- *Source Note: The provisions of this §91.1 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.2** Definitions {#sec-91.2 omnilex-key=us-tx-regs-official--title-1--91.2}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) APA--Administrative Procedure Act, Government Code, Chapter 2001.

(2) Agency--A state officer, board, commission, or department with statewide jurisdiction that makes rules or determines contested cases other than an agency wholly financed by federal money, the legislature, the courts, or an institution of higher education.

(3) Certify--To confirm that documents have been reviewed by legal counsel to determine that the rule action is within the agency's legal authority to adopt or that the rule action is a valid exercise of the agency's legal authority.

(4) Certifying official--An individual authorized by an agency to certify documents submitted for filing with the Texas Register, as authorized by the Government Code, §2002.020, concerning Certification.

(5) Electronic file--An electronic text file consisting of either one or more miscellaneous documents or one or more rulemaking documents submitted for publication in the *Texas Register.*

(6) Graphic material--Charts, maps, spread sheets, pictures, equations, tables of two or more columns, or any other type of information that requires special formatting to be reproduced in the *Texas Register.*

(7) Liaison--An individual designated by an agency to act as its representative to the Texas Register, as authorized by the Government Code, §2002.021, concerning Agency Liaison.

(8) Miscellaneous document--A nonrulemaking notice that is submitted for publication in the "In Addition" section of the *Texas Register.*

(9) Preamble--A narrative introduction to a notice of rulemaking that conforms to the requirements of the Government Code, §§2001.024, 2001.033, and 2001.034, for proposed, adopted, and emergency rules. Two or more rulemaking documents may have a single or "common" preamble, as long as they share the same chapter and fiscal note.

(10) Rule--Any agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency. It includes the amendment or repeal of a prior rule, but does not include a statement regarding only the internal management of a state agency not affecting private rights or procedures.

(11) Rulemaking document--Notice of proposed rulemaking, adopted rulemaking, emergency rulemaking, or withdrawn rulemaking. In the context of rulemaking notices, a "rulemaking document" may be referred to as a "document". If a group of rulemaking notices share a common preamble as defined in paragraph (9) of this section, each separate notice is still considered to be a "rulemaking document".

(12) Section--A specific numbered rule in the Texas Administrative Code.

(13) Signature--A signature required by Government Code, §2002.016, Filing Procedures. It is not limited to the cursive writing of a signer's name, but may be electronic, printed, typed, stamped, or faxed, as authorized by the certifying official and liaison.

(14) TAC--The Texas Administrative Code, as established by the Government Code, Chapter 2002.

(15) Text only--The electronic file format required by the Texas Register in document submissions. Text only (.txt) excludes formatting such as indentations, type styles, and special characters.

(16) TRD number--The Texas Register docket number assigned to each document.

(17) Verify--To confirm that submitted documents have been reviewed by the agency liaison and are correct in format, structure, and content.

**History**
- *Source Note: The provisions of this §91.2 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.3** Liaison and Certifying Official {#sec-91.3 omnilex-key=us-tx-regs-official--title-1--91.3}

(a) An agency must designate a liaison or liaisons in writing.

(b) The Texas Register will issue a User Name and Password to agency liaisons. This User Name and Password will allow the liaison to access submission forms and to post open meeting notices on the Secretary of State's web site.

(c) The certifying official indicates that he or she has certified a document by signing the submission form that accompanies any document submitted for publication in the *Texas Register.* The liaison indicates that he or she has verified that the document meets Texas Register filing requirements by signing the submission form.

(d) After submitting a document, the liaison must be available to answer questions about the document.

(e) It is the liaison's responsibility to keep his or her Texas Register account information current.

**History**
- *Source Note: The provisions of this §91.3 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.4** Acceptance or Refusal of a Document {#sec-91.4 omnilex-key=us-tx-regs-official--title-1--91.4}

When we receive a document submission form in the Texas Register office, we stamp it with the date, time of receipt, and a Texas Register docket (TRD) number. We also write on the form the date of the issue in which the document will be published if it meets our requirements. We then fax an "acknowledgment of receipt" copy of the form back to the agency liaison.

(1) If we find that the document and submission form conform to statutory filing requirements and the rules of this chapter, we accept it for filing and publication in the *Texas Register.* The date of receipt becomes the date of filing.

(2) If we find that the document or submission form does not conform to statutory filing requirements or the rules of this chapter, we may refuse to accept it for filing and publication. If we refuse the document, we will notify the agency liaison in writing and explain why it was refused.

**History**
- *Source Note: The provisions of this §91.4 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.5** Corrections of Error and Omissions {#sec-91.5 omnilex-key=us-tx-regs-official--title-1--91.5}

(a) Notify us in writing if the Texas Register publishes your agency's document with an error or omission.

(b) Include the following information in the notification:

(1) the agency name;

(2) the date of the issue and the specific section of the *Texas Register* in which the error occurred (for example, In Addition, Proposed Rules, etc.); and

(3) the nature of the error, and whether it was made by the Texas Register or by the submitting agency.

(c) We publish corrections of errors in the "In Addition" section of the *Texas Register.*

(d) After the effective date of a rule, we will not accept a correction that conflicts with the text on file with the Secretary of State.

(e) Except as provided in subsection (d) of this section, we will publish a correction in the next available issue of the *Texas Register.* If the Texas Register inadvertently omits a proposed rule from an issue, the 30-day notice period will not begin until the rule is actually published. Otherwise, determination of adequate notice is an agency's responsibility.

**History**
- *Source Note: The provisions of this §91.5 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.6** Publication Deadlines {#sec-91.6 omnilex-key=us-tx-regs-official--title-1--91.6}

(a) The Texas Register publishes 52 issues yearly, excluding indexes. Friday is the day of publication.

(b) Rule filing deadline: 12:00 noon, Monday, the week before publication. Miscellaneous document filing deadline: 12:00 noon, Wednesday, the week before publication. When a state holiday falls on Monday or Wednesday, the deadline will be the day before Monday or Wednesday that is not a Saturday, Sunday, or state holiday.

(c) We will post the publication schedule on our web site. We will notify agencies in advance of any changes that occur in the deadline and publication schedule by publishing a notice in the "In Addition" section of the *Texas Register.*

**History**
- *Source Note: The provisions of this §91.6 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.7** Subscription Rates and Individual Copies {#sec-91.7 omnilex-key=us-tx-regs-official--title-1--91.7}

(a) The price of a *Texas Register* subscription, either on an annual or six-month basis, will not exceed the cost of publication and mailing. We will adjust print subscription rates from time to time to offset changes in costs incidental to publication and postage.

(b) As mandated by the Government Code, §2002.057, concerning Electronic Availability of Administrative Code, the *Texas Register* provides to the public "specialized value-added services" in the form of electronic subscriptions to e-mail notification, a historical document archive, and search capabilities across the Texas Administrative Code and *Texas Register.* We post subscription information about these services on our web site.

(c) The Secretary of State will approve all rate changes.

(d) We sell individual copies of the print *Texas Register,* if available, for a price not to exceed the cost of publication and mailing. Current prices are published in the *Texas Register* inside front cover.

**History**
- *Source Note: The provisions of this §91.7 adopted to be effective March 23, 2003, 28 TexReg 2303.*

#### **Subchapter B** NONRULEMAKING

##### **1 Tex. Admin. Code § 91.21** How to File an Open Meeting Notice {#sec-91.21 omnilex-key=us-tx-regs-official--title-1--91.21}

(a) The Texas Open Meetings Law, Government Code, Chapter 551, governs the posting of open meeting notices.

(1) In accordance with the Government Code, §551.044, statewide agencies that post open meeting notices with the Secretary of State must give at least seven days' notice before the time of meeting. The Secretary of State interprets the seven-day posting requirement to mean seven full 24-hour periods before the day of the meeting. The day of posting and the day of the meeting are not included in calculating the seven-day period.

(2) In accordance with the Government Code, §551.043, non-statewide government bodies that post open meeting notices with the Secretary of State must give at least 72 hours' notice before the time of meeting.

(3) In the case of emergency or urgent public necessity, the Government Code, §551.045, excepts statewide and non-statewide agencies from the notice requirements in paragraphs (1) and (2) of this subsection. If an emergency or urgent public necessity arises, an agency must give at least two hours' notice of an open meeting or revision to an open meeting agenda and clearly identify the emergency or urgent public necessity that exists.

(b) The Texas Register will issue a User Name and Password to agency liaisons to access the Open Meetings Submit Form on the Secretary of State's web site. In order to post an open meeting notice, you must:

(1) enter all required information into the form;

(2) include the agenda as text in the appropriate field of the web form; and

(3) click on the button labeled "Insert" to complete submission.

(c) An open meeting posting may generate one of the following acknowledgments or messages.

(1) An Acknowledgment of Receipt message indicating that the submission has been accepted and posted to the Secretary of State's web site. The message gives the agency name, the board or committee holding the meeting, the time and date of the meeting and the TRD number.

(2) An Acknowledgment of Receipt message indicating that the submission has been accepted and posted to the Secretary of State's web site but fails to meet the seven-day or 72-hour deadline. The message will give the agency name, the board or committee, the time and date of the meeting and the TRD number.

(d) Although the Open Meetings Law does not require notice of cancellation of a previously posted meeting, you may cancel an open meeting using the Open Meetings Cancellation option on the Secretary of State's web site.

(e) You may post a revision to an open meeting notice as you would a new open meeting notice except that you reference the original meeting's TRD number in the appropriate field.

(f) Do not include graphics in an open meeting notice.

(g) Do not submit an open meeting notice earlier than the 90th calendar day before the meeting date.

(h) If a meeting is to be held on consecutive days, post each day as a separate open meeting notice.

(i) Although the Open Meetings Submit Form is available to liaisons at all times, you will be able to contact Texas Register staff for assistance in posting open meeting notices only during normal business hours. If we anticipate that our web site will be off-line for an extended period of time, we will notify liaisons of an alternate means of posting open meeting notices.

**History**
- *Source Note: The provisions of this §91.21 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.22** How to File a Miscellaneous Document {#sec-91.22 omnilex-key=us-tx-regs-official--title-1--91.22}

(a) We publish miscellaneous documents in the "In Addition" section of the *Texas Register.* If publication of a notice of general interest is not required by statute, the Texas Register may publish it as space and time allow.

(b) Draft the text of the document using the following codes:

Attached Graphic

(c) Save the text of the document in "Text Only (*.txt)" format. Name the file using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one miscellaneous or nonrulemaking document in an electronic file.

(d) Submit the file using either e-mail or ftp (file transfer protocol).

(e) If the miscellaneous document includes a graphic, submit the graphic file electronically in compliance with §91.23 of this title (relating to How to File Miscellaneous Graphics).

(f) Complete a Miscellaneous Document form. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

**History**
- *Source Note: The provisions of this §91.22 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.23** How to File Miscellaneous Graphics {#sec-91.23 omnilex-key=us-tx-regs-official--title-1--91.23}

(a) If a miscellaneous document has an associated graphic as defined in §91.2 of this title (relating to Definitions), name the graphic file as follows: "date of submission"_"Texas Register agency code"-x."file extension." Example: 0310_004-1.pdf denotes the first graphic file submitted on March 10 by the Secretary of State.

(b) Use e-mail or file transfer protocol (ftp) to submit it to the Texas Register.

(c) Mark on the submission form that the miscellaneous document has an associated graphic. Indicate the name of the graphic file and whether it was submitted via e-mail or ftp.

(d) We accept only the following formats for graphic files:

(1) Word documents (.doc extension);

(2) Word Perfect documents (.wpd extension);

(3) Hypertext Markup Language (.htm or .html extension);

(4) image files (.gif, .tif, .jpg, and .bmp extensions); and

(5) Adobe Acrobat files (.pdf extension).

(e) Do not use the tab function in Word or Word Perfect to create tables.

(f) If we are unable to use the electronic file for any reason, we will require you to supply hard copy of the graphic.

**History**
- *Source Note: The provisions of this §91.23 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.24** How to Submit Executive Orders, Opinions, and Exempt Filings {#sec-91.24 omnilex-key=us-tx-regs-official--title-1--91.24}

(a) The Texas Register publishes:

(1) executive orders, appointments, and proclamations filed by the Office of the Governor;

(2) summaries of requests for opinions and summaries of opinions filed by the Texas Ethics Commission;

(3) summaries of requests for opinions, summaries of opinions, and open records decisions filed by the Office of the Attorney General; and

(4) notices of proposed and final actions filed by the Texas Department of Insurance pursuant to the Insurance Code, Chapter 5, Subchapter L.

(b) File the documents listed in subsection (a) of this section using the guidelines in §91.22 of this title (relating to How to File a Miscellaneous Document), but use the electronic submission forms specified for these documents.

**History**
- *Source Note: The provisions of this §91.24 adopted to be effective March 23, 2003, 28 TexReg 2303.*

#### **Subchapter C** RULEMAKING

##### **1 Tex. Admin. Code § 91.31** Classification Systems {#sec-91.31 omnilex-key=us-tx-regs-official--title-1--91.31}

(a) Use the following classification structure when drafting rules.

(1) We assign each agency to a title identified by a number and subject category. Example: Title 1, Administration.

(2) We assign each agency a part number to identify the agency within its title. The name of the part is the agency's name. Example: Part 4, Office of the Secretary of State.

(3) We assign a range of chapter numbers to each agency. Within that range, organize and name the chapters according to subject matter. Example: Chapter 91, Texas Register.

(4) You may subdivide a chapter into subchapters identified by capital letters. Name subchapters according to subject matter. Example: Subchapter C, Rulemaking.

(5) You may subdivide a subchapter into divisions identified by numbers. Name subdivisions according to subject matter. Example: Division 1, Administration.

(b) Do not indicate chapters, subchapters, divisions, rule numbers, or portions of rules as reserved for future use.

**History**
- *Source Note: The provisions of this §91.31 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.32** Rule Numbers {#sec-91.32 omnilex-key=us-tx-regs-official--title-1--91.32}

A rule number consists of the chapter number followed by a decimal point and the individual section number. Example: §91.15. Neither the chapter number nor the section number may exceed four digits. Comply with paragraphs (1) - (3) of this section when you draft and submit rulemaking documents.

(1) The proposed and adopted version of a rule must have the same rule number.

(2) Do not amend rule numbers. To change a rule number, repeal and replace the rule.

(3) Do not propose a new rule that uses the number of a rule in TAC before you propose the repeal of the earlier rule. Do not adopt a new rule that uses the number of a rule in TAC before you adopt the repeal of the earlier rule. You may submit the repeal and new actions simultaneously.

**History**
- *Source Note: The provisions of this §91.32 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.33** Rule Structure and Terminology {#sec-91.33 omnilex-key=us-tx-regs-official--title-1--91.33}

(a) Follow the structure and order outlined in paragraphs (1) - (7) of this subsection when drafting a rule.

(1) The highest subdivision within a rule is a "subsection." You need not subdivide below this level.

(A) When there are two or more subsections, designate them with a lowercase letter in parenthesis. Example: (a), (b), etc.

(B) When there is only one subsection in a section, omit the "(a)." This is referred to as an "implied (a)."

(2) The rule subdivision below a subsection is called a "paragraph" and is designated by an Arabic number in parenthesis. Example: (1), (2), etc.

(3) The rule subdivision below the paragraph is called a "subparagraph" and is designated by a capital letter in parenthesis. Example: (A), (B), etc.

(4) The rule subdivision below the subparagraph is called a "clause" and is designated by a lowercase Roman numeral in parenthesis. Example: (i), (ii), etc.

(5) The rule subdivision below the clause is called a "subclause" and is designated by a capitalized Roman numeral in parenthesis. Example: (I), (II), etc.

(6) The rule subdivision below the subclause is called an "item" and is designated by a lowercase letter with a dash on both sides in parenthesis. Example: (-a-), (-b-), etc.

(7) The rule subdivision below the item is called a "subitem" and is designated by an Arabic numeral with a dash on both sides in parenthesis. Example: (-1-), (-2-), etc.

(b) When drafting a rule, do not create a lone subdivision at any level, except for an "implied (a)." For example, a rule may not have a paragraph (1) without a (2), a subparagraph (A) without a (B), and so forth.

**History**
- *Source Note: The provisions of this §91.33 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.34** Calculation of Dates {#sec-91.34 omnilex-key=us-tx-regs-official--title-1--91.34}

We compute dates related to rulemaking submissions according to the Government Code, §311.014, concerning Computation of Time.

(1) In computing a period of days, the first day, such as the date of publication or date of filing, is excluded and the last day is included.

(2) If a number of months is to be computed by counting the months from a particular day, the period ends on the same numerical day in the concluding month as the numerical day of the earlier date. If there are not as many days in the concluding month as in the beginning month, the period ends on the last day of the concluding month. (Also see §91.36(a) of the title (relating to How to File Adopted Rules).)

**History**
- *Source Note: The provisions of this §91.34 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.35** How to File Proposed Rules {#sec-91.35 omnilex-key=us-tx-regs-official--title-1--91.35}

(a) Draft new or amended rules according to the structure outlined in §91.33 of this title (relating to Rule Structure and Terminology). You may group proposed new and/or amended rules into one rulemaking document as long as they share the same chapter, subchapter and division.

(1) Submit the complete text of a new rule.

(2) When you propose to amend an existing rule, put new language before obsolete language. You must account for all existing language, but you may omit the text of one or more subdivisions that are not being changed and replace it with the phrase "(No change.)" Examples: "(a) (No change.)"; "(1) - (3) (No change.)" However, when you propose to amend the text of a subdivision, you must submit the complete text for every higher subdivision. Example: If subparagraph (B) under subsection (a)(3) is amended, the entire text of subsection (a) and paragraph (3) must be included in the document although only subparagraph (B) is being amended. Do not designate an "implied (a)" as "(No change.)"

(b) When proposing to repeal existing rules, list the rule numbers and titles but omit the rule text. You may group proposed repeals into one rulemaking document as long as they share the same chapter, subchapter and division.

(c) Draft a proposed rule preamble that conforms to the Texas Government Code, §2001.024, concerning Content of Notice. The first paragraph of the preamble should state the name of your agency, the type of rulemaking action you are proposing (new, amendment, or repeal), and every section that is affected. Include any other statement that your agency determines is required by law.

(d) You may submit one preamble for all proposed rulemaking documents which share the same chapter and fiscal note. The "common preamble" accompanies the document with the lowest rule number. If a repeal and new rule document have the same number, the common preamble accompanies the repeal. The common preamble addresses all the affected rules; however, each rule document has its own statutory authority note.

(e) In a separate paragraph after the preamble, list the statutory or other authority under which the rule is proposed and the statutory section or article that the rule implements. For example: "Statutory Authority: Government Code, §2002.017. Cross-reference to Statute: Government Code, Chapter 2002."

(f) When you draft the proposed rule document in a word processing program, use a hard return at the end of every paragraph and rule subdivision and make sure that every line of text is flush with the left margin. Format preamble and rule text using the following codes:

Attached Graphic

(g) Save the text of the document in "Text Only (*.txt)" format. Name files using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one rulemaking document in an electronic file.

(h) Submit the file using either e-mail or ftp (file transfer protocol).

(i) If the proposed rulemaking document includes a graphic, submit the graphic file electronically in compliance with §91.41 of this title (relating to How to Submit Rule Graphics).

(j) Complete one Proposed Rulemaking form for each proposed rulemaking document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(k) Do not propose to amend a rule until any pending proposed action on that rule has been adopted and taken effect or has been withdrawn. The only exception is a rule that consists exclusively of definitions.

**History**
- *Source Note: The provisions of this §91.35 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.36** How to File Adopted Rules {#sec-91.36 omnilex-key=us-tx-regs-official--title-1--91.36}

(a) At least 30 days after publication of a proposed rulemaking document but not more than six months later, you may submit an adopted rulemaking document. If the last day of the six-month period falls on Saturday, Sunday, or a legal holiday, you may file the adopted rulemaking document on the next business day. The APA states that a rule takes effect 20 days after the date on which it is filed in the Office of the Secretary of State unless a later date is required by statute, specified in the rule, or required by federal mandate.

(b) Draft new or amended rules according to the structure outlined in §91.33 of this title (relating to Rule Structure and Terminology). Incorporate any changes to the proposed rule text, including any style or format corrections made by the Texas Register. Delete any new language coding, brackets and obsolete language. Submit the complete text of new and amended rules. Do not designate any portion of the rule text as "(No change.)" You may group adopted new and/or amended rules into one rulemaking document as long as they share the same chapter, subchapter and division.

(c) When adopting the repeal of existing rules, list the rule numbers and titles but omit the rule text. You may group adopted repeals into one rulemaking document as long as they share the same chapter, subchapter and division.

(d) Draft an adopted rule preamble that conforms to the Texas Government Code, §2001.033, concerning State Agency Order Adopting Rule. The first paragraph of the preamble should state the name of your agency, the type of rulemaking action you are adopting (new, amendment, or repeal), every section that is affected, and whether the sections are adopted with or without changes from the proposed rulemaking document. Cite the issue date and page number of the *Texas Register* in which the proposed rulemaking document was published. Include any other statement that your agency determines is required by law.

(e) You may submit one preamble for all adopted rulemaking documents that share the same chapter and fiscal note. The "common preamble" accompanies the document with the lowest rule number. If a repeal and new rule document have the same number, the common preamble accompanies the repeal. The common preamble addresses all the affected rules; however, each rule document has its own statutory authority note.

(f) In a separate paragraph after the preamble, list the statutory or other authority under which the rule is proposed and the statutory section or article that the rule implements. For example: "Statutory Authority: Government Code, §2002.017. Cross-reference to Statute: Government Code, Chapter 2002."

(g) When you draft an adopted rule document in a word processing program, use a hard return at the end of every paragraph and rule subdivision and make sure that every line of text is flush with the left margin. Format preamble and rule text using the following codes:

Attached Graphic

(h) Save the text of the document in "Text Only (*.txt)" format. Name files using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one rulemaking document in an electronic file.

(i) Submit the file using either e-mail or ftp (file transfer protocol).

(j) If the adopted rulemaking document includes a graphic, submit the graphic file electronically in compliance with §91.41 of this title (relating to How to Submit Rule Graphics).

(k) Complete one Adopted Rulemaking form for each adopted rulemaking document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

**History**
- *Source Note: The provisions of this §91.36 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.37** How to File Emergency Rules {#sec-91.37 omnilex-key=us-tx-regs-official--title-1--91.37}

(a) Draft new or amended emergency rules according to the structure outlined in §91.33 of this title (relating to Rule Structure and Terminology). You may group new and/or amended emergency rules into one rulemaking document as long as they share the same chapter, subchapter and division.

(1) Submit the complete text of a new emergency rule.

(2) When you propose an emergency amendment to an existing rule, put new language before obsolete language. You must account for all existing language, but you may omit the text of one or more subdivisions that are not being changed and replace it with the phrase "(No change.)" Examples: "(a) (No change.)"; "(1) - (3) (No change.)" However, when you propose to amend the text of a subdivision, you must submit the complete text for every higher subdivision. Example: If subparagraph (B) under subsection (a)(3) is amended, the entire text of subsection (a) and paragraph (3) must be included in the document although only subparagraph (B) is being amended. Do not designate an "implied (a)" as "(No change.)"

(b) When submitting the emergency repeal of existing rules, list the rule numbers and titles but omit the rule text. You may group emergency repeals into one rulemaking document as long as they share the same chapter, subchapter and division.

(c) Draft an emergency rule preamble that conforms to the Texas Government Code, §2001.034, concerning Emergency Rulemaking. In the first paragraph of the preamble, state the name of your agency, the type of rulemaking action you are adopting on an emergency basis (new, amendment, or repeal), and every section that is affected. Include any other statement that your agency determines is required by law.

(d) In a separate paragraph after the preamble, list the statutory or other authority under which the rule is proposed and the statutory section or article that the rule implements. For example: "Statutory Authority: Government Code, §2002.017. Cross-reference to Statute: Government Code, Chapter 2002."

(e) Use the following codes to format preamble and rule text:

Attached Graphic

(f) Save the text of the document in "Text Only (*.txt)" format. Name files using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one rulemaking document in an electronic file.

(g) Submit the file using either e-mail or ftp (file transfer protocol).

(h) If the emergency rulemaking document includes a graphic, submit the graphic file electronically in compliance with §91.41 of this title (relating to How to Submit Rule Graphics).

(i) Complete one Emergency Rulemaking form for each emergency rulemaking document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(j) Emergency action becomes effective immediately upon filing or on a stated date less than 20 days after filing. The effective date cannot be earlier than the filing date. The APA limits the effectiveness of emergency action to 120 days, renewable for no more than 60 days, for a maximum of 180 days. File the renewal notice during the last 20 days of the original period of effectiveness. You may not renew the effective period after the expiration date. The expiration date is the final full calendar day in the count.

(k) You may not amend an emergency rulemaking action. To change a new or amended emergency rule before it expires, file a withdrawal of the action and submit a new emergency rulemaking document. Do not withdraw an emergency rule and file it a second time for the purpose of extending the 180-day effective period.

**History**
- *Source Note: The provisions of this §91.37 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.38** How to Withdraw a Proposed or Emergency Rule {#sec-91.38 omnilex-key=us-tx-regs-official--title-1--91.38}

(a) Complete a Withdrawn Rulemaking form. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(b) You may submit a preamble explaining why the rule is withdrawn, but it is not required. If you submit a preamble, save it in "Text Only (*.txt)" format. Name files using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one rulemaking document in an electronic file. Submit the file using either e-mail or ftp (file transfer protocol).

(c) The withdrawal takes effect immediately upon filing or at a later date stated on the form.

(d) If an agency fails to adopt or withdraw a proposed rulemaking action within six months, the Texas Register will publish a notice of automatic withdrawal. (Also see §91.36(a) of the title (relating to How to File Adopted Rules).)

**History**
- *Source Note: The provisions of this §91.38 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.39** Rule Transfers and Invalid Rules {#sec-91.39 omnilex-key=us-tx-regs-official--title-1--91.39}

(a) Rule transfers (Government Code, §2002.058(a)). If legislation transfers rulemaking authority to your agency from another agency, send a letter to the director of the Texas Register, requesting the administrative transfer of the rules in question. Cite the legislation that requires this transfer as well as the effective date of the transfer. You will also submit a rule conversion chart containing the old and new chapters, subchapters and divisions (if applicable), and rule numbers affected by the transfer.

(1) Create the conversion chart in Word or Word Perfect. Use the table format, not tabs.

(2) Submit the chart to the Texas Register using e-mail or ftp (file transfer protocol).

(b) Invalid rules (Government Code, §2002.058(b)). If a final court judgment renders your agency's rules invalid, you must formally revise or repeal those rules according to the rulemaking procedures in this subchapter.

(c) Remand of rules (Government Code, §2001.040). If a court remands a rule or portion of a rule, you may determine to revise and readopt the rule according to the procedures in §91.36 of this title (relating to How to File Adopted Rules) or submit other appropriate notice that complies with the court's directive.

**History**
- *Source Note: The provisions of this §91.39 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.40** How to File Adoption by Reference (ABR) Material {#sec-91.40 omnilex-key=us-tx-regs-official--title-1--91.40}

(a) You may adopt the following documents by reference:

(1) federal statutes and regulations;

(2) state statutes and rules;

(3) publications specifically authorized by statute to be adopted by reference; and

(4) forms.

(b) The director of the Texas Register must approve ABR information not listed in subsection (a)(1) - (4) of this section before you adopt it by reference. To be considered for ABR, the information must be cumbersome, expensive, or otherwise inexpedient to include in the *Texas Register.*

(c) The text of the ABR information need not conform to the Texas Register format requirements and will not be published in the *Texas Register* or TAC.

(d) When adopting by reference, follow the requirements outlined in this subchapter. Give notice of intention to adopt by reference in the form of a numbered rule. Note the revision date of the ABR information. Amend the rule to adopt a newer version of the ABR information.

(e) You are responsible for maintaining and distributing to interested parties all versions of the ABR information, including those that have been superseded or repealed.

**History**
- *Source Note: The provisions of this §91.40 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.41** How to Submit Rule Graphics {#sec-91.41 omnilex-key=us-tx-regs-official--title-1--91.41}

(a) If a rule document has an associated graphic as defined in §91.2 of this title (relating to Definitions), name the rule graphic file as follows: aa_bbbb_cccc-x."file extension." In this scheme, aa denotes the title number, bbbb denotes the chapter number, cccc denotes the rule number, and x indicates the number of the graphic file (if there is more than one accompanying the rule). Example: 01_0091_0001-3.html indicates this is the third file submitted for Title 1, Chapter 91, rule 1 (1 TAC §91.1). Add leading zeroes to complete the aa_bbbb_cccc fields, if necessary.

(b) Use e-mail or file transfer protocol (ftp) to submit it to the Texas Register.

(c) Mark on the submission form that the rule document has an associated graphic. Indicate the name of the graphic file and whether it was submitted via e-mail or ftp.

(d) We accept only the following formats for graphic files:

(1) Word documents (.doc extension);

(2) Word Perfect documents (.wpd extension);

(3) Hypertext Markup Language (.htm or .html extension);

(4) image files (.gif, .tif, .jpg, and .bmp formats); and

(5) Adobe Acrobat files (.pdf extension).

(e) If we are unable to use the electronic file for any reason, we will require you to supply hard copy of the graphic.

(f) Include in the upper left corner of each electronic graphic file a label comprised of the word "Figure," the TAC citation, and the level of the rule that references the graphic. Example: "Figure: 34 TAC §3.334(a)(1)." The rule text must reference the same label at the appropriate level. Label a table or graphic within a preamble with the word "Figure," TAC citation, and the word "preamble." Example: "Figure: 34 TAC Chapter 3 - Preamble."

(g) Do not refer to the Tables and Graphics section of the *Texas Register* in rule text. Place graphic labels at the end of the appropriate subdivision.

(h) If the body of a graphic is not being amended, but it is moving within a rule, resubmit it with its new label in both the proposed and adopted rule filings.

(i) If a graphic attached to an amended subdivision is not changed or deleted, mark it as "(No change.)" Example: "Figure: 34 TAC §3.334(a)(1) (No change.)" If a subdivision with a graphic was marked "(No change.)" in the proposed rulemaking, submit the complete text of the adopted rule with its graphic label designated "(No change.)" When you propose or adopt a new rule, submit any associated graphics and do not mark the figure line as "(No change.)"

(j) When proposing to delete a graphic from a rule, bracket the figure label within the rule text. Example: [Figure: 34 TAC §3.334(a)(1)]. Do not submit the deleted graphic with the filing.

(k) Do not use rulemaking codes, as outlined in §91.35(f) of this title (relating to How to File a Proposed Rule), in graphic material. Do not use the "tab" function to create tables and equations in Word or Word Perfect because the tab formatting will be lost in the conversion to html.

**History**
- *Source Note: The provisions of this §91.41 adopted to be effective March 23, 2003, 28 TexReg 2303.*

#### **Subchapter D** RULE REVIEW

##### **1 Tex. Admin. Code § 91.71** Scope of Rule Review {#sec-91.71 omnilex-key=us-tx-regs-official--title-1--91.71}

(a) The Government Code, §2001.039, concerning Agency Review of Existing Rules, directs state agencies to develop plans to review their rules and to determine, at a minimum, whether the reasons for adopting the rules still exist.

(b) The procedures in this subchapter are discretionary, permitting agencies to distinguish rule review from rulemaking. These procedures provide the Texas Register with the information necessary to track rule review status. Agencies may determine to follow these procedures to comply with the notice requirements of the Government Code, §2001.039. We will track and report agency rule review documents only if they are published in accordance with this subchapter.

**History**
- *Source Note: The provisions of this §91.71 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.72** Plan to Review {#sec-91.72 omnilex-key=us-tx-regs-official--title-1--91.72}

(a) Agencies may file rule review plans with the Texas Register.

(b) The plan must state the date by which the agency will begin the review. Contact the Texas Register office or check the Office of the Secretary of State's web site for examples of rule review plans submitted by state agencies.

(c) Draft a rule review plan as a Word or Word Perfect file (.doc or .wpd file extension). Do not use the coding required for rulemaking, miscellaneous or proposed or adopted review documents.

(d) Submit the rule review plan using e-mail or ftp (file transfer protocol).

(e) Complete one Rule Review form for each rule review plan document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(f) We will post the text of rule review plans on the Secretary of State's web site. Each issue of the *Texas Register* will contain notices in the Rule Review section of any plans filed since the previous issue. These notices will refer readers to the Secretary of State's web site for the text of plans.

**History**
- *Source Note: The provisions of this §91.72 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.73** Notice of Intention to Review (Proposed Review) {#sec-91.73 omnilex-key=us-tx-regs-official--title-1--91.73}

(a) Draft a notice of proposed review that includes:

(1) the chapter numbers or subchapter letters;

(2) a request for comments on the chapters or subchapters from any interested person; and

(3) any other statement that an agency determines is required by law or explains the agency's intentions.

(b) You may list rule numbers and names. Exclude rule text.

(c) When you draft the proposed rule review document in a word processing program, use a hard return at the end of every paragraph and make sure that every line of text is flush with the left margin. Format the document using the following codes:

Attached Graphic

(d) Save the text of the document in "Text Only (*.txt)" format. Name the file using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one miscellaneous or nonrulemaking document in an electronic file.

(e) Submit the file using either e-mail or ftp (file transfer protocol).

(f) Complete one Rule Review form for each proposed review document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(g) You may submit documents concurrently for publication in the Rule Review section and the Proposed Rules, Adopted Rules, Emergency Rules, and Withdrawn Rules sections of the *Texas Register.* Do not submit revisions to rules through the rule review process outlined in this subchapter.

**History**
- *Source Note: The provisions of this §91.73 adopted to be effective March 23, 2003, 28 TexReg 2303.*

##### **1 Tex. Admin. Code § 91.74** Notice of Readoption (Adopted Review) {#sec-91.74 omnilex-key=us-tx-regs-official--title-1--91.74}

(a) You may submit a notice of readoption (adopted review) 30 days after publication of the notice of intention to review (proposed review).

(b) An agency may submit the review of multiple chapters, subchapters, divisions, or sections, but the Texas Register will post a Chapter Review Date for a chapter in TAC only after an agency submits a notice of readoption (adopted review) to confirm the review of an entire chapter. To ensure that we will track the Chapter Review Date, include a statement such as "This concludes the review of Chapter ___."

(1) The Chapter Review Date is the filing date of an adopted review notice, which states that the review of a chapter is complete. An agency may specify an earlier date, such as the first date on which an agency reviewed any portion of a chapter. The Chapter Review Date does not represent the "effective date" of a rule under the Government Code, §2001.036 (typically 20 days after filing), nor does it represent the "effective date" under §1.11(c) of Acts 1999, 76th Legislature, Chapter 1499, Senate Bill 178 (the date on which the state agency begins the review of the rule).

(2) The Chapter Review Date appears only in the searchable version of the TAC database available to subscribers. The Secretary of State will provide each agency with two free subscriptions to the database.

(c) Draft a notice of adopted review that includes:

(1) the chapter numbers or subchapter letters;

(2) the publication date and page number for the notice of intention to review (proposed review);

(3) a summary of public comments regarding the readoption or a statement that the agency received no comments;

(4) an assessment of whether the reasons for initially adopting the rules continue to exist; and

(5) any other statement that an agency determines is required by law or explains the agency's intentions.

(d) You may list rule numbers and names. Exclude rule text.

(e) When you draft the adopted rule review document in a word processing program, use a hard return at the end of every paragraph and make sure that every line of text is flush with the left margin. Format the document using the following codes:

Attached Graphic

(f) Save the text of the document in "Text Only (*.txt)" format. Name the file using the month and date of submission followed by a decimal point and the agency code assigned by the Texas Register. If you submit more than one file on the same day, insert a letter in sequence after the date and before the decimal point. For example: The file name 0715.004 indicates that a file was sent on July 15 by the Office of the Secretary of State while the names 0715a.004 and 0715b.004 indicate a second and third file were sent on the same day. If you are using e-mail, include the file name in the subject line. You may submit more than one miscellaneous or nonrulemaking document in an electronic file.

(g) Submit the file using either e-mail or ftp (file transfer protocol).

(h) Complete one Rule Review form for each adopted review document. Access the form on the Texas Register web site under the link "For Liaisons Only" using the User Name and Password described in §91.3(b) of this title (relating to Liaison and Certifying Official). Submit the form either:

(1) electronically over the web; or

(2) by fax to the Texas Register office.

(i) You may submit documents concurrently for publication in the Rules Review section and the Proposed Rules, Adopted Rules, Emergency Rules, and Withdrawn Rules sections of the *Texas Register.* Do not submit revisions to rules through the rule review process outlined in this subchapter.

**History**
- *Source Note: The provisions of this §91.74 adopted to be effective March 23, 2003, 28 TexReg 2303.*

### **Chapter 93** TRADEMARKS

#### **Subchapter A** GENERAL INFORMATION AND CORRESPONDENCE

##### **1 Tex. Admin. Code § 93.1** Address {#sec-93.1 omnilex-key=us-tx-regs-official--title-1--93.1}

All letters and other communications relating to trademark matters should be addressed to: Secretary of State of Texas, Business & Public Filings Division, P.O. Box 13697, Austin, Texas 78711-3697. Correspondence is not received on Saturdays, Sundays, or legal holidays.

**History**
- *Source Note: The provisions of this §93.1 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.2** Business To Be Transacted in Writing {#sec-93.2 omnilex-key=us-tx-regs-official--title-1--93.2}

Unless otherwise specifically stated in the rules of this chapter, all business should be transacted in writing. The action of the Secretary of State will be based on the written record; no consideration will be given to any alleged oral promise, stipulation, or understanding in relation to which there is disagreement or doubt.

**History**
- *Source Note: The provisions of this §93.2 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.3** Business To Be Conducted with Decorum and Courtesy {#sec-93.3 omnilex-key=us-tx-regs-official--title-1--93.3}

Applicants and their attorneys or agents are required to conduct their business with the Secretary of State with decorum and courtesy. Written complaints against examiners and other employees must be kept separate from any application file.

**History**
- *Source Note: The provisions of this §93.3 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.4** Correspondence {#sec-93.4 omnilex-key=us-tx-regs-official--title-1--93.4}

(a) A letter relating to a trademark application should identify the name of the applicant, the mark, and the reference number appearing on the office action letter.

(b) Each application file should be complete in itself. Although the response submitted for two or more applications may be identical, a separate response should be provided for each application.

(c) A letter relating to a registered trademark should include the name of the registrant, an identification of the mark, the registration number, and the date of registration.

**History**
- *Source Note: The provisions of this §93.4 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.5** Times for Taking Action: Expiration on Saturday, Sunday, or Holiday {#sec-93.5 omnilex-key=us-tx-regs-official--title-1--93.5}

Whenever periods of time are specified in these sections in days, calendar days are intended. When the day, or the last day, fixed by statute or by these sections for taking any action in the Office of the Secretary of State falls on Saturday, Sunday, or on a legal holiday, the action may be taken on the next succeeding day which is not a Saturday, Sunday, or a legal holiday.

**History**
- *Source Note: The provisions of this §93.5 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.6** Access to Applications {#sec-93.6 omnilex-key=us-tx-regs-official--title-1--93.6}

Copies of pending applications and accompanying letters and documents will be available for public inspection. Copies of the papers will be furnished upon paying the appropriate fee.

**History**
- *Source Note: The provisions of this §93.6 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter B** REPRESENTATION

##### **1 Tex. Admin. Code § 93.11** Representation by an Attorney {#sec-93.11 omnilex-key=us-tx-regs-official--title-1--93.11}

The owner of a trademark may file the application for registration of the mark or assignment or renewal of registration, or an attorney may represent the owner. The Secretary of State cannot aid in the selection of an attorney.

**History**
- *Source Note: The provisions of this §93.11 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.12** Recognition for Representation {#sec-93.12 omnilex-key=us-tx-regs-official--title-1--93.12}

When an attorney at law, acting in a representative capacity, appears in person or signs a paper in a trademark matter, the personal appearance or signature shall constitute a representation to the Secretary of State that the attorney is authorized and qualified to represent the particular party. Further proof of authority to act in a representative capacity may be required.

**History**
- *Source Note: The provisions of this §93.12 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.13** Correspondence with Attorney or Agent {#sec-93.13 omnilex-key=us-tx-regs-official--title-1--93.13}

The Secretary of State will correspond with the attorney or other recognized person representing the applicant. The Secretary of State will not undertake correspondence with more than one attorney or agent. If more than one attorney or agent appears, the Secretary of State will correspond with the last one appearing, unless otherwise requested.

**History**
- *Source Note: The provisions of this §93.13 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.14** Revocation of Power of Attorney or Authorization of Agent {#sec-93.14 omnilex-key=us-tx-regs-official--title-1--93.14}

Authority to represent an applicant may be revoked at any stage in the registration proceedings upon notification to the Secretary of State. Once revoked, the Secretary of State will communicate directly with the applicant or with any other person authorized by the applicant.

**History**
- *Source Note: The provisions of this §93.14 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.15** Representation by Non-Lawyers {#sec-93.15 omnilex-key=us-tx-regs-official--title-1--93.15}

Recognition of any person under this chapter is not to be construed as sanctioning or authorizing the performance of any acts regarded as the unauthorized practice of law.

**History**
- *Source Note: The provisions of this §93.15 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter C** SUBMISSION REQUIREMENTS

##### **1 Tex. Admin. Code § 93.21** Date of Receipt {#sec-93.21 omnilex-key=us-tx-regs-official--title-1--93.21}

(a) An application accompanied by the appropriate fee for at least one class of goods and/or services will be given a date of receipt for purposes of processing by the Secretary of State. The application will be held pending final determination of the mark's registrability by an examiner.

(b) An application delivered without the appropriate fee for at least one class of goods and/or services will not be accorded a date of receipt for purposes of processing and will be returned to sender.

**History**
- *Source Note: The provisions of this §93.21 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.22** Papers Not Returnable {#sec-93.22 omnilex-key=us-tx-regs-official--title-1--93.22}

(a) Applicants should not include confidential information with an application. Any documents containing confidential information will be returned to the sender prior to filing.

(b) After an application is filed the papers will not be returned for any purpose. The Secretary of State will furnish copies to the applicant upon request and payment of the copy cost.

**History**
- *Source Note: The provisions of this §93.22 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.23** Application To Be Clear and Legible {#sec-93.23 omnilex-key=us-tx-regs-official--title-1--93.23}

All documents must be clear and legible, written with black ink on white paper, so that a clear electronic image may be made. The application should be written on only one side of the paper.

**History**
- *Source Note: The provisions of this §93.23 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.24** Requirements for Receiving a Registration Date {#sec-93.24 omnilex-key=us-tx-regs-official--title-1--93.24}

A mark registrable under §16.051 of the Business & Commerce Code will receive a registration date only if each of the following items is received and found to comply with the requirements of the Code and this chapter:

(1) written application for registration that complies with Subchapter D of this chapter (relating to the Written Application);

(2) a drawing of the mark that complies with Subchapter E of this chapter (relating to Drawing);

(3) at least three specimens of the mark as actually used, that comply with Subchapter F of this chapter (relating to Specimens), including at least one specimen per class; and

(4) the application fee for each class of goods and/or services, as required by §93.151 of this title (relating to Recordation Fees).

**History**
- *Source Note: The provisions of this §93.24 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter D** THE WRITTEN APPLICATION

##### **1 Tex. Admin. Code § 93.31** Application Requirements {#sec-93.31 omnilex-key=us-tx-regs-official--title-1--93.31}

(a) The application must be in English, subject to the provisions of §93.35 of this title (relating to Description of Mark). Use of the application form promulgated by the Secretary of State is recommended, but not mandatory, for an applicant seeking to register a mark in two or fewer classes.

(b) The application must include:

(1) the name and business address of the applicant;

(2) if the applicant is a corporation or LLC, the state under whose laws the applicant was incorporated or organized;

(3) if the applicant is a general or limited partnership, the state under whose laws the partnership was organized and the names of the general partners;

(4) the names or a description of the goods and/or services on or in connection with which the mark is being used;

(5) the mode or manner in which the mark is being used on or in connection with the goods and/or services;

(6) the class to which the goods and/or services belong;

(7) the date the applicant or applicant's predecessor in interest first used the mark anywhere;

(8) the date the applicant or the applicant's predecessor in interest first used the mark in this state;

(9) a statement that the applicant is the owner of the mark, the mark is in use and, to the best of applicant's knowledge, no other person has registered the mark, either federally or in this state, no other person is entitled to use the mark in this state in the identical form used by applicant, or in a form that is likely, when used in connection with the goods and/or services, to cause confusion or mistake, or to deceive, because of its resemblance to the mark used by the applicant; and

(10) a statement as to whether the applicant or the applicant's predecessor in interest has filed an application to register the mark, or a portion or composite of the mark, with the United States Patent and Trademark Office, and, if so, the applicant shall fully disclose information with respect to that filing, including the filing date and serial number of each application, the status of the filing, and if any application was finally refused registration or has not otherwise resulted in the issuance of a registration, the reasons for the refusal or nonissuance.

(c) The application must be accompanied by:

(1) a drawing sheet;

(2) at least three specimens of the mark as actually used; and

(3) the application fee pursuant to §93.151 of this title (relating to Recordation Fees).

(d) The application must be signed and verified in compliance with §93.33 of this title (relating to Execution Requirements).

**History**
- *Source Note: The provisions of this §93.31 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.32** Supplemental Application Requirements for Applicants Seeking to Register a Mark in Two or More Classes {#sec-93.32 omnilex-key=us-tx-regs-official--title-1--93.32}

(a) An applicant seeking to register a mark in two or more classes must comply with §93.31 of this title (relating to Application Requirements). Additionally, the applicant must:

(1) clearly and concisely describe the goods and/or services, in each class, on or in connection with which the mark is being used by the applicant at the time of submission of the application;

(2) include the dates of use and specimen of use appropriate to each class; and

(3) submit an application fee for each class pursuant to §93.151 of this title (relating to Recordation Fees).

(b) The Secretary of State will issue a single certificate of registration that identifies each class in which the mark is registered. If an applicant wishes to obtain separate certificates of registration for one or more classes, the applicant must file a separate application for each class.

**History**
- *Source Note: The provisions of this §93.32 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.33** Execution Requirements {#sec-93.33 omnilex-key=us-tx-regs-official--title-1--93.33}

(a) The application must indicate the date of execution and be signed and verified by the oath or affirmation of an authorized person.

(1) The verification shall substantially comply with the following:

Attached Graphic

(2) In lieu of a verification, the application may include a declaration by an authorized person that complies with §132.001 of the Civil Practice & Remedies Code.

(b) For purposes of this subchapter, a person is authorized to sign an application if:

(1) the person has legal authority to bind the owner;

(2) the person has firsthand knowledge of the facts and actual or implied authority to act on behalf of the applicant; or

(3) the person is an attorney who has actual written or verbal power of attorney or an implied power of attorney from the applicant.

(c) A person with legal authority to bind the owner means:

(1) in the case of a sole proprietor, the individual that owns the mark;

(2) in the case of a joint venture, a party to the venture;

(3) in the case of a partnership, a general partner;

(4) in the case of a corporation, an authorized corporate officer;

(5) in the case of a limited liability company, an authorized manager, member, or officer;

(6) in the case of an applicant organized in any manner, other than set forth in this subsection, a person that has the authority to legally bind the applicant or registrant under its governing documents.

**History**
- *Source Note: The provisions of this §93.33 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.34** Description of Goods and/or Services {#sec-93.34 omnilex-key=us-tx-regs-official--title-1--93.34}

(a) The application must clearly and concisely identify the goods and/or services on or in connection with which the applicant uses the mark in commerce.

(b) The description of goods and/or services must use common or generic terms or phrases to describe applicant's goods and/or services. Do not include highly technical language or a reference to a federally or state registered mark.

(c) Each description of goods and/or services must be limited to a single class. If the applicant seeks to register a mark in multiple classes, the application must include a separate description of goods and/or services for each class.

(d) An application that contains a description of goods and/or services that is broad or ambiguous enough to fall into more than one class will be rejected. The applicant will be required to more narrowly specify the goods and/or services in connection with which the mark is being used. For example, "publication" is not an acceptable description of goods and/or services because it is not specific enough to identify the goods and/or services with which the mark is being used, e.g., downloadable publications (Class 09), educational publications (Class 16), online publications (Class 41).

**History**
- *Source Note: The provisions of this §93.34 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.35** Description of Mark {#sec-93.35 omnilex-key=us-tx-regs-official--title-1--93.35}

(a) The description should clearly and accurately describe all significant aspects of the mark, including both word and design elements. An element of a mark is considered significant if its addition or deletion would affect the overall commercial impression of the mark.

(b) The description of the mark should not mention colors unless applicant is making a color claim. If color is claimed as a feature of the mark, the description must comply with §93.36 of this title (relating to Color in the Mark).

(c) If the mark includes non-English wording, the description of the mark must include an English translation of that wording.

**History**
- *Source Note: The provisions of this §93.35 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.36** Color in the Mark {#sec-93.36 omnilex-key=us-tx-regs-official--title-1--93.36}

(a) If the mark includes color, the description of the mark must claim color as a feature of the mark and include a color location statement specifying where the color(s) appear on the mark. The color(s) should be described in generic terms rather than by reference to a commercial color identification system.

(1) A properly worded color claim would read as follows: "The color(s) {name the color(s)} is/are claimed as a feature of the mark."

(2) A properly worded color location statement would read as follows: "The mark consists of {specify the color(s) and literal or design element(s) on which the color(s) appear (e.g., a red balloon with a yellow ribbon)."}

(b) When color is claimed as part of the mark, the applicant may provide either a color or a black and white drawing sheet. If a color drawing sheet is provided, the colors must match the colors as described in the color location statement.

(c) When color is claimed as part of the mark, at least one specimen per class in which registration of the mark is sought, must be in color and the location of the colors must match the colors as described in the color location statement.

**History**
- *Source Note: The provisions of this §93.36 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.37** Identification of Prior Applications or Registrations with the United States Patent and Trademark Office {#sec-93.37 omnilex-key=us-tx-regs-official--title-1--93.37}

(a) The applicant must disclose any prior applications for registration of the mark, or a portion of the mark, with the United States Patent and Trademark Office (USPTO). If any prior applications for registration have been made by the applicant or applicant's predecessor, the applicant must provide the following information to the Secretary of State:

(1) the filing date and serial number of each application;

(2) the status of any filing; and

(3) if any application was finally refused registration or has not otherwise resulted in the issuance of a registration, the reasons for the refusal or nonissuance.

(b) Applicants may comply with subsection (a) of this section by providing copies of documents issued by the USPTO that include the required information.

(c) Failure to disclose an application for registration with the USPTO that was finally refused or has not otherwise resulted in issuance of a registration may result in the rejection of an application.

**History**
- *Source Note: The provisions of this §93.37 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.38** Use by Predecessor or by Related Companies {#sec-93.38 omnilex-key=us-tx-regs-official--title-1--93.38}

(a) An applicant may assert a date of first use by a predecessor in title, or by a related company, if the use operates to benefit the applicant. The application must include a statement that the first use was by the predecessor in title or by the related company.

(b) If the applicant is not using the mark, but one or more related companies are using the mark, and their use operates to benefit the applicant, the application must indicate this fact.

(c) The trademark examiner may inquire into the relationship and may require appropriate evidence showing that the use by related companies operates to benefit the applicant.

**History**
- *Source Note: The provisions of this §93.38 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.39** Proof of Distinctiveness {#sec-93.39 omnilex-key=us-tx-regs-official--title-1--93.39}

(a) An applicant may seek registration of a mark, otherwise unregistrable by reason of §16.051(a)(5)(A), (B), or (6) of the Business & Commerce Code, which the applicant believes has become distinctive as applied to the applicant's goods and/or services. To support the claim of distinctiveness the applicant may submit:

(1) evidence of prior registrations with the Secretary of State of the same or similar marks owned by the applicant or applicant's predecessor in interest;

(2) actual evidence of acquired distinctiveness; or

(3) a sworn statement of the applicant's substantially exclusive and continuous use of the mark for the five years preceding the date on which the applicant filed its application for registration.

(b) Types of evidence that may be submitted to support a claim of distinctiveness may include sworn affidavits, depositions, or other evidence showing duration, extent, and nature of use of the mark. The applicant also may submit evidence of advertising expenditures made in connection with the mark; the evidence should identify the types of media and should include typical advertisements. Additional evidence may include affidavits, letters, or statements from the trade or public. Sworn statements in the application may, in appropriate cases, be accepted as prima facie evidence of distinctiveness.

(c) After reviewing evidence submitted to support a claim of distinctiveness, the trademark examiner may require further evidence, or may determine that the mark is so generic or highly descriptive as applied to the applicant's goods and/or services that the mark cannot be registered regardless of the amount of evidence provided.

**History**
- *Source Note: The provisions of this §93.39 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.40** Olympic Symbols {#sec-93.40 omnilex-key=us-tx-regs-official--title-1--93.40}

(a) An application for registration of a mark that uses a symbol, emblem, trademark, trade name, or insignia of the International Olympic Committee or the United States Olympic Committee; or which consists of or includes the words, "Olympic," "Olympiad," or "Citius Altius Fortius," or a combination or simulation of those words must be accompanied by a letter from the United States Olympic Committee consenting to its use as a trademark or service mark and its registration as a trademark or service mark.

(b) Written consent from the United States Olympic Committee for the registration of the mark is not determinative of the issue of registrability under the provisions of §16.051 of the Business & Commerce Code.

**History**
- *Source Note: The provisions of this §93.40 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter E** DRAWING

##### **1 Tex. Admin. Code § 93.51** Drawing Required {#sec-93.51 omnilex-key=us-tx-regs-official--title-1--93.51}

(a) The drawing depicts the mark sought to be registered and will be used to reproduce the mark on the registration certificate. The drawing shall be a substantially exact representation of the mark as actually used on or in connection with the goods and/or services.

(b) The drawing must be clear and legible and presented on white paper, so that a clear electronic image may be made. An electronic reproduction of the mark will suffice as the drawing, as long as it meets the requirements of this section and §93.52 of this title (relating to Requirements for a Drawing).

(c) The drawing sheet should be no larger than 8 1/2 inches by 11 inches. The actual drawing of the mark must be no larger than 3.15 inches (8 cm) high by 3.15 inches (8 cm) wide.

(d) The drawing must depict only one mark and should be limited to the mark sought to be registered. Matter appearing on the specimens that is not part of the mark should not be placed on the drawing sheet. Purely informational matter such as package contents, contact information, and organizational identifiers are generally not considered part of the mark.

**History**
- *Source Note: The provisions of this §93.51 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.52** Requirements for a Drawing {#sec-93.52 omnilex-key=us-tx-regs-official--title-1--93.52}

(a) *Marks that include standard characters:* For purposes of this chapter, a "standard character" shall be words, letters, numbers, or any combination thereof without claim to any particular font, style, or color.

(1) If the mark sought to be registered consists of standard characters, those characters shall be typed in capital letters with black ink.

(2) When a mark includes standard characters, those characters shown in the drawing do not have to appear in the exact same font, style, or color as the specimen of use. However, the Secretary of State will review the mark depicted on the specimen to determine whether the characters are so distinctive as to change the overall commercial impression of the mark.

(b) *Marks that include a design element:* A mark is considered to contain a design element, if the mark is comprised, in whole or in part, of special characteristics such as a two or three-dimensional design and/or words, letters, or numbers or the combination thereof in a particular font, style, or color.

(c) *Marks that include color:* If a color is claimed as a feature of the mark pursuant to §93.36 of this title (relating to Color in the Mark), the drawing of the mark may be presented in either color or black and white. If the drawing of the mark is in color, it must match the color(s) described in the color location statement. If color is not claimed as a feature of the mark, any color(s) shown in the drawing sheet will be disregarded.

**History**
- *Source Note: The provisions of this §93.52 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter F** SPECIMENS

##### **1 Tex. Admin. Code § 93.61** Inclusion in Application {#sec-93.61 omnilex-key=us-tx-regs-official--title-1--93.61}

(a) The application must include at least three specimens or examples of use of the mark, including at least one specimen per class in which registration is sought. The specimen must show the mark as it is used on or in connection with the goods and/or services in Texas.

(b) If a specimen supports multiple classes, the applicant should indicate which classes are supported by the specimen.

(c) A specimen which is merely a printer's proof or reproduction of the drawing submitted to comply with §93.51 of this title (relating to Drawing Required) will not be considered to be a specimen of the mark in use.

**History**
- *Source Note: The provisions of this §93.61 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.62** Requirements for a Specimen {#sec-93.62 omnilex-key=us-tx-regs-official--title-1--93.62}

(a) *Marks that include color:* If a color is claimed as a feature of the mark pursuant to §93.36 of this title (relating to Color in the Mark), at least one specimen in each class in which registration of the mark is sought must be in color and the location of the colors must match the colors as described in the color location statement.

(b) *Trademark specimens:* An appropriate specimen for a trademark may include labels, tags, containers, or displays associated with the goods. In the case of goods for which the mark is applied by means of stamp impression or stencil, the specimen may be a representation or impression of the stamp or stencil on a piece of paper. If the nature of the goods makes placement of the mark on the goods impracticable, documents associated with the goods or sale of the goods may be submitted.

(c) *Service mark specimens:* An appropriate specimen for a service mark shall show the mark as actually used in the sale or advertising of the services. In the case of service marks not used in printed or written form, the Secretary of State may accept audio or video recordings in CD or DVD format, if accompanied by a written transcript of the contents.

**History**
- *Source Note: The provisions of this §93.62 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.63** Photographs as Specimens {#sec-93.63 omnilex-key=us-tx-regs-official--title-1--93.63}

When the manner of use of a mark prevents the applicant from providing actual specimens, the applicant may provide a suitable photograph. The photograph should be no larger than 8 1/2 inches by 11 inches. The photograph should clearly show the mark and the item on which it is used. Matte finish photographs are most suitable for creating an electronic image.

**History**
- *Source Note: The provisions of this §93.63 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter G** CLASSIFICATION

##### **1 Tex. Admin. Code § 93.71** Classification of Goods and Services {#sec-93.71 omnilex-key=us-tx-regs-official--title-1--93.71}

(a) In accordance with the Business & Commerce Code, §16.065, the Secretary of State uses the international classification of goods and services used by the United States Patent and Trademark Office (USPTO). That classification is set forth in this section. The classification shall not limit or extend an applicant's rights. The U.S. Acceptable Identification of Goods and Services Manual on the USPTO website may be referenced for a more specific listing of goods and services.

(b) The classes of goods and services are as follows:

(1) chemicals used in industry, science, and photography, as well as in agriculture, horticulture, and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesives used in industry;

(2) paints, varnishes, lacquers; preservatives against rust and against deterioration of wood; colorants; mordants; raw natural resins; metals in foil and powder form for painters, decorators, printers, and arts;

(3) bleaching preparations and other substances for laundry use; cleaning, polishing, scouring, and abrasive preparations; soaps; perfumery, essential oils, cosmetics, hair lotions; dentifrices;

(4) industrial oils and greases; lubricants; dust absorbing, wetting, and binding compositions; fuels (including motor spirit) and illuminants; candles and wicks for lighting;

(5) pharmaceutical, veterinary preparations; sanitary preparations for medical purposes; dietetic food and substances adapted for medical or veterinary use, food for babies; dietary supplements for humans and animals; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides;

(6) common metals and their alloys; metal building materials; transportable buildings of metal; materials of metal for railway tracks; nonelectric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal not included in other classes; ores;

(7) machines and machine tools, motors (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural implements other than hand-operated; incubators for eggs; automatic vending machines;

(8) hand tools and implements (hand-operated); cutlery; side arms; razors;

(9) scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signaling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission, or reproduction of sound or images; magnetic data carriers, recording discs; compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash registers, calculating machines, and data processing equipment, computers; computer software; fire-extinguishing apparatus;

(10) surgical, medical, dental, and veterinary apparatus and instruments, artificial limbs, eyes, and teeth; orthopedic articles; suture materials;

(11) apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply, and sanitary purposes;

(12) vehicles; apparatus for locomotion by land, air, or water;

(13) firearms; ammunition and projectiles; explosives; fireworks;

(14) precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; jewelry, precious stones; horological and chronometric instruments;

(15) musical instruments;

(16) paper, cardboard, and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists' materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers' type; printing blocks;

(17) rubber, gutta-percha, gum, asbestos, mica, and goods made from these materials and not included in other classes; plastics in extruded form for use in manufacture; packing, stopping, and insulating materials; flexible pipes, not of metal;

(18) leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and traveling bags; umbrellas, parasols, and walking sticks; whips, harness, and saddlery;

(19) building materials (nonmetallic); nonmetallic rigid pipes for building; asphalt, pitch, and bitumen; nonmetallic transportable buildings; monuments, not of metal;

(20) furniture, mirrors, picture frames; goods (not included in other classes) of wood, cork, reed, cane, wicker, horn, bone, ivory, whalebone, shell, amber, mother-of-pearl, meerschaum, and substitutes for all these materials, or of plastics;

(21) household or kitchen utensils and containers; combs and sponges; brushes (except paint brushes); brush-making materials; articles for cleaning purposes; steel wool; unworked or semi-worked glass (except glass used in building); glassware, porcelain, and earthenware not included in other classes;

(22) ropes, string, nets, tents, awnings, tarpaulins, sails, sacks and bags (not included in other classes); padding and stuffing materials (except of rubber or plastics); raw fibrous textile materials;

(23) yarns and threads, for textile use;

(24) textiles and textile goods, not included in other classes; bed and table covers;

(25) clothing, footwear, headgear;

(26) lace and embroidery, ribbons and braid; buttons, hooks and eyes, pins and needles; artificial flowers;

(27) carpets, rugs, mats and matting, linoleum and other materials for covering existing floors; wall hangings (nontextile);

(28) games and playthings; gymnastic and sporting articles not included in other classes; decorations for Christmas trees;

(29) meat, fish, poultry, and game; meat extracts; preserved, dried, and cooked fruits and vegetables; jellies, jams, compotes; eggs, milk, and milk products; edible oils and fats;

(30) coffee, tea, cocoa, and artificial coffee; rice, tapioca, sago; flour and preparations made from cereals; bread, pastry and confectionery, ices; sugar, honey, treacle; yeast, baking-powder; salt, mustard; vinegar, sauces (condiments); spices; ice;

(31) grains, and agricultural, horticultural, and forestry products not included in other classes; living animals; fresh fruits and vegetables; seeds, natural plants, and flowers; foodstuffs for animals; malt;

(32) beers; mineral and aerated waters and other nonalcoholic beverages; fruit beverages and fruit juices; syrups and other preparations for making beverages;

(33) alcoholic beverages (except beers);

(34) tobacco; smokers' articles; matches;

(35) advertising; business management; business administration; office functions;

(36) insurance; financial affairs; monetary affairs; real estate affairs;

(37) building construction; repair; installation services;

(38) telecommunications;

(39) transport; packaging and storage of goods; travel arrangement;

(40) treatment of materials;

(41) education; providing training; entertainment; sporting and cultural activities;

(42) scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software;

(43) services for providing food and drink; temporary accommodation;

(44) medical services; veterinary services; hygienic and beauty care for human beings or animals; agriculture, horticulture, and forestry services; and

(45) legal services; security services for the protection of property and individuals; personal and social services rendered by others to meet the needs of individuals.

**History**
- *Source Note: The provisions of this §93.71 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.72** Identification of Goods and/or Services {#sec-93.72 omnilex-key=us-tx-regs-official--title-1--93.72}

(a) The application must identify the goods and/or services in connection with which the mark is being used. A single class application may state that the mark is in use with any number of goods and/or services contained within one class. If the goods and/or services identified on the application fall within two or more classes, the application must comply with §93.32 of this title (relating to Supplemental Application Requirements for Applicants Seeking to Register a Mark in Two or More Classes).

(b) Classification is the basis for determining the fees that must be paid. If the application sets forth goods and/or services in more than one class and submits insufficient fees to cover all the classes, the applicant must either amend the application to restrict the goods and/or services to the number of classes for which the fee has been paid, or submit additional payment to cover each class set forth in the identification of goods and/or services.

**History**
- *Source Note: The provisions of this §93.72 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter H** EXAMINATION OF AN APPLICATION AND ACTION BY APPLICANT

##### **1 Tex. Admin. Code § 93.81** Action by Examiner {#sec-93.81 omnilex-key=us-tx-regs-official--title-1--93.81}

(a) Upon receiving an application for registration and payment of the application fee for at least one class, a trademark examiner will examine an application for registration.

(b) Applications will be examined in the order in which they are received, including applications concurrently processed for registration of the same or confusingly similar marks used in connection with the same or similar goods and/or services.

(c) The applicant will be notified in writing of any formal requirements or objections to the application for registration.

(d) An examiner may require the applicant to furnish any information and exhibits reasonably necessary to the proper examination of the application.

**History**
- *Source Note: The provisions of this §93.81 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.82** Concurrent Applications for Same or Similar Mark {#sec-93.82 omnilex-key=us-tx-regs-official--title-1--93.82}

(a) When concurrently processing applications for marks that are likely to cause confusion or mistake, when applied to the applicant's goods and/or services, the Secretary of State will give priority to the application with the earliest date of receipt, as determined by §93.21 of this title (relating to Date of Receipt). Applications for the same or similar mark that have a later date of receipt will be cited to the conflicting pending application. The application will be held pending until the Secretary of State makes a final determination regarding the registration of the prior received application.

(b) When applications have the same date of receipt, pursuant to §93.21 of this title, the application with the later date of execution will be held pending a final determination of the application with the earlier date of execution. An application that does not specify a date of execution will be presumed to have been executed no earlier than:

(1) its postmark date, if mailed; or

(2) its date of receipt, if delivered by other means.

(c) When applications have the same date of receipt and the same date of execution, the trademark examiner will give priority to the application stating the earliest date of first use in this state.

**History**
- *Source Note: The provisions of this §93.82 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.83** Period for Response {#sec-93.83 omnilex-key=us-tx-regs-official--title-1--93.83}

A written response must be received by the Secretary of State within 90 days from the date of mailing of any action by an examiner. The response may be made with or without amendment and include proper action by the applicant as the nature of the action and the case may require.

**History**
- *Source Note: The provisions of this §93.83 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.84** Suspension of Action {#sec-93.84 omnilex-key=us-tx-regs-official--title-1--93.84}

(a) Action may be taken by the Secretary of State to suspend a pending application for good and sufficient cause, including a pending proceeding before the United States Patent and Trademark Office (USPTO) or a court which is relevant to the issue of registrability of the applicant's mark. An application suspended by the Secretary of State will be reviewed for any substantive defects and then suspended for a reasonable amount of time, but not longer than six months. The applicant will be notified in writing of the reason for the suspension. The Secretary may suspend the application for additional six-month periods by notifying the applicant in writing.

(b) On written request of the applicant, the Secretary of State may suspend action for a period of up to six months, if a proceeding is pending before the USPTO or a court which is relevant to the issue of registrability of the applicant's mark. An applicant's written request for a suspension of action under this section filed within the 90-day response period may be considered responsive to an examiner's action.

(c) The request should include the following information:

(1) an identification of the application;

(2) a statement that the applicant requests suspension of the trademark examination process;

(3) an identification of the pending proceeding including the name of the court, file name, and cause number; and

(4) a brief statement of the relevance of the pending proceeding to the application before the trademark examiner.

(d) No later than upon request for suspension, the applicant should address all objections to registration other than those on which the suspension is based.

(e) The trademark examiner shall send written notice of the acceptance or rejection of the request to the applicant. If the examiner accepts the request, the examiner shall make appropriate notations on the application file.

(f) The applicant shall notify the Secretary of State within 20 days of the resolution of any proceeding.

(g) If the proceeding remains pending at the end of the initial, or any subsequent suspension period, the applicant shall provide written notice of this fact to the Secretary of State. The Secretary of State may suspend action for additional periods of up to six months. If the applicant does not provide notice by the end of the initial or any subsequent suspension period, the application will be deemed abandoned.

**History**
- *Source Note: The provisions of this §93.84 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.85** Third Party Communications {#sec-93.85 omnilex-key=us-tx-regs-official--title-1--93.85}

(a) Except as otherwise provided in subsection (b) of this section, action of the Secretary of State will be based upon the written record developed by the applicant and the trademark examiner. Communications from third parties in opposition to the registration of a pending application which are adversarial in nature are inappropriate and will not be considered part of the record by the trademark examiner. Objections to registration of this nature should be resolved judicially pursuant to §16.104, Business & Commerce Code.

(b) Communication from a third party which brings to the attention of the Secretary of State facts or information bearing upon the registrability of the mark because of the generic or descriptive nature of the mark may be made part of the record for consideration along with all other facts available to the examiner. Before any of the factual information can be made part of the record, the communication must be in writing and contain proof and support of the information provided.

**History**
- *Source Note: The provisions of this §93.85 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.86** Final Action {#sec-93.86 omnilex-key=us-tx-regs-official--title-1--93.86}

When a refusal of registration is stated to be a final action, the applicant's response is limited to bringing an action to compel registration pursuant to the Business & Commerce Code, §16.106.

**History**
- *Source Note: The provisions of this §93.86 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.87** Abandonment {#sec-93.87 omnilex-key=us-tx-regs-official--title-1--93.87}

If within 90 days of the date of mailing of an action by an examiner, an applicant fails to respond or fails to respond completely, the application will be deemed abandoned. After an application has been abandoned, the applicant may submit a new application and fee.

**History**
- *Source Note: The provisions of this §93.87 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.88** Express Abandonment {#sec-93.88 omnilex-key=us-tx-regs-official--title-1--93.88}

An applicant may expressly abandon an application during the course of the examination process by executing and submitting a written abandonment with the Secretary of State.

**History**
- *Source Note: The provisions of this §93.88 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.89** Judicial Review of Final Action of the Secretary of State {#sec-93.89 omnilex-key=us-tx-regs-official--title-1--93.89}

(a) A final action or final decision of the Secretary of State may be judicially reviewed pursuant to §16.057 of the Business & Commerce Code. An applicant or registrant may seek judicial review of the refusal of the Secretary of State to register a trademark or renew the registration of a trademark by seeking a writ of mandamus in a district court of Travis County, pursuant to §16.106 of the Business & Commerce Code.

(b) A person seeking cancellation of a trademark registered by the Secretary of State may bring suit in a district court in Travis County to cancel the registration pursuant to §16.106 of the Business & Commerce Code.

**History**
- *Source Note: The provisions of this §93.89 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter I** AMENDMENTS

##### **1 Tex. Admin. Code § 93.91** Amendments to Application {#sec-93.91 omnilex-key=us-tx-regs-official--title-1--93.91}

(a) The applicant may amend the application, as required, to correct informalities, to avoid objections, or at the request of the Secretary of State.

(b) The identification of goods and/or services may be amended to clarify or limit, but not to broaden, the stated goods and/or services.

(c) If the verification or declaration is executed by the wrong party, the applicant may submit a substitute verification or declaration.

(d) The dates of use may be amended, provided that the applicant does not amend the application to include a date of use that is subsequent to the date of receipt of the application.

(e) The name of the applicant may be amended if incorrectly stated in the application, but the application may not be amended to include a different applicant.

**History**
- *Source Note: The provisions of this §93.91 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.92** Amendments to Description or Drawing {#sec-93.92 omnilex-key=us-tx-regs-official--title-1--93.92}

The trademark examiner will permit amendments to the description or drawing of the mark only if warranted by the specimens or facsimiles as originally filed. Amendments to the description or drawing supported by additional specimens may require an additional statement signed by the applicant alleging that the mark shown in the amended drawing was in actual use prior to the date of receipt of the application.

**History**
- *Source Note: The provisions of this §93.92 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.93** Form of Amendment {#sec-93.93 omnilex-key=us-tx-regs-official--title-1--93.93}

(a) In every amendment the applicant must indicate the exact word or words to be stricken from or inserted in the application. The applicant must indicate precisely where the insertion or deletion is to occur. Additions or insertions on the application must be made by the applicant, applicant's agent, or attorney.

(b) An examiner may require the applicant to rewrite the entire application if the number or nature of amendments makes it difficult to consider the application. The examiner also may require the entire application to be rewritten to clarify the record.

**History**
- *Source Note: The provisions of this §93.93 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.94** Disclaimer by Amendment {#sec-93.94 omnilex-key=us-tx-regs-official--title-1--93.94}

(a) An examiner may require a disclaimer of any unregistrable component (such as descriptive words, abbreviations, names, symbols, terms, slogans, or elements) of a mark otherwise registrable.

(b) An applicant may voluntarily disclaim a component of a mark sought to be registered.

(c) An applicant's failure to comply with a request for disclaimer is sufficient basis for a final action denying registration.

**History**
- *Source Note: The provisions of this §93.94 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter J** ALLOWANCE OF REGISTRATION

##### **1 Tex. Admin. Code § 93.101** Registration {#sec-93.101 omnilex-key=us-tx-regs-official--title-1--93.101}

(a) If an examiner determines that all requirements have been met and the application is in condition for registration, the examiner will issue a certificate of registration to the applicant. The applicant will only receive a file-stamped copy of the application if the application, and all supporting material, were submitted in duplicate.

(b) The date of filing will be the date of receipt for examination, or the date of last receipt for reexamination. The date of filing may not be a date before the date on which the application is found to conform to law.

**History**
- *Source Note: The provisions of this §93.101 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.102** Certificate {#sec-93.102 omnilex-key=us-tx-regs-official--title-1--93.102}

When an application has been found to comply with Chapter 16 of the Business & Commerce Code, a certificate will be issued. The certificate will be under the signature and official seal of the Secretary of State and will include:

(1) the name and business address of the person claiming ownership of the mark;

(2) the applicant's organizational form and state of formation, if applicant is organized as an entity;

(3) the names of the general partners, if applicant is organized as a partnership;

(4) a description of any word element of the mark;

(5) a color claim and color location statement, if any;

(6) a description of the goods and/or services on or in connection with which the mark is being used;

(7) a statement of each class of goods and/or services in which the mark is registered;

(8) for each class, the date claimed for the first use of the mark anywhere;

(9) for each class, the date claimed for the first use of the mark in Texas;

(10) a black and white reproduction of the mark;

(11) the registration date; and

(12) the term of the registration.

**History**
- *Source Note: The provisions of this §93.102 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter K** CORRECTIONS

##### **1 Tex. Admin. Code § 93.111** Correction of Mistake by Owner {#sec-93.111 omnilex-key=us-tx-regs-official--title-1--93.111}

(a) If a registrant incorrectly sets forth its name, business address, organizational structure, state of organization, or name of general partners in the original application for registration or application for renewal of registration, the registrant may provide evidence of such mistake or error in execution and request that the record regarding the registered trademark be corrected. If the Secretary of State determines that the proposed correction is not a change in the identity or organizational form of the registrant or a change of ownership, but is merely a correction of a drafting error by the registrant, the Secretary may file the request and update its computer records accordingly.

(b) The Secretary of State records may be corrected to change the identification of goods and/or services relating to an active trademark or service mark registration to delete from that identification the registered word mark of another party. The notice of correction must be signed by the registrant and must set forth the following information:

(1) the name and address of the registrant;

(2) an identification of the trademark and its certificate of registration number;

(3) the term(s) to be deleted from the identification of goods and/or services; and

(4) the generic term(s) or phrase to be used in place of the deleted term(s). Upon receipt of the notice of correction, the Secretary of State will file the notice and place the notice on record, update its computer records accordingly, and send a letter of acknowledgment to the registrant. A duplicate "file stamped" copy of the notice of correction will accompany the letter of acknowledgment, provided that a duplicate copy of the notice is provided for such purpose.

(c) If the records of the Secretary of State clearly disclose a material mistake in a certificate of registration, including a mistake relating to the classification of goods and/or services, the Secretary, pursuant to §93.113 of this title (relating to Issuance of a Corrected Certificate), will issue a corrected certificate of registration, upon the registrant's request.

**History**
- *Source Note: The provisions of this §93.111 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.112** Change of Address {#sec-93.112 omnilex-key=us-tx-regs-official--title-1--93.112}

Upon written notification by the registrant, the Secretary of State shall change a registrant's business address. Upon submitting the notice of an address change, the registrant may request a new certificate of registration pursuant to §93.113 of this title (relating to Issuance of a Corrected Certificate).

**History**
- *Source Note: The provisions of this §93.112 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.113** Issuance of a Corrected Certificate {#sec-93.113 omnilex-key=us-tx-regs-official--title-1--93.113}

(a) A registrant, or registrant's authorized representative, may request a corrected certificate of registration by submitting the following to the Secretary of State:

(1) the required fee; and

(2) its original certificate of registration; or

(3) a statement that the certificate of registration has been lost, misplaced, or destroyed.

(b) This subsection also applies to certificates issued upon renewal, transfer of ownership, change of name, or assignment.

**History**
- *Source Note: The provisions of this §93.113 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.114** Correction of Office Mistake {#sec-93.114 omnilex-key=us-tx-regs-official--title-1--93.114}

If the Secretary of State makes a material mistake when recording pertinent information about a registration, the Secretary, upon receiving notice of the mistake, will update the computer records accordingly. In its discretion, the Secretary may also issue a new certificate of registration without charge.

**History**
- *Source Note: The provisions of this §93.114 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.115** Transfer of Ownership or Change of Name {#sec-93.115 omnilex-key=us-tx-regs-official--title-1--93.115}

(a) In the case of a transfer of ownership or a change of name of the registrant which does not constitute an assignment, a new certificate of registration for the remainder of the unexpired term of a mark's registration may, upon request, be issued in the new name or in the name of the transferee, if the instrument evidencing the transfer of ownership or change of name has been recorded pursuant to §16.062, Business & Commerce Code.

(b) A request for a new certificate under this section must comply with §93.113 of this title (relating to Issuance of a Corrected Certificate) and must be signed by the registrant or transferee or an agent of the registrant or transferee.

**History**
- *Source Note: The provisions of this §93.115 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter L** TERM AND RENEWAL

##### **1 Tex. Admin. Code § 93.121** Term of Registrations and Renewals {#sec-93.121 omnilex-key=us-tx-regs-official--title-1--93.121}

Unless cancelled in accordance with the Business & Commerce Code, Chapter 16, or these sections, a registration remains in force for five years, and may be renewed for additional terms of five years.

**History**
- *Source Note: The provisions of this §93.121 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.122** Renewal Period {#sec-93.122 omnilex-key=us-tx-regs-official--title-1--93.122}

(a) A registered mark may be renewed during the six months immediately preceding the expiration date of the current registration.

(b) An application for renewal may only be submitted during the renewal period. An application for renewal submitted before the renewal period begins or after the current term of registration of the mark expires will be rejected.

**History**
- *Source Note: The provisions of this §93.122 adopted to be effective September 1, 2012, 37 TexReg 6287; amended to be effective October 6, 2014, 39 TexReg 7911.*

##### **1 Tex. Admin. Code § 93.123** Requirements of Application for Renewal {#sec-93.123 omnilex-key=us-tx-regs-official--title-1--93.123}

An application for renewal of registration must include the following items:

(1) a verified statement setting forth the goods and/or services recited in the current registration on or in connection with which the mark is still in use in Texas. If the renewal application covers less than all the goods and/or services in the current registration, a list of the particular goods and/or services to be renewed;

(2) at least one specimen of the mark, per class, as actually used; and

(3) the renewal fee for each class of goods and/or services, as required by §93.151 of this title (relating to Recordation Fees).

**History**
- *Source Note: The provisions of this §93.123 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.124** Refusal of Renewal {#sec-93.124 omnilex-key=us-tx-regs-official--title-1--93.124}

(a) If the application for renewal is incomplete or defective, the renewal will be refused. The application may be completed or amended in response to a refusal.

(b) If the application for renewal is refused, the response to an action by the examiner must be received within 90 days from the date of mailing of an action by the examiner and before the registration expires. If the renewal cannot be filed before the registration expires, a new registration must be made.

**History**
- *Source Note: The provisions of this §93.124 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter M** ASSIGNMENT OF MARKS AND RECORDATION OF OTHER INSTRUMENTS

##### **1 Tex. Admin. Code § 93.131** Requirements for Assignments {#sec-93.131 omnilex-key=us-tx-regs-official--title-1--93.131}

(a) Assignments of registered marks may be recorded with the Secretary of State. An assignment may be recorded if it meets the following requirements:

(1) it is a written instrument executed by the registrant (assignor);

(2) it identifies the certificate of registration by registration number and date of registration (this information may be submitted as a separate statement if it is not contained within the assignment document);

(3) it is in English or, if not in English, it is accompanied by a translation signed by the translator; and

(4) it contains the name and address of the assignee (this information may be submitted as a separate statement if it is not contained within the assignment document).

(b) The original or a copy of the assignment should be submitted with the filing fee to the Secretary of State.

(c) If the original registration for the mark was filed before September 1, 2012, the assignment must include the information required by §93.31(b)(1) - (8) of this title (relating to Application Requirements), as well as a drawing sheet that complies with Subchapter E of this chapter (relating to the Drawing).

(d) Upon compliance with provisions of this section, the Secretary of State also will issue the assignee a new certificate of registration issued in the assignee's name for the remainder of the mark's term of registration, or the remainder of the mark's last term of renewal.

**History**
- *Source Note: The provisions of this §93.131 adopted to be effective September 1, 2012, 37 TexReg 6287; amended to be effective October 6, 2014, 39 TexReg 7911.*

##### **1 Tex. Admin. Code § 93.132** Requirements for Recordation of Other Instruments {#sec-93.132 omnilex-key=us-tx-regs-official--title-1--93.132}

(a) An instrument relating to the transfer of ownership of a mark or pending application (such as a certificate of merger or conversion) or a document effecting a name change (other than a change of entity), may be recorded with the Secretary of State. Each document may be recorded if it meets the following requirements:

(1) it is an instrument authorized by law to be recorded or filed and in fact is recorded or filed in a public office and the copy of the instrument is certified by the appropriate official or authority;

(2) the instrument is not authorized by law to be recorded or filed, but is the type of instrument which would be recorded and filed in the records of the Secretary of State if the business entity were a corporation;

(3) the certified copy of the instrument is in English or, if not in English, it is accompanied by a translation signed by the translator; and

(4) the certified copy is accompanied by a cover sheet, signed by the registrant or transferee or an agent of the registrant or transferee, which includes the following information:

(A) an identification of the mark, including the certificate of registration number and date of registration;

(B) the name of the registrant/transferor conveying the interest and the name and address of the transferee receiving the interest; and

(C) a concise description of the transaction being recorded.

(b) The certified copy of the instrument and accompanying cover sheet should be submitted with the filing fee to the Secretary of State. A corporation or other business entity which has filed the instrument to be recorded with the Corporations Section of the Secretary of State may provide an additional statement on the cover sheet identifying the instrument filed and the date of its filing with the Secretary of State in lieu of a certified copy of the instrument.

(c) Upon compliance with the provisions of this section, the Secretary of State shall file the instrument, and return a filed stamped copy if a duplicate copy was provided for such purpose.

(d) Upon written request of the registrant or transferee, or an agent of the registrant or transferee, the Secretary of State will send the registrant or transferee a new certificate of registration issued in the registrant's new name or in the transferee's name for the remainder of the mark's term of registration, or the remainder of the mark's term of renewal. The request for the new certificate must be accompanied by the fee established for a new or corrected certification pursuant to §93.151 of this title (relating to Recordation Fees). For those marks originally filed before September 1, 2012, the request must also include the information required by §93.31(b)(1) - (8) of this title (relating to Application Requirements), as well as a drawing sheet that complies with Subchapter E of this chapter (relating to the Drawing).

**History**
- *Source Note: The provisions of this §93.132 adopted to be effective September 1, 2012, 37 TexReg 6287; amended to be effective October 6, 2014, 39 TexReg 7911.*

#### **Subchapter N** CANCELLATION OF REGISTRATION

##### **1 Tex. Admin. Code § 93.141** Voluntary Cancellation {#sec-93.141 omnilex-key=us-tx-regs-official--title-1--93.141}

(a) The Secretary of State may cancel a registration upon receipt of a sworn request in writing for cancellation executed by the registrant or registrant's assignee of record. The request must include the following:

(1) the mark to be cancelled, registration number, and date registered;

(2) the name and address of the registrant; and

(3) a statement as to the classes sought to be cancelled, or if registrant seeks to cancel the registration in its entirety, a statement to that effect.

(b) The request for cancellation should be accompanied by:

(1) the certificate of registration; or

(2) the registrant's statement that the certificate has been lost.

(c) If fewer than all classes are cancelled, the Secretary of State will update the computer records to reflect the classes cancelled. A correct certificate of registration is available upon request by complying with §93.113 of this title (relating to Issuance of a Corrected Certificate).

**History**
- *Source Note: The provisions of this §93.141 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.142** Administrative Cancellation {#sec-93.142 omnilex-key=us-tx-regs-official--title-1--93.142}

(a) The Secretary of State shall cancel a registration upon:

(1) finding that the registration was granted under Chapter 16 and was not renewed under Business & Commerce Code, §16.059;

(2) receipt of a request for a cancellation of a mark in its entirety, pursuant to §93.141 of this title (relating to Voluntary Cancellation); or

(3) receipt of a cancellation pursuant to §93.143 of this title (relating to Judicial Cancellation).

(b) The Secretary of State may partially cancel a registration upon:

(1) receipt of a request for cancellation of a mark in fewer than all the registered classes, pursuant to §93.141 of this title; or

(2) proof that registrant of a mark, found by a court to be likely to cause confusion with a mark previously registered, holds a concurrent registration for the mark with the United States Patent and Trademark Office covering a portion of this state. In this situation, the mark may be cancelled only as to the portion of the state not covered by the USPTO registration.

**History**
- *Source Note: The provisions of this §93.142 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.143** Judicial Cancellation {#sec-93.143 omnilex-key=us-tx-regs-official--title-1--93.143}

(a) The Secretary of State is not a necessary party to any action or proceeding for the cancellation of a trademark registered by the Secretary of State. The Secretary of State will cancel a trademark registration upon receipt of a certified copy of a final judgment brought by a district or appellate court or other court of competent jurisdiction canceling the trademark or finding that:

(1) the registered mark has been abandoned;

(2) the registrant is not the owner of the mark;

(3) the registration was granted improperly;

(4) the registration was obtained fraudulently;

(5) the registered mark is or has become the generic name for the goods and/or services, or part of the goods and/or services, in connection with which the mark was registered; or

(6) the registered mark is so similar, as to be likely to cause confusion or mistake or to deceive, to a mark that:

(A) is registered by another person in the United States Patent and Trademark Office before the date the application for registration was filed under Chapter 16 of the Business & Commerce Code; and

(B) is not abandoned.

(b) There is no fee for the filing of a judicial cancellation of a trademark registration.

**History**
- *Source Note: The provisions of this §93.143 adopted to be effective September 1, 2012, 37 TexReg 6287.*

##### **1 Tex. Admin. Code § 93.144** Revocation of Registration, Renewal, Assignment or Recordation {#sec-93.144 omnilex-key=us-tx-regs-official--title-1--93.144}

The Secretary of State may revoke the filing of an application for registration, renewal of registration, or an assignment or other instrument recorded in the trademark records of the Secretary of State if the fee for the document was paid by an instrument or credit card that was dishonored when presented by the state for payment. The Secretary of State will mail notice of the revocation of the filing to the business address of the registrant or the registrant's agent. A revocation is effective as of the date of the filing of the document. Failure to give or receive notice does not invalidate the revocation.

**History**
- *Source Note: The provisions of this §93.144 adopted to be effective September 1, 2012, 37 TexReg 6287.*

#### **Subchapter O** FEES

##### **1 Tex. Admin. Code § 93.151** Recordation Fees {#sec-93.151 omnilex-key=us-tx-regs-official--title-1--93.151}

(a) The Secretary of State requires the following processing fees.

(1) Application for registration, per class--$50.

(2) Application for renewal of a trademark registration, per class--$25.

(3) Assignment of registration--$25.

(4) Transfer of ownership/change in registrant or applicant name--$10.

(5) Recording of other instruments--$10.

(6) Change of registrant address--no fee.

(7) Voluntary cancellation of registration--no fee.

(8) Issuance of a new or corrected certificate of registration--$15.

(b) The fee accompanying each trademark application, renewal, or assignment is not refundable, regardless of whether the application, renewal, or assignment is subsequently approved, rejected, or abandoned.

**History**
- *Source Note: The provisions of this §93.151 adopted to be effective September 1, 2012, 37 TexReg 6287.*

### **Chapter 95** UNIFORM COMMERCIAL CODE

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 95.100** Definitions {#sec-95.100 omnilex-key=us-tx-regs-official--title-1--95.100}

Terms used in these filing-office rules but not defined in this section that are defined in the UCC shall have the respective meanings accorded such terms in the UCC.

(1) Active Record. "Active Record" means a UCC record that has been stored in the UCC information management system and indexed in, but not yet removed from, the Searchable Indexes.

(2) Address. "Address" means information provided as an address on a UCC record as long as it includes at least a city and a state or foreign country.

(3) Amendment statement. "Amendment" means a UCC record that amends the information contained in a financing statement. Amendments include assignments, continuations and terminations.

(4) Assignment statement. "Assignment" is an amendment that assigns all or a part of a secured party's power to authorize an amendment to a financing statement.

(5) Information statement. "Information statement" means a UCC record that indicates that a financing statement is inaccurate or wrongfully filed.

(6) Filing office/officer. "Filing office" and "filing officer" mean Texas Secretary of State.

(7) Filing officer statement. "Filing officer statement" means a statement entered into the filing office's UCC information management system to correct an error made by the filing office.

(8) Initial financing statement. "Initial financing statement" means a UCC record that causes the filing office to establish the initial record of filing of a financing statement.

(9) Remitter. "Remitter" means a person who tenders a UCC record to the filing officer for filing, whether the person is a filer or an agent of a filer responsible for tendering the record for filing. "Remitter" does not include a person responsible merely for the delivery of the record to the filing office, such as the postal service or a courier service but does include a service provider who acts as a filer's representative in the filing process.

(10) Searchable indexes. "Searchable indexes" means the searchable index of individual debtor names and the searchable index of organization debtor names maintained in the UCC information management system.

(11) Secured party of record. "Secured party of record" includes a secured party of record as defined in the UCC as well as a person who has been a secured party of record with respect to whom an amendment has been filed purporting to delete them as a secured party of record. The term includes the assignor listed on an amendment that purports to be an assignment.

(12) UCC. "UCC" means the Uniform Commercial Code as adopted in this state.

(13) UCC information management system. "UCC information management system" means the information management system used by the filing office to store, index, and retrieve information relating to financing statements as described under Subchapter C of this chapter (relating to UCC Information Management System).

(14) UCC record. "UCC record" means an Initial financing statement, an amendment, an assignment, a continuation statement, a termination statement, a filing officer statement or an information statement, and includes a record thereof maintained by the filing office. The term shall not be deemed to refer exclusively to paper or paper-based writings.

(15) Unlapsed record. "Unlapsed record" means a UCC record that has been stored and indexed in the UCC information management system, which has not yet lapsed under §9.515, Texas Business and Commerce Code, with respect to all secured parties of record.

**History**
- *Source Note: The provisions of this §95.100 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.101** Means to Deliver UCC Records; Time of Filing {#sec-95.101 omnilex-key=us-tx-regs-official--title-1--95.101}

UCC records may be tendered for filing at the filing office as follows.

(1) Personal delivery by Remitter, at the filing office's street address. The file time for a UCC record delivered by this method is when delivery of the UCC record is taken by the filing office (even though the UCC record may not yet have been accepted for filing and subsequently may be rejected). This section applies only to a Remitter who tenders a UCC record to the filing office and awaits an immediate determination of whether or not the UCC record will be taken or not.

(2) Courier delivery by a person other than a Remitter, at the filing office's street address. The file time for a UCC record delivered by this method is, notwithstanding the time of delivery, the next close of business following the time of delivery (even though the UCC record may not yet have been accepted for filing and may be subsequently rejected). A UCC record delivered after regular business hours or on a day the filing office is not open for business will have a filing time of the close of business on the next day the filing office is open for business.

(3) Postal service delivery, to the filing office's mailing address. The file time for a UCC record delivered by this method is the next close of business following the time of delivery (even though the UCC record may not yet have been accepted for filing and may be subsequently rejected). A UCC record delivered after regular business hours or on a day the filing office is not open for business will have a filing time of the close of business on the next day the filing office is open for business.

(4) Telefacsimile delivery, to the filing office's fax filing telephone number. The file time for a UCC record delivered by this method, during regular business hours, after regular business hours, or on a day the filing office is not open for business, is the time the UCC record is first examined by a filing officer for processing (even though the UCC record may not yet have been accepted for filing and may be subsequently rejected).

(5) Electronic filing. UCC records, excluding information statements and filing officer statements, may be transmitted electronically using the XML Format approved by the filing office. At the request of an authorized XML Remitter, the filing officer shall identify which versions and releases of the XML Format are acceptable to the filing office. The filing office publishes an implementation guide that prescribes the use of the XML Format. The implementation guide shall be available to the public upon request. The file time for a UCC record delivered by this method is the time that the filing office's UCC information management system analyzes the relevant transmission and determines that all the required elements of the transmission have been received in a required format and are machine-readable.

(6) Direct web page data entry. UCC records may be delivered by on-line data entry using the filing office's website on the internet. Website data entry and payment procedures are available as provided at www.sos.state.tx.us. The file time for a UCC record delivered by this method is the time the entry of all required elements of the UCC record in the proper format is acknowledged by the on-line entry system.

(7) Means of communication. Regardless of the method of delivery, information submitted to the UCC filing office must be communicated only in the form of characters that are defined in an acceptable character set. A financing statement or amendment form that does not designate separate fields for organization and individual names, and separate fields for the surname, first personal name, additional name(s)/initial(s), and suffixes for individual names is not an acceptable means of communication to the filing office.

(8) Transmitting utility, manufactured-home and public-financing transactions. The only means to indicate to the filing office that an Initial financing statement is being filed in connection with a manufactured-home or public-finance transaction, or that a financing statement is being or has been filed against a debtor that is a transmitting utility, in order to affect the filing office's determination of the lapse date under §95.306(3) of this title (relating to Initial Financing Statement) or §95.307 of this title (relating to Amendments Generally), is to so indicate by checking the appropriate box on a UCC Financing Statement (Form UCC1) or by transmitting the requisite information in the proper field in an electronic filing that is such Initial financing statement or is part of such financing statement.

**History**
- *Source Note: The provisions of this §95.101 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.102** Search Request Delivery {#sec-95.102 omnilex-key=us-tx-regs-official--title-1--95.102}

UCC search requests may be delivered to the filing office by any of the means by which UCC records may be delivered to the filing office. A search request may not be delivered by checking a box or otherwise including a search request in or on an Initial financing statement, but may be delivered in or on a separate search request after the Initial financing statement is filed.

**History**
- *Source Note: The provisions of this §95.102 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.103** Forms {#sec-95.103 omnilex-key=us-tx-regs-official--title-1--95.103}

The forms prescribed by §9.5211, Texas Business and Commerce Code, are accepted by the filing office. Paper-based forms approved by the International Association of Commercial Administrators from time to time and forms otherwise approved by the filing office from time to time shall be accepted. A list of forms approved by the filing office will be made available on request.

**History**
- *Source Note: The provisions of this §95.103 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.104** Fees {#sec-95.104 omnilex-key=us-tx-regs-official--title-1--95.104}

(a) Filing fee. The fee for filing and indexing a UCC record of one or two pages communicated on paper or in a paper-based format (including faxes) is pursuant to §9.525(a)(1), Texas Business and Commerce Code. If there are additional pages, the fee is pursuant to §9.525(a)(2), Texas Business and Commerce Code. The fee for filing and indexing a UCC record communicated by a medium authorized by these sections which is other than on paper or in a paper-based format is pursuant to §9.525(a)(3), Texas Business and Commerce Code. The fee for filing and indexing a master amendment delivered in a format pursuant to §9.512(f) and §9.514(d), Texas Business and Commerce Code, is pursuant to §9.525(f), Texas Business and Commerce Code. The fee for filing and indexing a judicial finding of fact is pursuant to §51.905, Texas Government Code.

(b) Additional fees. In addition to fees set forth in subsection (a) of this section, a fee pursuant to §9.525(b)(1), Texas Business and Commerce Code, shall be paid for an Initial financing statement that indicates that it is filed in connection with a public-finance transaction, a fee pursuant to §9.525(b)(2), Texas Business and Commerce Code, shall be paid for an Initial financing statement that indicates that it is filed in connection with a manufactured-home transaction, and a fee pursuant to §9.525(b)(3), Texas Business and Commerce Code, shall be paid for an Initial financing statement that indicates that the debtor is a transmitting utility.

(c) UCC search fee. The fee for processing a UCC search request communicated on paper or in a paper-based format is pursuant to §9.525(d)(1), Texas Business and Commerce Code. The fee for processing a UCC search request communicated by XML is $3 and by SOSDirect is $15. The fee for responding to a web inquiry which was communicated by SOSDirect is $1.

(d) UCC search - copies. The fee for certified copies of records is pursuant to §405.031, Texas Government Code. The fee for uncertified copies of records is pursuant to §552.261, Texas Government Code, and §71.8 of this title (relating to Fees for Copies of Public Information).

**History**
- *Source Note: The provisions of this §95.104 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.105** Expedited Services {#sec-95.105 omnilex-key=us-tx-regs-official--title-1--95.105}

(a) Description of expedited service and fee.

(1) Expedited service and fees for filings - per page copies. Upon the request of any person, the filing office will expedite the filing of any document submitted to the Uniform Commercial Code Section. Generally, the filing of any such document shall occur before the close of business on the next business day following the document's date of receipt. The fee for this service is pursuant to §405.032, Texas Government Code. Charges for copies that accompany this service are pursuant to §552.261, Texas Government Code, and §71.7 of this title (relating to Requests to Transmit Documents by FAX Machine; Fee).

(2) Expedited service for UCC search request - per page copies. Upon the request of any person, the filing office will expedite the handling of a UCC search request, with or without copies, that is submitted to the Uniform Commercial Code Section. Generally, the expedited request will be processed before the close of business on the next business day following the document's date of receipt. The fee for this service is pursuant to §405.032, Texas Government Code. Charges for copies that accompany this service are pursuant to §552.261, Texas Government Code, and §71.7 of this title. A completed expedited search request may be mailed, faxed, or picked up in person.

(b) How to request expedited service.

(1) Expedited filing. UCC records presented in person or by fax are treated as an expedited filing.

(2) Expedited UCC search request. Requests for UCC records may be submitted by mail, telephone, fax, or in person.

**History**
- *Source Note: The provisions of this §95.105 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.106** Methods of Payment {#sec-95.106 omnilex-key=us-tx-regs-official--title-1--95.106}

Filing fees and fees for public records services may be paid by the following methods.

(1) Cash. Payment in cash shall be accepted if paid in person at the filing office.

(2) Checks. Personal checks, cashier's checks and money orders made payable to the filing office shall be accepted for payment provided that the drawer (or the issuer in the case of a cashier's check or money order) is deemed creditworthy by the filing office in its discretion. Checks may be made payable in an amount to be filled in by the filing office if the filing office is clearly authorized to fill in the amount. All checks must be drawn on a U.S. bank.

(3) Electronic funds transfer. The filing office may accept payment via electronic funds transfer under National Automated Clearing House Association ("NACHA") rules from Remitters who have entered into appropriate NACHA-approved arrangements for such transfers and who authorize the relevant transfer pursuant to such arrangements and rules.

(4) Prepaid account. A Remitter may open an account for prepayment of fees. The filing officer shall issue an account number to be used by a Remitter who chooses to pay filing fees by this method. The filing officer shall deduct filing fees from the Remitter's prepaid account when authorized to do so by the Remitter. The Remitter may authorize transactions against the prepaid account by use of the Remitter's SOSDirect account, by written authorization, facsimile, and by telephone authorization.

(5) Credit cards. The filing office shall accept payment by credit cards issued by approved credit card issuers. Approved credit card issuers are: American Express, Discover, MasterCard, or Visa or other valid and current credit cards designated by the contract(s) then existing between the Office of the Secretary of State, the Comptroller of Public Accounts, and the relevant financial institution. Remitters shall provide the filing officer with the card number, the expiration date of the card, the name of the card issuer, the name of the person or entity to whom the card was issued and the billing address for the card. Payment will not be deemed tendered until the issuer or its agent has confirmed payment. Fees paid by credit card are subject to a statutorily authorized convenience fee of the total fees incurred, when applicable. The convenience fee is assessed per credit card transaction.

(6) LegalEase. The filing office accepts payment via LegalEase from Remitters who have entered into appropriate LegalEase arrangements for such transfers and who authorize the relevant transfer pursuant to such arrangements.

**History**
- *Source Note: The provisions of this §95.106 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.107** Overpayment and Underpayment Policies {#sec-95.107 omnilex-key=us-tx-regs-official--title-1--95.107}

(a) Overpayment. The filing officer shall refund the amount of an overpayment exceeding $5 to the Remitter. The filing officer shall accrue the amount of the overpayment to the prepaid account if the overpayment is less than $5. This amount may be refunded only upon the written request of the Remitter.

(b) Underpayment. Upon receipt of a UCC record with an insufficient fee, the filing officer shall do the following: The UCC record and fee shall be returned to the Remitter as provided in §95.203 of this title (relating to Procedure Upon Refusal).

**History**
- *Source Note: The provisions of this §95.107 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.108** Public Records Services {#sec-95.108 omnilex-key=us-tx-regs-official--title-1--95.108}

Public records services are provided on a non-discriminatory basis to any member of the public. Copies of individual UCC records, bulk copies of records and data elements from the filing office's UCC information management system are made available in such forms, at such times and for such fees as the filing office may prescribe from time to time; provided that the filing office will make such information as is then-current available at least weekly in every medium then available to the filing office.

**History**
- *Source Note: The provisions of this §95.108 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.109** Fees for Public Records Services {#sec-95.109 omnilex-key=us-tx-regs-official--title-1--95.109}

Fees for public records services (other than those established under §95.104 of this title (relating to Fees)) are established by the filing office from time to time and are available upon request.

**History**
- *Source Note: The provisions of this §95.109 adopted to be effective July 1, 2012, 37 TexReg 4571.*

#### **Subchapter B** ACCEPTANCE AND REFUSAL OF DOCUMENTS

##### **1 Tex. Admin. Code § 95.200** Role of Filing Officer {#sec-95.200 omnilex-key=us-tx-regs-official--title-1--95.200}

The duties and responsibilities of the filing officer with respect to the administration of the UCC are ministerial. In accepting for filing or refusing to file a UCC record pursuant to these sections, the filing officer does not determine the legal sufficiency or insufficiency of the UCC record, determine that information in the record is correct or incorrect, in whole or in part, or create a presumption that information in the UCC record is correct or incorrect in whole or in part.

**History**
- *Source Note: The provisions of this §95.200 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.201** Time for Filing a Continuation Statement {#sec-95.201 omnilex-key=us-tx-regs-official--title-1--95.201}

(a) First day permitted. The first day on which a continuation statement may be filed is the date corresponding to the date upon which the related financing statement would lapse, six months preceding the month in which such financing statement would lapse. If there is no such corresponding date, the first day on which a continuation may be filed is the last day of the sixth month preceding the month in which the financing statement would lapse. This subsection is subject to the ability of the filing office to take delivery of the continuation statement as tendered and to §95.101 of this title (relating to Means to Deliver UCC Records; Time of Filing).

(b) Last day permitted. The last day on which a continuation statement may be filed is the date upon which the related financing statement lapses. This subsection is subject to the ability of the filing office to take delivery of the continuation statement as tendered and to §95.101 of this title. Accordingly, the time of filing of the continuation statement under §95.101 of this title must be on or prior to such last day and delivery by certain means of communication may not be available on such last day if the filing office is not open for business on such day.

**History**
- *Source Note: The provisions of this §95.201 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.202** Grounds for Refusal {#sec-95.202 omnilex-key=us-tx-regs-official--title-1--95.202}

In addition to refusing a record for any reason, or multiple reasons, as set forth in §9.516, Texas Business and Commerce Code, a filing office shall refuse to accept a UCC record that does not provide an address that meets the minimum requirements, as set forth in these filing-office rules (see §95.100(2) of this title (relating to Definitions)).

**History**
- *Source Note: The provisions of this §95.202 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.203** Procedure Upon Refusal {#sec-95.203 omnilex-key=us-tx-regs-official--title-1--95.203}

Except as provided in §95.107 of this title (relating to Overpayment and Underpayment Policies), if the filing officer finds grounds to refuse a UCC record, the filing officer shall return the document, if written, to the Remitter and may return or refund the filing fee. Communication of the refusal, the reason(s) for the refusal and other related information will be made to the Remitter as soon as practicable and in any event within two business days after the refused UCC record was received by the filing office, by the same means as the means by which such UCC record was delivered to the filing office, or by mail or such more expeditious means as the filing office shall determine. Records of refusal, including a copy of the refused UCC record and the ground(s) for refusal, shall be maintained until the first anniversary of the lapse date that applies or would have applied to the related financing statement, assuming that the refused record had been accepted and filed.

**History**
- *Source Note: The provisions of this §95.203 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.204** Refusal Errors {#sec-95.204 omnilex-key=us-tx-regs-official--title-1--95.204}

If a secured party or a Remitter demonstrates to the satisfaction of the filing officer that a UCC record that was refused for filing should not have been refused under §95.202 of this title (relating to Grounds for Refusal), the filing officer will file the UCC record with the filing date and time the UCC record was originally tendered for filing. A filing officer statement record relating to the relevant Initial financing statement will be placed in the UCC information management system on the date that the corrective action was taken. The filing officer statement must provide the date of the correction and explain the nature of the corrective action taken. The record shall be preserved for so long as the record of the Initial financing statement is preserved in the UCC information management system.

**History**
- *Source Note: The provisions of this §95.204 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.205** Notification of Defects {#sec-95.205 omnilex-key=us-tx-regs-official--title-1--95.205}

Nothing in these sections prevents a filing officer from communicating to a filer or a Remitter that the filing officer noticed apparent potential defects in a UCC record, whether or not it was filed or refused for filing. However, the filing office is under no obligation to do so and may not, in fact, have the resources to do so or to identify such defects. The responsibility for the legal effectiveness of filing rests with filers and Remitters and the filing office bears no responsibility for such effectiveness.

**History**
- *Source Note: The provisions of this §95.205 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

#### **Subchapter C** UCC INFORMATION MANAGEMENT SYSTEM

##### **1 Tex. Admin. Code § 95.300** General {#sec-95.300 omnilex-key=us-tx-regs-official--title-1--95.300}

The filing officer uses a UCC information management system to store, index, and retrieve information relating to financing statements. The UCC information management system includes an index of the names of debtors included on financing statements that are Active Records. No distinction will be made between upper and lower case letters for indexing purposes. The sections in this subchapter describe the UCC information management system.

**History**
- *Source Note: The provisions of this §95.300 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.301** Primary Data Elements {#sec-95.301 omnilex-key=us-tx-regs-official--title-1--95.301}

The primary data elements used in the UCC information management system are the following.

(1) Identification numbers.

(A) Each Initial financing statement is identified by its file number. Identification of the Initial financing statement is stamped on written UCC records or otherwise permanently associated with the record maintained for UCC records in the UCC information management system. A record is created in the UCC information management system for each Initial financing statement and all information comprising such record is maintained in the system. The record is identified by the same information assigned to the Initial financing statement.

(B) A UCC record other than an Initial financing statement is identified by a unique file number assigned by the filing officer. In the UCC information management system, records of all UCC records other than Initial financing statements are linked to the record of their related Initial financing statement.

(2) Type of record. The type of UCC record from which data is transferred is identified in the UCC information management system from information supplied by the Remitter.

(3) Filing date and filing time. The filing date and filing time of UCC records are stored in the UCC information management system. Calculation of the lapse date of an Initial financing statement is based upon the filing date.

(4) Identification of parties. The names and addresses of debtors and secured parties are transferred from UCC records to the UCC information management system.

(5) Page count. The total number of pages in a UCC record is maintained in the UCC information management system.

(6) Lapse indicator. An indicator is maintained by which the UCC information management system identifies whether or not a financing statement will lapse and, if it does, when it will lapse. The lapse date is determined as provided in §§95.306(3), 95.307, 95.308(a), and 95.408 of this title (relating to Initial Financing Statement; Amendments Generally; Continuation Statement; and Lapse Date and Time).

(7) Indexes of names. The filing office maintains in the UCC information management system a searchable index of organization debtor names, and a searchable index of individual debtor names. The filing office may also maintain a searchable index of names of secured parties of record. Such an index need not be a separate database but may be comprised of records in the UCC information management system identified to be included in such searchable index.

**History**
- *Source Note: The provisions of this §95.301 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.302** Individual Debtor Names {#sec-95.302 omnilex-key=us-tx-regs-official--title-1--95.302}

For purposes of these sections, an "individual debtor name" is any name provided as a debtor name in a UCC record in a format that identifies the name as that of a debtor who is an individual, without regard to the nature or character of the name or to the nature or character of the actual debtor.

(1) Individual name fields. Individual debtor names are stored in files that include only the individual debtor names, and not organization debtor names. Separate data entry fields are established for surnames (last or family names), first personal names (given), and additional name(s)/initial(s) of individuals. The name of a debtor with a single name (e.g., "Cher") is treated as a surname and shall be entered in the individual surname field. The filing officer assumes no responsibility for the accurate designation of the components of a name but shall accurately enter the data in accordance with the filer's designations.

(2) Titles, prefixes and suffixes. Titles, prefixes (e.g. "Ms.") and suffixes or indications of status (e.g. "M.D.") are not typically part of a debtor's name. Suffixes used to distinguish between family members with identical names (e.g., "JR.") should be provided in the suffix field. However, when entering a "name" into the UCC information management system, the data will be entered exactly as they appear.

(3) Extended debtor name field. The financing statement form has limited space for individual debtor names. If any portion of the individual debtor name is too long for the corresponding field, the filer is instructed to check the box that indicates the name was too long and enter the name in item 10 of the addendum Form UCC1Ad. A filing officer shall not refuse to accept a financing statement that lacks debtor information in item 1 and/or item 2 if the record includes an addendum that provides a debtor name in item 10.

(4) Truncation - individual names. Personal name fields in the UCC information management system are fixed in length. Although filers should continue to provide full names on their UCC records, a name that exceeds the fixed length is entered as presented to the filing officer, up to the maximum length of the data entry field. The lengths of data entry name fields are as follows.

(A) Surname: 50 characters.

(B) First personal name: 50 characters.

(C) Additional name(s)/initial(s): 50 characters.

(D) Suffix: 6 characters.

**History**
- *Source Note: The provisions of this §95.302 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.303** Organization Debtor Names {#sec-95.303 omnilex-key=us-tx-regs-official--title-1--95.303}

For purposes of these sections, an "organization debtor name" is any name provided as a debtor name in a UCC record in a format that identifies the name as that of a debtor who is an organization, without regard to the nature or character of the name or to the nature or character of the actual debtor.

(1) Single field. Organization debtor names are stored in files that include only organization debtor names and not individual debtor names. A single field is used to store an organization debtor name.

(2) Truncation - organization names. The organization debtor name field in the UCC information management system is fixed in length. The maximum length is 300 characters. Although filers should continue to provide full names on their UCC records, a name that exceeds the fixed length is entered as presented to the filing officer, up to the maximum length of the organization debtor name field.

**History**
- *Source Note: The provisions of this §95.303 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.304** Collateral Being Administered by a Decedent's Personal Representative {#sec-95.304 omnilex-key=us-tx-regs-official--title-1--95.304}

The debtor name to be provided on a financing statement when the collateral is being administered by a decedent's personal representative is the name of the relevant decedent. In order for the UCC information management system to function in accordance with the usual expectations of filers and searchers, the filer should provide the debtor name as an individual debtor name. However, the filing office will enter data submitted by a filer in the fields designated by the filer exactly as it appears in such fields.

**History**
- *Source Note: The provisions of this §95.304 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.305** Collateral Held in a Trust {#sec-95.305 omnilex-key=us-tx-regs-official--title-1--95.305}

The debtor name to be provided when the collateral is held in a trust that is not a registered organization is the name of the trust as set forth in its organic record(s), if the trust has such a name or, if the trust is not so named, the name of the trust's settlor. In order for the UCC information management system to function in accordance with the usual expectations of filers and searchers, the name of a trust or of a settlor that is an organization should be provided as an organization debtor name, and the name of a settlor who is an individual should be provided as an individual debtor name, in each case without regard to the nature or character of the debtor. Notwithstanding the foregoing, the filing office will enter data submitted by a filer in the fields designated by the filer exactly as it appears in such fields.

**History**
- *Source Note: The provisions of this §95.305 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.306** Initial Financing Statement {#sec-95.306 omnilex-key=us-tx-regs-official--title-1--95.306}

Upon the filing of an Initial financing statement the status of the parties and the status of the financing statement shall be as follows.

(1) Status of secured party. Each secured party named on an Initial financing statement shall be a secured party of record, except that if the UCC record names an assignee, the secured party/assignor shall not be a secured party of record and the secured party/assignee shall be a secured party of record.

(2) Status of debtor. Each debtor name provided by the Initial financing statement shall be indexed in the UCC information management system so long as the financing statement is an Active Record.

(3) Status of financing statement. The financing statement shall be an Active Record. A lapse date shall be calculated, five years from the file date, unless:

(A) the Initial financing statement indicates as provided in §95.101(8) of this title (relating to Means to Deliver UCC Records; Time of Filing) that it is filed with respect to a public-finance transaction or a manufactured-home transaction, in which case the lapse date shall be thirty years from the file date; or

(B) the Initial financing statement indicates as provided in §95.101(8) of this title that it is filed against a transmitting utility, in which case there shall be no lapse date.

**History**
- *Source Note: The provisions of this §95.306 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.307** Amendments Generally {#sec-95.307 omnilex-key=us-tx-regs-official--title-1--95.307}

Upon the filing of an amendment the status of the parties shall be unchanged, except that in the case of an amendment that adds a debtor or secured party, the new debtor or secured party shall be added to the appropriate index and associated with the record of the financing statement in the UCC information management system, and an amendment that designates an assignee shall cause the assignee to be added as a secured party of record with respect to the affected financing statement in the UCC information management system. Notwithstanding the filing of an amendment that deletes a debtor or a secured party from a financing statement, no debtor or secured party of record is deleted from the UCC information management system. A deleted secured party will still be treated by the filing office as a secured party of record as the filing office cannot verify the effectiveness of an amendment. In general, the filing of an amendment does not affect the status of the financing statement.

**History**
- *Source Note: The provisions of this §95.307 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.308** Continuation Statement {#sec-95.308 omnilex-key=us-tx-regs-official--title-1--95.308}

(a) Continuation of lapse date. Upon the timely filing of one or more continuation statements by any secured party(ies) of record, the lapse date of the financing statement shall be postponed for five years. The lapse date is postponed once notwithstanding the fact that more than one continuation statement is filed within a given six-month period prior to a lapse date. Notwithstanding the immediate postponement of the lapse date with respect to one or more secured parties of record who file timely a continuation statement within a given six-month period prior to a lapse date, such lapse date remains effective solely for purposes of determining whether or not a subsequent continuation statement filed in the same six-month period is timely.

(b) Status. The filing of a continuation statement shall have no effect upon the status of any party to the financing statement or upon the status of the financing statement.

**History**
- *Source Note: The provisions of this §95.308 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.309** Termination {#sec-95.309 omnilex-key=us-tx-regs-official--title-1--95.309}

The filing of a termination statement shall have no effect upon the status of any party to the financing statement or upon the status of the financing statement.

**History**
- *Source Note: The provisions of this §95.309 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.310** Information Statement {#sec-95.310 omnilex-key=us-tx-regs-official--title-1--95.310}

The filing of an information statement shall have no effect upon the status of any party to the financing statement, the status of the financing statement or to the information maintained in the UCC information management system.

**History**
- *Source Note: The provisions of this §95.310 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.311** Filing Officer Statement {#sec-95.311 omnilex-key=us-tx-regs-official--title-1--95.311}

A filing officer statement affects the status of parties and of the relevant financing statement as provided in the corrective action described as having been taken in the filing officer statement.

**History**
- *Source Note: The provisions of this §95.311 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.312** Procedure Upon Lapse {#sec-95.312 omnilex-key=us-tx-regs-official--title-1--95.312}

If there is no timely filing of a continuation with respect to a financing statement, the financing statement lapses on its lapse date but no action is then taken by the filing office.

**History**
- *Source Note: The provisions of this §95.312 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.313** Removal of Record {#sec-95.313 omnilex-key=us-tx-regs-official--title-1--95.313}

A financing statement must remain as an Active Record until at least one year after it lapses, or if it is indicated to be filed against a transmitting utility, until at least one year after it is terminated with respect to all secured parties of record. On or after the first anniversary of such lapse or termination date, the filing office or the UCC information management system may remove the financing statement and all related UCC records from the Searchable Indexes or from the UCC information management system and upon such removal, the removed UCC Records shall cease to be Active Records. UCC Records removed from the UCC information management system shall be maintained as provided in §95.407 of this title (relating to Archives - General).

**History**
- *Source Note: The provisions of this §95.313 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

#### **Subchapter D** FILING AND DATA ENTRY PROCEDURES

##### **1 Tex. Admin. Code § 95.400** Errors of the Filing Office {#sec-95.400 omnilex-key=us-tx-regs-official--title-1--95.400}

The filing office may correct data entry and indexing errors of filing office personnel in the UCC information management system at any time. If a correction is made to a record of a financing statement after the filing office has issued a search report with a through date and time (see §95.505(2)(D) of this title (relating to Search Responses)) that is on or after the filing date and time of the financing statement, the filing office will associate with the record of the financing statement in the UCC information management system a filing officer statement on the date that the corrective action was taken providing the date and an explanation of the correction.

**History**
- *Source Note: The provisions of this §95.400 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.401** Data Entry {#sec-95.401 omnilex-key=us-tx-regs-official--title-1--95.401}

(a) Characters of print acceptable in names.

(1) Names may consist of letters of the Roman alphabet, Arabic numerals, symbols capable of being reproduced on a standard English language keyboard, and such other symbols as permitted by the secretary of state's database and as posted on the secretary of state's website, or a combination thereof.

(2) No distinction will be made between upper and lower case letters for indexing purposes. No distinction as to typeface or font in the presentation of any name will be recognized. Subscript or superscript characters cannot be entered into the computer records of the secretary of state; consequently, such characters will not appear above or below the other characters in the name. Example: H2O will appear as H2O.

(3) Arabic numerals include 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9.

(4) The symbols recognized as part of a name may include ! " $ % ' ( ) * ? # = @ [ ] / + & and -.

(b) Data entry. Data that meets the guidelines in subsection (a) of this section are entered into the UCC information management system exactly as provided in the UCC record, without regard to apparent errors. Data provided in electronic form that meets the guidelines of subsection (a) of this section is transferred to the UCC information management system exactly as submitted by the Remitter.

**History**
- *Source Note: The provisions of this §95.401 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.402** Verification of Data Entry {#sec-95.402 omnilex-key=us-tx-regs-official--title-1--95.402}

The filing office will verify accuracy of the data from UCC records entered in accordance with §95.401 of this title (relating to Data Entry) into the UCC information management system, except that debtor name data are verified by double-blind keying. Data entry performed by Remitters with respect to electronically filed UCC records is the responsibility of the Remitter and is not verified by the filing office.

**History**
- *Source Note: The provisions of this §95.402 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.403** Master Amendments {#sec-95.403 omnilex-key=us-tx-regs-official--title-1--95.403}

(a) The filing officer may accept for filing a single UCC record for the purpose of amending or assigning more than one financing statement. Master amendments may accomplish one or both of the following purposes: amendment to change secured party name; amendment to change secured party address. Master assignments may accomplish a full assignment from a single assignor to a single assignee.

(b) A master amendment shall consist of a written document describing the requested amendment or assignment on a form approved by the filing office, and a machine readable file furnished by the Remitter and created to the filing officer's specifications containing appropriate indexing information. A copy of the master amendment specifications is available from the filing officer upon request. Acceptance of a master amendment is conditioned upon the determination of the filing officer in the filing officer's sole discretion.

**History**
- *Source Note: The provisions of this §95.403 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.404** Notice of Bankruptcy {#sec-95.404 omnilex-key=us-tx-regs-official--title-1--95.404}

The filing officer shall take no action upon receipt of a notification, formal or informal, of a bankruptcy proceeding involving a debtor named in the UCC information management system.

**History**
- *Source Note: The provisions of this §95.404 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.405** Redaction of Certain Information {#sec-95.405 omnilex-key=us-tx-regs-official--title-1--95.405}

The filing officer is obliged to redact certain information from the information it provides to searchers and bulk data purchasers in accordance with applicable privacy and identity theft protection laws. Such information should not be included in UCC records and will be redacted in accordance with such laws.

**History**
- *Source Note: The provisions of this §95.405 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.406** Judicial Finding of Fact {#sec-95.406 omnilex-key=us-tx-regs-official--title-1--95.406}

A record is created for the certified copy of the judicial finding of fact that bears the file number for the judicial finding of fact and the date and time of filing. The record of the judicial finding of fact is associated with the record of the related Initial financing statement in a manner that causes the judicial finding of fact to be retrievable each time a record of the financing statement is retrieved.

**History**
- *Source Note: The provisions of this §95.406 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.407** Archives - General {#sec-95.407 omnilex-key=us-tx-regs-official--title-1--95.407}

Active and lapsed filings are available by search of the debtor name or by request under a specific file number. Inactive records are available upon request by a specific file number only.

(1) Paper UCC documents.

(A) Storage. Documents are stored in expanding file pockets in sequential number in file boxes.

(B) Retention. Documents are stored on site for six months after receipt. Documents are transported to State Archives for a period of two years six months prior to destruction.

(2) Reductions.

(A) Storage. Paper documents are reduced to digital images prior to indexing.

(B) Retention. Digital images and previous microfilm are retained indefinitely.

(3) Database storage. The UCC information management system is backed up daily.

**History**
- *Source Note: The provisions of this §95.407 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.408** Lapse Date and Time {#sec-95.408 omnilex-key=us-tx-regs-official--title-1--95.408}

A lapse date is calculated for each Initial financing statement (unless the debtor is indicated to be a transmitting utility). The lapse date is the same date of the same month as the filing date in the fifth year after the filing date or relevant subsequent fifth anniversary thereof if a timely continuation statement is filed, but if the Initial financing statement indicates that it is filed with respect to a public-finance transaction or a manufactured-home transaction, the lapse date is the same date of the same month as the filing date in the thirtieth year after the filing date. The lapse takes effect at midnight at the end of the lapse date. The relevant anniversary for a February 29 filing date shall be March 1 in the fifth year following the year of the filing date. If the last day of any period is a Saturday, Sunday, or legal holiday, the period is extended to include the next day that is not a Saturday, Sunday, or legal holiday in accordance with §311.014(b), Texas Government Code.

**History**
- *Source Note: The provisions of this §95.408 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

#### **Subchapter E** SEARCH REQUESTS AND REPORTS

##### **1 Tex. Admin. Code § 95.500** General Requirements {#sec-95.500 omnilex-key=us-tx-regs-official--title-1--95.500}

The filing officer maintains for public inspection a searchable index for all Active Records in the UCC information management system. Active Records will be retrievable by the name of the debtor, with no distinction made between upper and lower case letters, or by the file number of the related Initial financing statement, and each Active Record related to an Initial financing statement is retrieved with the Initial financing statement using either retrieval method.

**History**
- *Source Note: The provisions of this §95.500 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.501** Search Requests - Required Information {#sec-95.501 omnilex-key=us-tx-regs-official--title-1--95.501}

Search requests shall include the following:

(1) Name searched. A search request must set forth the name of the debtor to be searched using designated fields for organization or individual surname, first personal name and additional name(s)/initial(s). A search request will be processed using the data and designated fields exactly as submitted, including the submission of no data in a given field, without regard to the nature or character of the debtor that is subject of the search.

(2) Requesting party. The name and address of the person to whom the search results are to be sent.

(3) Fee. The appropriate fee shall be tendered by a method described in §95.106 of this title (relating to Methods of Payment).

(4) Search logic. The request shall specify if a search methodology other than that described in §95.503(1) of this title (relating to Search Methodology) is to be applied in conducting the search. If no such methodology is specified, the one described in §95.503(1) of this title shall be applied.

**History**
- *Source Note: The provisions of this §95.501 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.502** Search Requests - Optional Information {#sec-95.502 omnilex-key=us-tx-regs-official--title-1--95.502}

Search requests may include the following:

(1) Copies. The request may limit the copies of UCC records that would normally be provided with a search report by requesting that no copies be provided or that copies be limited to those UCC records that include a particular city in the debtor address.

(2) Scope of search. A search request may ask for a search that reports all Active Records retrieved by the search.

(3) Mode of delivery. A search request may specify a mode of delivery for search results and that request will be honored if the requested mode is made available by the filing office.

(4) Search request with filing. If a filer requests a search at the time an Initial financing statement is filed by submitting a search request with the Initial financing statement at the time it is tendered for filing, the search request shall be deemed to request a search to be conducted as soon as practicable such that it would include all UCC records filed, against the debtor name(s) provided on the Initial financing statement, on or prior to the date the Initial financing statement is filed. The search to reflect should be held until the filing office through date meets or exceeds the date the Initial financing statement was filed.

**History**
- *Source Note: The provisions of this §95.502 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.503** Search Methodology {#sec-95.503 omnilex-key=us-tx-regs-official--title-1--95.503}

Search results are produced by the application of search logic to the name presented to the filing officer. Human judgment does not play a role in determining the results of the search.

(1) Standard search logic. Subparagraphs (A) - (J) of this paragraph describe the filing office's standard search logic and apply to all searches except for those where the search request specifies that a non-standard search logic be used:

(A) There is no limit to the number of matches that may be returned in response to the search criteria.

(B) No distinction is made between upper and lower case letters.

(C) The character "&" (the ampersand) is deleted and replaced with the characters "and" each place it appears in the name.

(D) Punctuation marks and accents are disregarded. For the purposes of this section, punctuation and accents include all characters other than the numerals 0 through 9 and letters A through Z (in any case) of the English alphabet.

(E) The following words and abbreviations at the end of an organization name that indicate the existence or nature of the organization are "disregarded" to the extent practicable as determined by the filing office's programming of its UCC information management system:

Attached Graphic

(F) The word "the" at the beginning of an organization debtor name is disregarded.

(G) All spaces are disregarded.

(H) For first personal name and additional name(s)/initial(s) of individual debtor names, initials are treated as the logical equivalent of all names that begin with such initials or no name or initial, and first personal name and no additional name(s)/initial(s) is equated with all additional name(s)/initial(s). For example, a search request for "John A. Smith" would cause the search to retrieve all filings against all individual debtors with "John" or the initial "J" as the first personal name, "Smith" as the surname, and with the initial "A" or any name beginning with "A" or no name or initial in the additional name(s)/initial(s) field. If the search request were for "John Smith" (first personal name and surname with no designation in the additional name(s)/initial(s) field), the search would retrieve all filings against individual debtors with "John" or the initial "J" as the first personal name, "Smith" as the surname and with any name or initial or no name or initial in the additional name(s)/initial(s) field. In addition, Texas will also retrieve filings with first personal name equivalents. If the search request were for "John Smith" the search would also retrieve records with the first personal name "Jack", "Johnnie", "Johnny", and "Jonathan". The following is a list of all first personal name equivalents that are considered.

Attached Graphic

(I) If the name being searched is the surname of an individual debtor name without any first personal name or additional name(s)/initial(s) provided, the search will retrieve from the UCC information management system all financing statements with individual debtor names with the surname being searched.

(J) After using subparagraphs (A) - (I) of this paragraph to modify the name being searched, the search will retrieve from the UCC information management system all Active Records that pertain to financing statements with debtor names that, after being modified as provided in this section, exactly match the modified name being searched.

(2) Non-standard search logic. The following non-standard search logic option is available for customers that have access to our online search site: wildcard debtor name search. This search option allows customers to search a character string at the beginning or anywhere within the organization, surname and/or first personal name fields. The displayed results consist only of the filing number and the debtor name.

**History**
- *Source Note: The provisions of this §95.503 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.504** Changes in Standard Search Logic {#sec-95.504 omnilex-key=us-tx-regs-official--title-1--95.504}

If the filing office changes its standard search logic or the implementation of its standard search logic in a manner that could alter search results, the filing office will provide public notice of such change.

**History**
- *Source Note: The provisions of this §95.504 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.505** Search Responses {#sec-95.505 omnilex-key=us-tx-regs-official--title-1--95.505}

Responses to a search request shall include the following.

(1) Copies. Copies of all UCC records retrieved by the search unless only limited copies are requested by the searcher. Copies will reflect any redaction of personal identifying information required by law.

(2) Introductory information. A filing officer shall include the following information with a UCC search response:

(A) Filing office identification. Identification of the filing office responsible for the search response.

(B) Unique search report identification number. Unique number which identifies the search report.

(C) Report date. The date the report was generated.

(D) Through date and time. The date and time at or prior to which a UCC record must have been filed with the filing office in order for it to be reflected on the search.

(E) Certification language. A report created by the filing officer in response to a request shall contain the following statement: "My acceptance for filing and custody of these documents in no way confirms, denies, or implies validity, legal effect, or enforceability of the attached documents."

(F) Scope of search. Search results shall consist of all Active Records.

(G) Search logic used. IACA Recommended Standard Search Logic.

(H) Name provided. Name as provided by searcher.

(I) Search string. Normalized name as provided by §95.503 of this title (relating to Search Methodology).

(J) Lien type searched. Financing Statement, Manufactured-Home Transaction, Public-Finance Transaction, Transmitting Utility, Utility Security Instrument, Notice of Federal Lien, Restitution Lien, Agricultural Chemical and Seed Lien, Liens for Animal Feed, Aircraft Maintenance Lien, Contract Agricultural Lien, and Transition Property Notice.

(K) Copies. Certified, Plain, Copies, not Requested, Partial Copies, and Specified Copies.

(3) Report. The search report shall contain the following.

(A) Identification. Identification of the filing office responsible for the search report.

(B) Search report identification number. Unique number assigned under paragraph (2)(B) of this section.

(C) Identification of financing statement. Identification of each Initial financing statement, including a listing of all related amendments, information statements, or filing officer notices, filed on or prior to the through date corresponding to the search criteria. Financing statement information shall include, but is not limited to the following:

(i) Initial financing statement file number. The Initial financing statement file number.

(ii) Initial financing statement filing date and time. The date and time it was filed.

(iii) Lapse date. Provide lapse date.

(iv) Debtor name. The debtor name(s) that appear(s) of record.

(v) Debtor address. The debtor address(es) that appear(s) of record.

(vi) Secured party name. The secured party name(s) that appear(s) of record.

(vii) Secured party address. The secured party address(es) that appear(s) of record.

(viii) Amendment type. An indication of type of each amendment, if any.

(ix) Amendment filing date and time. The date and time each amendment, if any, was filed.

(x) Amendment filing number. The amendment file number of each amendment, if any.

(xi) Information statement filing date and time. The date and time an information statement, if any, was filed.

(xii) Filing officer statement filing date and time. The date and time a filing officer statement, if any, was filed.

(xiii) Judicial finding of fact filing date and time. The date and time a judicial finding of fact, if any, was filed.

**History**
- *Source Note: The provisions of this §95.505 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

#### **Subchapter F** OTHER NOTICES OF LIENS

##### **1 Tex. Admin. Code § 95.600** General {#sec-95.600 omnilex-key=us-tx-regs-official--title-1--95.600}

The purpose of sections in this subchapter is to describe records of liens maintained by the filing office created pursuant to statutes other than the UCC that are treated by the filing officer in a manner substantially similar to UCC records and are included with the reports described in §95.505 of this title (relating to Search Responses).

**History**
- *Source Note: The provisions of this §95.600 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.601** Notice of Federal Lien {#sec-95.601 omnilex-key=us-tx-regs-official--title-1--95.601}

(a) Filing. Notices of federal liens such as federal tax liens, environmental, and pension will be accepted for filing as defined in Chapter 14, Texas Property Code. Notices of federal liens are filed and indexed within the UCC information management system. Notices of federal liens such as notices of discharge, release, and refiling are filed as though they were financing statement amendments and must include identification of the initial file number (as defined in §9.519(b), Texas Business and Commerce Code). A separate notice or certificate form is submitted for each federal lien. An amendment to a federal lien shall be refused if the document's identification of the initial lien does not correspond to the identification number and filing date of a federal lien then active in the UCC information management system.

(1) Where to file. Notices of liens, certificates, and other notices affecting federal tax liens or other federal liens are filed with the filing office pursuant to §14.002, Texas Property Code.

(2) Fee. The required fee for filing and indexing each notice of lien or certificate or notice affecting is pursuant to §14.005, Texas Property Code.

(3) Duration. The notice is effective until a certificate of release, nonattachment, discharge, or subordination is filed with the filing office pursuant to §14.004, Texas Property Code.

(b) Mechanics of search. Search requests and reports are conducted pursuant to §14.004, Texas Property Code and as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §14.004, Texas Property Code and §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.601 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.602** Notice of Utility Security Instrument {#sec-95.602 omnilex-key=us-tx-regs-official--title-1--95.602}

(a) Filing. A utility security instrument, an instrument that supplements or amends a utility security instrument, or a statement of name change, merger, or consolidation will be accepted for filing as defined in Chapter 261, Texas Business and Commerce Code. A separate notice is submitted for each utility security instrument and is filed and indexed within the UCC information management system. An instrument that supplements or amends a utility security instrument, or a statement of name change, merger, or consolidation is filed and indexed within the UCC information management system as though it were a financing statement amendment and must include the identification of the initial file number (as defined in §9.519(b), Texas Business and Commerce Code). An amendment to a utility security instrument shall be refused if the document's identification of the initial filing does not correspond to the identification number of a utility security instrument then active in the UCC information management system.

(1) Where to file. Utility security instruments, instruments supplementary or amendatory thereto, or a statement of name change, merger, or consolidation are filed with the filing office pursuant to §261.004, Texas Business and Commerce Code.

(2) Fee. The required fee for filing and indexing each utility security instrument, an instrument that supplements or amends a utility security instrument, or a statement of name change, merger, or consolidation is pursuant to §261.008, Texas Business and Commerce Code.

(3) Duration. The perfection and notice provided by the filing of a utility security instrument take effect on the date of filing and remain in effect without any renewal, refiling, or continuation statement until the interest granted as security is released by the filing of a termination statement, or a release of all or a part of the property, signed by the secured party pursuant to §261.005, Texas Business and Commerce Code.

(b) Mechanics of search. Search requests and reports are conducted pursuant to §261.009, Texas Business and Commerce Code and as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §261.009, Texas Business and Commerce Code and §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.602 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective December 10, 2012, 37 TexReg 9618.*

##### **1 Tex. Admin. Code § 95.603** Notice of Restitution Lien {#sec-95.603 omnilex-key=us-tx-regs-official--title-1--95.603}

(a) Filing. Restitution liens will be accepted for filing as defined in Article 42.22, Texas Code of Criminal Procedure. Restitution liens are filed and indexed within the UCC information management system. A separate affidavit is submitted for each restitution lien.

(1) Where to file. Restitution liens are filed with the filing office pursuant to Article 42.22, §7, Texas Code of Criminal Procedure.

(2) Fee. The required fee for filing and indexing each notice of lien or certificate or notice affecting is pursuant to Article 42.22, §7, Texas Code of Criminal Procedure.

(3) Duration. The lien expires on the 10th anniversary of the date the lien was filed or on the date the defendant satisfies the judgment creating the lien, whichever occurs first pursuant to Article 42.22, §12, Texas Code of Criminal Procedure. The lien may be refiled before the date the lien expires and will expire on the 10th anniversary of the date the lien was refiled or that the defendant satisfies the judgment creating the lien, whichever occurs first.

(b) Mechanics of search. Search requests and reports are conducted as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.603 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.604** Notice of Agricultural Chemical and Seed Liens {#sec-95.604 omnilex-key=us-tx-regs-official--title-1--95.604}

(a) Filing. Agricultural chemical and seed liens will be accepted for filing as defined in Chapter 128, Texas Agriculture Code. Agricultural chemical and seed liens are filed and indexed within the UCC information management system. A separate notice of claim of lien is submitted for each agricultural chemical and seed lien.

(1) Where to file. Agricultural chemical and seed liens are filed with the filing office pursuant to §128.016, Texas Agriculture Code.

(2) Fee. The required fee for filing and indexing each notice of claim of lien is pursuant to §128.016, Texas Agriculture Code.

(3) Duration. The notice of claim of lien is effective until the lien is satisfied pursuant to §128.011, Texas Agriculture Code. The lien may be terminated pursuant to §128.038, Texas Agriculture Code.

(b) Mechanics of search. Search requests and reports are conducted as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §128.031, Texas Agriculture Code, and §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.604 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.605** Notice of Liens for Animal Feed {#sec-95.605 omnilex-key=us-tx-regs-official--title-1--95.605}

(a) Filing. Animal feed liens will be accepted for filing as defined in Chapter 188, Texas Agriculture Code. Animal feed liens are filed and indexed within the UCC information management system. A separate notice of claim of lien is submitted for each animal feed lien.

(1) Where to file. Animal feed liens are filed with the filing office pursuant to §188.016, Texas Agriculture Code.

(2) Fee. The required fee for filing and indexing each notice of claim of lien is pursuant to §188.016, Texas Agriculture Code.

(3) Duration. The notice of claim of lien is effective until the lien is satisfied pursuant to §188.011, Texas Agriculture Code. The lien may be terminated pursuant to §188.038, Texas Agriculture Code.

(b) Mechanics of search. Search requests and reports are conducted as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §188.031, Texas Agriculture Code, and §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.605 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective January 9, 2014, 39 TexReg 73.*

##### **1 Tex. Admin. Code § 95.606** Notice of Aircraft Maintenance Liens {#sec-95.606 omnilex-key=us-tx-regs-official--title-1--95.606}

(a) Filing. Aircraft maintenance liens will be accepted for filing as defined in Chapter 70, Subchapter D, Texas Property Code. Aircraft maintenance liens are filed and indexed within the UCC information management system. A separate notice of claim of lien is submitted for each aircraft maintenance lien.

(1) Where to file. Aircraft maintenance liens are filed with the filing office pursuant to §70.3031, Texas Property Code.

(2) Fee. The required fee for filing and indexing each notice of claim of lien is pursuant to §70.3031, Texas Property Code.

(3) Duration. The notice of claim of lien is effective until the lien is satisfied pursuant to §95.408 of this title (relating to Lapse Date and Time).

(b) Mechanics of search. Search requests and reports are conducted as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.606 adopted to be effective July 1, 2012, 37 TexReg 4571.*

##### **1 Tex. Admin. Code § 95.607** Notice of Contract Agricultural Liens {#sec-95.607 omnilex-key=us-tx-regs-official--title-1--95.607}

(a) Filing. Contract agricultural liens will be accepted for filing as defined in Chapter 70, Subchapter E, Texas Property Code. Contract agricultural liens are filed and indexed within the UCC information management system. A separate notice of claim of lien is submitted for each contract agricultural lien.

(1) Where to file. Contract agricultural liens are filed with the filing office pursuant to §70.404, Texas Property Code.

(2) Fee. The required fee for filing and indexing each notice of claim of lien is pursuant to §70.404, Texas Property Code.

(3) Duration. The notice of claim of lien is effective until the lien is satisfied pursuant to §70.407, Texas Property Code.

(b) Mechanics of search. Search requests and reports are conducted as described in §§95.500 - 95.505 of this title (relating to Search Requests and Reports).

(c) Fee for search. The required fee for information from the filing office is pursuant to §70.404, Texas Property Code, and §95.104 and §95.105 of this title (relating to Fees and Expedited Services).

(d) Judicial Finding of Fact filing fee. The fee for a judicial finding of fact is pursuant to §51.905, Texas Government Code.

**History**
- *Source Note: The provisions of this §95.607 adopted to be effective July 1, 2012, 37 TexReg 4571; amended to be effective December 10, 2012, 37 TexReg 9618.*

### **Chapter 96** ELECTRIC UTILITY TRANSITION PROPERTY NOTICE FILINGS

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 96.1** Definitions {#sec-96.1 omnilex-key=us-tx-regs-official--title-1--96.1}

The following words and terms, when used in this chapter, have the following meanings, except as the context otherwise clearly requires:

(1) "Assignee" has the meaning accorded to such term by §39.302 of the Texas Utilities Code.

(2) "Assignor" means an electric utility or other person who transfers an interest in transition property to an assignee.

(3) "Certificate" means a document establishing, based upon the file number and financing order docket number, whether there is on file with the filing officer on the date and time stated a transition property notice.

(4) "Commission" means the Public Utility Commission of Texas, including a duly appointed successor entity.

(5) "File Number" means the unique identifying information assigned to an initial transition property notice filing by the filing officer for the purpose of identifying the transition property notice and all documents relating to that transition property notice in the filing officer's UCC information management system. For an initial transition property notice filed prior to July 1, 2001, the file number includes the year of filing expressed as a two-digit number followed by a unique eight-digit number assigned to the transition property notice by the filing officer. For a transition property notice with an initial transition property notice filed on or after July 1, 2001, the file number includes three segments; the year of filing expressed as a two-digit number, followed by a unique eight-digit number assigned to the transition property notice by the filing office and ending with a two-digit verification number assigned by the filing office but mathematically derived from the numbers in the first two segments. The filing number bears no relation to the time of filing and is not an indicator of priority.

(6) "Filing" means the presentation of a transition property notice or other document described in this chapter to the filing officer, which is evidenced by the indication of a file number and filing date and filing time.

(7) "Filing Date" means the date at which the filing officer receives a filing, as described by these rules.

(8) "Filing Officer" means the secretary of state, including an appointed successor entity or office.

(9) "Filing Party" means a person who makes a filing pursuant to this chapter.

(10) "Filing Time" means the time of day that a document is presented for filing at the filing office and is determined by the method of delivery.

(11) "Financing Order" has the meaning accorded to such term by §39.302 of the Texas Utilities Code.

(12) "Financing Order Docket Number" means the financing order file number established by the Public Utility Commission of Texas.

(13) "Financing Party" has the meaning accorded to such term by §39.302 of the Texas Utilities Code.

(14) "Grantor" means an electric utility or other person who grants a security interest in transition property to another person.

(15) "Person" means an individual, partnership, corporation, public authority or trust (including a business trust), unincorporated association, limited liability company, joint stock company or any other legal entity, whether public or private, existing under the laws of the State of Texas, another state, the United States, or a foreign country.

(16) "Release" means an amendment intended to indicate an action by a financing party to alter a right, duty, or obligation concerning the perfection of a security interest.

(17) "Retransfer" means an amendment intended to indicate an action by an assignee to return to an assignor all or a portion of the interest of the assignee in transition property.

(18) "Security Interest" means an interest in transition property securing the payment or performance of an obligation.

(19) "Submitter" means a person who tenders a transition property notice document to the filing officer for filing, whether the person is a filer or an agent of a filer responsible for tendering the document for filing. "Submitter" does not include a person responsible merely for the delivery of the document to the filing office, such as the postal service or a delivery service but does include a service provider who acts as a filer's representative in the filing process.

(20) "Termination" means an amendment intended to indicate that the related transition property notice has ceased to be effective with respect to the financing party or assignee authorizing the termination.

(21) "Transition Property" has the meaning accorded to such term by §39.302 of the Texas Utilities Code.

(22) "Transition Property Notice" means (as more fully described in §§96.61 - 96.65 of this title):

(A) a notice of a security interest in transition property, and all amendments to such notice; or

(B) a notice of a transfer to an assignee of an interest in transition property, and all amendments to such notice.

**History**
- *Source Note: The provisions of this §96.1 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.2** Place of Filing and Filing Office Information {#sec-96.2 omnilex-key=us-tx-regs-official--title-1--96.2}

(a) A transition property notice and each document filed pursuant to this chapter shall be filed with the filing officer at the filing office by the filing party and be accompanied by the payment of any required fees. Acceptable methods of payment are the same as those identified in §96.6 of this title.

(b) Information on the procedures and forms for filing pursuant to this chapter, submittals, requests, and other information or instructions can be obtained upon request directed to the Office of the Secretary of State, Business and Public Filings Division, Uniform Commercial Code Section. The filing office will disseminate information of its location, mailing address, telephone and fax numbers, and its website and other electronic "addresses" through usual and customary means.

(c) The filing office is open to the public between the hours of 8:00 AM and 5:00 PM (CT), Monday through Friday, except for state holidays.

**History**
- *Source Note: The provisions of this §96.2 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.3** Document Delivery {#sec-96.3 omnilex-key=us-tx-regs-official--title-1--96.3}

A transition property notice filing may be presented for filing at the filing office as follows:

(1) A filing may be delivered in person at the street address of the filing office during business hours. The file time for a transition property notice delivered by this method is when delivery of the transition property notice document is accepted by the filing office (even though the transition property notice document may not yet have been accepted for filing and may be subsequently rejected).

(2) A filing may be delivered by delivery service at the street address of the filing office. The file time for a transition property notice delivered by delivery service is 5:00 PM CT on a day the filing office is open to the public (even though the transition property notice document may not yet have been accepted for filing and may be subsequently rejected).

(3) A filing may be delivered by postal service delivery to the filing office's street or mailing address. The file time for a transition property notice document delivered by this method is 5:00 PM CT on a day the filing office is open to the public (even though the transition property notice document may not yet have been accepted for filing and may be subsequently rejected).

(4) A filing may be delivered by facsimile transmission to the filing office's fax filing telephone number. The file time for a transition property notice document delivered by this method is when delivery of the transition property notice is accepted by the filing office (even though the transition property notice document may not yet have been accepted for filing and may be subsequently rejected, and may indicate that the transition property notice document was received at an earlier time). Filings delivered by facsimile transmission must be accompanied by payment of the filing fees by credit card.

**History**
- *Source Note: The provisions of this §96.3 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.4** Approved Forms {#sec-96.4 omnilex-key=us-tx-regs-official--title-1--96.4}

(a) Forms for transition property notices that conform to the requirements of this rule will be acceptable by the filing office.

(b) Forms prescribed and disseminated by the filing officer for use in requesting a search of the transition property notices and for obtaining certificates or copies of transition property notices will be acceptable by the filing office.

**History**
- *Source Note: The provisions of this §96.4 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.5** Fees {#sec-96.5 omnilex-key=us-tx-regs-official--title-1--96.5}

(a) The fee for filing and indexing a transition property notice document of one or two pages communicated on paper or in a paper-based format (including faxes) is pursuant to §9.525(a)(1), Texas Business and Commerce Code. If there are additional pages, the fee is pursuant to §9.525(a)(2), Texas Business and Commerce Code.

(b) The fee for processing an information request which was communicated on paper or in a paper-based format is pursuant to §9.525(d)(1), Texas Business and Commerce Code. The fee for processing an information request which was communicated by XML is $3 and by SOSDirect is $15. The fee for responding to a web inquiry which was communicated by SOSDirect is $1.

(c) The fee for certified copies of transition property notice filings made in connection with an information request is pursuant to §405.031, Texas Government Code.

(d) The fee for uncertified copies of records is pursuant to §552.261, Texas Government Code, and §71.8 of this title (relating to Fees for Copies of Public Information).

**History**
- *Source Note: The provisions of this §96.5 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.6** Methods of Payment {#sec-96.6 omnilex-key=us-tx-regs-official--title-1--96.6}

Filing fees and fees for public records services may be paid by the methods as described in §95.106 of this title.

**History**
- *Source Note: The provisions of this §96.6 adopted to be effective December 17, 2007, 32 TexReg 9323; amended to be effective October 20, 2011, 36 TexReg 6940; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.7** Overpayment and Underpayment Policies {#sec-96.7 omnilex-key=us-tx-regs-official--title-1--96.7}

(a) Overpayment. The filing officer shall refund the amount of an overpayment exceeding $5 to the Remitter. The filing officer shall accrue the amount of the overpayment to the prepaid account if the overpayment is less than $5. This amount may be refunded only upon the written request of the Remitter.

(b) Underpayment. Upon receipt of a document with an insufficient fee, the filing officer shall do the following: The document and fee shall be returned to the Remitter as provided in §96.41 of this title.

**History**
- *Source Note: The provisions of this §96.7 adopted to be effective December 17, 2007, 32 TexReg 9323; amended to be effective January 9, 2014, 39 TexReg 75.*

#### **Subchapter B** DUTIES OF THE FILING OFFICER

##### **1 Tex. Admin. Code § 96.20** Role of Filing Officer {#sec-96.20 omnilex-key=us-tx-regs-official--title-1--96.20}

The duties and responsibilities of the filing officer with respect to the administration of the filing officer's UCC information management system under §39.309 of the Texas Utilities Code are ministerial. In accepting for filing or refusing to file a transition property notice pursuant to these rules, the filing officer does not determine the legal sufficiency or insufficiency of a document, determine that a security interest in the transition property exists or does not exist, determine that information in the document is correct or incorrect, in whole or in part, or create a presumption that information in the document is correct or incorrect, in whole or in part.

**History**
- *Source Note: The provisions of this §96.20 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.21** Duties of the Filing Officer {#sec-96.21 omnilex-key=us-tx-regs-official--title-1--96.21}

(a) Provided that there is no ground to refuse acceptance of a transition property notice under §96.40 of this title, a transition property notice is filed upon receipt by the filing officer with the filing fee and the filing officer shall assign a file number to the transition property notice document and index it in the UCC information management system.

(b) The filing officer will maintain a unique computer index of transition property notices along with financing statements and other security interest notice filings by assignment of a unique identifying transaction code ("T").

(c) The filing officer will mark each transition property notice with a file number as described in §96.1 of this title. Identification of the transition property notice is stamped on written transition property notice documents or otherwise permanently associated with the record maintained for transition property notice documents in the UCC information management system. A record is created in the UCC information management system for each transition property notice and all information comprising such record is maintained in such system. Such record is identified by the same information assigned to the transition property notice. A document other than an initial transition property notice is identified by a unique file number assigned by the filing officer. In the UCC information management system, records of all transition property notices other than initial transition property notices are linked to the record of their related initial transition property notice.

(d) If the filing officer has received a duplicate copy of a transition property notice for such purpose, the filing officer will mark the duplicate copy with the date and time of filing and return the duplicate copy to the submitter.

(e) The filing officer will make any transition property notice and each subsequent related filing or microfilm or other photographic or electronic copy of such documents available for public inspection.

**History**
- *Source Note: The provisions of this §96.21 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.22** Forms {#sec-96.22 omnilex-key=us-tx-regs-official--title-1--96.22}

The filing officer will prescribe and disseminate forms to the public, which will include the following:

(1) TPN 1 for use in filing a transition property notice;

(2) TPN 3 for use in filing an amendment, assignment, release, retransfer, or termination of interest in a transition property notice;

(3) Any established fee schedule; and

(4) Any other forms as may be necessary to effectively and efficiently administer the filing officer's duties under §39.309 of the Texas Utilities Code and these rules.

**History**
- *Source Note: The provisions of this §96.22 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.23** Informational Copies {#sec-96.23 omnilex-key=us-tx-regs-official--title-1--96.23}

The filing officer shall forward to the Commission, for informational purposes only, a copy of any transition property notice filing.

**History**
- *Source Note: The provisions of this §96.23 adopted to be effective September 4, 2001, 26 TexReg 6658.*

#### **Subchapter C** STANDARDS OF REVIEW AND INDEXING

##### **1 Tex. Admin. Code § 96.40** Grounds for Refusal of a Transition Property Notice {#sec-96.40 omnilex-key=us-tx-regs-official--title-1--96.40}

The following grounds are the sole grounds for the filing officer's refusal to accept a transition property notice for filing. As used herein, the term "legible" is not limited to refer only to written expressions on paper: it requires a machine-readable transmission for electronic transmissions and an otherwise readily decipherable transmission in other cases.

(1) Grantor or Assignor Name and Address. An initial transition property notice or an amendment that purports to add a grantor or assignor under §96.42 of this title shall be refused if the document fails to include a legible grantor or assignor name and address for a grantor, in the case of an initial transition property notice, or for a grantor or assignor purporting to be added in the case of such an amendment. If the document contains more than one grantor or assignor name or address and some names or addresses are missing or illegible, the filing officer shall index the legible name and address pairings, and provide a notice to the submitter containing the file number of the document, identification of the grantor or assignor name(s) that was (were) indexed, and a statement that grantors or assignors with illegible or missing names or addresses were not indexed.

(2) Financing Party or Assignee Name and Address. An initial transition property notice, an amendment purporting to add a financing party or assignee of record, or an assignment, that is required to name a financing party or assignee of record under §96.42 of this title shall be refused if the document fails to include a legible financing party or assignee of record name and address if the document contains more than one financing party or assignee name or address and some names or addresses are missing or illegible, the filing officer shall refuse the transition property notice document.

(3) Lack of Identification of Initial Transition Property Notice Filing. A transition property notice other than an initial transition property notice shall be refused if the document does not provide a file number of a transition property notice in the UCC information management system that has not lapsed.

(4) Other Required Information. A transition property notice that does not identify itself as an original transition property notice or another type of transition property notice shall be refused.

(5) Fee. A document shall be refused if the document is accompanied by less than the full filing fee tendered by a method described in §96.6 of this title.

**History**
- *Source Note: The provisions of this §96.40 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.41** Procedure upon Refusal {#sec-96.41 omnilex-key=us-tx-regs-official--title-1--96.41}

(a) If the filing officer finds grounds under §96.40 of this title to refuse acceptance of a transition property notice, the filing officer shall return the document, if written, to the Remitter and may return or refund the filing fee. A refund may be delivered with the returned document or under separate cover.

(b) The document shall be accompanied by a notice that contains the date and time the document would have been filed had it been accepted for filing (unless such date and time are stamped on the document); and a brief description of the reason for refusal to accept the document for purposes of filing and that cites the provision of §96.40 of this title that establishes the ground for refusal. The notice shall be sent to the Remitter, whether or not the document or another writing contains a request that an acknowledgment copy be sent to a financing party or another person. The notice shall be sent no later than the second business day after the filing office receives the document.

**History**
- *Source Note: The provisions of this §96.41 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

##### **1 Tex. Admin. Code § 96.42** Information Required for Indexing {#sec-96.42 omnilex-key=us-tx-regs-official--title-1--96.42}

(a) Original Transition Property Notice. An original transition property notice must contain the following information for the purpose of maintaining an index of transition property notice information.

(1) Identification of the document as a transition property notice.

(2) The name and address of the grantor or assignor of record.

(3) The name and address of the financing party or assignee of record.

(b) Notice of Amendment of a Transition Property Notice. An amendment of a filed transition property notice must contain the following information for the purpose of maintaining an index of transition property notice information.

(1) Identification of the document as a notice of amendment to a transition property notice.

(2) Identification of the initial transition property notice to be amended by the notice.

(3) The name and address of the financing party or assignee of record whose interest is affected by the notice of amendment.

(c) Notice of Assignment of Interest in Transition Property. A notice of assignment of interest in transition property must contain the following information for the purpose of maintaining an index of transition property information.

(1) Identification of the document as a notice of assignment.

(2) A designation whether the assignment is a full or partial assignment of rights under the transition property notice. The designation shall apply only to the financing party or assignee of record affected by the notice of assignment.

(3) Identification of the initial transition property notice to which the notice of assignment relates.

(4) The name and address of each financing party or assignee of record whose interest is to be assigned.

(5) The name and address of each transferee.

(d) Termination Notice. A termination notice must contain the following information for the purpose of maintaining an index of transition property information.

(1) Identification of the document as a termination notice.

(2) Identification of the initial transition property notice to which the termination notice relates.

(3) The name and address of the financing party whose interest is terminated.

(e) Notice of Release or Retransfer of Interest in Transition Property. A notice of release or retransfer of interest in transition property must contain the following information for the purpose of maintaining an index of transition property notice information.

(1) Identification of the document as a notice of release or retransfer of transition property.

(2) Identification of the initial transition property notice to which the notice of release or retransfer relates.

(3) The name and address of the financing party or assignee of record whose interest is affected by the release or retransfer.

(f) Other Amendments. A document intended to reflect an amendment to a filed transition property notice must contain the following information for the purpose of maintaining an index of transition property notice information.

(1) Identification of the document as an amendment to a filed transition property notice.

(2) Identification of the initial transition property notice to which the amendment relates.

(3) The name and address of the financing party or assignee of record whose interest is affected by the amendment.

**History**
- *Source Note: The provisions of this §96.42 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.43** Name of Grantor or Assignor {#sec-96.43 omnilex-key=us-tx-regs-official--title-1--96.43}

(a) In the case of a grantor or assignor who is not an individual, the name of the grantor or assignor to be provided is:

(1) the entity name of the grantor or assignor, as such name is shown on the public records in the jurisdiction of organization in the case of persons who are required to register in the public records in order to organize, or

(2) the entity name of the grantor or assignor as such name is shown on the organizational documents of the person in the case of other persons formed under written agreements that are not required to register in the public records in order to organize.

(b) A transition property notice that identifies the name of the grantor or assignor as provided by subsection (a) does not need to include any trade name, assumed name, or other names, or names of partners, members, or associates of the grantor or the assignor.

**History**
- *Source Note: The provisions of this §96.43 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.44** Identification and Indexing of Parties {#sec-96.44 omnilex-key=us-tx-regs-official--title-1--96.44}

(a) The name and address of a grantor or assignor of record of a transition property notice is identified, indexed, stored and retrieved by use of the term "debtor" in the UCC information management system maintained by the filing officer.

(b) The name and address of each financing party or assignee of record of a transition property notice is identified, indexed, stored, and retrieved by use of the term "secured party" in the UCC information management system maintained by the filing officer.

(c) The nomenclature used in subsections (a) and (b) of this section is solely for the convenience of the filing officer, and shall not be a factor in determining whether a particular assignment should be treated as a "true sale" or as a secured financing transaction.

**History**
- *Source Note: The provisions of this §96.44 adopted to be effective September 4, 2001, 26 TexReg 6658; amended to be effective January 9, 2014, 39 TexReg 75.*

#### **Subchapter D** FILINGS

##### **1 Tex. Admin. Code § 96.60** What Constitutes a Filing, Duration, and Filing Sequence {#sec-96.60 omnilex-key=us-tx-regs-official--title-1--96.60}

(a) A filing under §39.309 of the Texas Utilities Code is made when:

(1) a transition property notice is presented to and received by the filing officer; and

(2) the filing officer indicates a file number and filing date and filing time thereon.

(b) Except to the extent amended, assigned, or released pursuant to §§96.62 - 96.65 of this title, a security interest remains effective until terminated pursuant to §96.65 of this title.

(c) A transition property notice may be filed before a security interest is made or a security interest otherwise attaches or before a transfer of an interest in transition property to an assignee becomes effective.

**History**
- *Source Note: The provisions of this §96.60 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.61** Transition Property Notice {#sec-96.61 omnilex-key=us-tx-regs-official--title-1--96.61}

(a) The filing officer has promulgated a form for the filing of a transition property notice. A filing party may use the form or submit a document identified as a transition property notice that contains:

(1) The name of the grantor or assignor;

(2) The address of the grantor or assignor;

(3) The name of the financing party or assignee;

(4) The address of the financing party or assignee from which information concerning the security interest or transfer of an interest in transition property may be obtained;

(5) A statement setting forth whether all or a portion of the recovery permitted under the financing order (from which the transition property is derived) is covered by the transition property notice. If the portion covered by a transition property notice relates to less than all of the financing order, the portion or the amount thereof to which the transition property notice relates shall be stated;

(6) A statement of whether the transition property notice is intended to be filed to perfect a security interest in transition property or to give notice of a transfer of an interest in transition property to an assignee; and

(7) The financing order docket number from which the transition property is derived.

(b) Effect of Possible Recharacterization. If a filed transition property notice is intended to give notice of a transfer of an interest in transition property to an assignee, and the transfer is thereafter held for any reason or purpose to constitute the grant of a security interest in such transition property, the filed transition property notice will be considered a filing with respect to that security interest, for purposes of these regulations, from and as of the filing date of the original transition property notice, without the necessity of any amendment or other action by the parties with respect thereto.

**History**
- *Source Note: The provisions of this §96.61 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.62** Amendments to a Transition Property Notice {#sec-96.62 omnilex-key=us-tx-regs-official--title-1--96.62}

A transition property notice may be amended to change information relating to a filed transition property notice. An amendment to a transition property notice includes an assignment, release, retransfer, or termination of interest in a transition property notice. Except as more specifically provided in §§96.63 - 96.65 of this title, an amendment to a transition property notice may be made on the form promulgated by the filing officer for evidencing a change to a transition property notice or by a document that identifies itself as an amendment to a filed transition property notice and contains:

(1) Identification of the document as a notice of amendment to a transition property notice;

(2) Identification of the initial transition property notice to be amended by the notice;

(3) The name and address of the financing party or assignee of record whose interest is affected by the amendment;

(4) The name and address of the grantor or assignor; and

(5) A description of the amendment to the transition property notice.

**History**
- *Source Note: The provisions of this §96.62 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.63** Assignment {#sec-96.63 omnilex-key=us-tx-regs-official--title-1--96.63}

(a) Disclosed in Transition Property Notice. An initial transition property notice signed by the financing party or assignee of record may disclose an assignment of a security interest of a financing party or of the interest of an assignee in the transition property described in the transition property notice by indicating the name and address of the transferee.

(b) Separate Notice of Assignment. A financing party or assignee of record may assign all or a part of its rights under a transition property notice by submitting a form for evidencing an amendment to a transition property notice or by submitting a copy of the assignment or a document identified as a notice of assignment that contains:

(1) The name and address of the financing party or assignee of record;

(2) The file number and the filing date of the transition property notice;

(3) The name and address of the transferee;

(4) A description of the interest in the transition property being assigned and a statement whether the interest represents an assignment of all or part of the rights of the financing party or assignee of record under the transition property notice; and

(5) The financing order docket number for the financing order from which the transition property is derived.

(c) Status of Transferee. After the filing of an assignment under this section, the transferee becomes the financing party or assignee of record as to the interest assigned.

**History**
- *Source Note: The provisions of this §96.63 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.64** Release or Retransfer of Interest in Transition Property {#sec-96.64 omnilex-key=us-tx-regs-official--title-1--96.64}

By its signed notice, a financing party of record may release, and an assignee of record may retransfer all or a part of its interest in transition property described in a filed transition property notice. The filing officer has promulgated a form for an amendment to a transition property notice that may be used to indicate a release or retransfer of interest in transition property. A filing party may use the form or submit a document identified as a notice of release or retransfer that contains:

(1) A description of the transition property being released or retransfered;

(2) The name and address of the grantor or assignor;

(3) The name and address of the financing party or assignee of record;

(4) The file number of the transition property notice to which the release or retransfer relates;

(5) The financing order docket number for the financing order from which the transition property is derived.

**History**
- *Source Note: The provisions of this §96.64 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.65** Termination Notice {#sec-96.65 omnilex-key=us-tx-regs-official--title-1--96.65}

The filing officer has promulgated a form for an amendment to a transition property notice that may be used to indicate a termination of a security interest of a financing party. A filing party may use the form or submit a document identified as a termination notice that contains:

(1) The file number of the transition property notice issued by the filing officer;

(2) The financing order docket number relating to such filing;

(3) The name and address of the financing party of record whose interest is terminated; and

(4) A statement that the financing party of record no longer claims a security interest in the transition property described in the original transition property notice.

**History**
- *Source Note: The provisions of this §96.65 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.66** Minor Errors {#sec-96.66 omnilex-key=us-tx-regs-official--title-1--96.66}

A transition property notice, substantially complying with the requirements of this chapter, will be sufficient even if it contains minor errors that are not seriously misleading.

**History**
- *Source Note: The provisions of this §96.66 adopted to be effective September 4, 2001, 26 TexReg 6658.*

#### **Subchapter E** SEARCH AND INFORMATION REQUESTS

##### **1 Tex. Admin. Code § 96.80** Search Requests {#sec-96.80 omnilex-key=us-tx-regs-official--title-1--96.80}

(a) A search request for transition property notice information may be made on a form promulgated by the filing officer or by submission of a request that contains:

(1) the full correct name of a grantor or assignor to be searched, or the name variant to be searched and must specify whether the grantor or assignor is an individual or an organization;

(2) the name and address of the requesting party to whom the search report is to be sent;

(3) the appropriate fee payable by a method described in §96.5 of this title.

(b) A search request may also contain the following additional information.

(1) A request that copies of documents referred to in the report be included with the report sent to the requestor. The request may limit the copies requested by limiting them to the city of the grantor or assignor, the date of filing or the identity of the financing party of record on the transition property notices located by the related search.

(2) Instructions on the mode of delivery requested, if other than by ordinary mail, will be honored if the requested mode is made available by the filing office.

**History**
- *Source Note: The provisions of this §96.80 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.81** Furnishing Certificates and Copies {#sec-96.81 omnilex-key=us-tx-regs-official--title-1--96.81}

(a) Upon receipt of a request in compliance with §96.80 of this title, the filing officer will issue a report showing whether there is on file on the date and time stated therein, a transition property notice naming a particular grantor or assignor and a notice of assignment, and if there is, giving the date and time of filing of each notice and the names and addresses of each financing party or assignee named therein.

(b) A report will also show whether there is on file on the date and time stated therein, a notice affecting transition property of the grantor or assignor, and if there is, giving the date and time of filing of each notice.

(c) Upon request, the filing officer will furnish, upon payment of any requisite fees, a copy of a filed transition property notice, or notice affecting transition property of a grantor or assignor, or a termination notice, notice of assignment, notice of release, or notice of retransfer respecting a transition property notice.

**History**
- *Source Note: The provisions of this §96.81 adopted to be effective September 4, 2001, 26 TexReg 6658.*

##### **1 Tex. Admin. Code § 96.82** Rules Applied to Search Requests {#sec-96.82 omnilex-key=us-tx-regs-official--title-1--96.82}

A search request will be processed using the name in the exact form it is submitted. Search results are created by applying the standardized search logic described in §95.503 of this title to the name presented to the filing officer by the person requesting the search.

**History**
- *Source Note: The provisions of this §96.82 adopted to be effective September 4, 2001, 26 TexReg 6658.*

### **Chapter 97** BUSINESS OPPORTUNITY

#### **Subchapter A** BUSINESS OPPORTUNITY REGISTRATION

##### **1 Tex. Admin. Code § 97.1** Registration of Business Opportunities {#sec-97.1 omnilex-key=us-tx-regs-official--title-1--97.1}

The materials required to be filed with the secretary of state by §51.051, Business and Commerce Code (hereinafter "Business Opportunity Act") shall be referred to in this title as the "registration." The secretary of state will not accept a registration for filing unless, in addition to meeting the requirements of §51.051, the registration is accompanied by the applicable fee as set forth in §97.21 of this title (relating to Fees).

**History**
- *Source Note: The provisions of this §97.1 adopted to be effective October 30, 1981, 6 TexReg 3870; amended to be effective September 3, 2009, 34 TexReg 5895.*

#### **Subchapter B** FEES AND GENERAL INFORMATION

##### **1 Tex. Admin. Code § 97.21** Fees {#sec-97.21 omnilex-key=us-tx-regs-official--title-1--97.21}

(a) The filing fee for filing a new registration is $195 and is nonrefundable.

(b) The fee for filing any of the following is $25 and is nonrefundable:

(1) a renewal or amended registration;

(2) a notice of exemption pursuant to §51.003(b)(8), Business Opportunity Act and §97.22 of this title (relating to Notice of Exemption); and

(3) a voluntary termination pursuant to §51.251, Business Opportunity Act.

**History**
- *Source Note: The provisions of this §97.21 adopted to be effective October 30, 1981, 6 TexReg 3870; amended to be effective January 13, 1986, 11 TexReg 44; amended to be effective October 18, 1998, 23 TexReg 10397; amended to be effective September 3, 2009, 34 TexReg 5895.*

##### **1 Tex. Admin. Code § 97.22** Notice of Exemption {#sec-97.22 omnilex-key=us-tx-regs-official--title-1--97.22}

(a) In addition to the information required by §51.003(b)(8) of the Business Opportunity Act, notice filed with the secretary of state pursuant to §51.003(b)(8) must contain:

(1) a statement that the franchisor claims an exemption under §51.003(b)(8), Business Opportunity Act;

(2) the date the notice is signed; and

(3) the signature of the person executing the notice.

(b) The notice of exemption will be effective as of the date of receipt by the secretary of state of both the complete notice of exemption and the filing fee provided in §97.21 of this title (relating to Fees).

**History**
- *Source Note: The provisions of this §97.22 adopted to be effective January 13, 1986, 11 TexReg 44; amended to be effective September 3, 2009, 34 TexReg 5895; amended to be effective August 3, 2010, 35 TexReg 6647.*

##### **1 Tex. Admin. Code § 97.23** Voluntary Termination {#sec-97.23 omnilex-key=us-tx-regs-official--title-1--97.23}

(a) A voluntary termination of business opportunity filed with the secretary of state pursuant to §51.251, Business Opportunity Act, must contain:

(1) the name of the business opportunity;

(2) the date of registration of the business opportunity with the secretary of state;

(3) the registration number issued by the secretary of state;

(4) a statement of voluntary termination specifying the applicable subsection of §51.251, Business Opportunity Act;

(5) the date the statement is signed; and

(6) the signature of the person executing the statement.

(b) The voluntary termination will be effective as of the date of receipt by the secretary of state of both the complete voluntary termination statement and the filing fee provided in §97.21 of this title (relating to Fees).

**History**
- *Source Note: The provisions of this §97.23 adopted to be effective January 13, 1986, 11 TexReg 44; amended to be effective September 3, 2009, 34 TexReg 5895; amended to be effective August 3, 2010, 35 TexReg 6647.*

##### **1 Tex. Admin. Code § 97.27** Update Filings; Delinquency and Termination {#sec-97.27 omnilex-key=us-tx-regs-official--title-1--97.27}

(a) A disclosure statement filed under §51.051 of the Business Opportunity Act, must be updated annually and whenever a material change occurs. The list of individuals who sell the business opportunity for the principal seller must be updated every six months.

(b) A registered seller of a business opportunity that does not file the updates required by §51.052 of the Business Opportunity Act is delinquent and subject to termination of its registration under the procedures outlined in this section.

(c) After an update is 30 days past the required filing date, the secretary of state shall send a notice of delinquency to the seller that:

(1) informs the seller of the delinquency;

(2) gives the seller the opportunity to show compliance with the required filing; and

(3) informs the seller of its right to request a hearing, present evidence, and be represented by counsel.

(d) If, within 35 days of the date the notice is mailed, the seller does not respond, file the required updates, or request a hearing, the seller's registration will be terminated. Notice of the termination shall be sent to the seller in accordance with subsection (e) of this section.

(e) The notice described in subsections (c) and (d) of this section shall be sent to the seller's registered agent, or, if the seller does not have a registered agent, to the address shown in the most recent filing with the secretary of state made by the seller pursuant to the Business Opportunity Act.

**History**
- *Source Note: The provisions of this §97.27 adopted to be effective October 21, 1991, 16 TexReg 5593; amended to be effective September 3, 2009, 34 TexReg 5895.*

##### **1 Tex. Admin. Code § 97.28** Forms {#sec-97.28 omnilex-key=us-tx-regs-official--title-1--97.28}

The secretary of state provides forms for required business opportunity filings. The forms are available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Office of the Secretary of State, Statutory Documents Section, P.O. Box 13550, Austin, Texas 78711.

**History**
- *Source Note: The provisions of this §97.28 adopted to be effective October 21, 1991, 16 TexReg 5593; amended to be effective September 3, 2009, 34 TexReg 5895.*

#### **Subchapter C** TRUST ACCOUNT

##### **1 Tex. Admin. Code § 97.31** Requirements of Trust Account {#sec-97.31 omnilex-key=us-tx-regs-official--title-1--97.31}

A trust account established in accordance with §51.101(a)(2) of the Business Opportunity Act must be established with an entity that has the power to accept deposits under the law and that is authorized to transact business in Texas.

**History**
- *Source Note: The provisions of this §97.31 adopted to be effective September 7, 1988, 13 TexReg 4233; amended to be effective September 3, 2009, 34 TexReg 5895.*

##### **1 Tex. Admin. Code § 97.32** Cancellation of Trust Account {#sec-97.32 omnilex-key=us-tx-regs-official--title-1--97.32}

A trust account shall be maintained until the earlier of:

(1) approval of the secretary of state to cancel the trust account; or

(2) two years after the registrant formally terminates registration.

**History**
- *Source Note: The provisions of this §97.32 adopted to be effective September 7, 1988, 13 TexReg 4233; amended to be effective September 3, 2009, 34 TexReg 5895.*

#### **Subchapter D** IRREVOCABLE LETTER OF CREDIT

##### **1 Tex. Admin. Code § 97.41** Requirements of Irrevocable Letter of Credit {#sec-97.41 omnilex-key=us-tx-regs-official--title-1--97.41}

An irrevocable letter of credit must be obtained from an entity that has the power to issue letters of credit under the law and that is authorized to transact business in Texas.

**History**
- *Source Note: The provisions of this §97.41 adopted to be effective September 7, 1988, 13 TexReg 4233; amended to be effective September 3, 2009, 34 TexReg 5895.*

##### **1 Tex. Admin. Code § 97.42** Cancellation of Irrevocable Letter of Credit {#sec-97.42 omnilex-key=us-tx-regs-official--title-1--97.42}

An irrevocable letter of credit established in accordance with §97.41 of this title (relating to Requirements of Irrevocable Letter of Credit) shall be maintained until the earlier of:

(1) approval of the secretary of state to cancel the irrevocable letter of credit; or

(2) two years after the registrant formally terminates registration.

**History**
- *Source Note: The provisions of this §97.42 adopted to be effective September 7, 1988, 13 TexReg 4233; amended to be effective September 3, 2009, 34 TexReg 5895.*

### **Chapter 98** DENTAL SUPPORT ORGANIZATIONS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 98.1** Definitions {#sec-98.1 omnilex-key=us-tx-regs-official--title-1--98.1}

Words and terms defined in Chapter 73 of the Business & Commerce Code shall have the same meaning in this chapter. In addition the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Dental Support Agreement--The agreement under which a dental support organization provides two or more business support services to a dentist.

(2) Non-Dentist Owner--A person, including a corporation, association, limited partnership, limited liability company, limited liability partnership, sole proprietorship, or other legal entity, who is not a licensed dentist but maintains 10% or more ownership in a dental support organization.

(3) Professional Entity--A professional corporation, professional limited liability company, professional association, general partnership that provides a professional service, or limited partnership that provides a professional service.

**History**
- *Source Note: The provisions of this §98.1 adopted to be effective April 10, 2016, 41 TexReg 2473.*

#### **Subchapter B** REGISTRATION AND RENEWAL OF DENTAL SUPPORT ORGANIZATIONS

##### **1 Tex. Admin. Code § 98.2** Registration and Renewal of Dental Support Organizations {#sec-98.2 omnilex-key=us-tx-regs-official--title-1--98.2}

(a) A complete initial registration or renewal is comprised of:

(1) A completed registration form (See Form 3801);

(2) Payment of the filing fee stated in §98.5 of this chapter (relating to Filing Fees); and

(3) A registrant contact sheet (See Form 3802).

(b) A registration or renewal must comply with the Business & Commerce Code, §73.004, and also provide:

(1) For the dental support organization:

(A) The legal name; and

(B) The business address and mailing address, if different.

(2) For each dentist who is being provided two or more business support services under a dental support agreement:

(A) The dentist's name and business address;

(B) If the dentist provides services through a professional entity, the legal name of the professional entity; and

(C) A disclosure of the business support services provided pursuant to any dental support agreement the dental support organization has.

(3) For each person who owns 10% or more of the dental support organization:

(A) The name and address of the owner; and

(B) Whether the owner is a dentist or non-dentist owner.

(c) Each registration shall be signed by a person authorized to act by or on behalf of the dental support organization.

**History**
- *Source Note: The provisions of this §98.2 adopted to be effective April 10, 2016, 41 TexReg 2473.*

##### **1 Tex. Admin. Code § 98.3** Timing of Registration {#sec-98.3 omnilex-key=us-tx-regs-official--title-1--98.3}

(a) Registrations will expire annually on December 31 of each year. Renewals may be submitted from 90 days prior to expiration until January 31 of the year for which the next registration will be effective, by submitting a completed registration form and paying the filing fee, except as provided in subsection (b) of this section.

(b) In the event a dental support organization meets the requirements for registration under §73.004 of the Business & Commerce Code after January 31, the dental support organization must file an application for registration within 90 days after the date of execution of a dental support agreement.

(c) The initial registration for a dental support organization that has entered into a dental support agreement prior to February 1, 2016 must be filed not later than January 31, 2017.

(d) The initial registration for a dental support organization that first enters into a dental support agreement on or after February 1, 2016 must be filed not later than the 90th day after the date the agreement is executed.

**History**
- *Source Note: The provisions of this §98.3 adopted to be effective April 10, 2016, 41 TexReg 2473.*

#### **Subchapter C** STATEMENT OF CORRECTION

##### **1 Tex. Admin. Code § 98.4** Corrections {#sec-98.4 omnilex-key=us-tx-regs-official--title-1--98.4}

(a) A dental support organization must submit a statement of correction if, during the quarter, any information provided in the registration changes.

(b) A statement of correction must include the following information:

(1) The legal name of the dental support organization;

(2) The date of the last filed registration;

(3) Any identification number assigned by the secretary of state assigned to the dental support organization; and

(4) A statement identifying the information that has changed.

(c) A dental support organization that is required to submit a statement of correction in accordance with subsection (a) shall do so according to the following schedule:

(1) First quarter (January 1 - March 31) - Statement of correction due not later than the 45th day after March 31.

(2) Second quarter (April 1 - June 30) - Statement of correction due not later than the 45th day after June 30.

(3) Third quarter (July 1 - September 30) - Statement of correction due not later than the 45th day after September 30; and

(4) Fourth quarter (October 1 - December 31) - Statement of correction due not later than the 45th day after December 31.

(d) Each statement of correction shall be signed by a person authorized to act by or on behalf of the dental support organization.

**History**
- *Source Note: The provisions of this §98.4 adopted to be effective April 10, 2016, 41 TexReg 2473.*

#### **Subchapter D** FILING FEES

##### **1 Tex. Admin. Code § 98.5** Filing Fees {#sec-98.5 omnilex-key=us-tx-regs-official--title-1--98.5}

(a) The filing fee for registering or renewing the registration of a dental support organization is $150.

(b) The filing fee for a statement of correction is $50.

**History**
- *Source Note: The provisions of this §98.5 adopted to be effective April 10, 2016, 41 TexReg 2473.*

### **Chapter 101** PRACTICE AND PROCEDURE BEFORE THE OFFICE OF THE SECRETARY OF STATE

#### **Subchapter A** GENERAL RULES

##### **1 Tex. Admin. Code § 101.1** Definitions {#sec-101.1 omnilex-key=us-tx-regs-official--title-1--101.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Agency--The Office of the Secretary of State.

(2) APA--Administrative Procedure Act, Texas Government Code, §2001.01 et seq.

(3) Complaint--The short and plain written statement by which an individual alleges that a person has violated or is violating a statute within the jurisdiction of the agency to regulate.

(4) Contested case or hearing--A proceeding, including, but not limited to, ratemaking and licensing, in which the legal rights, duties, or privileges of a party are to be determined by the agency after an opportunity for an adjudicative hearing.

(5) Formal hearing--An adjudicative proceedings in accordance with these sections.

(6) Hearings examiner--The administrative law judge assigned by the State Office of Administrative Hearings to conduct a proceeding on matters within the agency's jurisdiction. All references to hearings examiner in these rules shall mean administrative law judge.

(7) Motion--A written or oral request to the agency for a ruling made before, during, or after a contested case.

(8) Office--The department, section, or division of the agency which supervises the regulation of the applicable statute.

(9) Party--Each person with sufficient legal, economic, or other interest to be named or admitted as such by the agency to a contested case proceeding before the agency.

(10) Person--Any individual, partnership, corporation, association, governmental subdivision, or public or private organization.

(11) Pleading--A formal statement by a party or the agency containing their respective claims or defenses.

**History**
- *Source Note: The provisions of this §101.1 adopted to be effective April 7, 1986, 11 TexReg 1508; amended to be effective June 22, 1992, 17 TexReg 4171.*

##### **1 Tex. Admin. Code § 101.2** Object of Rules {#sec-101.2 omnilex-key=us-tx-regs-official--title-1--101.2}

The objective of these sections is to provide for a straight forward, comprehensive, and efficient system of procedure before the agency to the end that justice may be served, the public's interest and welfare may be protected, and the disposition of cases may not be unduly delayed.

**History**
- *Source Note: The provisions of this §101.2 adopted to be effective April 7, 1986, 11 TexReg 1508.*

##### **1 Tex. Admin. Code § 101.3** Scope, Applicability, and Construction of Rules {#sec-101.3 omnilex-key=us-tx-regs-official--title-1--101.3}

This chapter shall govern the conduct of all contested cases before the agency. The sections contained in this chapter shall be construed liberally, with a view toward the objective for which they were adopted. They shall not be construed so as to enlarge, diminish, modify, or otherwise alter the jurisdiction, powers, or authority of the agency or the substantive rights of any person. Unless otherwise expressly provided, the past, present, or future tense includes the other; the masculine, feminine, or neuter gender each includes the other; and the singular and plural number each includes the other. In addition to this chapter, parties participating in a contested case before this agency should make reference to the Administrative Procedure Act, Texas Government Code; to the Automobile Club Services Act; to the State Seal of Texas Act, Texas Business and Commerce Code, §17.08; to the Texas Notaries Public Act, Texas Government Code, §406.001 et seq.; to the Texas Election Code, Chapter 122; and to the substantive rules, administrative regulations, and orders of the agency.

**History**
- *Source Note: The provisions of this §101.3 adopted to be effective April 7, 1986, 11 TexReg 1508.*

##### **1 Tex. Admin. Code § 101.5** Agreements To Be in Writing {#sec-101.5 omnilex-key=us-tx-regs-official--title-1--101.5}

No stipulation or agreement between the parties, their attorneys, or their representatives, with regard to any matter involved in any contested case before the agency, shall be enforced, unless it has been reduced to writing and signed by the parties or their authorized representatives, or unless it has been dictated into the record during the course of a hearing, or incorporated in any order bearing their written approval. This section does not limit a party's ability to waive or modify by stipulation or agreement any right or privilege afforded by these sections or by law, unless otherwise precluded by law.

**History**
- *Source Note: The provisions of this §101.5 adopted to be effective April 7, 1986, 11 TexReg 1508.*

##### **1 Tex. Admin. Code § 101.6** Ex Parte Communications {#sec-101.6 omnilex-key=us-tx-regs-official--title-1--101.6}

Unless otherwise provided by law, there shall be no verbal communications with the hearings examiner regarding any issue of fact or law in a contested case without notice and opportunity for all parties to participate, and there may be no written communications that are not transmitted at the same time to all parties, except that an individual involved in rendering the decision in a contested case may communicate ex parte with employees of the agency who did not participate in the hearing for the purpose of utilizing their special skills or knowledge in evaluating the evidence.

**History**
- *Source Note: The provisions of this §101.6 adopted to be effective April 7, 1986, 11 TexReg 1508.*

##### **1 Tex. Admin. Code § 101.7** Personal Service by the Agency {#sec-101.7 omnilex-key=us-tx-regs-official--title-1--101.7}

Where personal service of notice, complaint, pleading, or other document by the agency is required, the agency shall mail the same by certified mail, return receipt requested, to the last known address of the person entitled to receive such notice, complaint, pleading, or documents.

**History**
- *Source Note: The provisions of this §101.7 adopted to be effective April 7, 1986, 11 TexReg 1508.*

#### **Subchapter B** INITIATION OF PROCEEDINGS, COMPLAINTS, AND PLEADINGS

##### **1 Tex. Admin. Code § 101.22** Initiation of Proceedings and Examination of Pleadings {#sec-101.22 omnilex-key=us-tx-regs-official--title-1--101.22}

(a) Where applicable, upon the filing of a complaint with the appropriate office, the office shall determine whether the complaint complies with its prescribed form, if any, and whether a contested case should be initiated.

(1) If the office determines that the complaint does not substantially comply with its form, the office may return the complaint to the person who filed it, together with a statement of the office's reasons for returning the complaint.

(A) The person who filed a complaint shall thereafter have the right to correct and refile the complaint.

(B) The refiling of the complaint shall be within the time limit prescribed by the office.

(2) If the office determines that the complainant complies with its prescribed form but fails to state facts which, if proven, would be grounds for the secretary to take action, the complainant will be notified of the basis for such determination.

(A) The complainant shall be allowed to submit additional facts which, if proven, would be grounds for action by the secretary.

(B) The submission of the additional facts shall be within the time period specified by the office.

(C) If the person who filed the complaint does not submit additional facts within the time allowed, no further action shall be taken on the complaint and the file pertaining to the complaint shall be closed.

(3) If the agency determines that the legal rights, duties, or privileges of a party might be affected by action taken as a result of a complaint or the agency determines on its own volition that a contested case should be initiated, the agency shall give notice by certified mail to the party of facts and conduct alleged to warrant the intended action, and the party shall be given an opportunity as described in the notice to show compliance with all requirements of the law concerning the applicable rights, duties, or privileges.

(4) It is the intention of the Office of the Secretary of State to afford all parties an opportunity for a hearing in all contested cases.

(5) If revocation, suspension, probation, or other action concerning a registration, license, or commission is proposed, the agency shall give written notice to the affected party that the party must request, in writing, a formal hearing within 10 days of receipt of the notice. The notice shall state the basis for the proposed action. Receipt of the notice is presumed to occur on the 10th day after the notice is mailed to the last known address shown in the most recent filing with the appropriate office of the agency unless another date is reflected on a United States Postal Service return receipt.

(6) If no timely request for a hearing is received, the party is deemed to have waived the hearing and be in agreement with the allegations and proposed action.

(7) If the hearing is waived, action including, but not limited to, suspension, revocation, or probation of the registration, license, or commission, shall be taken by an order of the secretary of state.

(8) If a civil penalty is assessed pursuant to the Athlete Agents Act, Texas Civil Statutes, Article 8871, the procedures delineated in Section 9 of the referenced Athlete Agents Act supersedes those stated in paragraphs (1)-(7) of this subsection.

(9) If a formal hearing is requested, it shall be conducted in accordance with the provisions of the Administrative Procedure Act, other state statutes, agency rules applying to such hearings, and the rules of the State Office of Administrative Hearings.

(b) A formal hearing is initiated by the filing of a petition with the State Office of Administrative Hearings and a request for a setting of a hearing or an assignment of an administrative law judge in accordance with §155.7 of this title (relating to Jurisdiction). The formal hearing is conducted by the State Office of Administrative Hearings. The petition shall state the following:

(1) the name and address of the person initiating the proceeding or the name and address of the party's attorney or representative, if any;

(2) a statement of the legal authority and jurisdiction under which the contested case has been initiated;

(3) a reference to the particular sections of the statutes and rules involved;

(4) a statement of the matters asserted;

(5) a copy of the complaint, if any, upon which the proceeding is based; and

(6) the relief requested.

(c) Unless otherwise provided by law, where an office initiates a contested case on its own volition, the Office of Administrative Hearings shall assign a hearings examiner to hear the case and the office shall follow the notice procedures as outlined by §101.7 of this title (relating to Personal Service by the Agency).

(d) Upon the filing of any pleading, the hearing examiner may examine same and determine its sufficiency under these sections.

(1) If the hearings examiner finds that the pleading does not substantially comply with these sections, the hearings examiner may return it to the person who filed it, together with a statement of the reasons for returning the pleading.

(2) The person who filed such pleading shall thereafter have the right to correct and refile the pleading, provided that the refiling of such shall not be permitted to delay any contested case, unless the hearings examiner determines that the interest of justice so requires.

**History**
- *Source Note: The provisions of this §101.22 adopted to be effective April 7, 1986, 11 TexReg 1508; amended to be effective June 22, 1986, 12 TexReg 1866; amended to be effective June 22, 1992, 17 TexReg 4171.*

##### **1 Tex. Admin. Code § 101.23** Filing of an Answer by a Party {#sec-101.23 omnilex-key=us-tx-regs-official--title-1--101.23}

Upon the receipt of a petition a party shall file a response to such petition within 20 days. The answer shall comply with §101.20 of this title (relating to Filing, Form, and Content of Complaints, Pleadings and Other Documents) and shall be signed by the party or the party's attorney. If the party is to be represented by an attorney, the name and address of the attorney should be set forth in the answer.

**History**
- *Source Note: The provisions of this §101.23 to be adopted effective June 22, 1987, 12 TexReg 1866.*

##### **1 Tex. Admin. Code § 101.24** Failure To Answer/Default Judgment {#sec-101.24 omnilex-key=us-tx-regs-official--title-1--101.24}

If the party shall fail to answer within the time period established by §101.23 of this title (relating to Filing of an Answer by a Party) or if a party answers but fails to appear at the time set for hearing, the agency may request that the hearings examiner render a default judgment adverse to the party. The default judgment will be entered upon the basis of the pleadings and the complaint, and upon proof of the proper service.

**History**
- *Source Note: The provisions of this §101.24 adopted to be effective June 22, 1987, 12 TexReg 1866.*

#### **Subchapter C** PREHEARING PROCEDURES

##### **1 Tex. Admin. Code § 101.30** Informal Disposition of a Contested Case {#sec-101.30 omnilex-key=us-tx-regs-official--title-1--101.30}

Unless otherwise precluded by law, the agency may request informal disposition of a contested case by stipulation or agreed settlement, which may include the issuance of an official reprimand or the entry of a consent order.

**History**
- *Source Note: The provisions of this §101.30 adopted to be effective April 7, 1986, 11 TexReg 1508; amended to be effective June 22, 1987, 12 TexReg 1866.*

#### **Subchapter D** HEARING PROCEDURES

##### **1 Tex. Admin. Code § 101.41** Place of Hearings {#sec-101.41 omnilex-key=us-tx-regs-official--title-1--101.41}

Unless otherwise authorized or required by statute, all contested cases shall be held in Austin.

**History**
- *Source Note: The provisions of this §101.41 adopted to be effective April 7, 1986, 11 TexReg 1508.*

#### **Subchapter E** POST-HEARING PROCEDURES

##### **1 Tex. Admin. Code § 101.51** Exceptions and Replies {#sec-101.51 omnilex-key=us-tx-regs-official--title-1--101.51}

(a) Any party of record, within 15 days after the date of service of a proposal for decision, may file exceptions to the hearings examiner's proposal for decision with the appropriate office, serving copies of such on all other parties.

(b) If a party files exceptions, the other parties shall have 15 days after the date of filing to reply.

(c) Exceptions and replies shall conform to §101.20 of this title (relating to Filing, Form, and Content of Complaints, Pleadings, and other Documents).

(d) Exceptions and replies filed with an office shall be immediately forwarded to the secretary of state.

**History**
- *Source Note: The provisions of this §101.51 adopted to be effective April 7, 1986, 11 TexReg 1508.*

##### **1 Tex. Admin. Code § 101.52** Secretary of State's Decision {#sec-101.52 omnilex-key=us-tx-regs-official--title-1--101.52}

(a) The proposed decision of the hearings examiner must be approved by the secretary of state before it is given any effect.

(b) Unless otherwise provided by law or these sections, the secretary of state shall render a decision on the hearings examiner's proposed decision on the following date which occurs first:

(1) 20 days after the date of service of the hearings examiner's proposed decision on the parties, where no exceptions have been timely filed; or

(2) 20 days after the timely filing of exceptions to the hearings examiner's proposed decision with the appropriate office.

(c) After approval by the secretary of state, the proposed decision of the hearings examiner shall become the agency's decision. The agency's decision will be served on all parties and is final 20 days after the date a party or his attorney is notified of the agency decision, unless a motion for rehearing is filed with the appropriate office on or before the 20th day.

(d) The agency shall notify parties or their attorneys of record either personally or by first class mail of the agency decision. An appropriate record of that mailing shall be kept by the agency. A party or his attorney of record notified by mail shall be presumed to have been notified on the date such notice was mailed.

(e) If the motion for rehearing is granted, the decision is vacated pending a subsequent decision upon rehearing. If the motion for rehearing is overruled, whether by order or by the operation of law, the decision is final on the date it is overruled.

**History**
- *Source Note: The provisions of this §101.52 is adopted to be effective April 7, 1986, 11 TexReg 1508; amended to be effective August 30, 1990, 15 TexReg 4691.*

#### **Subchapter F** APPEAL

##### **1 Tex. Admin. Code § 101.60** Motion for Rehearing {#sec-101.60 omnilex-key=us-tx-regs-official--title-1--101.60}

(a) Unless otherwise permitted by law, a motion for rehearing is a prerequisite to an appeal. A motion for rehearing must be filed, with the appropriate office, within 20 days after the party or his attorney of record is notified of the agency decision. The motion must state each specific ground upon which the party believes the agency's decision is erroneous. The motion for rehearing will be acted on within 45 days after the date the party or his attorney of record is notified of the agency decision.

(b) Any reply to a motion for rehearing must be filed, with the appropriate office, within 30 days after a party or his attorney is notified of the agency decision.

(c) If the agency has not acted on the motion for rehearing within the 45-day period, the motion for rehearing is overruled by operation of law, 45 days after the date the party or his attorney of record is notified of the agency decision.

(d) By written order, the agency may extend the period of time for filing the motions and replies and for taking agency action, except that an extension may not extend the period for agency action beyond 90 days after the date the party or his attorney is notified of the agency decision.

(e) In the event of an extension, the motion for rehearing is overruled by operation of law on the date fixed by the agency's decision or, in the absence of a fixed date, 90 days after the date the party or his attorney is notified of the agency's decision.

**History**
- *Source Note: The provisions of this §101.60 adopted to be effective April 7, 1986, 11 TexReg 1508; amended to be effective August 30, 1990, 15 TexReg 4691.*

##### **1 Tex. Admin. Code § 101.61** Original or Certified Copies of Record {#sec-101.61 omnilex-key=us-tx-regs-official--title-1--101.61}

A party who appeals a final decision in a contested case shall pay all of the cost of preparation of any original or certified copy of the record of the agency proceedings that is required to be transmitted to the reviewing court.

**History**
- *Source Note: The provisions of this §101.61 adopted to be effective April 7, 1986, 11 TexReg 1508.*

### **Chapter 102** HEALTH SPAS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 102.1** Definitions {#sec-102.1 omnilex-key=us-tx-regs-official--title-1--102.1}

Words and terms defined in the Health Spa Act (Texas Occupations Code, Chapter 702) shall have the same meaning in this chapter. In addition the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Act--The Health Spa Act, Texas Occupations Code, Chapter 702.

(2) Equivalent Facilities--Facilities that have substantially similar hours of operation, physical structures, improvements, square footage, exercise equipment, and access to instructors, trainers and classes as the closed facility.

(3) Fully open or fully open for business--The date on which all services of the health spa that were advertised before the opening or promised to be made available are available for use by its members.

(4) Registrant--A person who has registered with the secretary and has been issued a health spa operator's certificate of registration.

(5) Secretary--The Texas secretary of state.

**History**
- *Source Note: The provisions of this §102.1 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective December 27, 2004, 29 TexReg 11947; amended to be effective April 20, 2009, 34 TexReg 2375.*

#### **Subchapter B** REGISTRATION PROCEDURES

##### **1 Tex. Admin. Code § 102.10** Procedure for Filing an Application for or Renewal of a Certificate of Registration {#sec-102.10 omnilex-key=us-tx-regs-official--title-1--102.10}

(a) A separate application for a health spa operator's certificate of registration must be submitted for each location where the applicant operates a health spa.

(b) In addition to the information required by §702.102 of the Health Spa Act (Act), an applicant for a health spa operator's certificate of registration must include the following information on any application for registration or renewal of application for registration:

(1) the health spa's name;

(2) a detailed disclosure of the proposed facilities and services, including the hours of operation and the availability and access to instructors, trainers and classes;

(3) the approximate square footage of the health spa;

(4) a complete disclosure of any litigation, or any complaint filed with a governmental authority filed within two years preceding the application or currently pending relating to the failure to open or the closing of a health spa brought against the owners, officers, or directors of the applicant; or a statement signed and sworn to by or on behalf of the applicant stating that there has been no litigation or complaint filed with a governmental authority relating to the failure to open or the closing of a health spa brought against the owners, officers, or directors of the applicant; and

(5) the federal employer identification number of the applicant.

(c) For purposes of compliance with the requirement of §702.102(a)(3)(C) of the Act, that the registration specify the name and address of each person who directly or indirectly owns or controls the applicant's business:

(1) if the applicant is a corporation, the name and address of each person who directly or indirectly owns or controls 10% or more of the issued and outstanding voting shares of a corporation;

(2) if the applicant is a general partnership, the name and address of each partner who directly or indirectly owns or controls 10% or more of the partnership interests;

(3) if the applicant is a limited partnership, the name and address of each general partner;

(4) if the applicant is a limited liability company, the name and address of each member who directly or indirectly owns or controls 10% or more of the membership interests;

(5) if the applicant is a sole proprietorship, the name and address of the sole proprietor; and

(6) if the applicant is an entity not otherwise described in this rule, the name and address of each person who directly or indirectly owns or controls 10% or more of the ownership interests of the entity.

(d) The registration must be renewed one year from the original registration date and each year thereafter on or before the anniversary of the original registration date. Renewals may be submitted 90 days prior to expiration.

(e) Each application for registration or renewal shall be signed and sworn to before a notary public or other person authorized to administer oaths by or on behalf of the applicant.

(f) The secretary of state provides a form for the application for registration or renewal as a health spa. The form can be obtained from the Statutory Documents Section of the Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. The form is also available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/statforms.shtml#HSF. See form 3001.

**History**
- *Source Note: The provisions of this §102.10 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.11** Amendment {#sec-102.11 omnilex-key=us-tx-regs-official--title-1--102.11}

(a) The registrant shall amend the registration or any renewal not later than the 90th day after the date on which a change in the information provided in the registration or renewal occurs.

(b) The amendment to the registration shall set forth the following information:

(1) the name of the registrant;

(2) the date of the last filed registration or renewal and any identification number assigned by the secretary to that registration or renewal; and

(3) an identification of the information that has changed and the manner in which the information has changed.

(c) The amendment shall be signed and sworn to by or on behalf of the registrant in the same manner as an original application for registration or any renewal thereof.

(d) If the amendment is filed to reflect a change in the address of the health spa, the amendment must be accompanied by a rider to any security bond reflecting the change in address.

**History**
- *Source Note: The provisions of this §102.11 adopted to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.12** Transferability of Certificate of Registration {#sec-102.12 omnilex-key=us-tx-regs-official--title-1--102.12}

The certificate of registration is not transferable. If a health spa is purchased or otherwise transferred to a new owner, the new owner or transferee must submit a new application for registration within five business days of the purchase or transfer. In addition, the new owner or transferee must submit a new surety bond, post other security or a new application for exemption within five business days after the ownership has been transferred. Transfer includes a sale of substantially all of the assets, a sale of a majority of the ownership interests, or a merger or consolidation of the registrant into a surviving or resulting entity. Transfer does not include the conversion of a business entity of one type into a business entity of another type or the redomestication of an entity from one jurisdiction to another jurisdiction.

**History**
- *Source Note: The provisions of this §102.12 adopted to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.13** Fees {#sec-102.13 omnilex-key=us-tx-regs-official--title-1--102.13}

(a) A fee of $100 will accompany the application for registration.

(b) The fee for filing a renewal application is $100.

(c) The fee for an initial or renewal application that is not completed before the 31st day after it is received is forfeited and the application or renewal abandoned.

(d) There is no fee for filing an amendment to a registration or renewal.

**History**
- *Source Note: The provisions of this §102.13 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.15** Excluded Activities {#sec-102.15 omnilex-key=us-tx-regs-official--title-1--102.15}

The following facilities or activities are not included within the definition of "health spa" in §702.003 of the Health Spa Act and are not required to register with the secretary under Chapter 702:

(1) facilities owned by organizations that are tax exempt under 26 United States Code 501 et seq.;

(2) private clubs owned and operated by its members;

(3) entities exclusively operated for teaching dance or aerobic exercise;

(4) entities exclusively engaged in physical rehabilitation activity related to an individual's injury or disease;

(5) an individual or entity engaged in an activity authorized under a valid license issued by this state; or

(6) activities conducted or sanctioned by a school operating under the Education Code.

**History**
- *Source Note: The provisions of this §102.15 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective December 27, 2004, 29 TexReg 11947; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.18** Application for Exemption from the Security Requirements {#sec-102.18 omnilex-key=us-tx-regs-official--title-1--102.18}

(a) A registrant meeting the requirements for exemption from the security requirements as set forth in §702.202 of the Health Spa Act (Act) must apply for an exemption from the security requirements of Subchapter D of Chapter 702 of the Act on the application form prescribed by the secretary of state. The application for exemption must be signed and sworn to by or on behalf of the applicant.

(b) The application form may be obtained from the Statutory Documents Section of the Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. It is also available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/forms/3006.doc. See form 3006.

(c) The application for exemption from the security requirements must be submitted with the application for registration.

(d) If the secretary of state determines that the applicant meets the requirements for exemption, the secretary shall issue a certificate of exemption providing that the certificate holder is not required to file a surety bond or post other security for the location registered.

(e) If an applicant has been granted an exemption under §702.202(2) of the Act, the applicant must submit a statement signed by or on behalf of the applicant continues to comply with the requirements of §702.202(2), on the third anniversary of the initial registration and every three years thereafter.

(f) The certificate of exemption is not transferable. If a health spa is purchased or otherwise transferred to a new owner, the new owner must submit a surety bond, post other security or file a new application for exemption within five business days after the ownership has been transferred. Transfer includes a sale of substantially all of the assets, a sale of a majority of the ownership interests, or a merger or consolidation of the registrant into a surviving or resulting entity. Transfer does not include the conversion of a business entity of one type into a business entity of another type or the redomestication of an entity from one jurisdiction to another jurisdiction.

**History**
- *Source Note: The provisions of this §102.18 adopted to be effective October 22, 2001, 26 TexReg 8340; amended to be effective April 20, 2009, 34 TexReg 2375.*

#### **Subchapter C** ESCROW

##### **1 Tex. Admin. Code § 102.20** Procedure for Establishing and Releasing Escrow Accounts {#sec-102.20 omnilex-key=us-tx-regs-official--title-1--102.20}

(a) Unless exempted by the Health Spa Act, §702.353 a registrant or an assignee or agent that accepts prepayments for membership in a health spa before the date the health spa opens shall deposit all of the funds in an escrow account established with a financial institution whose accounts are insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund, or the National Credit Union Administration which shall hold the funds as escrow agent for the benefit of the members that prepay.

(b) The following conditions apply to escrow accounts:

(1) Prepayments must be deposited at least biweekly and the first deposit must be made not later than the 14th day after the date on which the registrant or its agent accepts the first payment;

(2) The funds must remain in escrow and may not be withdrawn by the registrant unless the following conditions are met:

(A) The health spa remains open for not less than 30 days; and

(B) The registrant provides the escrow agent proof that the registrant has filed an affidavit with the secretary of state certifying that all obligations of the registrant for which a lien could be filed under Property Code, Chapter 53, have been paid and that no person is eligible to claim a lien under that chapter during the period the registrant, its agent or assignee accepts prepayments.

(3) The escrow account will terminate and the funds will be refunded to the members of the health spa under the following conditions:

(A) If the health spa does not fully open for business before the 181st day after the registrant first sells a membership in the health spa, or if the health spa does not remain open for 30 days, the escrow agreement shall terminate and all prepayment deposits shall be refunded to the members; or

(B) If another health spa is operated by the same seller and is located not more than 10 miles from the proposed location of the new health spa and the person purchasing the membership is authorized to use these other facilities, then the member of the new spa whose fees are held in escrow is entitled to receive a full refund of the membership fees from the escrow agent if the new health spa does not open before the 361st day after the date on which the new spa first sells a membership or if the new spa does not remain open for 30 days.

(4) The financial institution shall hold each prepayment as an escrow agent for the benefit of the member who made the prepayments.

(5) The financial institution will respond to each inquiry made by the secretary of state regarding the escrow account.

**History**
- *Source Note: The provisions of this §102.20 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective December 27, 2004, 29 TexReg 11947; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.21** Statement Regarding Escrow Account {#sec-102.21 omnilex-key=us-tx-regs-official--title-1--102.21}

The registrant shall submit a statement to the secretary of state that identifies the escrow agent, the style of the deposit account, the name and address of the financial institution, and any other information which will identify the escrow account into which the prepayments have been deposited. In addition, the statement must give authority to the secretary of state to direct inquiries to the financial institution regarding the escrow account. The statement shall be on a form prescribed by the secretary of state. The statement shall be signed and notarized by the registrant and signed by the escrow agent.

**History**
- *Source Note: The provisions of this §102.21 adopted to be effective April 20, 2009, 34 TexReg 2375.*

#### **Subchapter D** SECURITY

##### **1 Tex. Admin. Code § 102.30** Acceptable Forms of Security {#sec-102.30 omnilex-key=us-tx-regs-official--title-1--102.30}

(a) Unless exempted, a health spa operator must file a surety bond or post as other security:

(1) Cash or its equivalent; or

(2) a Certificate of Deposit as prescribed in §102.45 of this subchapter (relating to Procedure for Filing Certificates of Deposit as Security).

(b) The secretary of state will not accept Letters of Credit as security under §702.151 of the Health Spa Act. Letters of Credit posted as security on December 27, 2004 may continue as security until the expiration date of the Letter of Credit. On or before such expiration date, the health spa operator shall replace the Letter of Credit with a form of security authorized by subsection (a) of this section.

**History**
- *Source Note: The provisions of this §102.30 adopted to be effective December 27, 2004, 29 TexReg 11948; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.32** Amount of Security Required {#sec-102.32 omnilex-key=us-tx-regs-official--title-1--102.32}

(a) For purposes of this section, the term "total membership" in §702.151 and §702.158 of the Health Spa Act (Act) means the health spa's total prepaid memberships. The total amount paid for all prepaid memberships determines the amount of the security that must be filed or posted.

(b) "Prepaid membership" means any membership for which a member pays consideration in advance for a term that exceeds 31 days.

(c) An application for registration or any renewal from a health spa operator, not exempt under §702.202 of the Act, shall include a written statement from the health spa operator that specifies:

(1) the total number of prepaid memberships at the health spa location; and

(2) the total amount paid for all such prepaid memberships.

(d) The health spa operator shall file a security for each of the operator's health spa locations in the following amounts:

Attached Graphic

**History**
- *Source Note: The provisions of this §102.32 adopted to be effective January 4, 2006, 30 TexReg 8851; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.35** Adjudication of Claims and Posting of Notice of Closure {#sec-102.35 omnilex-key=us-tx-regs-official--title-1--102.35}

(a) Within 10 days of receiving notice that a health spa which has posted a security with the secretary has ceased operations, the secretary shall notify the surety or obligor that:

(1) the health spa has ceased operations;

(2) the members of the health spa may have suffered financial losses within the meaning of the Health Spa Act (Act) and these rules;

(3) the secretary may make a claim on the bond or other security or require that the surety or obligor holding funds compensate the members for any losses; and

(4) the secretary intends to inform the registrant that the registrant must post a notice at the health spa location notifying the public of the fact that the health spa is closed and the procedures for and the timeframe in which documents must be submitted to the secretary to perfect a claim under the security posted.

(b) The notice must be:

(1) at least 8 1/2 by 11 inches in size;

(2) posted inside and outside each entrance to the health spa; and

(3) posted continuously for at least 30 days and include the following information:

(A) the date the health spa is scheduled to close or relocate;

(B) that a member of the health spa may file a claim with the secretary to recover actual financial loss within the time prescribed by the Act; and

(C) the procedures for perfecting a security claim.

(c) If, no later than 10 days from the date the secretary discovers a health spa is closed, the secretary determines that the registrant has not posted the required notice, the secretary will take action to post the notice. In all cases, the secretary of state will post a notice of closure on the secretary of state's web site at: http://www.sos.state.tx.us/statdoc/healthspas/index.shtml.

(d) All claims received by the secretary after 90 days following the date the notice is first posted are barred and may not be considered by the secretary. The secretary has no discretion to waive the statutory time period for filing claims.

(e) In order to perfect a claim, a claimant must submit a copy of the contract that forms a basis of the claim together with documentation or a sworn affidavit indicating the total of payments made pursuant to the contract. In the event the claimant does not submit adequate documentation, the secretary shall promptly inform the claimant of this fact together with notice that adequate documentation must be received within 30 days in order for the claim to be considered.

(f) If the total of claims evidencing actual financial loss exceeds the amount of the security, the secretary shall adjudicate the claims on a pro rata basis by dividing the amount of the security by the total amount of the claims in order to ascertain a percentage to be applied to each claim.

(g) After the time for filing claims has lapsed, the secretary shall timely present claims to the surety or obligor for payment together with an administrative order signed by the secretary or deputy secretary pursuant to §702.157 of the Act.

(h) Actual financial loss shall mean and be limited to those sums which have been paid under a health spa contract to a registrant or a registrant's assignee and, which at the time the health spa is closed, are unearned. Actual financial losses shall be computed in accordance with §702.252 of the Act by multiplying the gross monthly payment by the total of months or partial months remaining on a contract at the time of closing minus any payments not made. For the purposes of this section the following terms shall have the following meanings.

(1) Gross monthly payment--The gross monthly payment shall be calculated by determining the total of payments, including down payments and initiation fees required by the contract, divided by the total number of months in the term of the contract.

(2) Calculation of dates--The date of closing and the date of the contract expiration shall be rounded to the nearest full month. The total months remaining on the contract shall be calculated by subtracting the date of closing from the expiration date of the contract. The result will be expressed in whole months.

(i) The surety or obligor shall provide the secretary proof of payment of the members' claims.

**History**
- *Source Note: The provisions of this §102.35 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective October 22, 2001, 26 TexReg 8340; amended to be effective April 20, 2009, 34 TexReg 2375.*

##### **1 Tex. Admin. Code § 102.45** Procedure for Filing Certificates of Deposit as Security {#sec-102.45 omnilex-key=us-tx-regs-official--title-1--102.45}

(a) If the registrant provides a certificate of deposit as security under the Health Spa Act, §702.151, the certificate of deposit must be issued by a financial institution in this state whose deposits are insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund, or the National Credit Union Administration. The certificate of deposit must be assigned to the secretary of state, payable to the State of Texas for the use and benefit of each member of a health spa who suffers financial loss due to closure of a health spa. The assignment shall remain in full force and effect until expressly withdrawn by the assignor with the approval of the secretary of state.

(b) A copy of the document, issued by the financial institution evidencing the existence of the certificate of deposit must be filed along with an executed assignment form. The assignment form can be obtained from the Statutory Documents Section of the Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. The assignment form is also available on the secretary of state web site at http://www.sos.state.tx.us/statdoc/statforms.shtml#HSF. See form 3004.

**History**
- *Source Note: The provisions of this §102.45 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective September 6, 1999, 24 TexReg 6967; amended to be effective December 27, 2004, 29 TexReg 11948; amended to be effective April 20, 2009, 34 TexReg 2375.*

#### **Subchapter E** GENERAL INFORMATION

##### **1 Tex. Admin. Code § 102.50** Forms {#sec-102.50 omnilex-key=us-tx-regs-official--title-1--102.50}

Forms shall be provided by the Office of the Secretary of State for the purposes of complying with the Health Spa Act, Chapter 702, and this chapter. The forms may be obtained from the Office of the Secretary of State, Statutory Documents Section, P.O. Box 13550, Austin, Texas 78711-3550. Forms are also available on the secretary of state web site at: http://www.sos.state.tx.us/statdoc/statforms.shtml#HSF.

**History**
- *Source Note: The provisions of this §102.50 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective April 20, 2009, 34 TexReg 2375.*

### **Chapter 103** MEMBERSHIP CAMPING RESORTS

##### **1 Tex. Admin. Code § 103.1** Registration {#sec-103.1 omnilex-key=us-tx-regs-official--title-1--103.1}

(a) The Texas Membership Camping Resort Act, Chapter 222, Texas Property Code, requires membership camping resort operators, as well as sellers and contract brokers, to register with the secretary of state.

(b) A registration will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee.

(c) Registration forms are available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Forms 3101, 3102.

**History**
- *Source Note: The provisions of this §103.1 adopted to be effective September 3, 2009, 34 TexReg 5896.*

##### **1 Tex. Admin. Code § 103.2** Filing Fees {#sec-103.2 omnilex-key=us-tx-regs-official--title-1--103.2}

(a) The filing fee for registering a membership camping resort is $250.

(b) The filing fee for registering a membership camping contract broker or seller is $50.

**History**
- *Source Note: The provisions of this §103.2 adopted to be effective September 3, 2009, 34 TexReg 5896.*

##### **1 Tex. Admin. Code § 103.3** Revocation, Suspension, or Denial of Registration {#sec-103.3 omnilex-key=us-tx-regs-official--title-1--103.3}

The secretary of state may revoke, suspend, or deny a registration as set forth in §§53.021 - 53.024, Texas Occupations Code.

**History**
- *Source Note: The provisions of this §103.3 adopted to be effective September 3, 2009, 34 TexReg 5896.*

### **Chapter 105** SOLICITATIONS

#### **Subchapter A** PUBLIC SAFETY SOLICITATIONS

##### **1 Tex. Admin. Code § 105.1** Registration; Forms {#sec-105.1 omnilex-key=us-tx-regs-official--title-1--105.1}

(a) A registration statement will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee. See Forms 3201, 3203.

(b) Registration and other forms designed for the purposes of complying with Chapter 1803, Texas Occupations Code and this subchapter are available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Forms 3201, 3203, 3205-06.

(c) If an initial or renewal registration is not complete before the 45th day after it is received incomplete, the file will be closed and registration fee forfeited.

(d) If a renewal filing is not received before the 30th day after the registration has lapsed, the file will be closed.

**History**
- *Source Note: The provisions of this §105.1 adopted to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.4** Updates {#sec-105.4 omnilex-key=us-tx-regs-official--title-1--105.4}

A registered public safety organization, independent promoter, public safety publication, or solicitor shall file an updated statement and pay the applicable fee within 30 days after the date of a change of street address, mailing address, phone number, or name.

**History**
- *Source Note: The provisions of this §105.4 adopted to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.7** Filing Fees {#sec-105.7 omnilex-key=us-tx-regs-official--title-1--105.7}

(a) The filing fee for a new or renewal registration statement for a public safety organization, independent promoter, or public safety publication is $250.

(b) The filing fee for a new or renewal solicitor's registration statement is $500.

(c) The filing fee for an updated statement pursuant to §105.4 of this title (relating to Updates) is $50.

**History**
- *Source Note: The provisions of this §105.7 adopted to be effective January 1, 2010, 34 TexReg 9177.*

#### **Subchapter B** VETERANS SOLICITATIONS

##### **1 Tex. Admin. Code § 105.101** Registration; Forms {#sec-105.101 omnilex-key=us-tx-regs-official--title-1--105.101}

(a) A registration statement will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee. See Forms 3501, 3504.

(b) Registration and other forms designed for the purposes of complying with Chapter 1804, Texas Occupations Code and this subchapter are available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Form 3501-06.

(c) If an initial or renewal registration statement is not complete before the 45th date after it is received incomplete, the file will be closed and the registration fee forfeited.

(d) If a renewal filing is not received before the 30th day after the registration has lapsed, the file will be closed.

**History**
- *Source Note: The provisions of this §105.101 adopted to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.106** Reports {#sec-105.106 omnilex-key=us-tx-regs-official--title-1--105.106}

(a) Before January 15 of each year, a registered veterans organization that received more than $500 in solicited funds during the preceding calendar year shall file a report with the secretary of state. See Form 3503.

(b) At the end of each calendar quarter, a solicitor who raises more than $5,000 for a veterans organization during that calendar quarter shall file a report with the secretary of state. See Form 3506.

**History**
- *Source Note: The provisions of this §105.106 adopted to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.109** Filing Fees {#sec-105.109 omnilex-key=us-tx-regs-official--title-1--105.109}

(a) The filing fee for a new or renewal registration statement for a veterans organization is $150.

(b) The filing fee for a new or renewal solicitor's registration statement is $500.

(c) The filing fee for a report pursuant to §105.106 of this title (relating to Reports) is $50.

**History**
- *Source Note: The provisions of this §105.109 adopted to be effective January 1, 2010, 34 TexReg 9177.*

#### **Subchapter C** TELEPHONE SOLICITATIONS

##### **1 Tex. Admin. Code § 105.201** Registration; Forms {#sec-105.201 omnilex-key=us-tx-regs-official--title-1--105.201}

(a) A registration statement will be accepted for filing only upon submission of a completed registration form and payment of the applicable fee. See Form 3401.

(b) Registration and other forms designed for the purposes of complying with Chapter 302, Texas Business and Commerce Code and this subchapter are available on the secretary of state web site at www.sos.state.tx.us/statdoc/statforms.shtml or may be obtained by writing the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. See Forms 3401, 3403-06.

(c) A telephone solicitation seller shall file an irrevocable consent appointing the secretary of state to act as the seller's agent to receive service of any lawful process in any noncriminal suit, action, or proceeding against the seller that may arise under Chapter 302, Texas Business and Commerce Code. The consent form may be obtained by writing the Statutory Documents Section at the address provided in subsection (b) of this section. See Form 3406.

(d) The effective date of a registration statement is the date on which the secretary of state issues the certificate of registration. A registration statement is effective for one year after its effective date and may be renewed.

(e) A registration statement is renewed by filing a renewal registration statement and paying the applicable fee. See Form 3401.

(f) If an initial or renewal registration statement is not complete before the 45th day after it is received incomplete, the file will be closed and the registration fee forfeited.

(g) If a renewal filing is not received before the 30th day after the registration has lapsed, the file will be closed.

**History**
- *Source Note: The provisions of this §105.201 adopted to be effective November 9, 1993, 18 TexReg 7474; amended to be effective October 16, 1995, 20 TexReg 7973; amended to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.204** Updates {#sec-105.204 omnilex-key=us-tx-regs-official--title-1--105.204}

(a) A registered telephone solicitation seller shall file an update addendum at quarterly intervals, computed from the effective date of registration. The addendum must provide all required registration information for all salespersons who are currently soliciting or have solicited on behalf of the seller at any time during the period between the filing of the registration statement or the last addendum and the current addendum.

(b) The update described in subsection (a) of this section may be filed by providing a copy of the Employer's Quarterly Report for employee wages prepared for filing with the Texas Workforce Commission.

(c) In addition to the quarterly updates, if a material change in a registration statement, other than the information delineated in subsection (a) of this section, occurs before the date for renewal, a seller shall submit that information by filing an update addendum.

(d) If an update is not filed before the 60th day after it is required to have been filed, the file will be closed and the registration fee forfeited.

(e) If an update is not completed before the 45th day after it is received incomplete, the file will be closed and the update fee and registration fee forfeited.

**History**
- *Source Note: The provisions of this §105.204 adopted to be effective November 9, 1993, 18 TexReg 7474; amended to be effective October 16, 1995, 20 TexReg 7973; amended to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.205** Valid Security Required {#sec-105.205 omnilex-key=us-tx-regs-official--title-1--105.205}

(a) A registrant must maintain the required security during the time the registrant conducts telephone solicitations as defined by §302.107, Texas Business and Commerce Code.

(b) The registration status of the registrant will be placed in suspense if the security instrument filed by the registrant lapses at any time during the registration period. If valid security has not been properly filed by the 45th day after the security becomes ineffective, the file will be closed and the registration fee forfeited.

**History**
- *Source Note: The provisions of this §105.205 adopted to be effective October 16, 1995, 20 TexReg 7973; amended to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.206** Release of Security {#sec-105.206 omnilex-key=us-tx-regs-official--title-1--105.206}

(a) Upon the cessation of telephone solicitation business activities, a registrant may request in writing the release of the registrant's security.

(b) Except as provided by subsection (c) of this section, the secretary of state shall release a registrant's security no later than the 90th day after the release request is received in the Statutory Documents Section of the Office of the Secretary of State.

(c) A registrant's security may not be released where the secretary of state has received by mail actual notice that an action has been filed to recover against the security, unless:

(1) a court order directs the security to be released to the registrant by the secretary of state;

(2) documents are filed with the Office of the Secretary of State indicating that a settlement has been approved by a court directing that the security be released to the registrant; or

(3) the registrant files in the Office of the Secretary of State a court order indicating that the action against the registrant has been dismissed.

**History**
- *Source Note: The provisions of this §105.206 adopted to be effective October 16, 1995, 20 TexReg 7973; amended to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.207** Bond Payout Procedures {#sec-105.207 omnilex-key=us-tx-regs-official--title-1--105.207}

If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the secretary of state for distribution to claimants entitled to recovery. The secretary of state shall pay the claims on a pro rata basis by dividing the amount of the security by the total amount of the claims, in order to determine a percentage to be applied to each claim.

**History**
- *Source Note: The provisions of this §105.207 adopted to be effective October 16, 1995, 20 TexReg 7973; amended to be effective January 1, 2010, 34 TexReg 9177.*

##### **1 Tex. Admin. Code § 105.209** Filing Fees {#sec-105.209 omnilex-key=us-tx-regs-official--title-1--105.209}

(a) The filing fee for a registration statement is $200. This fee includes one certificate of registration for one location. If the telephone solicitation seller uses one registration statement to register more than one business location, there is a fee of $15 for each additional certificate of registration.

(b) The filing fee for a renewal registration statement is $200. The fee for additional certificates of renewal is as delineated in subsection (a) of this section.

(c) The filing fee for an update addendum pursuant to §105.204 of this title (relating to Updates) is $50.

**History**
- *Source Note: The provisions of this §105.209 adopted to be effective November 9, 1993, 18 TexReg 7474; amended to be effective November 27, 2005, 30 TexReg 7849; amended to be effective January 1, 2010, 34 TexReg 9177.*

### **Chapter 106** REGISTRATION OF DATA BROKERS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 106.1** Definitions {#sec-106.1 omnilex-key=us-tx-regs-official--title-1--106.1}

Words and terms defined in Chapter 509 of the Business and Commerce Code shall have the same meaning in this chapter. In addition, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Primary physical address--The physical address at which the relevant individual or entity is available for contact.

(2) Registrant--A data broker who has registered with the secretary and has been issued a registration certificate.

(3) Secretary--The Texas Secretary of State.

**History**
- *Source Note: The provisions of this §106.1 adopted to be effective December 4, 2023, 48 TexReg 7041.*

#### **Subchapter B** REGISTRATION AND RENEWAL OF DATA BROKERS

##### **1 Tex. Admin. Code § 106.2** Registration and Renewal of Data Brokers {#sec-106.2 omnilex-key=us-tx-regs-official--title-1--106.2}

(a) A complete initial registration statement or renewal application is comprised of:

(1) A completed registration statement or renewal application that is signed by a person authorized to act by or on behalf of the data broker, in the form promulgated by the secretary (See Form 4001); and

(2) Payment of the registration fee or renewal fee stated in Business and Commerce Code §509.005(a) or §509.005(d), as applicable.

(b) A registration statement or renewal application must comply with Business and Commerce Code §509.005, and also provide:

(1) For the individual submitting the registration statement or renewal application:

(A) The individual's legal name;

(B) The individual's telephone number;

(C) The individual's primary physical address;

(D) The individual's mailing address; and

(E) The individual's e-mail address.

(2) For all renewals, the renewal application must also:

(A) Specify that the submission is a renewal application related to an existing registration certificate; and

(B) Provide the registration number assigned to the data broker by the secretary.

**History**
- *Source Note: The provisions of this §106.2 adopted to be effective December 4, 2023, 48 TexReg 7041.*

##### **1 Tex. Admin. Code § 106.3** Timing of Registration {#sec-106.3 omnilex-key=us-tx-regs-official--title-1--106.3}

(a) A registration certificate expires on the first anniversary of its date of issuance by the secretary.

(b) A data broker seeking to renew an existing registration certificate shall file a renewal application within ninety (90) days before the expiration of the registration certificate.

(c) The initial registration of a data broker to which Chapter 509 of the Business and Commerce Code applies must be filed on or before March 1, 2024.

**History**
- *Source Note: The provisions of this §106.3 adopted to be effective December 4, 2023, 48 TexReg 7041.*

#### **Subchapter C** STATEMENT OF CORRECTION

##### **1 Tex. Admin. Code § 106.4** Corrections {#sec-106.4 omnilex-key=us-tx-regs-official--title-1--106.4}

(a) A data broker must submit a statement of correction if, during the year, it becomes known to the registrant that any information given at the time of registration or renewal, as applicable, was inaccurate.

(b) A statement of correction must include the following information:

(1) The legal name of the data broker;

(2) The date of the last filed registration statement or renewal application;

(3) The registration number assigned to the data broker by the secretary; and

(4) A statement that identifies the inaccuracy and provides the corrected information.

(c) The statement of correction must be signed by a person authorized to act by or on behalf of the data broker in the same manner as a registration statement or renewal application.

(d) There is no filing fee for a correction.

**History**
- *Source Note: The provisions of this §106.4 adopted to be effective December 4, 2023, 48 TexReg 7041.*

#### **Subchapter D** NOTICE REQUIREMENTS

##### **1 Tex. Admin. Code § 106.5** Notice Requirements {#sec-106.5 omnilex-key=us-tx-regs-official--title-1--106.5}

A data broker that maintains an Internet website or mobile application shall post a conspicuous notice on the website or mobile application that states:

(1) For websites:

Attached Graphic

(2) For mobile applications:

Attached Graphic

**History**
- *Source Note: The provisions of this §106.5 adopted to be effective December 4, 2023, 48 TexReg 7041.*

### **Chapter 107** REGISTRATION OF VISION SUPPORT ORGANIZATIONS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 107.1** Definitions {#sec-107.1 omnilex-key=us-tx-regs-official--title-1--107.1}

Words and terms defined in Chapter 74 of the Business and Commerce Code shall have the same meaning in this chapter. In addition, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Non-optometrist owner--A person, including a corporation, association, general partnership, limited partnership, limited liability company, limited liability partnership, other legal entity, or sole proprietorship, who is not a licensed optometrist but maintains 5% or more ownership in a vision support organization.

(2) Professional entity--A professional corporation, professional limited liability company, professional association, general partnership that provides a professional service, or limited partnership that provides a professional service.

(3) Secretary--The Texas Secretary of State.

(4) Vision support agreement--One or more agreements under which a vision support organization provides two or more business support services to an optometrist.

**History**
- *Source Note: The provisions of this §107.1 adopted to be effective September 11, 2024, 49 TexReg 6985.*

#### **Subchapter B** REGISTRATION AND RENEWAL OF VISION SUPPORT ORGANIZATIONS

##### **1 Tex. Admin. Code § 107.2** Registration and Renewal of Vision Support Organizations {#sec-107.2 omnilex-key=us-tx-regs-official--title-1--107.2}

(a) A complete initial registration or renewal registration is comprised of:

(1) A completed registration form that is signed by a person authorized to act by or on behalf of the vision support organization, in the form promulgated by the secretary (See Form 4101); and

(2) Payment of the filing fee stated in §107.5 of this chapter (relating to Filing Fees).

(b) A registration statement or renewal application must comply with Business and Commerce Code §74.004, and also provide:

(1) For the vision support organization:

(A) The legal name;

(B) The business address and mailing address, if different; and

(C) A contact name, email address, and phone number.

(2) For each optometrist and each entity that employs or contracts with an optometrist to provide eye care services in this state with which the vision support organization has entered into an agreement to provide two or more business support services:

(A) The legal name and business address of each optometrist and each such entity, as applicable;

(B) If the optometrist provides eye care services through a professional entity, the legal name of the professional entity; and

(C) A disclosure of all business support services provided to each optometrist or each entity that employs or contracts with an optometrist to provide eye care services.

(3) For each optometrist who owns any portion of the vision support organization and for each non-optometrist owner who owns 5% or more of the vision support organization:

(A) The legal name and business address of the owner; and

(B) Whether the owner is an optometrist or a non-optometrist owner.

**History**
- *Source Note: The provisions of this §107.2 adopted to be effective September 11, 2024, 49 TexReg 6985.*

##### **1 Tex. Admin. Code § 107.3** Timing of Registration {#sec-107.3 omnilex-key=us-tx-regs-official--title-1--107.3}

(a) Registrations will expire annually on December 31 of each year.

(b) A vision support organization seeking to renew an existing registration must file a renewal registration. Renewals may be submitted from ninety (90) days prior to expiration until January 31 of the year for which the next registration will be effective by submitting a completed registration form and paying the filing fee, except as provided in subsection (c) of this section.

(c) In the event a vision support organization is required to register under Chapter 74 of the Business and Commerce Code after January 31, the vision support organization must file an initial registration within ninety (90) days after the date of execution of a vision support agreement.

(d) The initial registration for a vision support organization that entered into a vision support agreement prior to February 1, 2024, must be filed not later than January 31, 2025.

(e) The initial registration for a vision support organization that first enters into a vision support agreement on or after February 1, 2024, must be filed not later than the ninetieth (90th) day after the date the agreement is executed.

**History**
- *Source Note: The provisions of this §107.3 adopted to be effective September 11, 2024, 49 TexReg 6985.*

#### **Subchapter C** STATEMENT OF CORRECTION

##### **1 Tex. Admin. Code § 107.4** Corrections {#sec-107.4 omnilex-key=us-tx-regs-official--title-1--107.4}

(a) A vision support organization must submit a statement of correction semiannually if, during that period, any information provided in the initial registration or renewal registration, as applicable, changes.

(b) A statement of correction must include the following information:

(1) The legal name of the vision support organization;

(2) The date of the last filed registration;

(3) The registration number assigned by the secretary to the vision support organization; and

(4) A statement identifying the information that has changed.

(c) A vision support organization that is required to submit a statement of correction in accordance with subsection (a) of this section shall do so according to the following schedule:

(1) First half (January 1 - June 30) - Statement of correction due not later than the forty-fifth (45th) day after June 30.

(2) Second half (July 1 - December 31) - Statement of correction due not later than the forty-fifth (45th) day after December 31.

(d) The statement of correction must be signed by a person authorized to act by or on behalf of the vision support organization.

(e) The statement of correction must be accompanied by the filing fee stated in §107.5 of this chapter (relating to Filing Fees).

**History**
- *Source Note: The provisions of this §107.4 adopted to be effective September 11, 2024, 49 TexReg 6985.*

#### **Subchapter D** FILING FEES

##### **1 Tex. Admin. Code § 107.5** Filing Fees {#sec-107.5 omnilex-key=us-tx-regs-official--title-1--107.5}

(a) The filing fee for an initial registration or a renewal registration is $150.

(b) The filing fee for a statement of correction is $50.

**History**
- *Source Note: The provisions of this §107.5 adopted to be effective September 11, 2024, 49 TexReg 6985.*

## **Part 5** TEXAS FACILITIES COMMISSION

### **Chapter 111** ADMINISTRATION

#### **Subchapter A** ORGANIZATION

##### **1 Tex. Admin. Code § 111.1** Commission {#sec-111.1 omnilex-key=us-tx-regs-official--title-1--111.1}

(a) All references to the "Commission" in this Chapter mean the Texas Facilities Commission. The Commission is composed of seven members: three members appointed by the Governor, two members appointed by the Governor from a list of nominees submitted by the Speaker of the House of Representatives, and two members appointed by the Lieutenant Governor. The Commissioners shall set policy and employ an Executive Director. The Commissioners retain and exercise all authority and responsibility assigned to them by law and not delegated to the Executive Director.

(b) All decisions of the Commission shall be by majority vote of Commissioners present and voting.

**History**
- *Source Note: The provisions of this §111.1 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.2** Executive Director {#sec-111.2 omnilex-key=us-tx-regs-official--title-1--111.2}

(a) The Executive Director manages the day-to-day business of the Commission, employs staff, and carries out other duties and responsibilities assigned by law or delegated by the Commission.

(b) A delegation of authority to the Executive Director must be made by the Commission in an open meeting. The Commission may review, modify, or ratify a delegation at any open meeting. A change in membership of the Commission does not void an existing delegation of authority; it remains in effect until another one is approved by a majority vote of the Commission at an open meeting.

**History**
- *Source Note: The provisions of this §111.2 adopted to be effective August 7, 2008, 33 TexReg 6129.*

#### **Subchapter B** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 111.20** Ethical Standards {#sec-111.20 omnilex-key=us-tx-regs-official--title-1--111.20}

The Commission adopts by reference the rules of the Texas Ethics Commission in 1 TAC Part 2, Chapter 45 (relating to Conflicts of Interest). The Texas Ethics Commission rules are located at the Office of the Secretary of State's internet website: www.sos.state.tx.us/tac/index.html. The Texas Ethics Commission has specific rulemaking authority relating to the ethical standards set out in Texas Government Code §2152.064 relating to conflicts of interest in certain transactions by the Texas Facilities Commission.

**History**
- *Source Note: The provisions of this §111.20 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.21** Historically Underutilized Businesses {#sec-111.21 omnilex-key=us-tx-regs-official--title-1--111.21}

In accordance with Texas Government Code §2161.003, the Commission adopts by reference the rules of the Comptroller of Public Accounts in 34 TAC Part 1, Chapter 20, Subchapter B (relating to the Historically Underutilized Business Program). The Comptroller of Public Accounts rules are located at the Office of the Secretary of State's internet website: www.sos.state.tx.us/tac/index.html.

**History**
- *Source Note: The provisions of this §111.21 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.22** Petition for Adoption of Rules {#sec-111.22 omnilex-key=us-tx-regs-official--title-1--111.22}

(a) Any interested person or organization may petition the Commission requesting the adoption or amendment of a rule.

(b) For the purpose of interpreting this section, the term "rule" shall have the same meaning as contained in Texas Government Code, Chapter 2001, §2001.003.

(c) Petitions for adoption of rules must be submitted in writing and directed to the Commission's Executive Director.

(d) The petitioner may either hand deliver the petition to the Commission's central office at 1711 San Jacinto Boulevard, Austin, Texas, 78701, or mail the petition to P.O. Box 13047, Austin, Texas 78711-3047.

(e) For purposes of calculating days under this section, the date of submission of a petition under this section shall be the date the petition is hand delivered to the Commission, or if the petition was sent by mail or carrier, the date it is date-stamped according to regular agency incoming mail procedures.

(f) The petition must include the following minimum requirements:

(1) specify or otherwise make clear that the petition is made pursuant to the provisions of the Administrative Procedure Act;

(2) clearly state the body or substance of the rule requested for adoption, and, if appropriate, relate the requested rule to an adopted rule or rules of the Commission;

(3) contain the full name and address of the petitioner; and

(4) be signed by the petitioner.

(g) The Executive Director or the Executive Director's designee, shall:

(1) acknowledge receipt of the petition in writing and include in the letter the date the petition was received; and

(2) communicate with the petitioner, if necessary, to clarify the requested rule or to clarify other relevant information contained in the petition.

(h) Not later than the 60th day after the date of submission of a petition under this section, the Executive Director shall either:

(1) deny the petition in writing, stating the reasons for the denial; or

(2) initiate rulemaking procedures and inform the petitioner of the date rule action by the Commission is scheduled pursuant to Texas Government Code, Title 10, Chapter 2001.

(i) The Executive Director shall provide copies of all petitions, whether denied or approved, to the Commissioners prior to scheduled Commission meetings for review.

**History**
- *Source Note: The provisions of this §111.22 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.23** Sick Leave Pool {#sec-111.23 omnilex-key=us-tx-regs-official--title-1--111.23}

A sick leave pool is established to alleviate hardship caused to an employee and employee's immediate family if a catastrophic illness or injury forces the employee to exhaust all sick leave time earned by that employee and to lose compensation from the state.

(1) The Commission's Human Resources Director is designated as the pool administrator.

(2) The pool administrator will recommend a policy, operating procedures, and forms for the administration of this section to the Executive Director.

(3) Operation of the pool shall be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §111.23 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.24** Training and Education of Employees {#sec-111.24 omnilex-key=us-tx-regs-official--title-1--111.24}

(a) With the approval of the Executive Director, the Commission may make available to its employees funds for training and education in accordance with the Employee Training Act, Texas Government Code §§656.041 - 656.049.

(b) In order to be eligible for agency supported training and education, the employee must demonstrate in writing, to the satisfaction of the Executive Director or designee, that the training or education is related to the duties or prospective duties of the employee. If the training or education is offered by an institution of higher education or private or independent institution of higher education, as defined by Texas Education Code §61.003, and is allowed under agency human resources policies:

(1) the agency may only pay the tuition expenses for a program course successfully completed by the employee at an accredited institution of higher education; and

(2) the Executive Director must authorize the tuition reimbursement payment.

(c) An employee who completes training and education to obtain a degree or certification for which the Commission has provided all or part of the required fees must agree in writing to fully repay the Commission any amounts paid for educational assistance if the employee voluntarily terminates employment with the agency within one year after the course or courses are completed.

(d) All materials received by an employee as part of agency-funded training and education remain the property of the Commission.

(e) Approval to participate in a training and education program, including an agency-sponsored training, seminar or conference, shall not in any way affect an employee's at-will status. The approval of a training and education program is not a guarantee or indication that approval will be granted for subsequent training and education programs. Approval to participate in a training and education program shall in no way constitute a guarantee or indication of continued employment, nor shall it constitute a guarantee or indication of future employment in a current or prospective position.

**History**
- *Source Note: The provisions of this §111.24 adopted to be effective August 7, 2008, 33 TexReg 6129; amended to be effective July 7, 2016, 41 TexReg 4797.*

##### **1 Tex. Admin. Code § 111.25** Negotiated Rulemaking {#sec-111.25 omnilex-key=us-tx-regs-official--title-1--111.25}

(a) The Commission will undertake negotiated rulemaking procedures when the Commission is of the opinion that proposed rules are likely to be complex, controversial, or may affect disparate groups.

(b) When negotiated rulemaking is to be considered, the Commission will appoint a convener, in accordance with Government Code, §2008.052, to assist in determining whether it is advisable to proceed. The convener shall have the duties as described in Chapter 2008, Government Code, and shall make a recommendation to the Executive Director to proceed or to defer negotiated rulemaking. The recommendation shall be made after the convener, at a minimum, has considered all of the items set forth in Government Code, §2008.052(c).

(c) Upon the convener's recommendation to proceed, the Commission shall initiate negotiated rulemaking according to the provisions of Chapter 2008, Government Code.

**History**
- *Source Note: The provisions of this §111.25 adopted to be effective November 12, 2013, 38 TexReg 7947.*

##### **1 Tex. Admin. Code § 111.26** Contract Monitoring Roles and Responsibilities {#sec-111.26 omnilex-key=us-tx-regs-official--title-1--111.26}

The contract monitoring roles and responsibilities of the Commission's internal audit staff and other inspection, investigative, or compliance staff are as follows:

(1) The internal audit division will perform internal audit activities which will include providing assistance and consulting regarding contract monitoring issues. The internal audit division will also perform audits of the contract management function and systems when they are warranted by the results of risk assessment or included in the audit plan approved by the Commission pursuant to Government Code, §2102.005, §2102.008.

(2) The legal services division will seek to improve contract compliance by serving as a central repository for agency contracts so the agency can perform contract compliance reviews.

(3) The Commission does not have a criminal enforcement unit. Criminal activity related to agency contracts will be reported to the appropriate authorities as set out in statute.

(4) The contract administrator/project manager that oversees a contract will monitor and report to other appropriate agency divisions regarding contract compliance.

(5) The Commission's Historically Underutilized Business Program will assist the administering division or divisions and contract management staff in monitoring agency contracts in connection with applicable historically underutilized and minority business contract requirements.

(6) Upon contract close-out the Commission's procurement division will file vendor performance reports, as required by the rules of the Comptroller of Public Accounts in 34 TAC Part 1, Chapter 20, Subchapter C (relating to Procurement), §20.108 (Vendor Performance Tracking System).

**History**
- *Source Note: The provisions of this §111.26 adopted to be effective July 9, 2015, 40 TexReg 4347.*

##### **1 Tex. Admin. Code § 111.27** Enhanced Contract Monitoring {#sec-111.27 omnilex-key=us-tx-regs-official--title-1--111.27}

(a) Contracts for the purchase of goods or services that have a value in excess of $1 million will be identified for enhanced contract or performance monitoring.

(b) Contracts that are identified for enhanced contract or performance monitoring will be included in reports provided to the commission for commission open meetings.

(c) Contracts will be monitored in accordance with policies and procedures in the commission's contract management handbook.

(d) The commission will be notified, as appropriate, of any serious issue or risk that is identified with report to a contract monitored under this rule.

**History**
- *Source Note: The provisions of this §111.27 adopted to be effective July 7, 2016, 41 TexReg 4797.*

#### **Subchapter C** COMPLAINTS AND DISPUTE RESOLUTION

##### **1 Tex. Admin. Code § 111.30** Customer Service and Complaints {#sec-111.30 omnilex-key=us-tx-regs-official--title-1--111.30}

The Commission will maintain an online customer service system. The system will be located on the Commission's Internet site at http://www.tfc.state.tx.us. The customer service system will provide a survey for actual consumers, service recipients or persons contracting with the Commission to provide customer service feedback. The customer service system will also provide a process for consumers, service recipients, persons contracting with the Commission and members of the public to submit a written complaint to the Commission.

(1) All initial complaints to the Commission must be submitted, in writing, through the customer service system. The Commission will investigate and respond to initial complaints submitted through the customer service system no later than the 10th business day from the date the complaint is received by the Commission. All initial complaints will be investigated by, and responded to, by the program area that is the subject of the complaint. Unless "no response necessary" has been requested by the complainant, the Commission will respond in writing to the initial complaint through the customer service system.

(2) Consumers, service recipients, persons contracting with the Commission or members of the public may file a subsequent complaint in writing to the address specified in the following subsection if the complainant believes the Commission's initial response through the customer service system does not resolve the complaint. Subsequent complaints will be investigated by the Executive Director or the Executive Director's designee. The Commission's response to a subsequent complaint will be made in writing to the complainant.

(3) Subsequent complaints may be sent by mail to the Texas Facilities Commission at P.O. Box 13047, Austin, Texas 78711-3047 or hand-delivered at 1711 San Jacinto Blvd., 4th Floor, Austin, Texas 78701. All subsequent complaints should be addressed to the Customer Service Representative.

(4) The Customer Service Representative upon notice of a subsequent complaint will confirm whether the complainant had utilized the customer service system to submit an initial complaint and received a response from the Commission in accordance with paragraph (1) of this section. If it is determined that the notice is an initial complaint, complainant will be directed to utilize the Commission's customer service system. If it is determined that the notice is a subsequent complaint that was properly submitted after utilizing the customer service system and receiving a response from the Commission, the complaint will be processed in accordance with paragraph (2) of this section.

**History**
- *Source Note: The provisions of this §111.30 adopted to be effective July 7, 2016, 41 TexReg 3797.*

##### **1 Tex. Admin. Code § 111.31** Negotiation and Mediation of Certain Contract Disputes {#sec-111.31 omnilex-key=us-tx-regs-official--title-1--111.31}

(a) The Commission adopts by reference the rules of the Office of the Attorney General in 1 TAC Part 3, Chapter 68 (relating to Negotiation and Mediation of Certain Contract Disputes). The Office of the Attorney General rules are located at the Office of the Secretary of State's internet website: www.sos.state.tx.us/tac/index.html.

(b) The rules set forth a process to permit parties to structure a negotiation or mediation in a manner that is most appropriate for a particular dispute regardless of contract's complexity, subject matter, dollar amount, or method and time of performance.

(c) The adoption of this rule is required by Texas Government Code, Chapter 2260, §2260.052(c).

**History**
- *Source Note: The provisions of this §111.31 adopted to be effective August 7, 2008, 33 TexReg 6129.*

##### **1 Tex. Admin. Code § 111.32** Protests/Dispute Resolution/Hearing {#sec-111.32 omnilex-key=us-tx-regs-official--title-1--111.32}

(a) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract may formally protest to the Commission's Director of Procurement. Such protests must be in writing and received by the Director of Procurement within 10 working days after such aggrieved person knows, or should have known, of the occurrence of the action which is protested. Formal protests must conform to the requirements of this subsection and subsection (c) of this section, and shall be resolved in accordance with the procedure set forth in subsections (d) and (e) of this section. Copies of the protest must be mailed or delivered by the protesting party to the Commission and other interested parties. For the purposes of this section, "interested parties" means all vendors who have submitted bids or proposals for the contract involved.

(b) In the event of a timely protest or appeal under this section, the state shall not proceed further with the solicitation or with the award of the contract unless the Executive Director, after consultation with the Director of Procurement, makes a written determination that the award of contract without delay is necessary to protect the best interests of the state.

(c) A formal protest must be sworn and contain:

(1) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in paragraph (1) of this subsection;

(3) a precise statement of the relevant facts;

(4) an identification of the issue or issues to be resolved;

(5) argument and authorities in support of the protest; and

(6) a statement that copies of the protest have been mailed or delivered to the using agency and other identifiable interested parties.

(d) The Director of Procurement shall have the authority, prior to appeal to the Executive Director of the Commission, to settle and resolve the dispute concerning the solicitation or award of a contract. The Director of Procurement may solicit written responses to the protest from other interested parties.

(e) If the protest is not resolved by mutual agreement, the Director of Procurement will issue a written determination on the protest.

(1) If the Director of Procurement determines that no violation of rules or statutes has occurred, he shall so inform the protesting party and other interested parties by letter which sets forth the reasons for the determination.

(2) If the Director of Procurement determines that a violation of the rules or statutes has occurred in a case where a contract has not been awarded, he shall so inform the protesting party, the using agency, and other interested parties by letter which sets forth the reasons for the determination and the appropriate remedial action.

(3) If the Director of Procurement determines that a violation of the rules or statutes has occurred in a case where a contract has been awarded, he shall so inform the protesting party and other interested parties by letter which sets forth the reasons for the determination, which may include ordering the contract void.

(f) The Director of Procurement's determination on a protest may be appealed by the protesting party to the Executive Director of the Commission. An appeal of the Director of Procurement's determination must be in writing and must be received in the Executive Director's office no later than 10 working days after the date of the Director of Procurement's determination. The appeal shall be limited to review of the Director of Procurement's determination. Copies of the appeal must be mailed or delivered by the protesting party to the Commission and other interested parties and must contain a certified statement that such copies have been provided.

(g) The Executive Director may confer with the Commission's General Counsel in his review of the matter appealed. The Executive Director may, in his discretion, refer the matter to the Commissioners for their consideration at a regularly scheduled open meeting or issue a written decision on the protest.

(h) When a protest has been appealed to the Executive Director under subsection (f) of this section and has been referred to the Commissioners by the Executive Director under subsection (g) of this section, the following requirements shall apply:

(1) Copies of the appeal and responses of interested parties, if any, shall be mailed to the Commissioners.

(2) All interested parties who wish to make an oral presentation at the open meeting are requested to notify the Commission's General Counsel at least 48 hours in advance of the open meeting.

(3) The Commissioners may consider oral presentations and written documents presented by staff and interested parties. The Commission Chair shall set the order and amount of time allowed for presentations.

(4) The Commissioners' determination of the appeal shall be by duly adopted resolution reflected in the minutes of the open meeting, and shall be final.

(i) Unless good cause for delay is shown or the Commission determines that a protest or appeal raises issues significant to procurement practices or procedures, a protest or appeal that is not filed timely will not be considered.

(j) A decision issued either by the Commissioners in open meeting, or in writing by the Executive Director, shall be the final administrative action of the Commission.

**History**
- *Source Note: The provisions of this §111.32 adopted to be effective August 7, 2008, 33 TexReg 6129; amended to be effective July 7, 2016, 41 TexReg 3797.*

##### **1 Tex. Admin. Code § 111.33** Alternative Dispute Resolution {#sec-111.33 omnilex-key=us-tx-regs-official--title-1--111.33}

(a) Policy. It is the Commission's policy to encourage the use of alternative dispute resolution procedures in appropriate situations.

(b) Alternative Dispute Resolution. The Commission encourages the fair and expeditious resolution of disputes through alternative dispute resolution ("ADR") procedures.

(1) ADR procedures include any procedure or combination of procedures described by Civil Practice and Remedies Code, Chapter 154. ADR procedures are intended to supplement and not limit other dispute resolution procedures available for use by the Commission.

(2) Any ADR procedure used to resolve disputes before the Commission shall conform with Government Code, Chapter 2009, and, to the extent possible, the model guidelines for the use of ADR issued by the State Office of Administrative Hearings ("SOAH").

(3) Upon receipt of notice of a dispute, the Commission's Executive Director, in consultation with the Commission's general counsel, shall determine whether use of an ADR procedure is an appropriate method for resolving the dispute.

(4) If an ADR procedure is determined to be appropriate, the Commission's Executive Director shall recommend to the claimant the use of ADR to resolve the dispute. The Commission's general counsel will collaborate with the claimant to select an appropriate procedure for dispute resolution and implement the agreed upon procedure consistent with SOAH's model guidelines.

(5) ADR for Breach of Contract Claims. Resolution of breach of certain contract claims brought by a contractor against the Commission shall conform to the requirements of Government Code, Chapter 2260. The Commission has adopted by reference the Office of the Attorney General's rules regarding the negotiation and mediation of certain contract disputes (§111.31 of this title (relating to Negotiation and Mediation of Certain Contract Disputes)).

(6) The requirements of Government Code, Chapter 2260, and the Office of the Attorney General's model rules are required prerequisites to a contractor filing suit in accordance with Civil Practices and Remedies Code, Chapter 107.

(c) The Commission's general counsel is designated as the coordinator to implement the Commission's policy under this rule, provide necessary training, and collect data concerning the effectiveness of the implemented procedures.

**History**
- *Source Note: The provisions of this §111.33 adopted to be effective August 6, 2014, 39 TexReg 5873.*

#### **Subchapter D** VEHICLES

##### **1 Tex. Admin. Code § 111.40** Fleet Management {#sec-111.40 omnilex-key=us-tx-regs-official--title-1--111.40}

In accordance with the plan developed by the Office of Vehicle Fleet Management under the direction of the State Council on Competitive Government, the Commission will adhere to all requirements detailed in the plan, including, but not limited to:

(1) The disposal of any vehicles declared excess through the routine review of vehicle use. The Commission will:

(A) follow the Commission's Surplus Property Division process for the disposal of vehicles; and

(B) submit proper documentation to certify successful disposal of vehicles declared excess.

(2) The adoption of all detailed policies, procedures and goals related to vehicle replacement, state fuel contracts, alternative fuel use, minimum use criteria, interagency agreements, and fleet consolidation.

(3) The submission of all fleet data required for vehicle inventory, fuel, mileage, repairs and preventive maintenance on an internet-based technology fleet data system.

(4) The review of internal fleet policies and procedures to determine if the fleet management "Best Practices," as determined by the Office of Vehicle Fleet Management under the direction of the State Council on Competitive Government, are appropriate and feasible for use by the fleet.

(5) The adherence to the fleet size and vehicle purchasing restrictions established by the plan adopted pursuant to Texas Government Code §2171.104, and any further fleet size reduction resulting from the ongoing review of vehicle use.

**History**
- *Source Note: The provisions of this §111.40 adopted to be effective August 7, 2008, 33 TexReg 6129; amended to be effective July 7, 2016, 41 TexReg 4797.*

##### **1 Tex. Admin. Code § 111.41** Assignment and Use of Pooled Vehicles {#sec-111.41 omnilex-key=us-tx-regs-official--title-1--111.41}

(a) Each vehicle in the Commission's vehicle fleet pool, with the exception of vehicles assigned to field employees, is assigned to the agency motor pool and is available for checkout, as needed. Some vehicles, because of mission critical status, may be permanently assigned to sub-pools within divisions and available only to employees within those divisions.

(b) Commission employees must present a valid Texas driver's license each time a pooled vehicle is checked out.

(c) Pooled vehicle assignments will be made by designated Commission personnel to ensure that all Commission vehicles are used and rotated to balance mileage and time usage among all pooled vehicles.

(d) Pooled vehicles assigned on a regular or daily basis to individual administrative or executive employees, require written documentation that the assignment is critical to the Commission's needs and mission of the agency. Documentation for all assigned Commission vehicles will be kept on file with designated Commission personnel.

**History**
- *Source Note: The provisions of this §111.41 adopted to be effective August 7, 2008, 33 TexReg 6129; amended to be effective July 7, 2016, 41 TexReg 4797.*

### **Chapter 115** FACILITIES LEASING PROGRAM

#### **Subchapter A** STATE LEASED PROPERTY

##### **1 Tex. Admin. Code § 115.1** Definitions {#sec-115.1 omnilex-key=us-tx-regs-official--title-1--115.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Commission--The Texas Facilities Commission.

(2) State agency or agency--A board, a commission, or agency established by the Texas Legislature.

**History**
- *Source Note: The provisions of this §115.1 adopted to be effective March 18, 2002, 27 TexReg 2004; amended to be effective March 10, 2004, 29 TexReg 2293; amended to be effective August 5, 2008, 33 TexReg 6131.*

##### **1 Tex. Admin. Code § 115.2** Prerequisites for Leasing Space {#sec-115.2 omnilex-key=us-tx-regs-official--title-1--115.2}

(a) When a board, commission or agency requests to lease property that is not owned by the state, the Commission shall verify that state-owned space is not available.

(b) All requests for lease space must be submitted by the office of the Executive Director or designated the agency representative head of the requesting agency party.

(c) The Chief Administrative Officer of the requesting agency must certify the availability of funds for the requested lease space, the number of full time employees to be located at the requested space and the agency's projected schedule.

(d) The requesting agency shall not submit any specifications that would:

(1) unnecessarily limit meaningful competition for the requested space;

(2) unnecessarily increase the cost of the lease;

(3) exceed the authorized space limitations established by the Commission; or

(4) require more than is reasonably necessary to carry out the business mandated to the requesting agency.

**History**
- *Source Note: The provisions of this §115.2 adopted to be effective March 14, 2004, 29 TexReg 2294; amended to be effective August 5, 2008, 33 TexReg 6131.*

##### **1 Tex. Admin. Code § 115.3** Leasing Space for Health and Human Services Agencies {#sec-115.3 omnilex-key=us-tx-regs-official--title-1--115.3}

(a) All requests for lease space by Health and Human Services Commission (HHSC) agencies must be submitted by the office of the Executive Commissioner.

(b) The Chief Administrative Officer of HHSC, or a designated representative, shall certify the availability of funds for the requested lease space, the number of full time employees to be located at the requested lease space and the agency's projected schedule.

**History**
- *Source Note: The provisions of this §115.3 adopted to be effective March 14, 2004, 29 TexReg 2294; amended to be effective August 5, 2008, 33 TexReg 6131.*

##### **1 Tex. Admin. Code § 115.4** Delegation of Authority to State Agencies {#sec-115.4 omnilex-key=us-tx-regs-official--title-1--115.4}

A request by an agency for delegated leasing authority must have the approval of the governing body of the agency making the request. Any agency under the authority of an individual Commissioner or Executive Director, appointed by or directly accountable to the Governor, must provide evidence of notification to the Office of the Governor in order for such a request to be considered valid. The Commission may revoke delegated leasing authority upon notice to the affected state entity.

**History**
- *Source Note: The provisions of this §115.4 adopted to be effective March 14, 2004, 29 TexReg 2294.*

##### **1 Tex. Admin. Code § 115.6** Leasing Services to State Agencies {#sec-115.6 omnilex-key=us-tx-regs-official--title-1--115.6}

(a) Any agency excluded from the leasing requirements who seeks the assistance from the Commission for leasing services shall submit the request in writing.

(b) The head of the agency that requests leasing assistance must agree to pay the actual costs of the leasing services provided before the request for lease assistance shall be considered.

**History**
- *Source Note: The provisions of this §115.6 adopted to be effective March 14, 2004, 29 TexReg 2294.*

##### **1 Tex. Admin. Code § 115.8** Use of Private Firms to Obtain Space {#sec-115.8 omnilex-key=us-tx-regs-official--title-1--115.8}

(a) Any entity that provides lease services to the Commission shall immediately disclose any conflict of interest in a transaction to all parties and shall withdraw from all matters related to the conflict. Final determination of a conflict of interest shall be made by the Commission.

(b) No broker, real estate firm, tenant representative or entity representing the state as an agent in a leasing matter may, during the term of the agency, simultaneously represent, participate or profit from the actions of buyers, sellers, owners or any other entity that possesses an interest in any lease in which the Commissioner is the lessor.

**History**
- *Source Note: The provisions of this §115.8 adopted to be effective March 14, 2004, 29 TexReg 2294; amended to be effective August 5, 2008, 33 TexReg 6131.*

##### **1 Tex. Admin. Code § 115.10** Tenant Agency Responsibility; Reporting {#sec-115.10 omnilex-key=us-tx-regs-official--title-1--115.10}

(a) No state agency occupying state leased space shall commit any act or action that may endanger the State's interest under the lease contract.

(b) Any state agency that the Commission determines has acted in bad faith against the State's interest, or is in noncompliance as referenced in §2167.105 of the Government Code, shall be reported to the Governor, Lieutenant Governor, Office of the Speaker of the House of Representatives, the House Committee on Appropriations, and the Senate Committee on Finance.

**History**
- *Source Note: The provisions of this §115.10 adopted to be effective March 14, 2004, 29 TexReg 2294; amended to be effective August 5, 2008, 33 TexReg 6131.*

##### **1 Tex. Admin. Code § 115.13** Best Value Guidelines {#sec-115.13 omnilex-key=us-tx-regs-official--title-1--115.13}

(a) The Commission shall develop procedures, deadlines, site analyses and market analyses to ensure that recommendations for lease procurements reflect the best value to the State of Texas.

(b) In determining the specific procedures to be used to evaluate the properties and identification of the best value to the state, the Commission shall develop and maintain documents in the permanent lease file of the Commission detailing its evaluation of each of the following criteria for all qualified sites selected for final consideration:

(1) analysis of the total cost of occupancy offered by the proposed Lessor;

(2) utility costs;

(3) age, type and condition of the premises;

(4) costs, if any, of improvements required to meet the approved agency specifications;

(5) location of the property and access to public facilities and transportation;

(6) access to and cost of parking;

(7) security of premises;

(8) space planning considerations including implementation of the master facilities plan and space consolidation options;

(9) direct and indirect costs of relocation; and

(10) any other considerations relevant to the approved agency specifications and existing market conditions.

(c) Prior to making a recommendation to the Commission, an assessment of the proposed Lessor shall be performed to determine the relevant experience, financial condition, and history of bankruptcy, litigation and judgments involving the proposed Lessor, and, as appropriate, its owners, officers, directors, subsidiaries, affiliates, or predecessors that may be relevant indicators of proposed Lessor's ability to perform under the lease contract. The findings of this inquiry shall be maintained in the permanent lease file of the Commission.

**History**
- *Source Note: The provisions of this §115.13 adopted to be effective August 5, 2008, 33 TexReg 6131; amended to be effective October 3, 2016, 41 TexReg 7709.*

#### **Subchapter B** CANCELLATION OF LEASE DUE TO LACK OF FUNDING

##### **1 Tex. Admin. Code § 115.20** Definitions {#sec-115.20 omnilex-key=us-tx-regs-official--title-1--115.20}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) "Cost of idle facilities or idle capacity" means costs such as maintenance, repair, housing, rent, and other related costs, e.g., insurance, interest, property taxes and depreciation or use allowances.

(2) "Facilities" means land and buildings or any portion thereof, equipment individually or collectively, or any other tangible capital asset, wherever located, and whether owned or leased by the governmental agency.

(3) "Funding Out Clause" means the constitutional prohibitions on spending as set out in Sections 49 and 49a, Article III, Texas Constitution and codified in Texas Government Code §2167.055(e) (West 2008) which are incorporated into the state lease, as amended.

(4) "Governmental agency" means a board, commission, department, office, or other agency in the executive branch of state government, including an institution of higher education as defined by Section 61.003, Education Code.

(5) "Idle capacity" means the unused capacity of partially used facilities. It is the difference between: (a) that which a facility could achieve under 100 percent operating time on a one-shift basis less operating interruptions resulting from time lost for repairs, setups, unsatisfactory materials, and other normal delays; and (b) the extent to which the facility was actually used to meet demands during the accounting period. A multi-shift basis should be used if it can be shown that this amount of usage would normally be expected for the type of facility involved.

(6) "Idle facilities" means completely unused facilities that are excess to the governmental agency's current needs.

**History**
- *Source Note: The provisions of this §115.20 adopted to be effective October 3, 2016, 41 TexReg 7709.*

##### **1 Tex. Admin. Code § 115.21** Determination of Idle Capacity or Idle Facilities {#sec-115.21 omnilex-key=us-tx-regs-official--title-1--115.21}

(a) Prior to requesting that the Commission cancel a lease due to lack of funding, the governmental agency shall determine that it occupies idle facilities or has idle capacity due to one of the following factors:

(1) changes in program requirements;

(2) the implementation of changes that result in a reduction in staff;

(3) consolidation of office or building space to achieve cost efficiencies;

(4) a change in client demographics resulting in the need to relocate staff to other locations; or

(5) efforts to achieve more economical operations, reorganization, termination, or other causes which could not have been reasonably foreseen.

(b) Upon furnishing a written determination that the governmental agency occupies idle facilities or has idle capacity based upon the factors set out in subsection (a) above to the Commission, a lease may be considered for cancellation by the Commission upon request by a governmental agency.

**History**
- *Source Note: The provisions of this §115.21 adopted to be effective October 3, 2016, 41 TexReg 7709.*

##### **1 Tex. Admin. Code § 115.22** Cancellation of Lease Upon Request by a Governmental Agency Due to Lack of Funding {#sec-115.22 omnilex-key=us-tx-regs-official--title-1--115.22}

(a) Unless a governmental agency has been abolished by the Legislature, a governmental agency that elects to invoke the Funding Out Clause to cancel a lease due to lack of funding shall request the Commission to either cancel the lease or make the leased premises available to another governmental agency.

(b) A request by a governmental agency to cancel a lease due to lack of funding must have the approval of the governing body of the governmental agency making the request. Any agency under the authority of an individual commissioner or executive director, appointed by or directly accountable to the Governor, must provide evidence of notification to the Office of the Governor in order for such a request to be considered for action by the Commission.

(c) Unless the term of the lease is amended by written agreement between a lessor and the Commission, the Commission will serve written notice to the lessor of intent to cancel the lease effective on a date certain at least 180 days prior to the date of the lease cancellation. Notice to the lessor is effective upon receipt if served by electronic mail directed to the lessor's designated contact on the Commission's database. Rent shall continue to be paid through the date that the lessee vacates the facilities or through the end of the biennium, whichever is earlier, for which funds had been certified pursuant to Texas Government Code §2167.101 (West 2008).

**History**
- *Source Note: The provisions of this §115.22 adopted to be effective October 3, 2016, 41 TexReg 7709.*

### **Chapter 116** PROPERTY MANAGEMENT DIVISION

#### **Subchapter A** STATE OWNED PROPERTY

##### **1 Tex. Admin. Code § 116.1** Definitions {#sec-116.1 omnilex-key=us-tx-regs-official--title-1--116.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Facility--A building, utility system, grounds or other physical entity under the inventory of the commission.

(2) Commission--Texas Facilities Commission.

(3) Maintenance--Actions required to keep a facility or part of a facility in a usable condition and/or in good appearance, or to prevent deterioration once it has been placed in good condition for its type and age.

(4) Minor Construction--The addition to, or alteration, rehabilitation, or repair of an existing building, structure or appurtenant facility or utility.

(5) Modification--A change in the facility to improve its appearance or function.

(6) Repair--To replace or restore part of a facility to its original operating condition.

(7) Tenant Manual--Mandatory rules and regulations governing occupying agency use of a state owned property. The Manual is promulgated by the Commission in performance of its statutory duties and may be amended from time to time.

(8) Utilities--Electricity, gas, water and wastewater services purchased for facilities.

**History**
- *Source Note: The provisions of this §116.1 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.2** Occupying Agency Responsibility {#sec-116.2 omnilex-key=us-tx-regs-official--title-1--116.2}

(a) The chief executive of each occupying agency shall be responsible for the building space assigned to the agency.

(b) The chief executive of the occupying agency may designate one of his employees to coordinate affairs between the agency and the Commission. The designee should have the authority to make decisions for the occupying agency and to encumber agency funds for projects accomplished under interagency contract with the Commission.

(c) The chief executive shall be responsible for the control of interior door keys to the space assigned to the occupying agency. Only the Department of Public Safety, Capitol Police may reproduce keys, install or remove locks, or change locks in doors of the building.

(d) The chief executive of each occupying agency is responsible for his/her agency's compliance with the Commission's Tenant Manual.

**History**
- *Source Note: The provisions of this §116.2 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.3** Maintenance, Repairs, and Modifications {#sec-116.3 omnilex-key=us-tx-regs-official--title-1--116.3}

(a) Maintenance service requests may be made by telephone or e-mail to the Commission or through the Commission Facilities Service Center website located at http://portal.tfc.state.tx.us/fcsm/facilityfrontpage.asp. Requestor shall give his name, telephone number, location, nature of the maintenance service required, and assessment of the priority of the requirement, i.e., emergency, at first opportunity, or include in regular maintenance schedule.

(b) Facilities on the Commission's inventory may not be modified except by or under the control of the Commission.

(c) Requests for modifications of space in state-owned facilities under the Commission's control shall be made through the Commission Facilities Service Center website located at http://portal.tfc.state.tx.us/fcsm/facilityfrontpage.asp.

(d) Modifications or improvements to buildings carried on the Commission's inventory that become attached to and considered a part of the building may not be removed by the occupying agency without the Commission's approval.

(e) Equipment that is used specifically for the occupying agency's work process is the agency's responsibility to maintain.

**History**
- *Source Note: The provisions of this §116.3 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637; amended to be effective April 18, 2016, 41 TexReg 2737.*

##### **1 Tex. Admin. Code § 116.4** Procedures Governing Maintenance Service and Minor Construction Contracts {#sec-116.4 omnilex-key=us-tx-regs-official--title-1--116.4}

(a) An occupying agency shall not perform nor contract for any facilities management service within a Commission managed facility without prior written approval of the Commission. A contract for a facilities management service in a Commission managed facility must be executed by an authorized representative of the Commission.

(b) The Commission will provide facilities management in accordance with the Texas Government Code.

(c) The Commission shall require prior approval for any contract for services associated with and affecting the operation or maintenance of the Commission managed facility. The Commission may require contracts to include specific termination clauses.

**History**
- *Source Note: The provisions of this §116.4 adopted to be effective March 14, 2004, 29 TexReg 2619; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.5** Tenant Manual {#sec-116.5 omnilex-key=us-tx-regs-official--title-1--116.5}

In performance of its statutory duties, the Commission shall promulgate mandatory regulations governing an occupying agency's use of state owned property, including but not limited to building operations, energy conservation measures, air quality, conference rooms, signage, and security. Such regulations shall be compiled in a Tenant Manual and may be amended periodically.

**History**
- *Source Note: The provisions of this §116.5 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.6** Temporary Use of Property on the Commission's Inventory {#sec-116.6 omnilex-key=us-tx-regs-official--title-1--116.6}

(a) Temporary use of parking garages and surface lots on the Commission's inventory must receive prior approval by the Department of Public Safety (DPS).

(b) The Commission is the "owner" of record for all property on its inventory for purposes of permits, zoning and other proceedings before local municipal authorities.

**History**
- *Source Note: The provisions of this §116.6 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.7** Applicability of National Fire Codes {#sec-116.7 omnilex-key=us-tx-regs-official--title-1--116.7}

All remodeling and installations of equipment, wiring, data cable and accessories in state buildings under the Commission's jurisdiction and control shall comply with the latest edition of the National Fire Codes, including the National Electrical Code and the Life Safety Code.

**History**
- *Source Note: The provisions of this §116.7 adopted to be effective November 21, 1999, 24 TexReg 10040; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.8** Parking {#sec-116.8 omnilex-key=us-tx-regs-official--title-1--116.8}

The Commission shall manage, administer, maintain and assign parking in parking lots and/or parking structures in facilities managed by the Commission and those within the Commission's inventory, with the exception of those which are under the jurisdiction of the Texas Department of Public Safety during State of Texas business hours of 7:00 a.m. to 6:00 p.m.

**History**
- *Source Note: The provisions of this §116.8 adopted to be effective March 14, 2004, 29 TexReg 2619; amended to be effective May 12, 2010, 35 TexReg 3637.*

##### **1 Tex. Admin. Code § 116.12** Delegated Authority for Facilities Management {#sec-116.12 omnilex-key=us-tx-regs-official--title-1--116.12}

(a) Requests for delegated facilities management authority for state-leased and owned facilities under the Commission's control shall be made in writing by the requesting agency.

(1) Requests shall provide the following information:

(A) Statement of justification that addresses staff (enumerate number of FTEs and agency unit), inadequacy of current services, and anticipated cost-savings.

(B) Written certification that funds are authorized and available to accomplish the requested action.

(C) Identification of the services the request applies to and any related service contracts.

(D) The location of the facilities subject to the request including street address and zip code.

(E) Term of the application: short-term (48 months or less) or long-term (specify duration), requested effective date, and other factors the applicant deems are critical.

(F) Special conditions related to agency functions that require facility services beyond regular business hours.

(G) Requesting agency contact, telephone and fax numbers.

(2) The Commission will grant or deny a request in writing.

(b) The Commission may delegate facilities management responsibilities in facilities or associated parking facilities for which the Commission is responsible for providing management services in accordance with the Texas Government Code.

(c) Any delegated authority granted by the Commission in relation to facilities management services may be revoked in writing at the discretion of the Commission. The facility management responsibility shall revert to the Commission or its designee. In the event that the delegated authority is revoked, monies appropriated to and/or available for facility management services by an occupying agency shall be transferred to the Commission for management of said facilities.

(d) Any occupying agency granted delegated facility management authority shall be required to use the Commission's facilities management software, including but not limited to, facilities cost accounting, repair requests and tracking, contract tracking, utility management, etc.

(e) Occupying agency granted delegated authority shall submit a report to the Commission by October 1st of each year detailing all costs and expenditures related to each facility managed by designated agency. Failure to submit required reports shall result in revocation of delegated authority.

(f) Reports provided by occupying agencies granted delegated authority shall be reviewed, compiled and submitted to the Legislative Budget Board and the Governors Budget Office.

(g) At any time subsequent to the delegation permitted under this section, the Commission may inspect any facility and may require enhancement changes, including but not limited to, cost savings, life-safety, cleanliness, structural, contractual, regulatory matters, space utilization, utilities, signage, security, accessibility, smoking, energy management and efficiency, telecommunication, indoor air quality, janitorial, recycling, renovations, cabling, and grounds maintenance.

**History**
- *Source Note: The provisions of this §116.12 adopted to be effective March 14, 2004, 29 TexReg 2619.*

##### **1 Tex. Admin. Code § 116.14** Vending Machines; Mandatory Energy-Savings Devices {#sec-116.14 omnilex-key=us-tx-regs-official--title-1--116.14}

(a) Definitions.

(1) "Energy Consumption" refers to the amount of energy a Vending Machine consumes.

(2) "Energy Star Program Requirements" refers to the Federal Energy Star Program Requirements for Refrigerated Beverage Vending Machines as designated by the U.S. Environmental Protection Agency and the U.S. Department of Energy.

(3) "Existing Vending Machine" refers to a Vending Machine that, prior to September 1, 2007, was located in a building owned or leased by the State of Texas.

(4) "Low Power Mode" refers to the reduced power state of a Vending Machine during extended periods of inactivity.

(5) "Vending Machines" or "Refrigerated Beverage Vending Machines" refers to a self-contained system designed to accept consumer payments and dispense bottled, canned, and other sealed beverages at appropriate temperatures without outside labor intervention. This definition does not include a vending machine that contains a perishable food product, as defined by §96.001, Civil Practice and Remedies Code.

(b) Existing Vending Machines.

(1) Any entity that owns or operates an Existing Vending Machine is required to meet the Low Power Mode Federal Energy Star Program Requirements.

(2) Within five (5) years from the promulgation of these rules or ten (10) years from the manufacturing date of an Existing Vending Machine, whichever is later, any entity that owns or operates an Existing Vending Machine is required to replace it or retrofit it to meet both the energy consumption and Low Power Mode Federal Energy Star Program Requirements.

(c) Any entity that owns or operates a Vending Machine other than an Existing Vending Machine is required to meet both the Energy Consumption and Low Power Mode Federal Energy Star Program Requirements.

**History**
- *Source Note: The provisions of this §116.14 adopted to be effective January 7, 2009, 34 TexReg 41.*

### **Chapter 117** MANDATORY PAPER RECYCLING PROGRAM

##### **1 Tex. Admin. Code § 117.1** Definitions {#sec-117.1 omnilex-key=us-tx-regs-official--title-1--117.1}

The following words and terms, when used in this subchapter, shall have the following meanings:

(1) Commission--the Texas Facilities Commission.

(2) Contaminants--Any material that significantly decreases the market value of the Single Stream. Contaminants include, but are not limited to, food containers (polystyrene, aluminum foil, food wrappers, etc.) food waste, hardbound covered books, paper towels, napkins, rubber bands, express mail envelopes, padded envelopes, laminated paper, self-adhesive nonpaper products, and glass.

(3) Facility--a building, utility system, grounds or other physical entity included in the Commission's Facilities inventory.

(4) Facilities inventory--a compilation of the property owned or maintained by the Commission.

(5) Mandatory Paper Recycling Program--A statutory program to collect all paper deposited in specifically marked containers for the purpose of recycling.

(6) Recycling coordinator--An agency's point of contact who shall coordinate recycling efforts within the agency, track the success of the program, and educate employees on recycling methods.

(7) Single Stream--A recycling initiative to maximize and collect all recyclable materials, including all recyclable paper collected under the Mandatory Paper Recycling Program, by permitting the deposit of such materials to occur in a single specially marked container for the purpose of recycling. Glass and trash items are excluded from the Single Stream.

(8) Toner cartridge--A cartridge containing a substance used to develop a latent xerographic image, commonly used in connection with computer printers, facsimile and copier machines.

**History**
- *Source Note: The provisions of this §117.1 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.2** Goals {#sec-117.2 omnilex-key=us-tx-regs-official--title-1--117.2}

The goals of the paper recycling program are to:

(1) encourage agencies to cooperatively participate in the Mandatory Paper Recycling Program and in the Single Stream initiative;

(2) dispose of waste paper in an efficient manner;

(3) obtain revenue at the highest possible rate for the State;

(4) actively seek all possible recycling methods and solutions; and

(5) increase the amount of paper diverted from the waste stream.

**History**
- *Source Note: The provisions of this §117.2 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.3** Designated Recycling Coordinator {#sec-117.3 omnilex-key=us-tx-regs-official--title-1--117.3}

(a) An agency that occupies a building listed on the facilities inventory maintained by the Commission shall designate a recycling coordinator for the agency.

(b) The recycling coordinator shall execute the following responsibilities:

(1) act as liaison between the agency and the Commission on the effectiveness of the recycling program within the agency;

(2) foster a sense of teamwork for the recycling program within the agency and enlist the support of all employees;

(3) identify areas that generate a large volume of paper, such as a computer room or an in-house print shop and provide information and appropriate receptacles in order to eliminate the waste of recyclable materials;

(4) visually inspect recycling containers for contaminants, notify the appropriate agency personnel and the Commission of the location of receptacles that were found to contain contaminants, and take appropriate remedial measures as necessary;

(5) identify areas within the agency that improperly dispose of recyclable waste paper and request assistance from the Commission to assist with efforts to mitigate the waste;

(6) designate receptacles within the agency to deposit used toner cartridges, which are accepted in the Single Stream in a sealed bag; and

(7) provide reports or information on the recycling program as requested by the Commission.

(c) The Commission shall annually compile and update a list of agency recycling coordinators. Agencies that are subject to the requirements of the Program, but have failed to designate a recycling coordinator, will be referred to the Office of the State Auditor.

**History**
- *Source Note: The provisions of this §117.3 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.4** Performance Measures {#sec-117.4 omnilex-key=us-tx-regs-official--title-1--117.4}

(a) Performance measures for the Mandatory Paper Recycling Program shall report to the Legislative Budget Board the total quantity of paper in tons recycled by all agencies located in a facility on the Commission's Facilities inventory.

(b) Commission staff shall compile this information on a quarterly basis.

**History**
- *Source Note: The provisions of this §117.4 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.5** Paper Recycling Training {#sec-117.5 omnilex-key=us-tx-regs-official--title-1--117.5}

(a) Custodial education and training. The Commission shall provide annual training on recycling procedures to all custodial personnel who collect or handle trash for collection. Custodial personnel shall include state employees and employees of contracted private vendors who provide custodial and recycling services for the Commission.

(b) Recycling coordinator training. The Commission shall provide annual training on recycling procedures to all agency recycling coordinators. Training shall include methods to promote recycling efforts within the agency, how to monitor the effective use of recycling containers, and how to recognize those areas within the agency that have successfully followed recycling procedures.

(c) Employee training and education. The Commission, upon request of a participating agency, shall provide training and education to employees on recycling procedures for separating and disposing of waste paper and contaminants. The Commission shall provide training and/or educational information and material for state agencies that have been approved to conduct in-house recycling training.

(d) Training records. The Commission shall maintain records of all training offered to custodial personnel, state employees, and recycling coordinators. Agencies that provide training under this section shall forward the records to the Commission no later than October 15 of each year. The records shall be maintained according to the Commission's record retention schedule.

**History**
- *Source Note: The provisions of this §117.5 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.6** Delegation of Responsibility {#sec-117.6 omnilex-key=us-tx-regs-official--title-1--117.6}

(a) The Commission may delegate responsibility for maintaining a paper recycling program to agencies located outside of Travis County in state buildings that are under the Commission's control, if they have demonstrated they have met and can continue to meet the following standards:

(1) compliance with Commission guidelines regarding the proper separation and disposal of waste paper in appropriate recycling containers;

(2) the paper recycling coordinator actively monitors and trains employees according to Commission procedures on disposal of contaminants found in recycling containers;

(3) development of a paper recycling contract to sell paper to the highest bidder;

(4) adequate staff and equipment to transport the waste paper to the purchasing vendor;

(5) Commission standards, procedures and guidelines for the Mandatory Paper Recycling Program continue to be followed; and

(6) the agency has continuously maintained a designated recycling coordinator.

(b) An agency seeking delegated responsibility to operate a paper recycling program shall make written application to the Commission, in a format prescribed by the Commission. The application should include the agency's justification for the requested delegation and documentation that the standards of this section have been met or exceeded.

(c) The Commission shall determine if the standards for delegation have been met and are in the best interest of the State. The Commission shall submit a written response to the requesting agency. The Commission's decision shall be final for the fiscal year in which the application was made.

(d) An agency that has been delegated responsibility to administer a paper recycling program that fails to follow the Commission's standards, procedures, and guidelines shall forfeit the delegated responsibility upon notice from the Commission. The Commission shall include the basis of the decision in the notice.

(e) Agencies that have been delegated responsibility to administer their own paper recycling program shall provide the Commission with quarterly reports stating the quantity of paper recycled and sold, the revenue received by the agency, and their expenses in administering the program. Reports shall be forwarded to the Commission no later than forty-five (45) days after the end of each fiscal quarter.

**History**
- *Source Note: The provisions of this §117.6 adopted to be effective May 12, 2010, 35 TexReg 3638.*

##### **1 Tex. Admin. Code § 117.7** Guidelines and Procedures for Collecting and Recycling of Paper through the Single Stream {#sec-117.7 omnilex-key=us-tx-regs-official--title-1--117.7}

State employees who office in buildings under the Commission's control and those listed on the Commission's facilities inventory shall adhere to the following paper recycling guidelines and procedures:

(1) All contaminant-free white and mixed waste paper, newsprint, and small sized cardboard are recyclable through the Single Stream and must be placed in designated recycling containers provided to the agency. Cardboard boxes, or large sized cardboard, and discarded telephone books are accepted in the Single Stream;

(2) Recycle containers shall be centrally located in areas accessible to employees;

(3) All employees shall participate in the Mandatory Paper Recycling Program training and make a conscientious effort to keep contaminants from entering the recycling containers;

(4) Affected state agencies shall designate paper recycling coordinators who will promote the use of proper recycling methods within the agency;

(5) Custodial personnel who have attended training described in §117.5 of this Chapter shall collect white and mixed waste paper, newsprint, cardboard boxes, large size cardboard, and discarded telephone books, and place them in an area designated by the Commission for disposal; and

(6) The Commission shall collect all waste paper, newsprint, cardboard and discarded telephone books, and transport them to the contracted recycling vendor.

(7) The Commission shall provide feedback and recognition to state agencies when appropriate and inform state agencies when proper recycling methods are not used.

**History**
- *Source Note: The provisions of this §117.7 adopted to be effective May 12, 2010, 35 TexReg 3638.*

### **Chapter 121** COMPREHENSIVE PLANNING AND DEVELOPMENT PROCESS

##### **1 Tex. Admin. Code § 121.1** Definitions {#sec-121.1 omnilex-key=us-tx-regs-official--title-1--121.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Capitol Complex--Has the meaning prescribed in §411.061(a)(10), Texas Government Code.

(2) Commission--The Texas Facilities Commission as defined in §2165.0011, Texas Government Code.

(3) Division--The Commission's internal division that is primarily responsible for comprehensive planning, use or development of State Property.

(4) State Property--All public buildings, grounds, and property on the Commission's inventory within the charge and control of the Commission.

(5) Project--A building construction project of the state that is financed wholly or partly by a specific appropriation, a bond issue, or federal money. The term includes the construction of a building, structure, or appurtenant facility or utility, including the acquisition and installation of original equipment and original furnishings.

(6) Proposal--A building construction project of the state that is financed wholly or partly by a public-private partnership. The term includes the construction of a building, structure, or appurtenant facility or utility, including the acquisition and installation of original equipment and original furnishings.

**History**
- *Source Note: The provisions of this §121.1 adopted to be effective June 12, 2014, 39 TexReg 4419.*

##### **1 Tex. Admin. Code § 121.2** Commission Involvement Policy {#sec-121.2 omnilex-key=us-tx-regs-official--title-1--121.2}

(a) The Commission shall be regularly informed as to the planning, use or development of State Property.

(b) The Commission shall include "Division report about planning, use or development of State Property" as a line item on the agenda for each regularly scheduled Commission meeting. The Division shall present the Project or any other proposal; identify its location; summarize its nature, timing and scope; and include such other and additional information as required by law.

**History**
- *Source Note: The provisions of this §121.2 adopted to be effective June 12, 2014, 39 TexReg 4419.*

##### **1 Tex. Admin. Code § 121.3** Planning and Development for the Capitol Complex {#sec-121.3 omnilex-key=us-tx-regs-official--title-1--121.3}

(a) The Commission adopts by reference §§2166.105, 2166.106, 2166.1065, 2166.107, and 2166.108, Texas Government Code, as the comprehensive planning and development process for Projects upon State Property in the Capitol Complex.

(b) The Commission adopts by reference §§2267.006, 2267.0061 - 2267.0067, 2267.051, 2267.052, 2267.053, 2267.055, 2267.058, 2267.059, 2267.065, and 2267.066, Texas Government Code, as the comprehensive planning and development process for Proposals upon State Property in the Capitol Complex in addition to the requirements set out in subsection (a) of this section.

(c) It is the policy of the Commission that before the Commission makes a decision on the planning, use or development of State Property within the Capitol Complex, the public and interested parties have the opportunity to review and comment on the Commission's proposed plans for such planning, use or development of State Property. Any proposed plans for such planning, use or development of State Property shall be listed as a line item on the agenda for each regularly scheduled Commission meeting. In addition to the required notices to state agencies under the provisions named in this section, at least thirty (30) days prior to each regularly scheduled Commission meeting, the Commission shall serve notice of each Project or Proposal for the planning, use or development of State Property within the Capitol Complex upon the public and interested parties, including a designated representative of the city, county, and any other affected jurisdiction where the State Property is located. Notice shall be given by posting on the Commission website and in the *Texas Register.* The posting shall generally describe the Project or Proposal; identify its location, summarize its nature, timing and scope, and include such other and additional information as required by law.

**History**
- *Source Note: The provisions of this §121.3 adopted to be effective June 12, 2014, 39 TexReg 4419.*

##### **1 Tex. Admin. Code § 121.4** Planning and Development for Other State Properties {#sec-121.4 omnilex-key=us-tx-regs-official--title-1--121.4}

(a) It is the policy of the Commission that before the Commission makes a decision on the planning, use or development of State Property situated outside the Capitol Complex that the public and interested parties have the opportunity to review and comment on the Commission's proposed plans for such planning, use or development of State Property. Any proposed plans for such planning, use or development of State Property shall be listed as a line item on the agenda for each regularly scheduled Commission meeting.

(b) As to planning, development or use of State Property in a municipality or the extraterritorial jurisdiction of a municipality or an unincorporated area, the Commission and the Division shall include public comment as an integral part of the planning process at points in time to assure that such public comment is meaningful for the Commission's planning and development responsibilities. As a matter of its promulgated policies, the Commission may further direct the Division to detail the manner in which the Division shall achieve meaningful public comment.

(c) At least thirty (30) days prior to each regularly scheduled Commission meeting, the Commission shall serve notice of each Project or Proposal for the planning, use or development of State Property upon the public and interested parties, including a designated representative of the city, county, and any other affected jurisdiction where the State Property is located. Notice shall be given by posting on the Commission website and in the *Texas Register.* The posting shall generally describe the Project or Proposal; identify its location; summarize its nature, timing and scope; and include such other and additional information as required by law.

(d) In addition to the public notices required in this section, not later than the 30th day before the date the Commission is scheduled to meet and vote on a Project or Proposal, the Commission and the Division must:

(1) place the Project or Proposal on the Commission's meeting agenda to provide the public with notice of the meeting and an opportunity to comment; and

(2) present sufficient information to the Commission members to enable the members to adequately prepare for the meeting and to address the members' questions and concerns.

**History**
- *Source Note: The provisions of this §121.4 adopted to be effective June 12, 2014, 39 TexReg 4419.*

##### **1 Tex. Admin. Code § 121.5** Confidentiality {#sec-121.5 omnilex-key=us-tx-regs-official--title-1--121.5}

The Commission is subject to Texas Government Code, Chapter 552, also known as the Texas Public Information Act (the "Act"). The Act gives the public the right to request access to government information and to receive information subject to statutory exceptions, including confidentiality as provided by the Act or other law.

**History**
- *Source Note: The provisions of this §121.5 adopted to be effective June 12, 2014, 39 TexReg 4419.*

### **Chapter 122** SPACE MANAGEMENT

##### **1 Tex. Admin. Code § 122.1** Definitions {#sec-122.1 omnilex-key=us-tx-regs-official--title-1--122.1}

The following words and terms, when used in this chapter and in studies and reports conducted pursuant to Texas Government Code, Chapter 2165, Subchapter C, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Agency Employee--The full-time equivalent (FTE) of a person performing services on site under the direction of a state agency, including hours worked by full-time employees, part-time employees, and consultant and contract individuals as defined by the state auditor including employees paid from funds maintained outside the treasury and hours worked by volunteers performing necessary services.

(2) Agency Space Allocation--The area assigned to an agency calculated on the basis of Gross Area less the following areas:

(A) Space designated and regularly used for public activities, including ancillary space such as lobbies, corridors, toilet rooms and refreshment areas associated with the public space. This does not include lobbies and other space ancillary to space primarily intended for internal use by FTEs in the course of interfacing with clients or to accommodate occasional visits by members of the public;

(B) Vertical shafts or chases used for circulation (elevators or stairs) or mechanical, electrical, telecommunication, or data cabling distributions;

(C) Mechanical, electrical, telecommunication, and data cabling rooms which house equipment serving more than a single tenant; and

(D) Other areas which are not relevant to tenant agency functions.

(3) Circulation Space--Percentage added to open or built-out spaces to provide adequate egress within allocation.

(4) Commission--The Texas Facilities Commission (TFC).

(5) Facilities Service Center--Central internet site where application for all facilities-related work shall be requested. Services available through the Facilities Service Center include leased or state owned space assignments, space planning and feasibility studies, real estate market studies, new construction, modifications and alterations of state owned and leased facilities, exclusion requests for modifications to state owned or leased facilities, inspections and surveys, and architectural/engineering services or consultations. The internet address for the Facilities Service Center is: http://portal.tfc.state.tx.us/fcsm/facilityfrontpage.asp.

(6) General Space Allocation Guidelines--Guidelines developed by TFC with tenant agencies based on analysis of agency functional needs, adjacencies and quantities of space.

(7) Gross Area--Gross Floor Areas shall be the area within the inside perimeter of the outside walls of the building with no deduction for hallways, stairs, closets, interior wall thickness, columns, or other features. When floors open to an atrium, the inside finished surface of the walls enclosing the atrium shall be used in lieu of an outer building wall.

(8) Space Allocation Ratio--The mathematical result of dividing the tenant agency's Space Allocation by the total number of agency employees per site.

(9) Space Use Study--A study conducted by the Commission to determine space requirements for state agencies.

(10) State Agency--A department, commission, board, office, or other agency in the executive branch of state government created by the state constitution or a state statute; the supreme court, the court of criminal appeals, a court of appeals, the Texas Judicial Council; and a university system or an institution of higher education as defined by §61.003, Education Code, except a public junior college.

(11) Usable Office Space--That area of space as defined in paragraph (2) of this section, computed by measuring from the finished surface of the office side of a corridor and/or permanent wall, to the center of partitions that separate interior spaces from adjoining Usable Areas, and the inside finished surface of the dominant portion of the permanent outer building walls.

(12) Waiver--The Commission's decision to allow more square feet for an Agency Space Allocation than the tenant agency's General Space Allocation Guidelines provide.

**History**
- *Source Note: The provisions of this §122.1 adopted to be effective January 12, 2006, 31 TexReg 101; amended to be effective June 10, 2008, 33 TexReg 4501.*

##### **1 Tex. Admin. Code § 122.2** Requests for Allocation, Relinquishment, or Modification of Space in Facilities under the Commission's Control {#sec-122.2 omnilex-key=us-tx-regs-official--title-1--122.2}

(a) Requests for allocation, relinquishment, or modification of space in facilities under the Commission's control shall be submitted via the TFC Facilities Service Center by an authorized agency representative. The internet address for the Facilities Service Center is: http://portal.tfc.state.tx.us/fcsm/facilityfrontpage.asp. Requests shall include the following information:

(1) Statement of justification including any increases in number of FTEs and the name of the agency unit; inadequacy of current facilities; lease expiration; and other reasons relevant to the request for facility space changes;

(2) Certification that funds are authorized and available to accomplish the requested action;

(3) Identification of action requested including whether the request adds, relinquishes, or modified state-owned space; and other reasons relevant to the request;

(4) Desired location including: location of current facility; location of requested facility; or special needs relevant to the request;

(5) Term of need to include: short-term (48 months or less) or long-term (specify duration); date occupancy or action is needed; and any other critical schedule factors;

(6) Present occupancy status of subject agency program describing whether the unit is now housed in state-owned or state-leased property (name and address of facility) or not housed; present lease number; number of current FTEs and agency's current square footage; requests must include all contract and volunteer employees' work hours and functions;

(7) Special conditions related to critical agency functions that require facility services beyond regular business hours, or other relevant factors; and

(8) Requesting agency contact and telephone and fax numbers for agency program requiring space or modification.

(b) The requesting agency shall work with TFC to establish General Space Allocation Guidelines for the agency's particular tasks and functions.

(c) TFC will grant or deny a request in writing. TFC's decision on the request is final.

**History**
- *Source Note: The provisions of this §122.2 adopted to be effective January 12, 2006, 31 TexReg 101; amended to be effective June 10, 2008, 33 TexReg 4501.*

##### **1 Tex. Admin. Code § 122.3** Space Allocation {#sec-122.3 omnilex-key=us-tx-regs-official--title-1--122.3}

(a) General. The Commission is required to allocate space to state agencies based on best space planning practices for specific functional needs in the best and most efficient manner possible.

(b) Applicability. Sections 122.1 - 122.3 of this chapter apply to TFC's actions under Texas Government Code, Chapter 2165, Subchapter C and property subject to that subchapter, as outlined in Texas Government Code, §2167.001.These rules apply whether the facility is state-owned or leased.

(c) General Space Allocation Guidelines. Each request for allocation, relinquishment or modification of agency space will be evaluated in a Space Use Study to determine specific functional requirements. The Space Use Study will be based on space allocation determined by space planning criteria and design standards. Such criteria and standards shall relate directly to tasks for which space is being allocated and shall be updated regularly to reflect changes in best management practices, office equipment, personnel policies and for consistency with private sector standards and industry best practices. TFC may allocate usable office space in amounts greater than that provided by the General Space Allocation Guidelines when:

(1) particular agency tasks require a specific design response not otherwise categorized;

(2) application of the General Space Allocation Guidelines to a given site is not practical; or

(3) the best financial interest of the state allows for greater space.

(d) Waivers of General Space Allocation Guidelines. Waivers may be granted where the tenant agency is willing to accept different quality space at less cost in exchange for a greater amount of space; or the tenant agency will accept space in a different location at a lower cost in exchange for a greater amount of space; or there is less market flexibility in the market, as in rural areas. Waivers may also be granted because of the particular needs of the agency programs.

(e) Request for Waiver. An agency request for a waiver from General Space Allocation Guidelines must be submitted, in writing, and must:

(1) describe the reason that the General Space Allocation Guidelines are not practical for the particular needs of the agency at the particular location; and

(2) discuss the financial impact of the requested waiver.

(f) Appeal of TFC Space Allocation Determination. A state agency may appeal TFC's space allocation determination by a written request for review from the Executive Director, or equivalent position, of the state agency to the Executive Director of the TFC. The request must be received at TFC within 14 days of the state agency's receipt of TFC's space allocation decision. If the state agency is not satisfied with the decision of the TFC's Executive Director, then the state agency may, within 14 days of the decision, request a review by the Commission at a scheduled public meeting of the Commission.

**History**
- *Source Note: The provisions of this §122.3 adopted to be effective January 12, 2006, 31 TexReg 101; amended to be effective June 10, 2008, 33 TexReg 4501.*

### **Chapter 123** FACILITIES DESIGN AND CONSTRUCTION

#### **Subchapter A** GENERAL MATTERS

##### **1 Tex. Admin. Code § 123.1** Definitions {#sec-123.1 omnilex-key=us-tx-regs-official--title-1--123.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Commission--The Texas Facilities Commission.

(2) Contractor's Qualification Form--A Commission promulgated form which contractors must complete and return to the Commission prior to consideration for a construction contract award.

(3) Cost of Services--Commission costs incurred in providing construction project administration services, including Project management, professional inspection, staff time, prior Project Analysis cost, travel expense, the estimated cost of minor and incidental materials used in pursuit of a Project, and may include overhead employee benefit costs.

(4) Design Professional--Persons licensed by the State of Texas to practice architecture in accordance with Texas Occupations Code, Chapter 1051 or engineering in accordance with Texas Occupations Code, Chapter 1001.

(5) Division--The Commission division responsible for administration of construction projects under the Commission's jurisdiction and such other projects that the Commission has agreed to manage.

(6) Executive Director--The Executive Director of the Commission.

(7) Project Analysis--A study done before the legislative appropriation process for a Project to establish basic program elements and scope of work and to develop a reliable estimate of the cost of the Project to be used in the appropriations process, and as authorized by Texas Government Code, Title 10, Subtitle D, Chapter 2166, Subchapter D.

(8) Project--A building construction project as defined in Texas Government Code, §2166.001(4).

(9) Purchasing Agency--An instrumentality of the State of Texas that is appropriated funds for a construction Project involving a real property acquisition.

(10) Using Agency--An instrumentality of the State of Texas that occupies and uses a state-owned or state-leased building, or the Commission, with respect to a state-owned building maintained by the Commission.

**History**
- *Source Note: The provisions of this §123.1 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2622; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.2** Delegation of Authority {#sec-123.2 omnilex-key=us-tx-regs-official--title-1--123.2}

(a) The Commission may act to exercise any power or authority set out in this chapter or it may delegate such authority to the Executive Director. The Executive Director, in exercising delegated authority, may further delegate this authority to another member of the Division staff.

(b) Operating Procedures for this chapter may be found in the Division's Internal Procedures Manual.

**History**
- *Source Note: The provisions of this §123.2 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

#### **Subchapter B** REAL PROPERTY ACQUISITION

##### **1 Tex. Admin. Code § 123.12** Land and Real Property Acquisition, Negotiated {#sec-123.12 omnilex-key=us-tx-regs-official--title-1--123.12}

(a) Commission staff shall establish procedures for the process to acquire real property in accordance with state law.

(b) Written responses to the request for offers to sell from property owners will be evaluated by staff of the Commission and the Purchasing Agency. All final recommendations shall be presented to the Commission or the Purchasing Agency for acceptance. All appropriate studies, appraisals and title work shall accompany such recommendations.

(c) The Commission or the Purchasing Agency shall accept offers which are in the best interest of the State of Texas. The Commission and the Purchasing Agency retain the right to reject any and all offers.

(d) The Commission or the Purchasing Agency, after acceptance of a written offer to sell property, is authorized to complete the purchase as follows:

(1) A real estate contract will be executed by the seller and the Commission stating all specific conditions of the transfer of property, including delivery of draft deeds; acquisition of title insurance policies; conducting surveys, environmental tests, and other such matters; and other details of the individual transaction. A closing on the transaction shall be scheduled at the convenience of the parties.

(2) The terms and conditions under which the Commission or the Purchasing Agency purchases the real property shall be designed to comply with applicable law to protect the interests of the State of Texas and shall be reasonable and prudent under normal business practices.

**History**
- *Source Note: The provisions of this §123.12 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.13** Land and Real Property Acquisition, Condemnation {#sec-123.13 omnilex-key=us-tx-regs-official--title-1--123.13}

(a) When no agreement on purchase price between the seller and the buyer is reached through negotiations, the Commission may exercise its power of eminent domain.

(b) At least one appraisal as to fair market value shall be obtained from independent sources and a final offer presented to the seller based on an appraisal.

(c) The final offer to purchase shall contain a designated acceptance period stated in calendar days.

(d) If this final offer to purchase is not accepted by the seller within the designated time period, the Commission may proceed to make a finding of public purpose for the taking and seek assistance from the Office of the Attorney General to proceed with the condemnation action.

(e) The condemnation proceedings shall be conducted in accordance with state law.

**History**
- *Source Note: The provisions of this §123.13 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

#### **Subchapter C** CONSTRUCTION PROJECT ADMINISTRATION

##### **1 Tex. Admin. Code § 123.23** General Project Responsibility {#sec-123.23 omnilex-key=us-tx-regs-official--title-1--123.23}

(a) The Commission is responsible for the administration of Project Analyses and Projects for all state agencies except as otherwise provided in Texas Government Code, §§2165.007, 2166.003, 2166.004 and other statutes.

(b) The Commission will act as the owner for the benefit of the Using Agency and shall provide timely and complete information to the Using Agency for any pending Project for which it is responsible.

(c) The Commission shall act in the best interests of the State of Texas in administering Project contracts for which it is responsible.

(d) Each Project administered by the Commission shall bear the Cost of Services to be rendered. At the start of a Project, an estimate of the Cost of Services provided by the Commission will be provided to the Using Agency. This estimate may be changed by agreement of the Commission and the Using Agency.

(e) The funds for all costs of the Project, when allowed by law, shall be transferred to the Commission by an agreement signed by both parties and an interagency transfer voucher to convey the funds. This process shall occur immediately after the Project request is received and analyzed by the Commission and before work commences on the Project. Once the Project is accepted and the initial funding requirements are identified, the voucher shall be processed and the funds transferred. For Projects where statute required the funding to be controlled by the Using Agency, the Commission shall be responsible for oversight and approval of expenditures, and the Using Agency shall be responsible for payment.

**History**
- *Source Note: The provisions of this §123.23 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.24** Project Analysis Process {#sec-123.24 omnilex-key=us-tx-regs-official--title-1--123.24}

(a) The Using Agency shall initiate a Project Analysis by submitting a request to the Commission or a proposed project analysis. Requests shall be made in writing and submitted via e-mail to the Commission's Deputy Executive Director of Facilities Design and Construction. The request shall include:

(1) a general description of the project;

(2) whether the Using Agency is requesting that a portion of the cost be used for a fine arts component of the project;

(3) key point of contact for Using Agency and/or description of the agency's representative body assigned to collaborate with the Commission on the development of the Project Analysis;

(4) a written justification for the project;

(5) if applicable, a justification statement addressing the reason that lease space in the new or renovated facility to private tenants is not feasible; and

(6) any known cost limitations for the project.

(b) Requests for Project Analyses shall be made no later than January 1 of even-numbered years in order to ensure the Project Analysis is completed in time to be submitted with the Using Agency's budget prior to a regular session of the legislature.

**History**
- *Source Note: The provisions of this §123.24 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.25** Construction Project Process {#sec-123.25 omnilex-key=us-tx-regs-official--title-1--123.25}

(a) Initiation of a Construction Project.

(1) The Using Agency is responsible for initiating a construction project. The Using Agency may commence the process by submitting a request to initiate work on the Project on its letterhead or any other method that the Commission deems acceptable. The Using Agency shall include their statutory authority in their request; and

(2) Projects should be initiated not later than January 1 of even-numbered years. This is required for a contract award to be made within the fiscal year for which appropriated Project funds are available.

(b) If a proposed contingency expenditure is required for the Project and the Commission refuses to concur with the request, the Using Agency may appeal to the Commission's Executive Director. The appeal shall be articulated in a letter to the Executive Director on the Using Agency's letterhead, including a description of the proposed expenditure, reason for the necessity of the change, and the Using Agency's justification for requesting the change. The Commission's Executive Director shall make the final decision concerning the acceptance of the contingency expenditure.

**History**
- *Source Note: The provisions of this §123.25 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.26** Exclusions from Commission Authority {#sec-123.26 omnilex-key=us-tx-regs-official--title-1--123.26}

(a) Pursuant to the Texas Government Code, §§2166.003(a)(6) and (7), 2166.004 and 2166.063, certain types of repair and rehabilitation projects are not subject to Commission construction administration, or are otherwise excluded from Commission's jurisdiction.

(b) Applications for a determination that a project is excluded shall be provided to the Commission in writing on or before June 1 of each fiscal year. The Commission shall advise Using Agencies of this deadline, because an approval after the June 1 deadline may result in a lapse in unencumbered funds for that fiscal year. Each application must provide the proposed changes, budget information, and method of construction intended by the Using Agency. Applications for exclusions shall be submitted to the Commission for final decision.

(c) Responses to applications shall be reasonably and promptly returned to the requesting agency.

**History**
- *Source Note: The provisions of this §123.26 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.27** Selection of Design Professionals for Construction Projects {#sec-123.27 omnilex-key=us-tx-regs-official--title-1--123.27}

The Commission is responsible for selecting any private Design Professional retained for a Project. The Commission shall conduct selections of Design Professionals in accordance with Texas Government Code, Chapter 2254, Subchapter A. The Commission shall request that the Using Agency make recommendations regarding private Design Professionals and may include a representative of the Using Agency to observe the selection process. The criteria upon which Design Professionals are evaluated may include, but not be limited to, relevant project experience and qualifications, previous recent project experience relative to budget and schedule compliance, design methodology, quality assurance and quality control, and any other qualifications the Commission deems relevant. Notification to Design Professionals for an interview on a Project shall be provided 30 days prior to the date of the interview. Notification may be provisional based on the Design Professional's selection and be included in the schedule of events in the original solicitation request for qualifications.

**History**
- *Source Note: The provisions of this §123.27 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.28** Contractor Qualifications {#sec-123.28 omnilex-key=us-tx-regs-official--title-1--123.28}

Interested contractors shall submit a Contractor's Qualification Form to the Commission no later than the date set forth in the notice to bidders. Forms are available with bid documents or on the Commission website, under the Division's link to forms. Incomplete forms shall be rejected.

**History**
- *Source Note: The provisions of this §123.28 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective March 14, 2004, 29 TexReg 2623; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.29** Bidding Procedures {#sec-123.29 omnilex-key=us-tx-regs-official--title-1--123.29}

(a) Commission Projects are bid competitively or bid using best value alternative delivery methods, and publicly opened in the office designated by the Commission. When Projects are bid using best value alternate delivery methods, the public opening is conducted in accordance with Texas Government Code, §2269 et seq.

(b) The Commission shall develop detailed operating procedures for the contractor selection and bidding process, including selection for best value alternate delivery methods.

(c) The Commission may require a proposal guaranty for competitive pricing submitted as a response to a request for proposal. The value of the guaranty will be established in the language of the request for proposal document. The guaranty may be in the form of a:

(1) cashier's check or money order drawn on an account with a financial entity determined by the Commission;

(2) bid bond issued by a surety authorized to do business in this state; or

(3) any other method approved by the Commission.

(d) Upon award and execution of the construction contract, all proposal guaranties shall be returned to their respective issuers. In the case of best value alternative delivery method contracts, proposal guaranties shall be returned upon receipt of payment and performance bonds for the initial phase of work.

**History**
- *Source Note: The provisions of this §123.29 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.30** Construction Contract Award {#sec-123.30 omnilex-key=us-tx-regs-official--title-1--123.30}

(a) Award of construction contracts will be made by the Commission except in cases of emergency as outlined in §123.31(c) of this chapter (relating to Emergency Bidding and Award Procedures). Award will be based upon the best value to the state for bids and proposals received from a qualified bidder.

(b) The Commission shall develop detailed operating procedures for construction contract awards.

**History**
- *Source Note: The provisions of this §123.30 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.31** Emergency Bidding and Award Procedures {#sec-123.31 omnilex-key=us-tx-regs-official--title-1--123.31}

(a) Emergency Bidding. The Division may issue an advertisement for a bid and let a bid for a period of time less than required by Texas Government Code, 2166.253, when an emergency condition requires expedient action.

(b) Emergency conditions. Emergency conditions include, but are not limited to:

(1) preventing undue additional cost to a state agency; or

(2) preventing or removing a hazard to life or property.

(c) Emergency Award Procedures. The Executive Director, or designee of the Executive Director, is authorized to award construction contracts when conditions as described in subsection (b) of this section are determined to exist. The award shall be reported to the Commission at its next regularly scheduled meeting.

(d) Documenting Emergency Conditions. Each time an emergency is determined to exist, a written statement describing the emergency condition shall be prepared for approval by the Executive Director, or designee of the Executive Director. Copies of the document shall be maintained in the Project file.

**History**
- *Source Note: The provisions of this §123.31 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

##### **1 Tex. Admin. Code § 123.32** Construction Contract Administration {#sec-123.32 omnilex-key=us-tx-regs-official--title-1--123.32}

The Division shall develop detailed operating procedures for management of the construction process, which shall focus on administrative procedures, successful compliance with the project schedule and budget, and successful completion of the Project.

**History**
- *Source Note: The provisions of this §123.32 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.33** Small Contractor Participation Assistance Program {#sec-123.33 omnilex-key=us-tx-regs-official--title-1--123.33}

The Commission operates a Small Contractor Participation Assistance Program as set forth in Texas Government Code, §2166.258. In the process of developing detailed operating procedures to implement a program in compliance with Texas Government Code, §2166.258, the Commission may contract with insurance company(ies), surety company(ies), agent(s), broker(s), or other public or private entities to provide surety technical assistance services for the benefit of small and historically underutilized businesses.

**History**
- *Source Note: The provisions of this §123.33 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.34** Xeriscaping {#sec-123.34 omnilex-key=us-tx-regs-official--title-1--123.34}

The Commission shall consult with the Texas Commission on Environmental Quality, the Texas Department of Transportation, the Texas Turfgrass Association, and the Texas Nursery and Landscape Association to develop design guidelines for the required use of xeriscape on state property associated with construction of a new state building.

**History**
- *Source Note: The provisions of this §123.34 adopted to be effective November 15, 2011, 36 TexReg 7658; amended to be effective March 9, 2017, 42 TexReg 1011.*

#### **Subchapter D** WAGE RATES

##### **1 Tex. Admin. Code § 123.43** Wage Rate Surveys {#sec-123.43 omnilex-key=us-tx-regs-official--title-1--123.43}

(a) The Commission has adopted the prevailing wage rates for the locality as determined by the United States Department of Labor in accordance with the Davis-Bacon Act, if the survey was conducted within three years before the Project in question is to be bid, or the wage determination of the Texas Workforce Commission, or other available sources. For counties designated in Texas Government Code, §2258.022(b), the Commission will use the "Davis-Bacon" rates and the wage rate determinations of the Texas Workforce Commission, or other available surveys, for the local and state average wage rate determinations.

(b) Affected workers, contractors and subcontractors are responsible for complying with Texas Government Code, Chapter 2258. The Commission is not a party to arbitration under Chapter 2258 of the Texas Government Code.

**History**
- *Source Note: The provisions of this §123.43 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

##### **1 Tex. Admin. Code § 123.44** Withholding of Penalties {#sec-123.44 omnilex-key=us-tx-regs-official--title-1--123.44}

The Commission shall retain the amounts authorized by Texas Government Code, Chapter 2258 upon a finding that prevailing wages have not been paid. The Commission shall use any amounts retained to pay the affected worker in accordance with Texas Government Code, §2258.056.

**History**
- *Source Note: The provisions of this §123.44 adopted to be effective March 18, 2002, 27 TexReg 2005; amended to be effective November 15, 2011, 36 TexReg 7658.*

### **Chapter 126** SURPLUS AND SALVAGE PROPERTY PROGRAMS

#### **Subchapter A** STATE SURPLUS AND SALVAGE PROPERTY

##### **1 Tex. Admin. Code § 126.1** Definitions {#sec-126.1 omnilex-key=us-tx-regs-official--title-1--126.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Certificate of Acquisition--A form prescribed by the Commission that verifies the qualifications of an approved assistance organization or political subdivision as an entity entitled to receive state surplus or salvage property.

(2) Commission--The Texas Facilities Commission.

(3) Local Governmental Entity--Each local government entity of the state, including counties, municipalities, and special purpose districts such as school districts, districts for fire and emergency services, including volunteer fire departments, utility and water districts, and health districts.

(4) Political subdivision--Each political subdivision of the state, including counties, municipalities, public school districts, volunteer fire departments.

(5) State agency--

(A) a department, commission, board, office, or other agency in the executive branch of state government created by the state constitution or a state statute;

(B) the supreme court, the court of criminal appeals, a court of appeals, or the Texas Judicial Council; and

(C) the Civil Air Patrol, Texas Wing.

**History**
- *Source Note: The provisions of this §126.1 adopted to be effective November 15, 2011, 36 TexReg 7660; amended to be effective September 29, 2016, 41 TexReg 7473.*

##### **1 Tex. Admin. Code § 126.2** Delegation of Authority to State Agencies {#sec-126.2 omnilex-key=us-tx-regs-official--title-1--126.2}

(a) Criteria used to delegate authority to a state agency demonstrating cost savings to the state may include, but is not limited to the following:

(1) information about the property such as age, condition, limited use, size, volume, expected return and location; and

(2) information about the state agency related to its ability to handle property transactions such as adequacy of staffing, recordkeeping and reporting practices, location, and specific knowledge about the property.

(b) A state agency that is delegated authority under this section shall follow all statutes and administrative rules governing the Commission concerning surplus and salvage property at the time the delegation is granted and shall provide a report of the proceeds to the Commission by assigned sale number no later than September 10th of each year for the prior fiscal year.

**History**
- *Source Note: The provisions of this §126.2 adopted to be effective November 15, 2011, 36 TexReg 7660.*

##### **1 Tex. Admin. Code § 126.3** Firearms {#sec-126.3 omnilex-key=us-tx-regs-official--title-1--126.3}

A sale or transfer of a surplus firearm must be to a licensed firearm dealer.

**History**
- *Source Note: The provisions of this §126.3 adopted to be effective November 15, 2011, 36 TexReg 7660.*

##### **1 Tex. Admin. Code § 126.4** Direct Transfer, Priority, Reporting, and Other Disposition {#sec-126.4 omnilex-key=us-tx-regs-official--title-1--126.4}

(a) Priority of claim.

(1) The first state agency, political subdivision or assistance organization that agrees to the established price before the expiration of ten (10) business days shall be entitled to the property; provided, however, a state agency shall have first priority over all other entities.

(2) In the event two competing and equivalent requests are received from parties of equal standing, the Commission shall award the property in the best interests of the state. Two or more requests shall be considered "competing and equivalent" for purposes of this section if each meets the established price on the same business day and within the ten (10) business day period following posting on the Commission's website.

(b) Reporting requirements. When a transfer of property is made to a political subdivision or assistance organization, the state agency disposing of the property must ensure the completion of a "Certificate of Acquisition" form. In completing the Certificate of Acquisition, the political subdivision or assistance organization certifies its continued qualification as an entity entitled to receive state surplus or salvage property, acknowledges receipt of property, and certifies that the property will be used for the purpose expressed by the organization at the time of application. The completed "Certificate of Acquisition" is to be retained by the state agency and a copy should be sent to the Commission within 5 business days of transfer. After the transfer, the state agency disposing of the property must document the proceeds from sale into the Comptroller's State Property Accounting System.

**History**
- *Source Note: The provisions of this §126.4 adopted to be effective November 15, 2011, 36 TexReg 7660; amended to be effective September 29, 2016, 41 TexReg 7473.*

##### **1 Tex. Admin. Code § 126.5** Disposition of Surplus and Salvage Property to the Public by Competitive Bidding, Auction, or Direct Sale {#sec-126.5 omnilex-key=us-tx-regs-official--title-1--126.5}

(a) Method of Sale. The Commission will consider the following criteria when determining the method of sale for surplus and salvage property:

(1) geographic location;

(2) cost of transportation if applicable;

(3) sales history for similar property;

(4) type of property; and

(5) condition of property.

(b) Disposition by direct sale to the public.

(1) Location and method of direct sales. Direct sales operations may be conducted at designated state facilities or warehouses approved by the Commission or by live or Internet auction.

(A) Access. The general public, political subdivision, and assistance organizations will have equal access.

(B) Payment. A purchaser under this section must pay for the surplus or salvage property by an approved method of payment at the time of sale and prior to obtaining possession or actual title to the property.

(C) Live auctions. Surplus or salvage property sold through the live auction method shall be accompanied by an auctioneer's paid receipt. The auctioneer's paid receipt will serve as the authorization of the Commission that the purchaser has in good faith complied with the conditions of the sale.

(D) Internet auctions. The Commission may contract with one or more commercial Internet auction sites for sale of state surplus or salvage property. Property on the Internet auction site shall be posted for at least ten (10) calendar days.

(2) Transfer of property. When a purchaser or successful bidder has paid the full amount due for the purchase of surplus or salvage property, the Commission or its designee shall notify both the successful bidder and the state agency holding the title of the surplus or salvage property and authorize the transfer of possession. In the case of vehicles or other items which require title transfer, it shall be the responsibility of the state agency holding title to complete the transfer of title to the purchaser or successful bidder.

(3) Forfeiture. In the event a purchaser or successful bidder pays for the property, but fails to remove the property within the time specified, the purchaser or successful bidder forfeits his rights to the property and any monies tendered, and ownership of the property reverts to the state.

(c) Direct Donations to Assistance Organizations and Local Governmental Entities.

(1) If the Commission determines that disposition by public sale is not in the State's best interest then the Commission may destroy the property as worthless salvage or donate it to an assistance organization or local government entity.

(2) A State agency may also make similar donations if the agency first notifies the Commission and provides sufficient information for the Commission to determine the donation is in the State's best interest. The State agency is responsible for documenting the donation and any proceeds in the Comptroller's State Property Accounting System.

(3) The Commission may charge the recipient a fee (not to exceed 10% of the item's market value) to cover the costs of the donation.

(d) Returns on Small Value Items--For the purpose of this section, Small Value Items are non-capitalized items in the Comptroller's State Property Accounting System. The Commission may not provide participating State agencies with monetary returns on the transfer or sale of that agency's small value items. However, the Commission will allow the State agency to receive a return in the form of transfers of similar items at zero or reduced cost.

**History**
- *Source Note: The provisions of this §126.5 adopted to be effective November 15, 2011, 36 TexReg 7660; amended to be effective September 29, 2016, 41 TexReg 7473.*

## **Part 7** STATE OFFICE OF ADMINISTRATIVE HEARINGS

### **Chapter 155** RULES OF PROCEDURE

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 155.1** Purpose {#sec-155.1 omnilex-key=us-tx-regs-official--title-1--155.1}

(a) This chapter governs the procedures of the State Office of Administrative Hearings (SOAH). These rules apply in all matters referred to SOAH, including contested cases under the Administrative Procedure Act (APA), Tex. Gov't Code Chapter 2001. These rules do not apply to matters otherwise addressed by statute or to matters that are otherwise limited by the provisions of this chapter.

(b) Administrative License Suspension cases initiated by the Texas Department of Public Safety are governed by Chapter 159 of this title.

(c) Arbitration procedures for certain enforcement actions of the Texas Department of Aging and Disability Services regarding assisted living facilities and nursing homes are governed by Chapters 156 and 163 of this title.

(d) Appeals of appraisal review board decisions are governed by Chapter 165 of this title.

(e) Dispute resolution procedures for certain consumer health benefit disputes under Insurance Code, Chapter 1467, are governed by Chapter 167 of this title.

(f) The procedural rules of the Public Utility Commission of Texas (PUC) that are adopted by reference are those enacted in Title 16, Chapter 22 of the Texas Administrative Code. The procedural rules of the Texas Commission on Environmental Quality (TCEQ) are adopted by reference are those enacted in Title 30, Chapter 80 of the Texas Administrative Code. This adoption does not include any PUC or TCEQ rules addressing the use of Alternative Dispute Resolution (ADR) processes at SOAH. Those ADR processes are governed by the Governmental Dispute Resolution Act, Tex. Gov't Code Chapter 2009; SOAH rule provisions pertaining to ADR; and interagency contracts, memoranda of understanding, or other written agreements with referring entities.

(g) The procedural rules of the Comptroller of Public Accounts (CPA) that address the hearing process in matters referred by that agency pertaining to protesting preliminary findings of a property value study are those enacted in Title 34, Chapter 9, Subchapter L of the Texas Administrative Code.

(h) Under Tex. Gov't Code §815.102, the procedural rules of the Employees Retirement System of Texas (ERS) govern the formal contested case process in matters it refers to SOAH.

(i) Proceedings under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. §§1400, *et seq.* , are governed by that statute, federal regulations at 34 C.F.R. Part 300, the rules of the Texas Education Agency at 19 TAC Chapter 89, and the procedures set forth in §§155.51, 155.53, 155.101(a)-(b), 155.103, 155.105, 155.301, 155.305, and 155.429(b) of this chapter.

**History**
- *Source Note: The provisions of this §155.1 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective April 16, 2009, 34 TexReg 2376; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective September 1, 2021, 46 TexReg 5381.*

##### **1 Tex. Admin. Code § 155.3** Application and Construction of this Chapter {#sec-155.3 omnilex-key=us-tx-regs-official--title-1--155.3}

(a) SOAH proceedings shall be conducted in accordance with the APA, when applicable, and with this chapter. The judge may modify and supplement the requirements of this chapter to promote the fair and efficient handling of the case and to facilitate resolution of issues, if doing so will not unduly prejudice the rights of any person or contravene applicable statutes.

(b) If there is a conflict between an agency's rules or prior decisions and statutory provisions applicable to the case, and the rules or decisions cannot be harmonized with the statute, the statute controls.

(c) The procedural rules of a state agency govern SOAH proceedings only to the extent that SOAH's rules adopt the agency's procedural rules by reference, unless otherwise required by law.

(d) If there is a conflict between SOAH's rules and the procedural rules of the TCEQ adopted in §155.1 of this chapter, the TCEQ rules will control.

(e) If there is a conflict between SOAH's rules and the procedural rules of the PUC adopted in §155.1 of this chapter, the PUC rules will control.

(f) If there is a conflict between SOAH's rules and the procedural rules of ERS referenced in §155.1 of this chapter, the ERS rules will control.

(g) This chapter shall be construed to ensure the just and expeditious determination of every matter referred to SOAH. Not all contested procedural issues will be susceptible to resolution by reference to the APA and other applicable statutes, this chapter, and case law. When they are not, the presiding judge will consider applicable policy of the referring agency documented in the record in accordance with §155.419 of this chapter, the Texas Rules of Civil Procedure (TRCP) as interpreted and construed by Texas case law, and persuasive authority established in other forums.

(h) Unless otherwise expressly provided, the past, present, and future tense shall each include the others; the masculine, feminine, and neuter gender shall each include the others; and the singular and plural number shall each include the other.

(i) Words and phrases shall be read in context and construed according to the rules of grammar and common usage. Words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, shall be construed accordingly. The principles of statutory construction and of the Code Construction Act, Tex. Gov't Code Chapter 311, apply.

**History**
- *Source Note: The provisions of this §155.3 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.5** Definitions {#sec-155.5 omnilex-key=us-tx-regs-official--title-1--155.5}

When used in this chapter, the following words and terms have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative law judge or judge--An individual appointed to serve as a presiding officer by SOAH's chief judge under Tex. Gov't Code Chapter 2003.

(2) Alternative Dispute Resolution or ADR--Processes used at SOAH to resolve disputes outside or in connection with contested cases, including mediation, mini-trials, early neutral evaluation, and arbitration.

(3) APA--The Administrative Procedure Act, Tex. Gov't Code Chapter 2001.

(4) Arbitration--A form of ADR, governed by an agreement between the parties or special rules or statutes providing for the process in which a third-party neutral issues a decision after a streamlined and simplified hearing. Arbitrations may be binding or non-binding, depending on the agreement, statutes, or rules. See Chapters 156 and 163 of this title for procedural rules specifically governing the arbitration of certain nursing home and assisted living facility enforcement cases referred by the Texas Department of Aging and Disability Services.

(5) Authorized representative--An attorney authorized to practice law in the State of Texas or, if authorized by applicable law, a non-attorney designated by a party to represent the party.

(6) Business day--A weekday on which state offices are open.

(7) Chief Judge--The chief administrative law judge of SOAH.

(8) Confidential Information--confidential information includes:

(A) information made confidential by law;

(B) information otherwise protected from disclosure by law or order of the presiding judge or a court; and

(C) documents submitted in camera, solely for the purpose of obtaining a ruling on the discoverability or admissibility of such documents.

(9) Discovery--The process of compulsory disclosure by a party, upon another party's request, of information, including facts and documents, relating to a contested case.

(10) Electronic filing or filed electronically--The electronic transmission of documents filed in a contested case referred to SOAH by uploading the documents to the case docket using the electronic filing manager, eFileTexas.gov, established by the Office of Court Administration and an electronic filing service provider certified by the Office of Court Administration, or in another the manner specified on SOAH's website, www.soah.texas.gov.

(11) Electronic Filing Service Provider or EFSP--An online web portal service offered by an independent third-party provider for use in electronically filing documents at SOAH and judicial courts of record, and that acts as the intermediary between the filer and the eFileTexas.gov system. Filers must create an account with an EFSP that is certified by the Office of Court Administration in order to electronically file documents at SOAH. A list of EFSP's that have met the requirements for certification by the Office of Court Administration is available www.efiletexas.gov.

(12) Electronic signature or signed electronically--An electronic version of a person's signature that is the legal equivalent of the person's handwritten signature, unless the document is required to be notarized or sworn. Electronic signature formats include:

(A) an "/s/" and the person's name typed in the space where the signature would otherwise appear;

(B) an electronic graphical image or scanned image of the signature; or

(C) a "digital signature" based on accepted public key infrastructure technology that guarantees the signers identity and data integrity.

(13) Electronic service or served electronically--The electronic transmission of documents filed in a matter referred to SOAH to a party or a party's authorized representative by means of an Electronic Filing Service Provider.

(14) Ex Parte Communication--Direct or indirect communication between a state agency, person, or representative of those entities and the presiding judge or other SOAH hearings personnel in connection with an issue of law or fact in a contested case or arbitration under SOAH's jurisdiction where the other known parties to the proceeding do not have notice of the communication and an opportunity to participate. Ex parte communication does not include:

(A) communication where the parties to the proceeding have notice of the communication and an opportunity to participate;

(B) communication concerning uncontested administrative or uncontested procedural matters;

(C) consultation between the presiding judge and other SOAH judges, SOAH legal counsel, or hearings personnel;

(D) consultation between the presiding judge and another disinterested expert on the law applicable to a proceeding before the judge, if the judge gives notice to the parties of the person consulted and the substance of the advice, and affords the parties reasonable opportunity to respond;

(E) ex parte communications required for the disposition of an ex parte matter or otherwise expressly authorized by law; and

(F) communications between a state agency, party, person, or representative of those entities and a SOAH mediator made in an effort to evaluate a contested matter for mediation, or to mediate or settle matters.

(15) Evidence--Testimony and exhibits admitted into the record to prove or disprove the existence of an alleged fact.

(16) Exhibits--Documents, records, photographs, and other forms of data compilation, regardless of media, or other tangible objects offered by a party as evidence.

(17) Filed--The receipt and acceptance for filing by SOAH's docketing department.

(18) IDEA--The Individuals with Disabilities Education Act.

(19) Media or media agency--A person or organization regularly engaged in news gathering or reporting, including any newspaper, radio or television station or network, news service, magazine, trade paper, professional journal, or other news reporting or news gathering entity.

(20) Mediation--A confidential, informal dispute resolution process in which an impartial person, the mediator, facilitates communication among the parties to promote settlement, reconciliation, or understanding.

(21) Party--A person named or admitted to participate in a case before SOAH.

(22) Person--An individual, representative, corporation, or other entity, including a public or non-profit corporation, or an agency or instrumentality of federal, state, or local government.

(23) Personal Identifying Information--Information that alone or in conjunction with other information identifies a specific individual, and that, is protected from unlawful use, possession, or disclosure. Personal identifying information includes an individual's:

(A) Social Security number, taxpayer identification number, driver's license number, passport number, or similar government-issued personal identification number;

(B) bank account number, credit card number, or other financial account number;

(C) telecommunication access device as defined by Section 32.51, Penal Code;

(D) date of birth;

(E) mother's maiden name;

(F) full name, if the person is a minor;

(G) unique biometric data, including the individual's fingerprint, voice print, and retina or iris image; and

(H) information that identifies the individual and relates to:

(i) the physical or mental health or condition of the individual;

(ii) the provision of health care to the individual; or

(iii) payment for the provision of health care to the individual.

(24) Pleading--A filed document that requests procedural or substantive relief, makes claims, alleges facts, makes legal argument(s), or otherwise addresses matters involved in the case.

(25) PUC--The Public Utility Commission of Texas.

(26) Redaction--To redact information means to remove confidential references from the document.

(27) Referring agency--A state board, commission, department, agency, or other governmental entity that refers a contested case or other matter to SOAH.

(28) SOAH--The State Office of Administrative Hearings.

(29) Stipulation--A binding agreement among opposing parties concerning a relevant issue or fact.

(30) TAC--The Texas Administrative Code.

(31) TCEQ--The Texas Commission on Environmental Quality.

(32) TRCP--The Texas Rules of Civil Procedure. The TRCP are found on the website of the Texas Supreme Court.

(33) TRE--The Texas Rules of Evidence. The TRE are found on the website of the Texas Supreme Court.

**History**
- *Source Note: The provisions of this §155.5 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

##### **1 Tex. Admin. Code § 155.7** Computation of Time {#sec-155.7 omnilex-key=us-tx-regs-official--title-1--155.7}

(a) Application of rule. This rule applies unless another method is required by statute, another rule in this chapter, or order.

(b) Computing time periods. When computing periods of time prescribed or allowed in this chapter:

(1) the day of the act, event, or default from which the designated time period begins to run is not counted; and

(2) the last day of the time period is counted, unless it is a day on which SOAH's offices are closed, in which case the time period will end on the next day SOAH's offices are open.

(c) Calendar days. Time limits shall be computed using calendar days rather than business days except as provided by subsection (d) of this section.

(d) Five days or less. If the time limit is five days or less, the intervening Saturdays, Sundays, and legal holidays are not counted.

(e) Requests to extend a time limit are governed by §155.307 of this chapter.

**History**
- *Source Note: The provisions of this §155.7 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.9** Seal {#sec-155.9 omnilex-key=us-tx-regs-official--title-1--155.9}

SOAH may maintain a seal to authenticate its official acts, including certifying copies of the administrative records of any matters heard by SOAH. The seal shall have a star with five points and the words "State Office of Administrative Hearings" engraved upon it.

**History**
- *Source Note: The provisions of this §155.9 adopted to be effective November 26, 2008, 33 TexReg 9451.*

#### **Subchapter B** DOCKETING--FILING A CONTESTED CASE

##### **1 Tex. Admin. Code § 155.51** Jurisdiction {#sec-155.51 omnilex-key=us-tx-regs-official--title-1--155.51}

(a) Acquisition of jurisdiction. SOAH acquires jurisdiction over a case when a referring agency completes and files a Request to Docket Case form. A separate Request to Docket Case form shall be completed and filed for each case referred to SOAH.

(b) When Request to Docket Case form is considered filed. A Request to Docket Case form shall be considered filed on the date the form is received and accepted by SOAH.

(c) Commencement of time periods. A period of time established by these rules shall not begin to run until SOAH acquires jurisdiction over a case.

(d) Effect of acquisition of jurisdiction by SOAH. After SOAH acquires jurisdiction, any party may initiate discovery or move for appropriate relief, including evidentiary rulings, continuances, summary disposition, and setting of proceedings. SOAH retains jurisdiction until it has concluded its involvement in the matter.

**History**
- *Source Note: The provisions of this §155.51 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

##### **1 Tex. Admin. Code § 155.53** Request to Docket Case {#sec-155.53 omnilex-key=us-tx-regs-official--title-1--155.53}

(a) Request to Docket Case form. A referring agency shall file with SOAH a completed Request to Docket Case form for each matter referred to SOAH.

(1) For contested cases, the Request to Docket Case form shall be submitted together with the complaint, petition, application, or other pertinent documents describing the agency action giving rise to the case.

(2) For matters referred for alternative dispute resolution or mediation evaluation, the Request for ADR form may be filed without accompanying documentation.

(b) Actions to be requested. A referring agency shall request one of the following actions on the Request to Docket Case form:

(1) setting of a hearing;

(2) assignment of a judge; or

(3) an ADR process.

(c) Request for setting of hearing. If a referring agency requests a setting of hearing, SOAH will attempt to set the hearing on the date and time requested, but the setting will be based on the availability of hearing rooms and judges. SOAH will provide the agency with the date, time, and place of the setting.

(d) Request for assignment of judge. If a referring agency requests assignment of a judge, SOAH will assign a judge to handle the case.

(e) Request for ADR. If a referring agency requests ADR, SOAH will assign a judge, mediator, or arbitrator to handle the proceeding.

(f) Refusal of Request to Docket Case form. SOAH may refuse to accept for filing a Request to Docket Case form that has not been properly referred to SOAH or that does not substantially conform to the filing procedures of this chapter.

**History**
- *Source Note: The provisions of this §155.53 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

#### **Subchapter C** FILING AND SERVICE OF DOCUMENTS

##### **1 Tex. Admin. Code § 155.101** Filing Documents {#sec-155.101 omnilex-key=us-tx-regs-official--title-1--155.101}

(a) Filing and service required.

(1) All pleadings and other documents shall be filed using one of the methods described in this rule.

(2) On the same date a document is filed, it shall also be served on all other parties as described in §155.105 of this chapter.

(b) Method and format of filing in all cases other than PUC and TCEQ cases, or matters referred for mediation.

(1) Electronic Filing Required.

(A) Except as otherwise provided in this subchapter, attorneys, state agencies, and other governmental entities are required to file all documents, including exhibits, electronically in the manner specified on SOAH's website, www.soah.texas.gov. SOAH may require parties to electronically file documents through the electronic filing manager established by the Office of Court Administration and an electronic filing service provider certified by the Office of Court Administration. Parties not represented by an attorney are strongly encouraged to electronically file documents but may use alternative methods of filing described in paragraph (2) of this subsection.

(B) The electronic version of a document that has been electronically filed at SOAH shall be given the same legal status as the original document.

(C) In addition to the other requirements of this rule, electronic filings must comply with all requirements and procedures set forth on SOAH's website and electronic filing page, and the applicable technology standards of the Judicial Committee on Information Technology if filed through the electronic filing manager established by the Office of Court Administration.

(D) Formatting and submission. A document filed electronically must:

(i) be legible and in text-searchable portable document format (PDF);

(ii) be directly converted to PDF rather than scanned, to the extent possible;

(iii) not be locked;

(iv) include the email address of a party, attorney, or representative who electronically files the document;

(v) be accompanied by the entry in the electronic filing manager of complete and accurate service contact information known to the parties at the time of filing, including the designation of lead counsel if the party is represented by counsel;

(vi) include the SOAH docket number and the name of the case in which it is filed, if not attached to a pleading or document that already contains this information;

(vii) be properly titled or described in the electronic filing manager in a manner that permits SOAH and the parties to reasonably ascertain its contents;

(viii) if the document submitted for filing contains confidential information, comply with the requirements of §155.103 of this chapter and be submitted separately from public pleadings, exhibits, or filings to the extent possible;

(ix) if the document submitted for filing is an exhibit, comply with the requirements of §155.429 of this chapter and be submitted separately from pleadings or other filings, unless the exhibit is attached as a necessary supporting document to a pleading; and

(x) if the document submitted for filing is a motion, the motion will comply with the requirements of §155.305 of this chapter and be submitted separately from pleadings or other filings.

(E) A pleading or document that is filed electronically is considered signed if the document includes an electronic signature.

(F) Time of filing. Unless a document must be filed by a certain time of day, a document is considered timely filed if it is electronically filed at any time before midnight central time on the filing deadline. Once a document has been accepted for filing by SOAH, an electronically filed document is deemed filed on the date when transmitted to the filing party's electronic filing service provider, except:

(i) if a document is transmitted on a Saturday, Sunday, or legal holiday, it is deemed filed on the next business day; and

(ii) if a document requires a motion and an order allowing its filing, the document is deemed filed on the date that the motion is granted.

(iii) If the deadline required for filing a document in an IDEA special education due process proceeding falls on a Saturday, Sunday, or legal holiday, then clause (i) of this subparagraph does not apply and the document is deemed filed on the date when transmitted to the filing party's electronic filing service provider.

(G) Documents offered at a hearing.

(i) Any documents, including written testimony and exhibits, offered at a hearing that were not otherwise filed as part of the record shall be filed electronically.

(ii) If the judge sustained an evidentiary objection to a document offered at a hearing that resulted in exclusion of the document, then the excluded document shall be filed in accordance with this section only if there was an offer of proof.

(iii) Documents required to be filed by this section shall be filed electronically by not later than the next business day after the conclusion of the hearing at which they were offered, unless otherwise ordered by the judge.

(2) Filings by unrepresented parties.

(A) Parties who are not represented by an attorney may file documents using any of the following methods:

(i) electronically, in the manner and subject to the requirements specified in paragraph (1) of this subsection and on SOAH's website, www.soah.texas.gov;

(ii) by mail addressed to SOAH at P.O. Box 13025, Austin, Texas 78711-3025;

(iii) by hand-delivery to SOAH at 300 West 15th Street, Room 504;

(iv) by fax to the appropriate SOAH office location; or

(v) at the SOAH field office where the case is assigned, using the field office address available at SOAH's website.

(B) All documents filed by unrepresented parties must:

(i) include the SOAH docket number and the name of the case in which it is filed;

(ii) include the party's mailing address, email address (if available), and telephone number;

(iii) comply with the requirements of §155.103 of this chapter if the document submitted for filing contains confidential information; and

(iv) comply with the requirements of §155.429 of this chapter if the document submitted for filing is an exhibit.

(C) Time of filing for documents not filed electronically. With respect to documents filed by mail, fax, or hand-delivery, the time and date of filing shall be determined by the file stamp affixed by SOAH. Documents received after 5:00 p.m. or when SOAH is closed shall be deemed filed the next business day.

(3) Filing Errors.

(A) Filers shall attempt, in good faith, to resolve filing and service errors in accordance with requisite standards of conduct and decorum towards counsel, opposing parties, the judge, and members of SOAH staff, including through timely correction and resubmission of any non-conforming documents.

(B) Non-conforming documents. SOAH's docketing department may not refuse to file a document that fails to conform with this rule. When a filed document fails to conform to this rule, the presiding judge or SOAH's docketing department may identify the errors to be corrected and state a deadline for the person, attorney, or agency to resubmit the document in conforming format.

(C) SOAH shall not be responsible for user or system errors of the filing party occurring in the electronic filing, transmission, or service of electronically filed documents.

(D) Technical failure. If a document is untimely due to a technical failure or a system outage, the filing party may seek appropriate relief from the presiding judge. If the missed deadline is one imposed by SOAH's electronic filing rules, the filing party must be given a reasonable extension of time to complete the filing.

(4) For good cause, a judge may permit a party to file documents in paper or another acceptable form in a particular case.

(c) Method of filing in cases referred by the PUC.

(1) Except for exhibits offered at a prehearing conference or hearing, the original of all documents shall be filed at the PUC in accordance with the PUC rules.

(2) The party filing a document with the PUC (except documents provided in the discovery process that are not the subject of motions filed in a discovery dispute) shall serve the judge with electronic or hard copies of the document upon request or order of the judge.

(3) The court reporter shall provide the transcript and exhibits to the judge at the same time the transcript is provided to the requesting party. SOAH shall maintain the transcript and exhibits until they are released to the PUC by the judge. If no court reporter was requested by a party, SOAH shall maintain the recording of the hearing and the exhibits until they are released to the PUC by the judge.

(d) Method of filing in cases referred by the TCEQ.

(1) Except for exhibits offered at a prehearing conference or hearing, the original of all documents shall be filed with the TCEQ's chief clerk in accordance with the TCEQ rules.

(2) The time and date of filing of these materials shall be determined by the file stamp affixed by the chief clerk, or as evidenced by the file stamp affixed to the document or envelope by the TCEQ mail room, whichever is earlier.

(3) The party filing a document with the TCEQ (except documents provided in the discovery process that are not the subject of motions filed in a discovery dispute) shall serve the judge with a copy of the document by delivery to SOAH on the same day as the filing by electronically filing the document in accordance with the method and format required by subsection (b) of this section.

(4) The court reporter shall provide the transcript and exhibits to the judge at the time the transcript is provided to the requesting party. SOAH shall maintain the transcript and exhibits until they are released to the TCEQ by the judge. If no court reporter was requested by a party, SOAH shall maintain the recording of the hearing and the exhibits until they are released to the TCEQ by the judge.

(e) Method of filing in matters referred for mediation or mediator evaluation.

(1) Documents or communications relating to matters referred for mediation, or for evaluation by a mediator to determine if mediation is appropriate, shall not be filed with SOAH's docketing department, except to the extent the following items are required for SOAH's administration of alternative dispute resolution procedures:

(A) A request for ADR as described in §155.53 of this chapter, if the matter is initially referred for mediation only;

(B) An order of the judge referring a case for evaluation or mediation, if the matter was initially referred for a contested case hearing;

(C) Any letter or notice issued by a SOAH mediator, providing the parties with notice of assignment of a SOAH mediator and/or setting the date and time for the evaluation or mediation;

(D) Any motion or other request of the parties seeking cancellation of the evaluation or mediation;

(E) The mediator's report, which shall include only the information as described in §155.351(f)(3) of this chapter;

(F) The evaluator's written recommendation described in §155.351(b)(3) of this chapter; and

(G) Any administrative dismissal of the matter from SOAH's docket.

(2) Documents filed with SOAH's docketing department as described in paragraph (1) of this subsection are subject to public disclosure, and shall not contain any confidential information relating to the subject matter of the dispute.

(3) All other documents or communications relating to the mediation or evaluation, except those described in paragraph (1) of this subsection, must be provided to the SOAH mediator and/or exchanged between the parties in a manner approved by the SOAH mediator.

**History**
- *Source Note: The provisions of this §155.101 adopted to be effective January 1, 2017, 41 TexReg 8593; amended to be effective September 8, 2019, 44 TexReg 4691; amended to be effective November 29, 2020, 45 TexReg 8295; amended to be effective September 1, 2021, 46 TexReg 5381.*

##### **1 Tex. Admin. Code § 155.103** Confidential Information {#sec-155.103 omnilex-key=us-tx-regs-official--title-1--155.103}

(a) Records filed as part of a contested case proceeding at SOAH are presumed to be open to the public unless designated as confidential in accordance with this rule. A party filing or offering documents that contain confidential information and/or personal identifying information, as those terms are defined in §155.5 of this chapter, shall comply with this rule to prevent inadvertent public disclosure of such documents.

(b) Documents filed in confidential cases.

(1) Confidential cases. The records of certain contested case proceedings at SOAH are designated as confidential and closed to the public because of the necessity to comply with applicable confidentiality laws. Confidential proceedings include, but are not limited to:

(A) Tax proceedings subject to Tex. Gov't Code, §2003.104 referred by the Comptroller of Public Accounts;

(B) License suspension proceedings referred by the Child Support Division of the Office of the Attorney General;

(C) Child abuse and neglect central registry proceedings referred by the Health and Human Services Commission;

(D) Proceedings involving public retirement system benefits;

(E) Workers' compensation benefits proceedings referred by the Texas Department of Insurance, Division of Workers' Compensation;

(F) Proceedings related to a petition for correction of a peace officer separation report referred by the Texas Commission on Law Enforcement, unless the petitioner resigned or was terminated due to substantiated incidents of excessive force or violations of law other than traffic offenses; and

(G) IDEA special education due process proceedings referred by the Texas Education Agency.

(2) Filing documents in confidential cases. In addition to the requirements of §155.101 of this chapter, documents filed in confidential cases shall be submitted for filing as follows:

(A) Each page of the document shall be conspicuously marked "CONFIDENTIAL" in bold print, 12-point or larger type.

(B) Attorneys, state agencies, and other governmental entities required to electronically file documents in the manner specified by §155.101 of this chapter shall designate all such documents as "confidential" within the party's electronic filing service provider.

(C) Unless otherwise permitted by order of the presiding judge, only unrepresented parties may file documents in confidential proceedings by mail, hand-delivery, or fax. If filed by mail, fax, or hand-delivery, documents submitted for filing shall be accompanied by an explanatory cover letter that includes:

(i) the docket number and style of the case;

(ii) the filing party's name, address, email address (if available), and telephone number; and

(iii) conspicuous markings identifying the filing as "CONFIDENTIAL" in bold print, 12-point or larger type.

(c) Confidential information filed in public cases.

(1) Redaction required. A person who files documents at SOAH in proceedings designated as open to the public, including exhibits, shall redact from the documents all confidential information and personal identifying information that is unnecessary for resolution of the case. Unless otherwise ordered by the judge, a party may not file an unredacted document containing confidential information or personal identifying information in a proceeding that is open to the public except as provided in subsection (c)(2) of this section.

(2) Confidential documents necessary for resolution of the case. A party may designate an entire document or exhibit as confidential in a proceeding that is open to the public only if:

(A) the entire document or exhibit contains confidential information or includes personal identifying information;

(B) redaction of the document or exhibit would remove confidential information or personal identifying information necessary to the resolution of the case; and

(C) no less restrictive means other than withholding the information from public disclosure will adequately or effectively protect the specific confidentiality interest asserted.

(D) A party may file a motion seeking an order for the protection of confidential information to be filed in a proceeding that is open to the public. Such motion should state with particularity:

(i) the identity of the movant and a brief, but specific description of the nature of the case and the records which are sought to be protected;

(ii) the applicable law or regulation requiring or authorizing the specific information at issue to be protected from public disclosure; and

(iii) any stipulation of the parties with respect to the use or disclosure of confidential information.

(3) Filing confidential documents. In addition to the requirements of §155.101 of this chapter, a party filing confidential documents in a proceeding accessible to the public shall submit documents for filing as follows:

(A) A party shall separate confidential documents or exhibits from non-confidential documents or exhibits at the time the records are submitted for filing. A party may not designate an entire series of documents or exhibits as confidential for purposes of filing if only a part of the records contains confidential information or personal identifying information.

(B) Each page of the document containing confidential information or personal identifying information shall be conspicuously marked "CONFIDENTIAL" in bold print, 12-point or larger type.

(C) Attorneys, state agencies, and other governmental entities required to electronically file documents in the manner specified by §155.101 of this chapter shall designate all such documents as "confidential" within the party's electronic filing service provider.

(D) Unless otherwise permitted by order of the presiding judge, only unrepresented parties may file documents in confidential proceedings by mail, hand-delivery, or fax. If filed by mail, fax, or hand-delivery, documents submitted for filing shall be accompanied by an explanatory cover letter that includes:

(i) the docket number and style of the case;

(ii) the filing party's name, address, email address (if available), and telephone number; and

(iii) conspicuous markings identifying the filing as "CONFIDENTIAL" in bold print, 12-point or larger type.

(E) Documents filed pursuant to a protective order issued by the judge may be designated as "CONFIDENTIAL, FILED UNDER SEAL" in bold print, 12-point or larger type.

(d) Challenging confidentiality designations. A party may file a motion to challenge the redaction or confidential filing of any information, or the judge can raise the issue. If a confidentiality designation is challenged, the designating party has the burden of showing that the document should remain confidential.

(1) If the judge determines that a confidential filing under subsection (c) of this section is appropriate, the judge may allow the filing to remain inaccessible to the public on SOAH's website, admit the information into the evidentiary record under seal, or employ appropriate protective measures.

(2) If the judge determines that a confidential filing under subsection (c) of this section is not appropriate, the offering party must redact the confidential information or personal identifying information before resubmitting the document.

(e) Designation of a document as confidential in a SOAH proceeding is not determinative of whether that document would be subject to disclosure under Tex. Gov't Code Chapter 552 or other applicable law.

(f) In Camera Inspection. Documents presented for in camera inspection solely for the purpose of obtaining a ruling on their discoverability or admissibility shall not be filed, but shall be submitted only in the manner specified by the judge.

(g) Sanctions. The judge may issue an order imposing sanctions in the manner described in §155.157 of this chapter for the actions of a party in improperly filing or offering documents that contain confidential information or personal identifying information, or for actions that result in the public disclosure of information that is confidential by law.

**History**
- *Source Note: The provisions of this §155.103 adopted to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295; amended to be effective September 1, 2021, 46 TexReg 5381.*

##### **1 Tex. Admin. Code § 155.105** Service of Documents on Parties {#sec-155.105 omnilex-key=us-tx-regs-official--title-1--155.105}

(a) Method of service by parties in all cases other than those referred by PUC or TCEQ.

(1) Service on all parties. On the same date a document is filed, a copy shall also be sent to each party or the party's authorized representative in the manner specified by this section. By order, the judge may exempt a party from serving certain documents or materials on all parties.

(A) Documents Filed Electronically. A document filed electronically in accordance with §155.101(b) of this chapter must be served electronically through the electronic filing manager if the email address of the party or attorney to be served is on file with the electronic filing manager. It is the responsibility of the parties to the case to ensure that all service contact information entered in the electronic filing manager is complete and accurate. If the email address of the party or attorney to be served is not on file with the electronic filing manager, the document may be served on that party or attorney under subparagraph (B) of this paragraph.

(B) Documents Not Filed Electronically. A document not filed electronically may be served in person, by mail, by commercial delivery service, by fax, by email, or by such other manner as directed by the judge.

(2) Certificate of service. A person filing a document shall include a certificate of service that certifies compliance with this section.

(A) A certificate of service shall be sufficient if it substantially complies with the following example: "Certificate of Service: I certify that on {date} , a true and correct copy of this {name of document} has been sent to {name of opposing party or authorized representative for the opposing party} by {specify method of delivery, e.g., electronic filing, regular mail, fax, certified mail.} {Signature} "

(B) If a filing does not certify service, SOAH may:

(i) return the filing;

(ii) send a notice of noncompliance to all parties, stating the filing will not be considered until all parties have been served; or

(iii) send a copy of the filing to all parties.

(3) Exemption. By order, the judge may exempt a party from serving certain documents or materials on all parties, unless such service is required by applicable law.

(4) Presumed time of receipt of served documents. The following rebuttable presumptions shall apply regarding a party's receipt of documents served by another party:

(A) If a document was hand-delivered to a party, the judge shall presume that the document was received on the date of filing at SOAH.

(B) If a document was served by use of an electronic filing service or a commercial delivery service, the judge shall presume that the document was received no later than the next business day after filing at SOAH.

(C) If a document was served by mail, the judge shall presume that it was received no later than three days after mailing.

(D) If a document was served by fax or email before 5:00 p.m. on a business day, the judge shall presume that the document was received on that day; otherwise, the judge shall presume that the document was received on the next business day.

(5) Burden on sender. The sender has the burden of proving date and time of service.

(b) Method of service by parties in all cases referred by PUC or TCEQ. The procedural rules of the PUC and TCEQ govern the parties' service of documents in cases referred by those agencies.

**History**
- *Source Note: The provisions of this §155.105 adopted to be effective January 1, 2017, 41 TexReg 8593; amended to be effective September 8, 2019, 44 TexReg 4691; amended to be effective November 29, 2020, 45 TexReg 8295.*

#### **Subchapter D** JUDGES

##### **1 Tex. Admin. Code § 155.151** Assignment of Judges to Cases {#sec-155.151 omnilex-key=us-tx-regs-official--title-1--155.151}

(a) Discretion of Chief Judge. Assignment of judges to cases is at the discretion of the Chief Judge and the Chief Judge's designees and is not subject to request except as provided by §155.152 of this subchapter.

(b) Judge's inability to continue presiding. If a judge is unable to continue presiding or to issue a decision or proposal for decision after the conclusion of the hearing, the Chief Judge or the Chief Judge's designee may reassign the case to another judge. That judge shall review the existing record and need not repeat previous proceedings but may conduct further proceedings as necessary.

(c) Assignment of more than one judge. More than one judge may be assigned to a case.

(1) If more than one judge is assigned to a case, the judges may divide their areas of responsibility.

(2) Evidentiary and procedural questions will be resolved by the judge presiding at the time the issues arise or may be referred to another judge assigned to the case.

(d) Temporary assignments. Cases may be temporarily assigned to a judge or panel of judges to decide regularly occurring threshold issues.

**History**
- *Source Note: The provisions of this §155.151 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.152** Disqualification or Recusal of Judges {#sec-155.152 omnilex-key=us-tx-regs-official--title-1--155.152}

(a) A judge is subject to recusal or disqualification on the same grounds and under the same circumstances as specified in TRCP Rule 18b.

(1) Motion. A motion to recuse or disqualify a judge assigned to a case should:

(A) be made at the earliest practicable time;

(B) be verified, if the motion is in writing;

(C) state with particularity the grounds for the motion; and

(D) be based on personal knowledge and include such facts as would be admissible in evidence, except that facts may be stated on information and belief if the basis for such belief is specifically stated.

(2) Response to motion. Any other party may file or make a statement opposing or concurring with a motion to recuse or disqualify.

(b) If the presiding judge who is the subject of the motion disqualifies or recuses him- or herself based on the motion, the Chief Judge or a designee of the Chief Judge shall assign a different presiding judge to the case.

(c) If the presiding judge who is the subject of the motion does not disqualify or recuse him- or herself from the case, the Chief Judge or a designee of the Chief Judge shall assign another judge to consider and rule on the motion. At the discretion of the assigned judge, a hearing may be held on the motion. If the assigned judge finds that the presiding judge is disqualified or should be recused, the Chief Judge or a designee of the Chief Judge shall assign a different presiding judge to the case.

**History**
- *Source Note: The provisions of this §155.152 adopted to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.153** Powers and Duties {#sec-155.153 omnilex-key=us-tx-regs-official--title-1--155.153}

(a) Judge's authority and duties. The judge shall have the authority and duty to:

(1) conduct a full, fair, and efficient hearing;

(2) take action to avoid unnecessary delay in the disposition of the proceeding; and

(3) maintain order.

(b) Judge's powers. The judge shall have the power to regulate prehearing matters, the hearing, posthearing matters, and the conduct of the parties and authorized representatives, including the power to:

(1) administer oaths;

(2) take testimony, including the power to question witnesses and to request the presence of a witness from a state agency;

(3) rule on questions of evidence;

(4) rule on discovery issues;

(5) issue orders relating to hearing and prehearing matters, including orders imposing sanctions;

(6) admit or deny party status;

(7) designate the party with the burden of proof pursuant to §155.427 of this chapter;

(8) exclude irrelevant, immaterial, and unduly repetitious testimony and reasonably limit the time for presentations of evidence or argument;

(9) order parties to submit legal memoranda and proposed findings of fact and conclusions of law;

(10) reopen the record when justice requires, if the judge has not issued a dismissal, proposal for decision, or final decision;

(11) issue proposals for decision pursuant to Tex. Gov't Code §2001.062 and, when authorized, final decisions;

(12) rule on motions for rehearing, when authorized;

(13) reopen the record after a proposal for decision has been issued when a case is remanded by a referring agency for further proceedings; and

(14) reopen the record after a final decision has been issued by SOAH if the judge grants a motion for rehearing, or when a case is remanded by a court to SOAH for further proceedings.

**History**
- *Source Note: The provisions of this §155.153 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.155** Orders {#sec-155.155 omnilex-key=us-tx-regs-official--title-1--155.155}

(a) Judge's authority. The judge has authority to:

(1) issue orders to control the conduct and scope of the proceeding;

(2) rule on motions;

(3) establish deadlines;

(4) schedule and conduct prehearing or posthearing conferences;

(5) require the prefiling of exhibits and testimony;

(6) set out requirements for participation in the case; and

(7) take other steps conducive to a fair and efficient contested case process.

(b) Record of rulings. Rulings not made orally at a recorded prehearing conference or hearing shall be in writing and issued to all parties of record.

(c) Consolidation or joinder for hearing. The judge may order that cases be consolidated or joined for hearing if:

(1) there are common issues of law or fact; and

(2) consolidation or joint hearing will promote the fair and efficient handling of the matters.

(d) Severance of issues. The judge may order severance of issues if separate hearings on the issues will promote the fair and efficient handling of the matters.

(e) Referral to mediation. The judge may order referral of a case to mediation or other appropriate alternative dispute resolution procedure as provided by the Governmental Dispute Resolution Act, Tex. Gov't Code Chapter 2009, and the statute creating SOAH, Tex. Gov't Code Chapter 2003.

**History**
- *Source Note: The provisions of this §155.155 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.157** Sanctioning Authority {#sec-155.157 omnilex-key=us-tx-regs-official--title-1--155.157}

(a) Authority to impose sanctions. For contested cases referred by an agency other than the PUC or the TCEQ, the judge has the authority to impose appropriate sanctions against a party or its representative for:

(1) filing a motion or pleading that is deemed by the judge to be groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or resisting discovery; or

(3) failure to obey an order of the judge or a SOAH or referring agency rule.

(b) Sanctions that may be imposed. The judge may issue an order imposing sanctions when justified by party or representative behavior described in subsection (a) of this section and after notice and opportunity for hearing. Sanctions may include:

(1) disallowing or limiting further discovery by the offending party;

(2) charging all or part of the expenses of discovery against the offending party or its representatives;

(3) deeming designated facts be admitted for purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a claim or defense or prohibiting the party from introducing designated matters into the record;

(5) disallowing in whole or in part requests for relief by the offending party and excluding evidence in support of those requests; or

(6) striking pleadings or testimony in whole or in part.

**History**
- *Source Note: The provisions of this §155.157 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective July 8, 2009, 34 TexReg 4505.*

#### **Subchapter E** REPRESENTATION OF PARTIES

##### **1 Tex. Admin. Code § 155.201** Representation of Parties {#sec-155.201 omnilex-key=us-tx-regs-official--title-1--155.201}

(a) Representation. A party may represent himself or herself or may appear by authorized representative. Parties that are not represented by an attorney may obtain information regarding contested case hearings on SOAH's public website at www.soah.texas.gov.

(b) Appearance by authorized representative. A party's authorized representative who has not entered an appearance as a matter of record in the proceeding shall enter an appearance by filing with SOAH appropriate documentation that contains the representative's mailing address, email address and telephone number. If the party's representative is not licensed to practice law in Texas and the authority of the representative is challenged, the representative must show authority to appear as the party's representative.

(c) Nonresident attorney. An attorney who is a resident of and licensed to practice law in another state and who is not an active member of the State Bar of Texas shall comply with the requirements of Tex. Gov't Code §82.0361 and Rule XIX of the Rules Governing Admission to the Bar of Texas before entering an appearance on behalf of a party at SOAH. Rule XIX may be found on the website of the Board of Law Examiners.

(d) Attorney in charge. When more than one attorney makes an appearance on behalf of a party, the attorney whose signature first appears on the initial pleading for a party shall be the attorney in charge for that party unless another attorney is specifically designated in writing. Unless otherwise ordered by the judge, all communications sent by SOAH or other parties regarding the matter shall be sent to the attorney in charge.

(e) This rule does not allow a person to engage in the unauthorized practice of law.

**History**
- *Source Note: The provisions of this §155.201 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

##### **1 Tex. Admin. Code § 155.203** Withdrawal of Counsel {#sec-155.203 omnilex-key=us-tx-regs-official--title-1--155.203}

(a) An attorney may withdraw from representing a party only if a written motion showing good cause for withdrawal is filed by the withdrawing attorney, the substituting attorney, or the client.

(1) If another attorney is to be substituted as attorney for the party, the motion shall state: the substituted attorney's name, address, telephone number, and email address; that the substituting attorney has been notified of all pending settings and deadlines; and that the substituting attorney approves the substitution.

(2) If the party has no substitute attorney, the motion shall state: the party's last known address, telephone number, and email address; that the party has been notified of all pending settings and deadlines; and whether the party consents to the withdrawal. If the party does not consent to the withdrawal, the attorney also must affirm that the party has been served with a copy of the motion and informed of the right to object to the withdrawal.

(b) A motion to withdraw must be served on all parties and must comply with §155.305(b)(2) of this chapter.

(c) An attorney will remain a party's attorney of record until a filed motion to withdraw has been granted by the judge.

(d) If the motion to withdraw is granted, the withdrawing attorney shall immediately notify the party or substitute attorney in writing of any settings or deadlines of which the attorney has knowledge at the time of the withdrawal and about which the attorney has not already notified the party or substitute attorney.

(e) A state agency may substitute one attorney for another by providing written notice to all parties and the judge without necessity for a motion or order.

**History**
- *Source Note: The provisions of this §155.203 adopted to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

#### **Subchapter F** DISCOVERY

##### **1 Tex. Admin. Code § 155.251** General Provisions {#sec-155.251 omnilex-key=us-tx-regs-official--title-1--155.251}

(a) Commencement of discovery. Discovery may begin when SOAH acquires jurisdiction under §155.51 of this chapter.

(b) Discovery period. The discovery period ends ten days before the hearing on the merits begins, unless otherwise ordered by the judge or agreed by the parties.

(c) Discovery rights. Parties have the discovery rights provided in this section, the APA, and the TRCP, other than the provisions relating to discovery control plans and except as modified by this chapter. Discovery rights may be modified or changed by the judge. For cases not adjudicated under the APA, the judge will determine what discovery, if any, will be permitted.

(d) Discovery requests, responses, and documents produced in discovery shall not be filed with SOAH, except as provided in §155.259 of this chapter.

**History**
- *Source Note: The provisions of this §155.251 adopted to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.253** Depositions {#sec-155.253 omnilex-key=us-tx-regs-official--title-1--155.253}

(a) The APA governs the taking and use of depositions unless otherwise provided by law.

(b) Except with permission of the judge upon a showing of good cause or upon agreement by all parties, the following apply:

(1) All parties must receive at least seven days' notice of a deposition. The parties should make reasonable efforts to confer on the date, time, and location of the deposition.

(2) No party or side may examine or cross-examine an individual witness for more than six hours.

(3) Brief breaks taken during the deposition do not count in the calculation of the period for a deposition.

**History**
- *Source Note: The provisions of this §155.253 adopted to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.255** Written Discovery {#sec-155.255 omnilex-key=us-tx-regs-official--title-1--155.255}

(a) Forms of written discovery. Unless otherwise provided by this section or ordered by the judge, parties may use the forms of written discovery provided by the TRCP, with the following modifications:

(1) Requests for production. Each party may serve no more than 25 written requests for production. Each discrete subpart of a request for production is considered a separate request for production.

(2) Interrogatories. Each party may serve no more than 25 written interrogatories, excluding interrogatories asking a party only to identify or authenticate specific documents. Each discrete subpart of an interrogatory is considered a separate interrogatory.

(3) Requests for admissions. Each party may serve no more than 25 requests for admissions. Requests for admissions may be used only to address jurisdictional facts or the genuineness of any documents served with the request.

(4) Requests for disclosure.

(A) The discovery rules of the TRCP requiring initial disclosures without awaiting a discovery request do not apply to a contested case under SOAH's jurisdiction, except as may be ordered or allowed by the judge.

(B) A party may request disclosure of documents or information that the opposing party has in its possession, custody, or control, including, but not limited to, the following:

(i) the correct names of the parties to the contested case; the name, address, and telephone number of any potential parties;

(ii) a general description of the legal theories and the factual bases of the responding party's claims or defenses, if not already set forth in a pleading or document filed in the record of the proceeding at SOAH;

(iii) the name, address, and telephone number of persons having knowledge of relevant facts, and a brief statement of each identified person's connection with the case;

(iv) the statement of any person with knowledge of relevant facts (witness statement) regardless of when the statement was made; and

(v) a copy, or description by category and location, of all documents, electronic information, and tangible items that the disclosing party has in its possession, custody or control and may use to support its claims or defenses, unless the use would be solely for impeachment. A request for disclosure made pursuant to this subsection is not considered a request for production.

(5) Expert Disclosures and Reports. Upon request of the opposing party, or as otherwise ordered or allowed by the judge, a party must timely provide the following disclosures for any testifying expert in advance of a scheduled hearing on the merits:

(A) the expert's name, address, and telephone number;

(B) the subject matter on which the expert will testify;

(C) the general substance of the expert's mental impressions and opinions and a brief summary of the basis for them, or if the expert is not retained by, employed by, or otherwise subject to the control of the responding party, documents reflecting such information;

(D) if the expert is retained by, employed by, or otherwise subject to the control of the responding party:

(i) all documents, tangible things, reports, models, or data compilations that have been provided to, reviewed by, or prepared by or for the expert in anticipation of the expert's testimony;

(ii) the expert's current resume and bibliography;

(iii) the expert's qualifications, including a list of all publications authored in the previous 10 years;

(iv) a list of all other cases in which, during the previous four years, the expert testified as an expert at trial or by deposition; and

(v) a statement of the compensation to be paid for the expert's study and testimony in the case.

(E) If the discoverable factual observations, tests, supporting data, calculations, photographs, or opinions of an expert have not been recorded and reduced to tangible form, the judge may order these matters reduced to tangible form and produced, in addition to the deposition of the expert.

(b) Written discovery requests shall be served at least 30 days before the end of the discovery period, unless otherwise specified by this section or ordered by the judge.

(c) Response. Unless otherwise ordered by the judge or agreed by the parties, responses to written discovery requests shall be made within 30 days after receipt.

(1) Responses and documents produced in discovery shall be served upon the requesting party, and notice of service shall be given to all parties.

(2) A party producing documents in response to a discovery request must retain the original documents or exact duplicates of the original documents.

**History**
- *Source Note: The provisions of this §155.255 adopted to be effective January 1, 2017, 41 TexReg 8593; amended to be effective August 29, 2021, 46 TexReg 5173.*

##### **1 Tex. Admin. Code § 155.257** Subpoenas and Commissions {#sec-155.257 omnilex-key=us-tx-regs-official--title-1--155.257}

(a) Except in TCEQ and PUC cases, requests for issuance of subpoenas or commissions shall be directed to the referring agency. Any such requests shall comply with the APA and the applicable agency procedure, if any, regarding issuance of subpoenas or commissions.

(b) In TCEQ and PUC cases, requests for issuance of subpoenas or commissions shall be submitted in accordance with those agencies' rules.

(c) Disputes over whether a request complies with applicable law should be presented to the judge in a motion filed pursuant to §155.259 of this chapter.

**History**
- *Source Note: The provisions of this §155.257 adopted to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.259** Discovery Motions {#sec-155.259 omnilex-key=us-tx-regs-official--title-1--155.259}

(a) Certificate of conference. The parties and their authorized representatives shall cooperate in discovery and shall endeavor to make any agreements reasonably necessary for the efficient disposition of the case. All discovery motions shall include a certificate of conference complying with §155.305(b)(2) of this chapter.

(b) Motions for protection. A person from whom discovery is sought may file a motion within the time permitted for a response to request an order protecting that person from the discovery sought. A motion for protection shall include the relevant portion of the discovery request at issue. A person must comply with a discovery request to the extent protection is not sought unless it is unreasonable under the circumstances to do so before obtaining a ruling on the motion.

(c) Motions to compel. A person alleging failure to comply with discovery shall file a motion to compel as soon as practicable. A motion to compel shall include the relevant portion of the discovery response at issue. A motion to compel shall not be filed less than 10 days before the first day of the hearing on the merits, unless good cause is shown. A judge may deny or limit relief sought in a motion to compel if the judge determines that the discovery requests at issue are improper or unduly burdensome.

(d) *In camera* inspections. If a party's assertion of a privilege or an exemption under the TRCP is made the subject of a motion for protection or a motion to compel, the party resisting discovery must request an *in camera* inspection (inspection by the judge) and provide the documents for review under seal. The request shall state the factual and legal basis that support the claimed privilege or exemption and shall comply with the provisions of §155.103 of this chapter.

(e) Responses to discovery motion. Responses to discovery motions shall be filed in accordance with §155.305(c).

(f) Discovery materials. Motions and responses in a discovery dispute shall include only the relevant portions of the discovery materials at issue.

(g) Confidentiality. Confidential information contained in or attached to a discovery motion or response must be filed in compliance with §155.103 of this chapter.

**History**
- *Source Note: The provisions of this §155.259 adopted to be effective January 1, 2017, 41 TexReg 8593.*

#### **Subchapter G** PLEADINGS AND MOTIONS

##### **1 Tex. Admin. Code § 155.301** Required Form of Pleadings {#sec-155.301 omnilex-key=us-tx-regs-official--title-1--155.301}

(a) Content generally. Written requests for action in a contested case shall be typewritten or printed legibly in 8-1/2 x 11 inch format and timely filed at SOAH in accordance with the method and format required by §155.101 of this chapter. All filings shall contain or be accompanied by the following:

(1) the name of the party seeking action;

(2) the SOAH docket number;

(3) the parties to the case and their status as petitioner or respondent;

(4) a concise statement of the type of relief, action, or order desired by the pleader and identification of the specific reasons for and facts to support the action requested;

(5) a certificate of service, as required by §155.105(a)(2) of this chapter;

(6) any other matter required by statute or rule; and

(7) the signature of the submitting party or the party's authorized representative.

(b) Amendment or supplementation of pleadings. A party may amend or supplement its pleadings as follows:

(1) As to a proceeding in which a state agency has the burden of proof and intends to rely on a section of a statute or rule not previously referenced in the notice of hearing, the agency must amend the notice of hearing not later than the seventh day before the hearing. This subsection does not prohibit the state agency from filing an amendment during the hearing provided, if requested, the opposing party is granted a continuance of at least seven days to prepare its case.

(2) As to all other matters in a pleading, an amendment or supplementation that includes information material to the substance of the hearing, requests for relief, changes to the scope of the hearing, or other matters that unfairly surprise other parties may not be filed later than seven days before the date of the hearing, except by agreement of all parties or by permission of the judge.

**History**
- *Source Note: The provisions of this §155.301 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

##### **1 Tex. Admin. Code § 155.303** Effect of Signing Pleadings {#sec-155.303 omnilex-key=us-tx-regs-official--title-1--155.303}

The signatures of parties or authorized representatives constitute certification that they have read the pleading and that, to the best of their knowledge, information, and belief formed after reasonable inquiry, the pleading is neither groundless nor brought in bad faith.

**History**
- *Source Note: The provisions of this §155.303 adopted to be effective November 26, 2008, 33 TexReg 9451.*

##### **1 Tex. Admin. Code § 155.305** Motions, Generally {#sec-155.305 omnilex-key=us-tx-regs-official--title-1--155.305}

(a) Purpose and effect of motions. To make a request, including a request to change a setting or obtain a ruling, order, or any other procedural relief from the judge, a party shall file a written motion. The motion shall describe specifically the action requested and the basis for the requested action. Unless otherwise specified in this chapter, a motion is not granted until it has been ruled on by the judge, even if the motion is uncontested or agreed.

(b) General requirements for motions. Except as provided in this chapter, or unless otherwise ordered by the judge, all motions shall:

(1) be filed in writing no later than seven days before the date of the hearing; except, for good cause demonstrated in the motion, the judge may consider a motion filed after that time or presented orally at a hearing;

(2) include a certificate of conference that complies substantially with one of the following examples:

(A) Example one: "Certificate of Conference: I certify that I conferred with {name of other party or other party's authorized representative} on {date} about this motion. {Succinct statement of other party's position on the action sought and/or a statement that the parties negotiated in good faith but were unable to resolve their dispute before submitting it to the judge for resolution.} Signature."

(B) Example two: "Certificate of Conference: I certify that I made reasonable but unsuccessful attempts to confer with {name of other party or other party's authorized representative} on {date or dates} about this motion. {Succinctly describe these attempts.} Signature."; and

(3) include a reference in the motion's title to a request for a hearing on the motion if the moving party seeks a hearing.

(c) Responses to motions.

(1) Except as otherwise provided in this chapter or as ordered or allowed by the judge, responses to motions shall be in writing and filed on the earlier of:

(A) five days after the motion is filed; or

(B) the date and time of the hearing; however, if the judge finds a good reason has been shown, responses to written motions may be presented orally at hearing.

(2) If no response is filed within the time period prescribed by this section or chapter, the judge may consider the motion unopposed.

(d) Motions to intervene or for party status. Motions for party status shall be filed no later than 20 days prior to the date the case is set for hearing. Responses to such motions shall be filed no later than seven days after the motion is filed.

(e) Other motions. In addition, other types of motions are addressed in other sections of this chapter. If there is a conflict between this section and a requirement found in another section relating to a specific type of motion, the more specific provision applies.

**History**
- *Source Note: The provisions of this §155.305 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.307** Motions for Continuance and to Extend Time {#sec-155.307 omnilex-key=us-tx-regs-official--title-1--155.307}

(a) Contents of a motion for continuance. A request to postpone or delay a hearing or prehearing conference shall include:

(1) a statement of the number of motions for continuance previously filed in the case by each party;

(2) the specific reason for the continuance;

(3) at least three proposed dates for the rescheduled proceeding or a deadline by which the movant will confer with the non-moving parties to submit three agreed proposed dates; and

(4) a certificate of conference that complies substantially with one of the examples set out in §155.305(b)(2) of this subchapter.

(b) Contents of a motion to extend time. A request for more time to file a document or respond to discovery shall include:

(1) a statement of the number of extension requests previously sought in the case by the movant;

(2) the specific reason for the request;

(3) a proposed date for the deadline the movant seeks to extend; and

(4) a certificate of conference that complies substantially with one of the examples set out in §155.305(b)(2) of this subchapter.

(c) Date of filing. Motions for continuance or to extend time shall be filed no later than five days before the date of the proceeding or deadline at issue or shall state good cause for presenting the motion after that time. If the judge finds good cause has been demonstrated, the judge may consider a motion filed after that time or presented orally at the proceeding.

(d) Date of service. Motions for continuance or extension shall be served in accordance with §155.105 of this chapter. However, a motion for continuance that is filed five days or less before the date of the proceeding shall be served:

(1) by hand-delivery, fax, or email on the same day it is filed with SOAH, if feasible; or

(2) if same-day service is not feasible, by overnight delivery on the next business day.

(e) Responses to motions for continuance. Responses to motions for continuance shall be in writing, except a response to a motion for continuance made on the date of the proceeding may be presented orally at the proceeding. Unless otherwise ordered or allowed by the judge, responses to motions for continuance shall be made by the earlier of:

(1) three days after receipt of the motion; or

(2) the date and time of the proceeding.

(f) Responses to motions to extend time. Unless otherwise ordered by the judge, responses to motions for extension of a deadline are due three days after receipt of the motion.

(g) A motion for continuance or extension of time is not granted until it has been ruled on by the judge, even if the motion is uncontested or agreed. A case is subject to default or dismissal for a party's failure to appear at a scheduled hearing in which a motion for continuance has not been ruled on by the judge, even when the motion is agreed or unopposed.

**History**
- *Source Note: The provisions of this §155.307 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

#### **Subchapter H** MEDIATION

##### **1 Tex. Admin. Code § 155.351** Mediation {#sec-155.351 omnilex-key=us-tx-regs-official--title-1--155.351}

(a) Requesting mediation.

(1) A party may request mediation in writing or orally during a prehearing conference or hearing.

(2) A request for mediation must be based on a good faith belief that the parties may be able to resolve all or a portion of their dispute in mediation.

(3) A party may object to a request for mediation orally or in writing.

(4) Mediation may not be used as a delay or discovery tactic.

(5) Mediation does not stay an existing procedural schedule unless ordered by the presiding judge.

(6) A judge may refer a case to mediation without agreement of all parties.

(7) An agency may refer a case for mediation only.

(b) Evaluation for Mediation.

(1) A party may request, or the presiding judge may order, that a mediator evaluate whether a case is appropriate for mediation. The presiding judge will refer the case to the SOAH ADR Team Leader for assignment of a mediation evaluator.

(2) The mediation evaluator may conduct confidential, ex parte communications with the parties during the course of the evaluation.

(3) The mediation evaluator will make a written recommendation to the presiding judge indicating whether the case is appropriate for mediation as of the time of the evaluation. The written recommendation will be served on all parties.

(c) Referral to mediation.

(1) If a request for mediation is granted, the presiding judge will refer the case to the SOAH ADR Team Leader for assignment of a mediator, unless the parties have notified the judge that they have agreed upon a non-SOAH mediator qualified in accordance with Tex. Civ. Prac. & Rem. Code Chapter 154 and that they will be responsible for any costs and expenses of the non-SOAH mediator.

(2) The referral order may include requirements to facilitate the mediation.

(d) Assignment of SOAH mediators.

(1) The SOAH ADR Team Leader will assign a qualified judge or judges to serve as mediator or co-mediators.

(2) A party may object to an appointed mediator. Upon a timely showing of good cause for the objection, the SOAH ADR Team Leader will appoint another qualified judge to serve as mediator or co-mediator.

(3) The appointed mediator will not serve as presiding judge in the case.

(e) Use of non-SOAH mediators.

(1) Parties who agree to retain a non-SOAH qualified mediator shall notify the presiding judge within ten days of the mediator's retention.

(A) The notice must include the name, address, and telephone number of the non-SOAH mediator selected; a statement that the parties have entered into an agreement with the mediator regarding the mediator's rate and method of compensation; and an affirmation that the mediator is qualified to serve according to Tex. Civ. Prac. & Rem. Code Chapter 154.

(B) The presiding judge shall issue an order specifying the date by which the mediation must be completed.

(2) When a presiding judge refers a TCEQ case to mediation, the mediation will be conducted by a TCEQ mediator unless a party or TCEQ's Senior Mediator requests that SOAH conduct the mediation. TCEQ enforcement cases shall not be referred to mediation except on request of the Executive Director's representative.

(f) Confidentiality of mediation.

(1) The mediator may conduct confidential, ex parte communications with the parties during the course of the mediation.

(2) All communications in a mediation are confidential and subject to the provisions of Tex. Gov't Code §2009.054 and TRE 408.

(3) The mediator shall not communicate about the mediation with the presiding judge except to disclose in a written report, copied to all parties, whether the parties attended the mediation, whether the matter settled, and any other stipulations or matters the parties agree to be reported.

(4) The mediator shall not be required to testify about communications that occur in mediation or to produce documents submitted to the mediator.

(g) Agreements reached in mediation.

(1) Agreements reached by the parties in mediation shall be reduced to writing and signed by the parties before the end of the mediation, if possible.

(2) Whether an agreement signed by a governmental entity is subject to disclosure shall be determined in accordance with applicable law.

(h) Limits on mediator's authority.

(1) A mediator has no authority to order the parties to settle their dispute.

(2) A mediator has no authority to issue orders in a case referred to mediation. Deadlines in the case may be extended only by order of the presiding judge.

(i) This section does not limit the parties' ability to settle cases without mediation.

**History**
- *Source Note: The provisions of this §155.351 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

#### **Subchapter I** HEARINGS AND PREHEARINGS

##### **1 Tex. Admin. Code § 155.401** Notice of Hearing {#sec-155.401 omnilex-key=us-tx-regs-official--title-1--155.401}

(a) Notice of hearing. A referring agency shall provide notice of hearing to all parties in accordance with Tex. Gov't Code §§2001.051 and 2001.052 and shall include a specific citation to Chapter 155 of this title unless applicable law provides otherwise. The notice of hearing shall include the following language in 12-point, bold-face type: "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at www.soah.texas.gov, or in printed format upon request to SOAH."

(b) Judge's orders. A judge may issue orders regarding the date, time, and place for hearing, and orders affecting the scope of the proceeding.

(c) Sufficiency of initial notice of hearing. A notice of rescheduling of a hearing will not affect the sufficiency of an initial notice of hearing provided by an agency under subsection (a) of this section.

**History**
- *Source Note: The provisions of this §155.401 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.403** Venue {#sec-155.403 omnilex-key=us-tx-regs-official--title-1--155.403}

(a) Neutral hearing site. SOAH will designate a neutral hearing site in accordance with applicable law.

(b) Factors judge may consider. In designating a hearing site not in Austin, the judge may consider the following factors:

(1) the amount in controversy;

(2) the number of persons in the geographical region affected by the outcome of the hearing;

(3) the estimated length of the hearing;

(4) the availability of hearing facilities;

(5) the costs to and preferences of the parties;

(6) the location of witnesses;

(7) the availability and feasibility of videoconference technology as a means to reduce costs to SOAH and the parties;

(8) legislative restrictions on travel; and

(9) any applicable law or other factor relevant to the fair and expeditious resolution of the case.

**History**
- *Source Note: The provisions of this §155.403 adopted to be effective November 26, 2008, 33 TexReg 9451.*

##### **1 Tex. Admin. Code § 155.405** Participation by Telephone or Videoconference {#sec-155.405 omnilex-key=us-tx-regs-official--title-1--155.405}

(a) Request to appear by telephone. A party may request to appear or present testimony by telephone or to present the testimony of a witness by telephone.

(1) To appear or present testimony by telephone, a party must file a motion no later than ten days before the proceeding unless a different time period is allowed by the judge.

(2) A motion shall include at least the following:

(A) the reason for the request;

(B) the name of the party or witness who will appear by phone;

(C) the telephone number at which the party or witness may be reached at the time of the proceeding;

(D) a statement that the party or witness will be the same person who will appear by telephone at the proceeding; and

(E) a certificate of conference complying with §155.305(b)(2) of this chapter.

(3) A timely, unopposed motion will be deemed granted without the necessity of an order, unless denied by order.

(b) Request to appear by videoconference. A party may request to appear or present the testimony of a witness by videoconference.

(1) To appear or present testimony by videoconference, a party must file a motion no later than ten days before the proceeding.

(2) A motion shall include a statement of the reason for the request, the name of the party or witness who will appear by videoconference, and the city in which the party or witness will be located at the time of the proceeding.

(c) Hearings and prehearing conferences by telephone or videoconference. The judge may conduct hearings and prehearing conferences by telephone or videoconference upon notice to the parties, even in the absence of a motion.

(d) Substantive and procedural rights. All substantive and procedural rights apply to telephone and videoconference proceedings, subject only to the limitations of the physical arrangement.

(e) Documentary evidence. Prior to the hearing, the parties must exchange, and provide to witnesses appearing telephonically or by videoconference, all documents necessary for effective participation in the hearing.

(f) Failure to appear at telephone or videoconference proceeding. For a telephone or videoconference proceeding, the following may be considered a failure to appear and grounds for default, dismissal for want of prosecution, or other adverse action if the conditions exist for more than ten minutes after the scheduled time for the proceeding:

(1) failure to answer the telephone or videoconference line;

(2) failure to free the line for the proceeding; or

(3) failure to be ready to proceed.

**History**
- *Source Note: The provisions of this §155.405 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.407** Interpreters {#sec-155.407 omnilex-key=us-tx-regs-official--title-1--155.407}

(a) A party or witness who needs an interpreter or translator in order to participate in a proceeding shall file a written request at least seven days before the setting. A timely, unopposed request will be deemed granted without the necessity of an order, unless denied by order.

(b) SOAH shall provide and pay for the following:

(1) an interpreter for hearing-impaired parties and witnesses, in accordance with Tex. Gov't Code §2001.055;

(2) reader services or other communication services for visually-impaired parties and witnesses; and

(3) a certified language interpreter.

**History**
- *Source Note: The provisions of this §155.407 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.409** Public Attendance and Comment {#sec-155.409 omnilex-key=us-tx-regs-official--title-1--155.409}

(a) Proceedings open to public. Unless prohibited by law, all SOAH proceedings are open to the public.

(b) Removal of persons from proceeding. The judge retains the authority to remove persons whose conduct impedes the orderly progress of the proceeding and to take necessary steps to limit attendance due to any physical limitations of the hearing facility.

(c) Public comment. When authorized by statute, members of the public shall be allowed to make public comment addressing matters pertinent to the issues in the case. Unless provided by law, public comment is not part of the evidentiary record of the case.

**History**
- *Source Note: The provisions of this §155.409 adopted to be effective November 26, 2008, 33 TexReg 9451.*

##### **1 Tex. Admin. Code § 155.411** Media Coverage and Use of Recording Devices {#sec-155.411 omnilex-key=us-tx-regs-official--title-1--155.411}

(a) When coverage is permitted. Proceedings that are open to the public may be photographed or recorded, whether for broadcast or personal use, in a manner that does not interfere with the orderly conduct of the proceeding, unduly distract participants, or impair the dignity of the proceedings. A person desiring to photograph or record a SOAH proceeding must notify the judge before doing so. Photographing or recording in a covert manner is prohibited.

(b) Recording or photographing any of the following is prohibited:

(1) proceedings that are closed to the public;

(2) conferences between an attorney and client, witness, or aide, or between attorneys;

(3) bench conferences or other deliberations of the judge(s); or

(4) other privileged or confidential communications.

(c) Authority of presiding judge.

(1) The judge may deny, limit, or terminate any recording or photographing that does not comply with this section.

(2) No proceeding will be delayed or continued for the sole purpose of facilitating recording or photographing the proceeding.

(d) Equipment and personnel. The judge may specify the placement of media personnel and equipment to permit reasonable coverage or recording without disruption to the proceeding. Unless the judge orders otherwise, the following standards apply to the placement and operation of media equipment:

(1) If media coverage is sought by more than one person or entity, the judge may require a pool system to be used. It will be the responsibility of the media to resolve any disputes among themselves as to which personnel will operate equipment in the hearing room.

(2) Equipment shall not produce distracting sound or light. Moving lights, flash attachments, or sudden lighting changes are prohibited.

(3) Operators shall not move equipment while the hearing is in session or otherwise cause a distraction. All equipment shall be in place in advance of the commencement of the proceeding.

(4) Media personnel operating outside the hearing room shall not create a distraction and shall withdraw whenever necessary to avoid restricting movement of persons passing through the hearing room door.

**History**
- *Source Note: The provisions of this §155.411 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.415** Party Agreements {#sec-155.415 omnilex-key=us-tx-regs-official--title-1--155.415}

Unless otherwise provided in this chapter, no agreement between attorneys or parties regarding a contested case pending before SOAH will be enforced unless it is in writing, signed, and filed with SOAH or entered on the record at the hearing or prehearing conference.

**History**
- *Source Note: The provisions of this §155.415 adopted to be effective November 26, 2008, 33 TexReg 9451.*

##### **1 Tex. Admin. Code § 155.417** Stipulations {#sec-155.417 omnilex-key=us-tx-regs-official--title-1--155.417}

(a) Generally. Subject to the judge's approval, the parties may stipulate to any factual, legal, or procedural matters.

(b) Record of stipulations. A stipulation must be filed in writing or stated on the record.

**History**
- *Source Note: The provisions of this §155.417 adopted to be effective November 26, 2008, 33 TexReg 9451.*

##### **1 Tex. Admin. Code § 155.419** Consideration of Policy Not Incorporated in Referring Agency's Rules {#sec-155.419 omnilex-key=us-tx-regs-official--title-1--155.419}

(a) Agency policy. A party relying on a specific, written agency policy not incorporated in a rule has the burden of authenticating the policy and showing it to be applicable to a factual or legal issue in the case.

(b) Judge's consideration of agency policy. In resolving contested issues, the judge shall consider any applicable agency policy not incorporated in the agency's rules that is written and supported by the evidence. The judge's decision or recommendation on whether to apply an agency's policy will depend upon the nature and context of the policy, any request to apply it, and other factors such as:

(1) the extent to which the parties were given notice of the policy, including whether:

(A) the policy was made available through a generally accessible internet site as provided in Tex. Gov't Code §2001.007(a);

(B) the parties had adequate opportunity to address it in the presentation of their cases and arguments; and

(C) a party opposes application of the policy in the case;

(2) the specificity of the policy statement and the relative certainty of its applicability to the case;

(3) the stability and duration of the policy, as illustrated by the type of process that led to its adoption (including whether it was published in the *Texas Register),* the frequency and consistency with which it has been previously applied, and the level of formality of the process required for the agency to amend it;

(4) the highest level within the agency at which the policy has been adopted or ratified;

(5) whether the policy is a substantive principle coming within the agency's subject matter expertise and jurisdiction or pertains more to contested case procedure and practice; and

(6) whether application of the policy would violate applicable constitutional or statutory provisions or would be inconsistent with the agency's rules or applicable decisions by Texas courts.

**History**
- *Source Note: The provisions of this §155.419 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.421** Certification of Issues {#sec-155.421 omnilex-key=us-tx-regs-official--title-1--155.421}

In cases referred by the PUC and the TCEQ, a party may move to certify an issue to the respective commission. A judge may also certify an issue without a motion. Certified issues are governed by the rules of the PUC and the TCEQ.

**History**
- *Source Note: The provisions of this §155.421 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.423** Making a Record of the Proceeding {#sec-155.423 omnilex-key=us-tx-regs-official--title-1--155.423}

(a) Record of proceedings. A record will be made of all contested case proceedings and prehearing conferences.

(b) Court reporters. Unless otherwise ordered by the judge, the referring agency shall provide a court reporter for a proceeding set to last longer than one day.

(c) SOAH's responsibility. For a proceeding in a docket set to last no longer than one day, SOAH is responsible for making an audio recording of the proceeding unless otherwise ordered by the judge. If SOAH has recorded the proceeding, a party may request a copy of the recording from SOAH.

(d) Transcripts. If a court reporter is provided for a proceeding, the court reporter shall make a stenographic record of the proceeding but shall prepare a transcript only on the request of a party or the judge. If a proceeding lasts longer than one day, the judge may order that a transcript be prepared.

(1) The original transcript shall be filed with SOAH, and SOAH may assess the cost of the transcript to one or more of the parties.

(2) The cost of a copy of a transcript ordered by a party shall be paid by that party, unless otherwise ordered by the judge.

(3) The transcript prepared according to these procedures becomes part of the official record of the proceedings for purposes of all actions within SOAH's jurisdiction.

(4) Proposed written corrections of purported transcript errors must be filed with SOAH and served on the parties and the court reporter before issuance of the proposal for decision or final decision. The judge may establish deadlines for the filing of proposed corrections and responses. The transcript will be corrected only upon order of the judge.

(e) Official record. The recording made by SOAH under subsection (c) of this section or the transcript prepared under subsection (d) of this section constitutes part of the official record of the proceeding for purposes of all actions within SOAH's jurisdiction. The judge may order a different means of making a record and may designate that record as the official record of the proceeding.

(f) Maintenance of exhibits and official record. The judge shall maintain all exhibits admitted during the proceeding and the official record of the proceeding.

(1) The judge may allow the court reporter to retain the exhibits and the recording of the proceeding, if applicable, while a transcript is being prepared.

(2) The judge may retain the exhibits and transcript or recording to prepare for presentation of the proposal for decision to the referring agency. SOAH will send the exhibits and transcript or recording to the referring agency no later than after:

(A) the judge has issued the final decision; or

(B) the judge has issued the proposal for decision and the deadline for filing exceptions and replies has passed.

(g) Sealing records. The judge may order all or part of the record sealed in accordance with applicable law or rule or upon a showing of the following:

(1) a specific, serious, and substantial interest that clearly outweighs the presumption of openness that applies to SOAH's records and any probable adverse effect that sealing will have upon the public health or safety; and

(2) no less restrictive means than sealing the records will adequately and effectively protect the specific interest asserted.

**History**
- *Source Note: The provisions of this §155.423 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.425** Procedure at Hearing {#sec-155.425 omnilex-key=us-tx-regs-official--title-1--155.425}

(a) Control of the hearing. The judge shall exercise reasonable control over the mode and order of presenting preliminary matters, pending motions, opening statements, witness testimony and other evidence, oral or written closing argument, and other processes in the hearing.

(b) Designation of order of parties' presentations. The judge will designate the order in which the parties will present evidence and argument. Generally, the party with the burden of proof will present evidence first and will open and conclude oral argument. The judge shall designate the party with the burden of proof in accordance with §155.427 of this chapter.

(c) Waiver of allegations. An allegation contained in the notice of hearing, complaint, or other pleading that is not addressed during the proceeding may be deemed waived.

(d) Closing arguments. Closing arguments may be made orally or, when ordered by the judge, in writing.

(e) Closing the evidentiary record. Unless otherwise ordered by the judge, the record will close at the later of:

(1) the end of the hearing; or

(2) the date the final brief is due, when closing arguments are made in writing.

**History**
- *Source Note: The provisions of this §155.425 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.427** Burden of Proof {#sec-155.427 omnilex-key=us-tx-regs-official--title-1--155.427}

In determining which party bears the burden of proof, the judge shall first consider the applicable statute, the referring agency's rules, and the referring agency's policy in accordance with §155.419 of this chapter. After considering those sources, the judge may consider additional factors, including:

(1) the status of the parties;

(2) the parties' relative access to and control over information pertinent to the merits of the case;

(3) the party seeking affirmative relief;

(4) the party seeking to change the status quo; and

(5) whether a party would be required to prove a negative.

**History**
- *Source Note: The provisions of this §155.427 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.429** Evidence {#sec-155.429 omnilex-key=us-tx-regs-official--title-1--155.429}

(a) Rules of evidence.

(1) The Texas Rules of Evidence as applied in a nonjury civil case in district court govern contested case hearings conducted by SOAH.

(2) Evidence may be admitted if it meets the standards set out in Tex. Gov't Code §2001.081.

(b) Physical evidence: Exhibits.

(1) Paper size. Documents shall not be submitted on paper other than 8-1/2 x 11 inches unless good cause is shown that the documents cannot be reduced without loss of information, or if allowed by the judge.

(2) Numbering of pages. A multipage document shall be paginated.

(3) Physical limits.

(A) Exhibits offered as evidence must not unduly encumber the records of SOAH by their size or other qualities.

(B) Physical evidence that is bulky, dangerous, perishable, or otherwise not suitable for inclusion in agency records shall not be offered into the record.

(C) A party seeking to admit an exhibit contrary to this section must make reasonable efforts to use photographs, recordings, or other mechanical or electronic means to substitute for physical evidence that would encumber SOAH's records.

(D) Maps, drawings, blueprints, and other documents not reasonably susceptible to reduction shall be rolled or folded to avoid physically encumbering the record.

(4) Numbering of exhibits.

(A) Each exhibit to be offered shall first be numbered by the offering party or court reporter.

(B) Copies of the original exhibit shall be furnished by the party offering the exhibit to the presiding judge and to each party present at the hearing unless otherwise ordered by the judge.

(5) Excluded exhibits. An exhibit excluded from evidence will be considered withdrawn by the offering party and will be returned to the party, unless the party makes an offer of proof in accordance with the TRE.

(6) Exhibits deemed withdrawn. Prefiled exhibits that are not offered and admitted at the hearing will be deemed withdrawn.

(7) Non-conforming exhibits. The judge may exclude exhibits not conforming to this section.

(c) Prefiled evidence.

(1) Prefiled testimony.

(A) The judge may require that direct testimony of witnesses to be called at the hearing, and any exhibits to be presented through those witnesses, be filed in writing prior to hearing and served on other parties. The written testimony of a witness may be prepared in narrative or question-and-answer form.

(B) Prefiled testimony and related exhibits shall be subject to evidentiary objections. The judge may require that objections to prefiled testimony of witnesses and related exhibits be submitted in writing, filed prior to hearing, and served on other parties.

(C) After a witness has been sworn and has identified his or her written testimony as a true record of what the testimony would have been if given orally, the written testimony may be admitted into evidence at the hearing as if read or presented orally.

(D) When written testimony is offered into evidence, the witness must attend the hearing for cross-examination, unless cross-examination is waived by the other parties.

(E) A party may object to the prefiling of exhibits, testimony, and objections if the hearing will not be expedited and the interests of the parties will be substantially prejudiced by the entry of an order under this section.

(2) Prefiled exhibits. The judge may require parties to prefile some or all exhibits and provide those exhibits to the other parties. The judge may also require that objections to prefiled exhibits be submitted in writing, filed prior to the hearing, and provided to other parties.

(d) Exclusion of witnesses.

(1) At the request of either party or by the judge's own action, the judge may:

(A) order witnesses excluded from the hearing room so that they may not hear the proceedings;

(B) instruct the witnesses not to converse about the case with each other or any person other than the attorneys in the proceeding except by permission of the judge; and

(C) instruct the witnesses not to read any report of, or comment upon, the testimony in the case while under order of this section.

(2) This section does not authorize the exclusion of:

(A) a party who is a natural person or the spouse of such natural person;

(B) an officer or employee of a party that is not a natural person and who is designated by the party as its representative;

(C) a person whose presence is shown by a party to be essential to the presentation of the party's case.

**History**
- *Source Note: The provisions of this §155.429 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.431** Conduct and Decorum {#sec-155.431 omnilex-key=us-tx-regs-official--title-1--155.431}

(a) Standards of conduct. Parties, representatives, and other participants shall conduct themselves with dignity, show courtesy and respect for one another and for the judge, follow any additional guidelines of decorum prescribed by the judge, and adhere to the time schedule. Attorneys shall adhere to the standards of conduct in the Texas Lawyers' Creed promulgated by the Texas Supreme Court.

(b) Judge's authority. To maintain and enforce proper conduct and decorum, the judge may take appropriate action, including:

(1) issuing a warning;

(2) sanctioning a party pursuant to §155.157 of this chapter;

(3) excluding persons from the proceeding; and

(4) recessing the proceeding.

**History**
- *Source Note: The provisions of this §155.431 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

#### **Subchapter J** DISPOSITION OF CASE

##### **1 Tex. Admin. Code § 155.501** Failure to Attend Hearing and Default Proceedings {#sec-155.501 omnilex-key=us-tx-regs-official--title-1--155.501}

(a) If a party fails to appear for the hearing, the opposing party may move to proceed in that party's absence on a default basis.

(b) A motion for a default proceeding under this section must be supported by adequate proof of the following:

(1) the notice of hearing included a disclosure in at least 12-point, bold-face type that the factual matters asserted in the notice or pleadings could be deemed admitted and that the relief sought might be granted by default against the party that fails to appear at the hearing;

(2) the notice of hearing satisfies the requirements of Tex. Gov't Code §2001.051 and §2001.052, and §155.401 of this chapter; and

(3) the notice of hearing and any pleadings sought to be admitted were:

(A) issued or received by the defaulting party; or

(B) properly served to the defaulting party or their attorney.

(c) In the absence of a motion for default or adequate proof to support a default, the judge shall continue the case and direct the party responsible to provide adequate notice of hearing. If the responsible party persists in failing to provide adequate notice, the judge may dismiss the case from the SOAH docket for want of prosecution.

(d) Upon receiving a motion for default and the required showing of proof to support a default, the judge may grant the motion and issue one of the following:

(1) Default dismissal. In default proceedings where SOAH is not authorized by law to render a final decision in the proceeding, upon motion for default dismissal, the judge may issue an order finding adequate notice, granting a default dismissal based on facts deemed to be admitted.

(2) Default proposal for decision. In default proceedings where SOAH is not authorized by law to render a final decision in the proceeding, upon motion for a default proposal for decision, the judge may deem admitted the factual matters asserted in the notice of hearing or the non-defaulting party's pleadings and issue a proposal for decision.

(3) Default decision. In default proceedings where SOAH is authorized by law to render a final determination in the proceeding, upon motion for a default decision, the judge may deem admitted the factual matters asserted in the notice of hearing or the non-defaulting party's pleadings and issue a default decision.

(e) Default dismissals.

(1) An order of default dismissal issued under subsection (d)(1) of this section shall inform the party of the opportunity to have the default set aside under this subsection by filing an adequate motion no later than 15 days after the issuance of the order of default dismissal.

(2) If a motion to set aside a default dismissal is filed within 15 days after the issuance of an order of default dismissal, the judge will rule on the motion and either:

(A) grant the motion, set aside the default, and reopen the hearing for good cause shown; or

(B) issue an order denying the motion and remand the case to the referring agency for informal disposition on a default basis in accordance with Tex. Gov't Code §2001.056.

(3) In the absence of a timely motion to set aside a default, the case will be remanded to the referring agency for informal disposition on a default basis in accordance with Tex. Gov't Code §2001.056 after the expiration of 15 days from the date of the order of default dismissal.

(4) Dismissal under this section removes the case from the SOAH docket without a decision on the merits.

(f) Default proposals for decision. A default proposal for decision issued under subsection (d)(2) of this section is subject to §155.507 of this chapter.

(g) Default decisions.

(1) Default decisions are subject to motions for rehearing as provided for in the APA.

(2) A default decision issued under subsection (d)(3) of this section shall inform the party of the opportunity to have the default set aside by filing a motion for rehearing under Tex. Gov't Code Chapter 2001, Subchapter F.

(h) Motions to Set Aside Default.

(1) A motion to set aside default under this section shall set forth the grounds for reinstatement or rehearing and must be supported by affidavit of the movant or their attorney that:

(A) the party had no notice of the hearing;

(B) the party had no notice of the consequences for failure to appear; or

(C) although the party had notice, its failure to appear was not intentional or the result of conscious indifference, but due to reasonable mistake or accident that can be supported by adequate proof; and

(D) a statement of whether the motion is opposed, and if the motion is opposed, a list of dates and times for a hearing on the motion that are agreeable to both parties.

(2) Whether or not the motion is opposed, the judge may rule on the motion without setting a hearing or may set a hearing to consider the motion. If the judge finds good cause for the defaulting party's failure to appear, the judge shall vacate the default and reset the case for a hearing.

**History**
- *Source Note: The provisions of this §155.501 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective September 22, 2011, 36 TexReg 6257; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295.*

##### **1 Tex. Admin. Code § 155.503** Dismissal {#sec-155.503 omnilex-key=us-tx-regs-official--title-1--155.503}

(a) Voluntary dismissal or non-suit.

(1) At any time before the date set by the judge for close of the record, the party that bears the burden of proof may move to dismiss a case or take a non-suit. Notice of the dismissal or non-suit shall be served on all parties in accordance with §155.105 of this chapter.

(2) Upon filing of a motion to dismiss or take a non-suit, the judge shall promptly dismiss the case from SOAH's docket, unless such disposition would prevent a party from seeking relief to which it would otherwise be entitled.

(3) Any dismissal under this subsection shall have no effect on any motion for sanctions or costs pending at the time of dismissal, as determined by the judge.

(b) Agreed dismissal; settlement.

(1) At any time before the date set by the judge for close of the record, the parties may jointly move to dismiss a case in accordance with the agreement of the parties. Such motion shall be signed by the parties or their attorneys and filed with SOAH or entered on the record at the hearing or prehearing conference in accordance with §155.415 of this chapter.

(2) In accordance with an agreement of the parties, a severable portion of the proceeding may be disposed of under paragraph (1) of this subsection if it will not prejudice the proceedings as to any remaining parties.

(3) Upon filing or entering on the record of an agreed motion to dismiss, the judge shall promptly dismiss the case from SOAH's docket, or otherwise release any dismissed parties unless otherwise ordered by the judge in accordance with paragraph (2) of this subsection.

(c) Failure to prosecute.

(1) A contested case may be dismissed in whole or in part for want of prosecution if the party seeking affirmative relief fails to prosecute the case in accordance with a requirement of statute, rule, or order of the judge. The order of dismissal shall:

(A) explain the party's failure to prosecute;

(B) inform the party of an opportunity to seek reinstatement of the case; and

(C) inform the party that the case is dismissed and will be remanded to the referring agency unless:

(i) the party files a motion to reinstate the case on the docket not later than 15 days after the issuance of the order; and

(ii) the motion to reinstate specifies the basis for the motion and addresses the grounds for dismissal stated in the judge's order.

(2) The judge may grant a motion to reinstate the case if the moving party shows good cause for the failure to prosecute.

(3) Unless the judge grants a motion to reinstate the case:

(A) in a dismissal proceeding where SOAH is not authorized by law to issue a final decision, the case will be remanded to the referring agency after the expiration of 15 days from the date of the order.

(B) in a dismissal proceeding where SOAH is authorized by law to render a final decision, the judge will conclude SOAH's involvement in the matter and surrender jurisdiction after the expiration of 15 days from the date of the order.

(4) Dismissal under this section removes the case from the SOAH docket without a decision on the merits.

(d) Other Dismissal Actions.

(1) The judge may dismiss a case or a portion of the case from SOAH's docket for:

(A) lack of jurisdiction over the matter by the referring agency;

(B) lack of statute, rule, or contract authorizing SOAH to conduct the proceeding;

(C) mootness of the case;

(D) failure to state a claim for which relief can be granted;

(E) unnecessary duplication of proceedings; or

(F) abatement of the case for a period longer than 120 days. Dismissal under this subsection removes the case from the SOAH docket without prejudice to refiling.

(2) The judge may issue an order in response to a party's motion or after the judge notifies the parties of an intent to dismiss a case and allows time for responses.

**History**
- *Source Note: The provisions of this §155.503 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593; amended to be effective November 29, 2020, 45 TexReg 8295; amended to be effective May 6, 2021, 46 TexReg 2891.*

##### **1 Tex. Admin. Code § 155.505** Summary Disposition {#sec-155.505 omnilex-key=us-tx-regs-official--title-1--155.505}

(a) Final decision or proposal for decision on summary disposition. Summary disposition shall be granted on all or part of a contested case if the pleadings, the motion for summary disposition, and the summary disposition evidence show that there is no genuine issue as to any material fact and that the moving party is entitled to a decision in its favor as a matter of law on all or some of the issues expressly set out in the motion. Summary disposition is not permitted based on the ground that there is no evidence of one or more essential elements of a claim or defense on which the opposing party would have the burden of proof at hearing.

(b) Deadlines. Unless otherwise ordered by the judge:

(1) A party may file a motion for summary disposition at any time after SOAH acquires jurisdiction over a case, but the motion must be filed at least 30 days before a scheduled hearing on the merits.

(2) The response and opposing summary disposition evidence shall be filed no later than 15 days after the filing of the motion.

(c) Contents of Motion. A motion for summary disposition shall include the contents listed below. A motion may be denied for failure to comply with these requirements.

(1) The motion shall state the specific issues upon which summary disposition is sought and the specific grounds justifying summary disposition.

(2) The motion shall also separately state all material facts upon which the motion is based. Each material fact stated shall be followed by a clear and specific reference to the supporting summary disposition evidence.

(3) The first page of the motion shall contain the following statement in at least 12-point, bold-face type: "Notice to parties: This motion requests the judge to decide some or all of the issues in this case without holding an evidentiary hearing on the merits. You have 15 days after the filing of the motion to file a response. If you do not file a response, this case may be decided against you without an evidentiary hearing on the merits. See SOAH's rules at 1 Texas Administrative Code §155.505. These rules are available on SOAH's public website."

(d) Responses to motions.

(1) A party may file a response and summary disposition evidence to oppose a motion for summary disposition.

(2) The response shall include all arguments against the motion for summary disposition, any objections to the form of the motion, and any objections to the summary disposition evidence offered in support of the motion.

(e) Summary disposition evidence.

(1) Summary disposition evidence may include deposition transcripts; interrogatory answers and other discovery responses; pleadings; admissions; affidavits; materials obtained by discovery; matters officially noticed; stipulations; authenticated or certified public, business, or medical records; and other admissible evidence. No oral testimony shall be received at a hearing on a motion for summary disposition.

(2) Summary disposition may be based on uncontroverted written testimonial evidence of an interested witness, or of an expert witness as to subject matter concerning which the judge must be guided solely by the opinion testimony of experts, if the evidence is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.

(3) All summary disposition evidence offered in support of or in opposition to a motion for summary disposition shall be filed with the motion or response. Copies of relevant portions of materials obtained by discovery that are relied upon to support or oppose a motion for summary disposition shall be included in the summary disposition evidence.

(f) Proceedings on motions.

(1) A judge may hold a hearing on a motion for summary disposition or rule on the motion without a hearing.

(2) If summary disposition is granted on all contested issues in a case, the record shall close on the date ordered by the judge or on the later of the filing of the last summary disposition arguments or evidence, the date the summary disposition response was due, or the date a hearing was held on the motion. The judge shall prepare a final decision or proposal for decision as appropriate. The final decision or proposal for decision shall include a statement of reasons, findings of fact, and conclusions of law in support of the summary disposition rendered.

(3) If summary disposition is granted on some but not all of the contested issues in a case, the judge shall not take evidence or hear further argument upon the issues for which summary disposition has been granted. The judge shall issue an order:

(A) specifying the facts about which there is no genuine issue;

(B) specifying the issues for which summary disposition has been granted; and

(C) directing further proceedings as necessary. If an evidentiary hearing is held on the remaining issues, the facts and issues resolved by summary disposition shall be deemed established, and the hearing shall be conducted accordingly. After the evidentiary hearing is concluded, the judge shall include in the final decision or proposal for decision a statement of reasons, findings of fact, and conclusions of law in support of the partial summary disposition rendered.

**History**
- *Source Note: The provisions of this §155.505 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective July 16, 2013, 38 TexReg 4509; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.507** Proposals for Decision; Exceptions and Replies {#sec-155.507 omnilex-key=us-tx-regs-official--title-1--155.507}

(a) Submission of the proposal for decision. For contested cases in which a proposal for decision is issued, the judge shall submit the proposal for decision to the referring agency and furnish a copy to each party.

(b) Exceptions and replies. The parties may submit to the judge and the referring agency exceptions to the proposal for decision and replies to exceptions to the proposal for decision.

(1) Unless the referring agency's rules apply by statute, exceptions shall be filed within 15 days after the date the proposal for decision is issued.

(2) A reply to the exceptions shall be filed within 15 days of the filing of the exceptions.

(3) A motion to change the time to file exceptions or replies to exceptions shall be filed no later than the applicable deadline. The judge may change the time to file exceptions or replies if:

(A) good cause is shown for the requested change; or

(B) all parties agree.

(c) Judge's review of exceptions and replies. The judge shall review all exceptions and replies and notify the referring agency and parties whether the judge recommends any changes to the proposal for decision.

(d) Judge's authority. The judge may:

(1) amend the proposal for decision in response to exceptions and replies to exceptions; and

(2) correct any clerical errors in the proposal for decision.

**History**
- *Source Note: The provisions of this §155.507 adopted to be effective November 26, 2008, 33 TexReg 9451; amended to be effective January 1, 2017, 41 TexReg 8593.*

##### **1 Tex. Admin. Code § 155.509** Final Decisions; Motions for Rehearing {#sec-155.509 omnilex-key=us-tx-regs-official--title-1--155.509}

(a) Final decisions. For contested cases in which the judge issues a final decision, the judge shall furnish a copy of the decision to the referring agency and to each party.

(b) Motions for rehearing. Motions for rehearing shall be filed and handled in accordance with Tex. Gov't Code Chapter 2001, Subchapter F.

**History**
- *Source Note: The provisions of this §155.509 adopted to be effective January 1, 2017, 41 TexReg 8593.*

### **Chapter 156** ARBITRATION PROCEDURES FOR CERTAIN ENFORCEMENT ACTIONS OF THE DEPARTMENT OF AGING AND DISABILITY SERVICES REGARDING ASSISTED LIVING FACILITIES

#### **Subchapter A** GENERAL INFORMATION

##### **1 Tex. Admin. Code § 156.1** Definitions {#sec-156.1 omnilex-key=us-tx-regs-official--title-1--156.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative law judge or judge--An individual appointed by the chief administrative law judge of the State Office of Administrative Hearings (SOAH) under Government Code, §2003.041. The term shall also include any temporary administrative law judge appointed by the chief administrative law judge pursuant to Government Code, §2003.043.

(2) APA--Government Code, Chapter 2001.

(3) Authorized representative--An attorney authorized to practice law in the State of Texas or, where permitted by applicable law, a person designated by a party to represent the party.

(4) Chief judge--The chief administrative law judge or his or her designee for action under this chapter. Any designee shall be a person qualified to serve as an arbitrator.

(5) Code--Health and Safety Code, Chapter 247 as it may be amended from time to time.

(6) DADS--The Department of Aging and Disability Services.

(7) Facility--An assisted living facility as defined by the Code §247.002(1).

(8) Order--The award or final order issued by the arbitrator.

**History**
- *Source Note: The provisions of this §156.1 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.3** Construction of this Chapter {#sec-156.3 omnilex-key=us-tx-regs-official--title-1--156.3}

Unless otherwise expressly provided, the past, present, or future tense shall each include the other; the masculine, feminine, or neuter genders shall each include the other; and the singular and plural number shall each include the other.

**History**
- *Source Note: The provisions of this §156.3 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.5** Other SOAH Rules of Procedure {#sec-156.5 omnilex-key=us-tx-regs-official--title-1--156.5}

Unless specific applicable procedures are set out in this chapter, other SOAH rules of procedure found at Chapter 155 of this title (relating to Rules of Procedure), Chapter 157 of this title (relating to Temporary Administrative Law Judges), and Chapter 161 of this title (relating to Requests for Records) may apply in arbitration proceedings under this chapter. The rules that specifically apply include:

(1) 1 TAC 155, Subchapter A, §155.7 (relating to Computation of Time);

(2) 1 TAC 155, Subchapter C, §155.101 (relating to Filing Documents);

(3) 1 TAC 155, Subchapter C, §155.103 (relating to Service of Documents on Parties);

(4) 1 TAC 155, Subchapter D, §155.151 (relating to Assignment of Judges to Cases);

(5) 1 TAC 155, Subchapter D, §155.153 (relating to Powers and Duties);

(6) 1 TAC 155, Subchapter E, §155.201 (relating to Representation of Parties);

(7) 1 TAC 155, Subchapter I, §155.405 (relating to Participation by Telephone or Videoconference);

(8) 1 TAC 155, Subchapter I, §155.417 (relating to Stipulations);

(9) 1 TAC 155, Subchapter I, §155.425 (relating to Procedure at Hearing);

(10) 1 TAC 155, Subchapter I, §155.431 (relating to Conduct and Decorum);

(11) 1 TAC 155, Subchapter J, §155.503 (relating to Dismissal Proceedings);

(12) 1 TAC 157, §157.1 (relating to Temporary Administrative Law Judges); and

(13) 1 TAC 161, §161.1 (relating to Charges for Copies of Public Records).

**History**
- *Source Note: The provisions of this §156.5 adopted to be effective June 17, 2015, 40 TexReg 3627.*

#### **Subchapter B** ELECTION AND INITIATION OF ARBITRATION

##### **1 Tex. Admin. Code § 156.51** Opportunity to Elect Arbitration {#sec-156.51 omnilex-key=us-tx-regs-official--title-1--156.51}

(a) DADS or any affected facility may elect arbitration as an alternative to a contested case proceeding or to a judicial proceeding relating to any of the following disputes arising under the Code, Subchapter E:

(1) renewal of a license under §247.023;

(2) suspension, revocation, or denial of a license under §247.041;

(3) assessment of a civil penalty under §247.045; or

(4) assessment of an administrative penalty under §247.0451.

(b) Arbitration may not be elected if the facility has had an arbitration order levied against it in the previous five years.

(c) The election of arbitration is a representation that the party choosing arbitration is solvent and able to bear the costs of the proceeding. In cases where the facility is responsible for paying SOAH's costs and expenses, SOAH will require that an authorized representative of the facility provide:

(1) a deposit for the costs of the proceeding, based on SOAH's reasonable determination of the amounts expected to be incurred; and

(2) an affidavit acknowledging the facility's responsibility and duty to pay SOAH's costs and expenses.

(d) An election to engage in arbitration under this chapter is irrevocable and binding on the facility and DADS. However, an election does not preclude the parties from reaching an agreed resolution of a dispute that has been submitted for arbitration at any time during the arbitration process before the final order has been issued by the arbitrator.

**History**
- *Source Note: The provisions of this §156.51 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.53** Notice of Election of Arbitration {#sec-156.53 omnilex-key=us-tx-regs-official--title-1--156.53}

(a) Pursuant to Code §247.082(b), in an enforcement lawsuit filed in court:

(1) An affected facility may elect arbitration by filing a notice of election to arbitrate with the court in which the lawsuit is pending and sending copies to the office of the attorney general and to DADS or its designee.

(A) The notice of election must be filed no later than the tenth day after the date on which the answer is due or the date on which the answer is filed with the court, whichever is earlier.

(B) If a civil penalty is requested by an amended or supplemental pleading in a lawsuit, the affected facility must file its notice of election of arbitration not later than the tenth day after the date on which the amended or supplemental pleading is served on the affected facility or the facility's counsel.

(C) If the election of arbitration is challenged, the parties shall seek a prompt ruling from the court on the challenge. If a court finds SOAH has jurisdiction to conduct an arbitration, the Health and Human Services Appeal Division shall immediately file the court's order and the notice of election of arbitration at SOAH and request the arbitration be processed in the usual manner.

(2) DADS may elect arbitration by filing the election with the court in which the lawsuit is pending and by notifying the facility of the election not later than the date on which the facility may elect arbitration under paragraph (1) of this subsection.

(b) In an administrative enforcement proceeding originally docketed at SOAH:

(1) An affected facility may elect arbitration by filing a notice of election to arbitrate with the docket clerk at SOAH no later than the tenth day after receiving notice of hearing that complies with the requirements of the Administrative Procedure Act. A copy of this election shall be sent to DADS's representative of record in the relevant action and to DADS or its designee.

(2) DADS may elect arbitration under this chapter by filing a notice of election with the docket clerk at SOAH no later than the date that the facility may elect arbitration under paragraph (1) of this subsection and sending a copy of the notice of election to the facility's representative of record in the relevant action.

(c) The date of filing shall be the date affixed upon a notice of election by a date-stamp utilized by the docket clerk at the court for judicial proceedings, or by the docket clerk of SOAH for administrative proceedings.

(d) The notice of election shall include a written statement that contains:

(1) the nature of the action that is being submitted to arbitration, as listed in this subchapter, §156.51(a) (relating to Opportunity to Elect Arbitration);

(2) a brief description of the factual and/or legal controversy, including an estimate of the amount of any penalties sought;

(3) an estimate of the length of the arbitration hearing on the merits and the extensiveness of the record necessary to determine the matter;

(4) the remedy sought;

(5) a statement that the facility has not been the subject of an arbitration order within the previous five years;

(6) any special information that should be considered in selecting an arbitrator;

(7) if a hearing location other than Austin is requested, an explanation for requesting that location;

(8) the name, title, address, and telephone number of a designated contact person for the party who will be paying the costs of the arbitration; and

(9) a statement that arbitration is not otherwise prohibited by the Code.

**History**
- *Source Note: The provisions of this §156.53 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.55** Initiation of Arbitration {#sec-156.55 omnilex-key=us-tx-regs-official--title-1--156.55}

(a) When a notice of election of arbitration is filed at SOAH, the notice shall be date stamped and the file given a SOAH docket number that identifies it as a case submitted for arbitration. Parties shall include this docket number on all subsequent correspondence and documents filed with SOAH relating to the arbitration.

(b) The party that did not initiate the arbitration may file an answering statement with SOAH within ten days after receipt of the notice of election from the electing party. That answering statement should include a response to the claim and any challenge to the election of arbitration. If the party that did not initiate the arbitration does not file an answering statement, SOAH will presume that party denies the claim and does not challenge the election of arbitration. Failure to file an answering statement shall not operate to delay the arbitration.

**History**
- *Source Note: The provisions of this §156.55 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.57** Jurisdictional Challenges {#sec-156.57 omnilex-key=us-tx-regs-official--title-1--156.57}

(a) Parties who raise jurisdictional challenges to an election for arbitration in a judicial enforcement action are required to seek an expeditious ruling from the court in which the election was filed.

(b) Jurisdictional challenges brought to an election for arbitration in an administrative enforcement proceeding shall be decided by the presiding administrative law judge in the contested case.

**History**
- *Source Note: The provisions of this §156.57 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.59** Changes of Claim {#sec-156.59 omnilex-key=us-tx-regs-official--title-1--156.59}

If either party desires to make any new or different claim, it shall be made in writing and filed with SOAH. The other party may, within ten days from the date of such filing, file an answer with SOAH. After the arbitrator is appointed, however, no new or different claim may be submitted except with the arbitrator's consent.

**History**
- *Source Note: The provisions of this §156.59 adopted to be effective June 17, 2015, 40 TexReg 3627.*

#### **Subchapter C** FILING AND SERVICE OF DOCUMENTS

##### **1 Tex. Admin. Code § 156.101** Filing and Service of Documents {#sec-156.101 omnilex-key=us-tx-regs-official--title-1--156.101}

(a) All documents a party files with SOAH shall be governed by the provisions of 1 TAC §155.101 (relating to Filing Documents).

(b) All documents a party files with SOAH shall be simultaneously served on the other parties. Service of documents on parties shall be governed by the provisions of 1 TAC §155.103 (relating to Service of Documents on Parties).

(c) Except as provided herein, any oral or written communication, other than a communication authorized under subsection (a) of this section, from the parties to an arbitrator shall be directed to the association that is conducting the arbitration or, if there is no association conducting the arbitration, to SOAH, for transmittal to the arbitrator. After the arbitrator has been appointed in a case, materials may be filed directly with the arbitrator, if:

(1) the parties agree,

(2) the arbitrator agrees, and

(3) the service requirements of this section are met.

**History**
- *Source Note: The provisions of this §156.101 adopted to be effective June 17, 2015, 40 TexReg 3627.*

#### **Subchapter D** SELECTION OF ARBITRATOR AND COSTS

##### **1 Tex. Admin. Code § 156.151** Selection of Arbitrator {#sec-156.151 omnilex-key=us-tx-regs-official--title-1--156.151}

(a) The parties may agree upon an arbitrator qualified under this chapter and submit that individual's name with their initial statements.

(b) Arbitrators designated by the parties.

(1) Parties who agree to retain a qualified non-SOAH arbitrator shall notify the chief judge within ten days of the arbitrator's retention.

(2) The notice must include the name, address, and telephone number of the arbitrator selected; a statement that the parties have entered into an agreement with the arbitrator regarding the arbitrator's rate and method of compensation; and an affirmation that the arbitrator is qualified to serve according to the provisions of this chapter.

(3) The chief judge shall issue an order specifying the date by which the arbitration must be completed.

(c) If the parties do not agree on a non-SOAH arbitrator who is willing and available to serve, SOAH will provide a list of potential SOAH arbitrators.

(d) Any objections for cause pertaining to any name on the list shall be made in writing directed to the chief judge at SOAH within three days of receiving the list of potential SOAH arbitrators, with a copy served on all other parties. Such objections will be reviewed by the chief judge.

(e) SOAH will notify the parties of the arbitrator appointed.

(f) Until an arbitrator has been appointed, the chief judge may rule on pending matters, including dispositive motions.

**History**
- *Source Note: The provisions of this §156.151 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.153** Notice to and Acceptance of Appointment by Arbitrator who is not a SOAH Judge {#sec-156.153 omnilex-key=us-tx-regs-official--title-1--156.153}

(a) Notice of the appointment of the arbitrator shall be sent to the arbitrator by SOAH, together with a copy of this chapter and an acceptance form for the arbitrator to sign and return. The signed acceptance of the arbitrator shall be filed with SOAH prior to the first pre-hearing conference or other meeting of the parties to the arbitration.

(b) The acceptance of the arbitrator shall state that the arbitrator is qualified and willing to serve as arbitrator in accordance with this chapter, and with the current Code of Ethics for Arbitrators in Commercial Disputes issued by the American Bar Association and the American Arbitration Association. It shall also state that the arbitrator foresees no difficulty in completing the arbitration according to the schedule set out in this chapter.

(c) A potential arbitrator must not accept appointment in or continue handling any matter in which the arbitrator believes or perceives that participation as an arbitrator would be a conflict of interest or create the impression of a conflict. The duty to disclose is a continuing obligation throughout the arbitration process.

(d) Upon objection of a party to the continued service of an arbitrator, the chief judge shall provide the arbitrator and all parties an opportunity to respond. After consideration of these responses, the chief judge shall determine whether the arbitrator should be disqualified and shall inform the parties of his/her decision, which shall be conclusive.

**History**
- *Source Note: The provisions of this §156.153 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.155** Vacancies {#sec-156.155 omnilex-key=us-tx-regs-official--title-1--156.155}

If for any reason an appointed arbitrator is unable to perform the duties of the office, the chief judge may, on proof satisfactory to the chief judge, declare the office vacant. The chief judge may fill a vacancy by appointing a SOAH arbitrator. Objections for cause to the appointed arbitrator shall be filed in accordance with this subchapter, §156.151(d) (relating to Selection of Arbitrator). During the period of a vacancy, the chief judge may rule on pending matters, including dispositive motions.

**History**
- *Source Note: The provisions of this §156.155 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.157** Qualifications of Arbitrators {#sec-156.157 omnilex-key=us-tx-regs-official--title-1--156.157}

(a) The chief judge may appoint as an arbitrator any SOAH administrative law judge.

(b) A potential arbitrator who is not a SOAH administrative law judge shall be on an approved list of a nationally recognized association that performs arbitration services or meet the following minimum standards:

(1) Have at least five years of experience in health care and/or the legal profession and/or alternative dispute resolution with recognized expertise in his/her profession(s).

(2) Have the attributes necessary to be a successful arbitrator, including expertise, honesty, integrity, impartiality, and the ability to manage the arbitration process.

(3) May not represent any plaintiff in a proceeding seeking monetary damages from the State of Texas or any of its agencies, and he/she must affirm that he/she will not undertake any such representation during the pendency of the arbitration proceeding.

(c) The chief judge may remove an arbitrator if she/he determines that the arbitrator no longer meets the qualifications listed in this section. The determination of the chief judge in this matter is conclusive.

**History**
- *Source Note: The provisions of this §156.157 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.159** Duties of the Arbitrator {#sec-156.159 omnilex-key=us-tx-regs-official--title-1--156.159}

The arbitrator shall:

(1) secure appropriate facilities for the hearing, giving preference to using state facilities;

(2) protect the interests of DADS and the facility;

(3) ensure that all relevant evidence has been disclosed to the arbitrator, DADS, and facility; and

(4) render an order consistent with applicable state and federal law, including the Code and this chapter.

**History**
- *Source Note: The provisions of this §156.159 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.161** Cost of Arbitration {#sec-156.161 omnilex-key=us-tx-regs-official--title-1--156.161}

(a) An arbitrator's fees and expenses shall not exceed the statutory daily maximum for case preparation, pre-hearing conferences, hearings, preparation of the order, and any other required post-hearing work. Rates charged for less than one day must bear a reasonable relationship to the daily maximum.

(b) There may also be incidental expenses connected with an arbitration proceeding which may be charged in addition to the arbitrator's fees and expenses. If a party requests that an arbitration hearing be held outside of Austin, and the arbitrator agrees to hold the arbitration in that location, incidental expenses would include the cost of renting a room for the hearing and the arbitrator's travel expenses.

(c) SOAH charges fees for the services provided by SOAH arbitrators at the hourly rate approved in the General Appropriations Act, but the total amount charged for a SOAH arbitrator's services in an arbitration proceeding conducted under these rules shall not exceed the statutory daily maximum.

(d) The party electing arbitration must pay the cost of the arbitration.

**History**
- *Source Note: The provisions of this §156.161 adopted to be effective June 17, 2015, 40 TexReg 3627.*

#### **Subchapter E** ARBITRATION PROCEEDINGS

##### **1 Tex. Admin. Code § 156.201** Exchange and Filing of Information {#sec-156.201 omnilex-key=us-tx-regs-official--title-1--156.201}

(a) Unless the arbitrator orders otherwise, by the 30th day after the date SOAH mailed notice to the parties of the name of the appointed arbitrator, the parties shall have exchanged the following information:

(1) List of witnesses that a party expects to call with a short summary of their expected testimony;

(2) Any and all documents or other tangible things that contain information relevant to the subject matter, including any documents that will be testified about at the hearing or that witnesses have reviewed in preparing for their testimony.

(b) Not later than the seventh day before the first day of the arbitration hearing, sooner if so directed by the arbitrator, DADS and the facility shall exchange and file with the arbitrator:

(1) all documentary evidence not previously exchanged and filed that is relevant to the dispute, with the relevant portions clearly indicated; and

(2) information relating to a proposed resolution of the dispute.

(c) The parties are responsible for identifying any material that is confidential by law and for taking appropriate measures, for example, redacting resident identities, to ensure that all such material remains confidential.

(d) Each producing party's documents shall be labeled by name or initials of the party and Bates-stamped or otherwise consecutively numbered in the lower right hand corner of each page.

**History**
- *Source Note: The provisions of this §156.201 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.203** Preliminary Conference {#sec-156.203 omnilex-key=us-tx-regs-official--title-1--156.203}

The arbitrator may set a preliminary conference and may require parties to file a statement of position prior to that conference. The statement of position shall include:

(1) stipulations of the parties to uncontested facts and applicable law;

(2) citation to the statutory and regulatory law, both state and federal, that controls the controversy;

(3) a list of the issues of fact and law that are in dispute between the parties, including a citation to legal authorities that each party relies on for its legal positions;

(4) proposals designed to expedite the arbitration proceedings, including minimizing preparation and decision time required of the arbitrator;

(5) a list of documents that the parties have exchanged and a schedule for the delivery of any additional relevant documents, indicating the approximate length of each document;

(6) the identification of witnesses expected to be called during the arbitration proceeding, with a short summary of their expected testimony; and

(7) other matters as specified by the arbitrator.

**History**
- *Source Note: The provisions of this §156.203 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.205** Discovery {#sec-156.205 omnilex-key=us-tx-regs-official--title-1--156.205}

Discovery is not allowed in a proceeding under this chapter, except by agreement with the other party or by order of the arbitrator upon a showing of good cause. Any discovery will be completed no later than 14 days before the opening of the arbitration hearing on the merits, unless otherwise ordered by the arbitrator. Discovery should not be filed with SOAH or the arbitrator unless there is a related dispute which must be resolved by the arbitrator. No more than four hours of deposition testimony may be taken by either party, unless otherwise ordered by the arbitrator.

**History**
- *Source Note: The provisions of this §156.205 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.207** Stenographic Record {#sec-156.207 omnilex-key=us-tx-regs-official--title-1--156.207}

An official stenographic record of the proceeding is not required, but DADS or the facility may make a stenographic record. The party that makes the stenographic record shall pay the expense of having the record made. A copy of any transcript prepared at the request of a party shall be provided to the arbitrator.

**History**
- *Source Note: The provisions of this §156.207 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.209** Electronic Record {#sec-156.209 omnilex-key=us-tx-regs-official--title-1--156.209}

DADS shall make an electronic recording of the proceeding. If there is no stenographic record of the proceeding, the original recording or a copy will be provided to the arbitrator at the close of the proceeding if the arbitrator so requests. At the arbitrator's request, DADS shall also record prehearing conferences.

**History**
- *Source Note: The provisions of this §156.209 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.211** Interpreters {#sec-156.211 omnilex-key=us-tx-regs-official--title-1--156.211}

When an interpreter will be needed for all or part of a proceeding, a party shall file a written request at least seven days before the setting. SOAH shall provide and pay for:

(1) an interpreter for deaf or hearing impaired parties and subpoenaed witnesses in accordance with the APA, §2001.055;

(2) reader services or other communication services for blind and sight impaired parties and witnesses; and

(3) a certified language interpreter for parties and witnesses who need that service.

**History**
- *Source Note: The provisions of this §156.211 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.213** Communication of Parties with Arbitrator {#sec-156.213 omnilex-key=us-tx-regs-official--title-1--156.213}

(a) DADS and the facility shall not communicate with the arbitrator other than at an oral hearing, or through properly filed documents, unless the parties and the arbitrator agree otherwise.

(b) Any oral or written communication from the parties, other than a communication authorized under subsection (a) of this section, shall be directed to SOAH for transmittal to the arbitrator.

**History**
- *Source Note: The provisions of this §156.213 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.215** Date, Time, and Place of Hearing {#sec-156.215 omnilex-key=us-tx-regs-official--title-1--156.215}

(a) The arbitration hearing shall be scheduled to begin no later than the 90th day after the date that the arbitrator is selected.

(b) The arbitrator shall set the date, time, and place for each hearing. She/he shall send a notice of hearing to the parties at least 30 days in advance of the hearing date, unless otherwise agreed to by the parties. A copy of such notice shall be simultaneously filed with SOAH by the arbitrator.

(c) The arbitrator may grant a continuance of the arbitration at the request of DADS or the facility. The arbitrator may not unreasonably deny a request for a continuance.

(d) Arbitration hearings normally will be held at SOAH's hearings facility in Austin, Texas. If a party seeks to have the arbitration hearing held elsewhere, the party shall submit a written request to the arbitrator and make a showing of good cause. The arbitrator shall have sole discretion to determine whether to grant such a request. If the arbitrator grants the request, the arbitrator shall determine how the incidental expenses of holding the arbitration hearing outside of Austin will be apportioned between the parties. Incidental expenses include the cost of renting a room for the hearing and the arbitrator's travel expenses. Preference will be given to using state facilities. The arbitrator may require that the incidental expenses be paid in advance of the arbitration hearing.

**History**
- *Source Note: The provisions of this §156.215 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.217** Representation {#sec-156.217 omnilex-key=us-tx-regs-official--title-1--156.217}

Any party may be represented by counsel or other authorized representative.

**History**
- *Source Note: The provisions of this §156.217 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.219** Attendance Required {#sec-156.219 omnilex-key=us-tx-regs-official--title-1--156.219}

(a) The arbitrator may proceed in the absence of any party or representative of a party who, after notice of the proceeding, fails to be present or to obtain a continuance.

(b) An arbitrator may not make an order solely on the default of a party and shall require the party who is present to submit evidence, as required by the arbitrator, before issuing an order.

**History**
- *Source Note: The provisions of this §156.219 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.221** Public Hearings and Confidential Material {#sec-156.221 omnilex-key=us-tx-regs-official--title-1--156.221}

Hearings held under this chapter shall be open to the public. The parties are responsible for identifying any material that is confidential by law and for taking appropriate measures to ensure that such material remains confidential during the hearing. All exhibits shall be returned to DADS following the issuance of the order by the arbitrator, where they shall be maintained in accordance with DADS' rules.

**History**
- *Source Note: The provisions of this §156.221 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.223** Order of Proceedings {#sec-156.223 omnilex-key=us-tx-regs-official--title-1--156.223}

(a) Opening statements. The arbitrator may ask each party to make an opening statement to clarify the issues involved.

(b) The complaining party shall then present evidence to support its claim. The defending party shall then present evidence to support its claim. Witnesses for each party shall answer questions propounded by the other party and the arbitrator.

(c) The arbitrator has the discretion to vary this procedure but shall afford a full and equal opportunity to all parties for the presentation of any material and relevant evidence within the time frames set by the arbitrator.

(d) Exhibits offered by either party may be received in evidence by the arbitrator.

(e) The parties may make closing statements as they desire, but the record may not remain open for written briefs unless ordered by the arbitrator. If the arbitrator requests briefs the arbitration hearing shall be deemed "closed" on the date that the last requested brief is filed.

**History**
- *Source Note: The provisions of this §156.223 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.225** Control of Proceedings {#sec-156.225 omnilex-key=us-tx-regs-official--title-1--156.225}

The arbitrator shall exercise reasonable control over the proceedings, including but not limited to the manner and order of interrogating witnesses and presenting evidence so as to:

(1) make the interrogation and presentation effective for the determination of the truth;

(2) avoid needless consumption of time; and

(3) protect witnesses from harassment or undue embarrassment.

**History**
- *Source Note: The provisions of this §156.225 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.227** Evidence {#sec-156.227 omnilex-key=us-tx-regs-official--title-1--156.227}

(a) The parties may offer evidence as they desire and shall produce additional evidence that the arbitrator considers necessary to understand and resolve the dispute. However, any documentary evidence not properly exchanged between the parties before the hearing will be excluded from consideration unless good cause is shown.

(b) The arbitrator is the judge of the relevance and materiality of the evidence offered. Strict conformity to the rules of judicial proceedings is not required. The Texas Rules of Evidence are not binding on the arbitrator but may be used as a guideline.

(c) Each party shall produce any witnesses under its control without the necessity of a subpoena. Individuals may be compelled by the arbitrator, as provided under the Texas General Arbitration Act, Texas Civil Practice and Remedies Code, §171.007, to attend and give testimony or to produce documents at the arbitration proceeding or at a deposition allowed under this subchapter, §156.205 (relating to Discovery).

**History**
- *Source Note: The provisions of this §156.227 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.229** Witnesses {#sec-156.229 omnilex-key=us-tx-regs-official--title-1--156.229}

Witnesses shall testify under oath. Testimony may be presented in a narrative, without strict adherence to a "question and answer" format.

**History**
- *Source Note: The provisions of this §156.229 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.231** Exclusion of Witnesses {#sec-156.231 omnilex-key=us-tx-regs-official--title-1--156.231}

Any party may request that the arbitrator exclude witnesses from the hearing except when they are testifying. If such a request is made, the arbitrator shall instruct the witnesses not to discuss the case outside the official hearing other than with the designated representatives or attorneys in the case. However, an individual who is a party or any other single party representative shall not be excluded under this rule. A witness or other person violating these instructions may be punished by the exclusion of evidence as the arbitrator deems appropriate.

**History**
- *Source Note: The provisions of this §156.231 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.233** Evidence by Affidavit {#sec-156.233 omnilex-key=us-tx-regs-official--title-1--156.233}

The arbitrator may receive and consider evidence of witnesses by affidavit. Affidavit testimony must be filed with the arbitrator and served on the other party no later than 30 days before the hearing. The other party will have 15 days to file any objection to the admissibility of the affidavit or to file controverting affidavits. The arbitrator shall give such evidence only such weight as the arbitrator deems it entitled to after consideration of any objection made to its admission.

**History**
- *Source Note: The provisions of this §156.233 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.235** Evidence Filed After the Hearing {#sec-156.235 omnilex-key=us-tx-regs-official--title-1--156.235}

If the parties agree or the arbitrator directs that documents or other evidence be submitted to the arbitrator after the hearing, all parties shall be afforded an opportunity to examine such documents or other evidence. Such materials shall be served as provided in Subchapter C of this chapter, §156.101 (relating to Filing and Service of Documents).

**History**
- *Source Note: The provisions of this §156.235 adopted to be effective June 17, 2015, 40 TexReg 3627.*

#### **Subchapter F** ARBITRATION ORDER

##### **1 Tex. Admin. Code § 156.251** Order {#sec-156.251 omnilex-key=us-tx-regs-official--title-1--156.251}

(a) The arbitrator may enter any order consistent with state and federal law applicable to a dispute described in Subchapter B of this chapter, §156.51 (relating to Opportunity to Elect Arbitration).

(b) The order shall be entered no later than the 60th day after the close of the arbitration hearing.

(c) The arbitrator shall base the order on the facts established in the arbitration proceeding, including stipulations of the parties; and on the state and federal statutes and formal rules and regulations, as properly applied to those facts.

(d) The order must:

(1) be in writing;

(2) be signed and dated by the arbitrator; and

(3) include a list of stipulations on uncontested issues and a statement of the arbitrator's decisions on all contested issues. If requested by either of the parties, the decision shall contain findings of fact and conclusions of law on controverted issues.

(e) The arbitrator shall file a copy of the order with SOAH and DADS or its designee and send a copy to the parties.

**History**
- *Source Note: The provisions of this §156.251 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.253** Effect of Order {#sec-156.253 omnilex-key=us-tx-regs-official--title-1--156.253}

An order of an arbitrator under this chapter is final and binding on all parties. A party's right to appeal is limited to the provisions of the Code.

**History**
- *Source Note: The provisions of this §156.253 adopted to be effective June 17, 2015, 40 TexReg 3627.*

##### **1 Tex. Admin. Code § 156.255** Clerical Error {#sec-156.255 omnilex-key=us-tx-regs-official--title-1--156.255}

For the purpose of correcting clerical errors, an arbitrator retains jurisdiction of the order for 20 days after the date of the order.

**History**
- *Source Note: The provisions of this §156.255 adopted to be effective June 17, 2015, 40 TexReg 3627.*

### **Chapter 157** TEMPORARY ADMINISTRATIVE LAW JUDGES

##### **1 Tex. Admin. Code § 157.1** Temporary Administrative Law Judges {#sec-157.1 omnilex-key=us-tx-regs-official--title-1--157.1}

(a) If judges employed by the State Office of Administrative Hearings are not available to hear a case within a reasonable time, the chief judge may contract with qualified individuals to serve as temporary administrative law judges.

(b) To serve as a temporary administrative law judge, an individual must be licensed to practice law in the State of Texas and have five years experience in administrative law from conducting hearings under the Administrative Procedure Act and/or practicing administrative law.

(c) The chief judge will also consider:

(1) qualifications and experience; and

(2) expertise related to the subject matter of the hearing.

(d) To be considered for service as a temporary administrative law judge, an individual must comply with any applicable state bidding requirements.

**History**
- *Source Note: The provisions of this §157.1 adopted to be effective October 5, 1992, 17 TexReg 6443; amended to be effective June 6, 1995, 20 TexReg 3829; amended to be effective November 17, 2005, 30 TexReg 7428.*

### **Chapter 159** RULES OF PROCEDURE FOR ADMINISTRATIVE LICENSE SUSPENSION HEARINGS

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 159.1** Scope and Construction of this Chapter {#sec-159.1 omnilex-key=us-tx-regs-official--title-1--159.1}

(a) This chapter applies to contested hearings before SOAH concerning administrative suspension, denial, or disqualification of drivers' licenses under the Administrative License Revocation (ALR) Program governed by Texas Transportation Code, Chapters 522, 524, and 724.

(b) These regulations shall be construed to ensure the fair and expeditious determination of every action.

(c) These rules shall supplement the procedures required by law. To the extent that any provisions of these rules that are necessary to expedite the hearings process conflict with Texas Government Code, Chapter 2001, the provisions of this chapter shall prevail.

(d) When procedural issues arising under Texas Transportation Code, Chapters 522, 524, and 724 cannot be resolved by reference to this chapter, the APA, and applicable case law, then the presiding judge will consider and apply SOAH's Rules of Procedure in Chapter 155 of this title, and/or the Texas Rules of Civil Procedure (TRCP) as interpreted and construed by Texas case law, and persuasive authority established in other forums.

(e) An ALR hearing under this chapter is a civil administrative proceeding that is separate and independent from any criminal court proceedings relating to the same arrest.

**History**
- *Source Note: The provisions of this §159.1 adopted to be effective January 20, 2009, 34 TexReg 329; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.3** Definitions {#sec-159.3 omnilex-key=us-tx-regs-official--title-1--159.3}

In this chapter, the following terms have the meaning indicated:

(1) Adult--An individual twenty-one years of age or older.

(2) ALR proceeding--A civil administrative proceeding under Texas Transportation Code, Chapters 522, 524 and/or 724 and this chapter relating to a driver's license disqualification, suspension, or denial resulting from an arrest for an offense relating to the operation of a motor vehicle or watercraft while intoxicated or under the influence of alcohol or controlled substances.

(3) Alcohol concentration--Defined in Texas Penal Code §49.01.

(4) Alcohol-related or drug-related enforcement contact--Defined in Texas Transportation Code §524.001.

(5) Certified breath test technical supervisor--A person who has been certified by DPS to maintain and direct the operation of a breath test instrument used to analyze breath specimens of persons suspected of driving while intoxicated.

(6) Contested case--A proceeding brought under Texas Transportation Code, Chapter 522, Subchapter I; Chapter 524, Subchapter D; or Chapter 724, Subchapter D.

(7) Defendant--One who holds a license as defined in Texas Transportation Code, Chapter 521, or an unlicensed driver, whose legal rights, duties, statutory entitlement, or privileges may be affected by the outcome of a contested case under this chapter.

(8) Defense counsel--An attorney who is authorized to participate in an ALR proceeding as a current, former, or prospective representative of a Defendant. Defense counsel does not include a non-attorney representative or an attorney who is not authorized to practice law in Texas and has not obtained permission to appear pursuant to 1 Texas Administrative Code §155.201(c).

(9) Denial--The non-issuance of a license or permit, and loss of the privilege to obtain a license or permit.

(10) DPS or the Department--The Texas Department of Public Safety.

(11) Driver--A person who drives or is in actual physical control of a motor vehicle.

(12) Efile Texas or eFile Texas--An electronic filing service provider approved by the Texas Supreme Court for use in electronically filing and serving documents in cases at SOAH and in judicial courts of record, available at http://www.efiletexas.gov. In these rules, the terms "eFile Texas," "electronic filing service provider," and "electronic filing manager" may be used interchangeably, although they may be assigned more specific meaning as appropriate in a given context.

(13) Electronic filing or filed electronically--The electronic transmission of documents filed in an ALR proceeding by uploading the documents to the case docket using eFile Texas or another electronic filing service provider approved by the Texas Supreme Court. In these rules, the term "electronic filing" may also include the submission of digital audio and video evidence in the manner specified on SOAH's website, but does not include the submission of filings by email, facsimile transmission, or unapproved file sharing platforms.

(14) Electronic Filing Service Provider or Electronic Filing Manager--An online web portal service offered by an independent third-party provider and approved by the Texas Supreme Court for use in electronically filing documents at SOAH and judicial courts of record, and that acts as the intermediary between the filer and eFileTexas.

(15) Electronic signature or signed electronically--An electronic version of a person's signature that is the legal equivalent of the person's handwritten signature. Electronic signature formats include:

(A) an "/s/" and the person's name typed in the space where the signature would otherwise appear;

(B) an electronic graphical image or scanned image of the signature; or

(C) a "digital signature" based on accepted public key infrastructure technology that guarantees the signer's identity and data integrity.

(16) Electronic service or served electronically--The electronic transmission and delivery of documents to a party or a party's authorized representative by means of an electronic filing service provider.

(17) Filed--The receipt and acceptance for filing by the SOAH Chief Clerk's office.

(18) Final decision--The decision issued by a judge who hears the contested case or another judge who reviewed the record in its entirety and who is authorized under appropriate law to issue final decisions in an ALR case.

(19) Intoxicated--Defined in Texas Penal Code §49.01(2).

(20) Minor--An individual under twenty-one years of age.

(21) Operate--To drive or be in actual physical control of a motor vehicle.

(22) Peace officer--A person elected, employed, or appointed as a peace officer under Texas Criminal Procedure Code §2.12 or other law. A peace officer may also be referred to as an arresting officer.

(23) Public place--Defined in Texas Penal Code §1.07, Chapter 1, and Texas Transportation Code §524.001, Chapter 524.

(24) Research Texas or re:SearchTX--An online repository of court case records in Texas, including records filed in ALR proceedings at SOAH, available at http://research.txcourts.gov.

(25) Test--The taking of blood or breath specimens as set out in Texas Transportation Code, Chapters 522, 524 and 724.

(26) Videoconference--Technology that provides for a conference of individuals in different locations, connected by electronic means through audio and video signals transmitted over the Internet, where all participants have an opportunity to communicate and participate in the conference.

(27) The following terms are defined in 1 Texas Administrative Code §155.5 (relating to Definitions): Administrative Law Judge or judge; APA; authorized representative; business day; confidential information; Chief Judge; discovery; evidence; exhibits; ex parte communication; party; person; personal identifying information; TRCP; and SOAH.

**History**
- *Source Note: The provisions of this §159.3 adopted to be effective January 20, 2009, 34 TexReg 329; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.5** Computation of Time {#sec-159.5 omnilex-key=us-tx-regs-official--title-1--159.5}

Time shall be computed in the manner provided in 1 Texas Administrative Code §155.7.

**History**
- *Source Note: The provisions of this §159.5 adopted to be effective January 20, 2009, 34 TexReg 329; amended to be effective January 1, 2017, 41 TexReg 9459.*

##### **1 Tex. Admin. Code § 159.7** Other SOAH Rules of Procedure {#sec-159.7 omnilex-key=us-tx-regs-official--title-1--159.7}

Other SOAH rules of procedure found at Chapter 155 of this title (relating to Rules of Procedure), Chapter 157 of this title (relating to Temporary Administrative Law Judges) and Chapter 161 of this title (relating to Requests for Records) may apply in contested cases under this chapter unless there are specific applicable procedures set out in this chapter. The rules that specifically apply include:

(1) Subchapter C, §§155.101, 155.103, and 155.105 of this title (relating to Filing Documents, Confidential Information, and Service of Documents on Parties);

(2) Subchapter D, §§155.151 - 155.153, 155.155, 155.157 of this title (relating to Assignment of Judges to Cases, Disqualification or Recusal of Judges, Powers and Duties, Orders, and Sanctioning Authority);

(3) Subchapter E, §155.201 and §155.203 of this title (relating to Representation of Parties and Withdrawal of Counsel);

(4) Subchapter I, §155.417 of this title (relating to Stipulations);

(5) Subchapter I, §155.425 of this title (relating to Procedure at Hearing);

(6) Subchapter I, §155.431 of this title (relating to Conduct and Decorum);

(7) Section 157.1 of this title (relating to Temporary Administrative Law Judges); and

(8) Section 161.1 of this title (relating to Charges for Copies of Public Information).

**History**
- *Source Note: The provisions of this §159.7 adopted to be effective January 20, 2009, 34 TexReg 329; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

#### **Subchapter B** CASE ADMINISTRATION

##### **1 Tex. Admin. Code § 159.51** Jurisdiction {#sec-159.51 omnilex-key=us-tx-regs-official--title-1--159.51}

(a) Acquisition of jurisdiction. SOAH acquires jurisdiction over a case involving a particular hearing request on the date when sufficient information required by SOAH for the scheduling of an ALR proceeding is electronically transmitted by DPS to the SOAH Chief Clerk's Office.

(b) Effect of acquisition of jurisdiction by SOAH. Once SOAH acquires jurisdiction, SOAH shall promptly schedule the hearing in accordance with §159.201 of this title (relating to Scheduling and Notice of Hearing), and DPS and the defendant may initiate discovery or move for appropriate relief.

(c) Commencement of time periods. A period of time established by these rules shall not begin to run until the hearing is initially scheduled by SOAH.

(d) Cessation of Jurisdiction. SOAH jurisdiction over a case involving a particular hearing request ends upon the date the SOAH judge issues a final decision or order of dismissal, and if applicable, the deadline for any post-judgement motions has passed. Thereafter, jurisdiction may only be extended by order of the judge to:

(1) reinstate a case as provided by §159.203(c) of this title (relating to Involuntary Dismissal);

(2) vacate a default as provided by §159.213(f) of this title (relating to Failure to Attend Hearing and Default); or

(3) correct a decision as provided by §159.254 of this title (relating to Correction of Final Decision).

(e) After the cessation of jurisdiction, SOAH has concluded its involvement in the matter and has no continuing jurisdiction, including that SOAH has no authority to enforce or correct the Department's administration of a suspension, revocation, or reinstatement of a driver's license.

**History**
- *Source Note: The provisions of this §159.51 adopted to be effective January 20, 2009, 34 TexReg 330; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.53** Filing Documents {#sec-159.53 omnilex-key=us-tx-regs-official--title-1--159.53}

(a) All notices, pleadings, motions, exhibits, and other documents for ALR proceedings must be filed in the manner specified by this section and in compliance with 1 Texas Administrative Code §§155.101-.103.

(b) Methods of Filing.

(1) Electronic Filing. Defense counsel and the Department shall electronically file all notices, pleadings, motions, exhibits, and other documents for an ALR proceeding at SOAH by use of eFile Texas or another electronic filing service provider approved by the Texas Supreme Court. Parties not represented by an attorney are strongly encouraged to electronically file documents but may use alternative methods of filing described in paragraph (2) of this subsection.

(A) Party Information. As soon as practicable after the initial docketing of an ALR proceeding at SOAH, each party or attorney of record shall ensure that the electronic filing manager contains complete and accurate party contact information known to the parties at the time, including the entry and verification of the mailing address, phone number, and email address of each party.

(B) Designation of Lead Counsel. If the party will be represented by an attorney, the lead counsel who is primarily responsible for the representation shall ensure that the information entered into the electronic filing manager includes the designation of lead counsel and lead counsel's state bar identification number.

(C) Service Contact Information. Each party, or lead counsel if the party will be represented by an attorney, shall ensure that the electronic filing manager contains complete and accurate service contact information known to the parties at the time of filing, including the entry and verification of the email address of each party or attorney who is required to be served.

(i) The service contact information maintained in the electronic filing manager must be sufficient to allow SOAH and the parties to electronically serve documents through eFile Texas.

(ii) SOAH may rely on the service contact information on file in eFile Texas for electronic delivery of orders, decisions, and other case-related communications from SOAH. SOAH is not required to deliver copies of orders, decisions, or other case related communications to persons who are not identified as a party, lead counsel, or service contact for the case within eFile Texas.

(iii) Failure to enter and verify service contact information within eFile Texas may result in a failure to comply with legal requirements for service of process.

(D) Document Titles and Use of Proper Filing Codes. All documents submitted for electronic filing must be properly titled or described in the electronic filing manager in a manner that permits SOAH and the parties to reasonably ascertain its contents, including through use of the correct filing code for the type of document.

(2) Filing by Self-represented Parties. Defendants without an attorney are strongly encouraged, but not required, to file electronically in the manner described in paragraph (1) of this subsection. Self-represented parties may use approved alternative methods of email, facsimile transmission, mail, or hand-delivery in the manner specified on SOAH's website.

(3) Alternative Filing Methods. For good cause, a judge may permit a party to file documents in paper or another acceptable form in a particular case.

(c) Requirements for All Filers.

(1) Address of Record Required. The defendant, the Department, and lead counsel for each party shall provide and maintain a current mailing address and email address on file with SOAH during the pendency of the proceeding. SOAH and the parties may maintain the parties' address information on file as part of the electronic record in eFile Texas.

(2) Pleadings and Motions. All pleadings, motions, or applications to the judge for an order, whether in the form of a motion, plea, or other form of request, must be filed with the SOAH Chief Clerk's Office in writing and signed by the party, unless presented orally during a hearing.

(3) Separate Submissions Required. Different document types cannot be combined into a single submission for filing. A party may not combine motions requesting different types of relief or action into a single filing but must submit each motion separately. If the document submitted for filing is an exhibit, it must be properly identified as an exhibit and submitted separately from motions, pleadings, or other filings, unless the exhibit is attached as a necessary supporting document to a pleading.

(4) Confidential Filing Required. To avoid the public disclosure or redaction of confidential information or personal identifying information necessary for the resolution of an ALR proceeding, all documents submitted for filing shall be designated as "confidential" at the time of submission. Failure to correctly submit documents as "confidential" may result in the record being publicly-accessible through the re:SearchTX court records portal.

(5) Exhibit Submission.

(A) Prefiling Required. All exhibits shall be prefiled at least two days before the hearing to avoid unnecessary surprise or delay. The judge, in his or her discretion, may grant or deny the presentation and admission of exhibits that were not timely prefiled in accordance with this section.

(B) Organization of Exhibits. Exhibits should be numbered sequentially, and multipage documents shall be paginated or Bates stamped. If multiple exhibits are combined into a single document for submission, then the document must be bookmarked to allow the judge and parties to locate each exhibit within the record.

(C) DPS Notice of Hearing. The Department must file a copy of the notice of hearing and any amended or corrected notices of hearing.

(D) Audio and Video Evidence. Evidentiary exhibits in the form of audio or video recordings shall be filed electronically in the manner specified on SOAH's website. Audiovisual evidence may only be submitted in a common, non-proprietary file format (e.g., MP4, WMV, AVI, MPEG) that can be reviewed by the judge and presented at the hearing without the need for special equipment or software.

(E) Supplemental Exhibits. Any exhibits admitted at a hearing that were not prefiled as required by this section, shall be filed electronically by the party who offered the exhibit by no later than the next business day after the conclusion of the hearing. The parties may only supplement the record with exhibits that were offered and admitted as evidence, or for which an offer of proof was presented at the hearing.

**History**
- *Source Note: The provisions of this §159.53 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.55** Service of Documents on Parties {#sec-159.55 omnilex-key=us-tx-regs-official--title-1--159.55}

(a) Service Required. On the same date a document is filed at SOAH, a copy shall also be sent to each party or the party's lead counsel if the party is represented by an attorney. Documents shall be served in the manner specified by this section and in compliance with 1 Texas Administrative Code §155.105.

(b) Service Contact Information. It is the responsibility of DPS and defense counsel, if the defendant is represented by counsel, to ensure that complete and accurate service contact information is entered in the electronic filing manager for each party or attorney who is required to be served. SOAH or the Department may assist an unrepresented defendant with entering the defendant's service contact information into eFile Texas.

(c) Method of Service.

(1) Electronic Service. A document filed electronically at SOAH must be served electronically through the use of eFile Texas or another electronic filing service provider approved by the Texas Supreme Court if the email address of the party or attorney to be served is on file with the record of the case. If the email address of the party to be served is not on file with the electronic filing manager, the document may be served on that party or attorney under paragraph (2) of this subsection.

(2) Alternative Service. If the email address of the party to be served is on not file with the record of the case, then the document may be served in person, by mail, by commercial delivery service, by fax, or by such other manner as directed by the judge. Self-represented parties may use approved alternative methods of email, facsimile transmission, mail, or hand-delivery to serve documents to the Department.

(3) Service of Audio and Video Exhibits. The requirement to serve audio and video exhibits to the other party may be satisfied if the audio or video recordings are filed electronically at SOAH in the manner specified under §159.53 (relating to Filing Documents), and an electronic copy or online access to such exhibits is provided to the party or attorney to be served.

(d) Certificate of Service. A person filing a document shall include a certificate of service that certifies compliance with this section and 1 Texas Administrative Code §155.105. A certificate of service shall be sufficient if it substantially complies with the following example: "Certificate of Service: I certify that on {date} , a true and correct copy of this {name of document} has been sent to {name of opposing party or authorized representative for the opposing party} by {specify method of delivery, e.g., electronic filing, regular mail, hand-delivery, fax, certified mail.} {Signature}"

(e) Proof of Service. Proof of service may be established by evidence that the document required to be served was electronically served to the party, or if party has legal representation, to party's counsel, at email address of record on file in the electronic filing manager. Alternatively, proof of service may be established by evidence that the document was served in accordance with subparagraph (c)(2) of this subsection to the last known address, as reflected on defendant's notice of suspension, request for hearing, driving record or similar documentation.

(f) Delivery of SOAH Orders. All orders issued by the SOAH judge are considered received by the party upon SOAH's electronic transmission of the order to eFile Texas, if the recipient's email address is on file as part of the electronic record in eFile Texas.

**History**
- *Source Note: The provisions of this §159.55 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.57** Representation of the Parties {#sec-159.57 omnilex-key=us-tx-regs-official--title-1--159.57}

(a) Representation. A defendant may represent himself or herself, or may employ an attorney representative who is authorized to act as defense counsel. Defendants who are not represented by an attorney may obtain information about representing themselves in ALR proceedings on SOAH's public website at www.soah.texas.gov. SOAH cannot appoint an attorney or provide legal advice for a self-represented litigant.

(b) Appearance of Counsel. Defense counsel who has not otherwise entered an appearance as a matter of record in the proceeding at SOAH shall electronically file a notice of representation that contains the attorney's mailing address, email address, and telephone number. At the time of filing, defense counsel shall enter and verify their service contact information within eFile Texas, including the designation of lead counsel.

(c) Designation of Lead Counsel.

(1) Each party represented by counsel shall designate the lead counsel who is primarily responsible for the representation.

(2) When more than one attorney makes an appearance on behalf of a party, the attorney whose signature first appears on the initial pleading for a party shall be designated as lead counsel for that party unless another attorney is specifically designated in writing and/or within eFile Texas.

(3) If necessary to promote efficiency due to the large number of ALR cases, DPS may designate the lead attorney for the DPS region to which the case is assigned as lead counsel within eFile Texas, even if another DPS attorney appears on behalf of the Department at the hearing.

(4) All delivery of service of process and case-related communications shall be sent to the lead counsel as designated within eFile Texas.

**History**
- *Source Note: The provisions of this §159.57 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.59** Withdrawal and Substitution of Counsel {#sec-159.59 omnilex-key=us-tx-regs-official--title-1--159.59}

(a) Defense counsel may withdraw from representing a party only if a written motion showing good cause for withdrawal is filed by the withdrawing attorney, the substituting attorney, or the defendant.

(1) If another attorney is to be substituted as defense counsel for the defendant, the motion shall state: the substituted attorney's name, mailing address, telephone number, and email address; that the substituting attorney has been notified of all pending settings and deadlines; and that the substituting attorney approves the substitution.

(2) If the defendant has no substitute attorney, the motion shall state: the defendant's last known mailing address, telephone number, and email address; that the defendant has been notified of all pending settings and deadlines; and whether the defendant consents to the withdrawal. If the defendant does not consent to the withdrawal, the attorney also must affirm that the defendant has been served with a copy of the motion and informed of the right to object to the withdrawal.

(b) A motion to withdraw must be served on all parties and must include a certificate of conference.

(c) An attorney will remain a defendant's attorney of record until a filed motion to withdraw has been granted by the judge.

(d) If the motion to withdraw is granted, the withdrawing attorney shall immediately forward the notice of hearing, all additional information about settings and deadlines, and any discovery obtained for the case to a self-represented defendant or, if the defendant is represented by counsel, to the substitute attorney.

(e) To ensure the delivery of service of process and future case-related communications upon the withdrawal or substitution of counsel, defense counsel shall verify and update the contact information in the electronic filing manager as follows:

(1) If the defendant has no substitute attorney, the withdrawing attorney shall verify and update the party contact information and service contact information for the defendant within eFile Texas.

(2) If the defendant will be represented by a substitute attorney, then the substitute attorney shall file a notice of appearance, and shall verify and update the service contact information and lead counsel designation for the record of the case within eFile Texas.

(f) The Department may substitute one attorney for another by entering an appearance at the hearing or by providing notice to the defendant, or defense counsel if defendant is represented by an attorney, without necessity for a motion or order. Upon such substitution, the Department shall verify and update the service contact information and designation of lead counsel for the record of the case within eFile Texas to ensure the delivery of service of process and future case-related communications to the Department.

**History**
- *Source Note: The provisions of this §159.59 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.61** Electronic Case Records Access {#sec-159.61 omnilex-key=us-tx-regs-official--title-1--159.61}

(a) Electronic Document Repository. The case records for ALR proceedings at SOAH are available online through re:SearchTX, an electronic court records system approved by the Texas Supreme Court. This system serves as an official repository for SOAH case records.

(b) Accuracy and Completeness of Records. The electronic records available through re:SearchTX are automatically updated with the filing or issuance of any new documents in the ALR proceeding through eFile Texas. Case records available through re:SearchTX may be relied upon in the same manner as an original or certified copy. The repository includes file stamped copies of all current case records, but does not necessarily include:

(1) The electronic recording of the hearing;

(2) Evidentiary exhibits in the form of audio or video recordings; and

(3) The written transcript of the hearing, if any.

(c) Access to Records. Users of re:SearchTX must establish an eFile Texas account or a re:SearchTX account. Access to ALR case records is determined by the security role assigned to the individual within eFile Texas for the particular case. To access ALR case records at SOAH through re:SearchTX, users must be properly designated within the eFile Texas system as one of the following:

(1) A defendant who has used eFile Texas to file at least one document in the case and is listed as a party to the case;

(2) Lead counsel for the case, with a Texas state bar number that is electronically linked with the case in eFile Texas; or

(3) A member of lead counsel's eFile Texas firm profile, where lead counsel's Texas state bar number is electronically linked with the case in eFile Texas.

(d) Attorney use of re:SearchTX. Attorneys shall establish access to re:SearchTX, and are expected to obtain and maintain a sufficient level of technical competency to monitor case activity and obtain their own case records through the use of eFileTexas and re:SearchTX for the ALR cases in which they are authorized to appear.

**History**
- *Source Note: The provisions of this §159.61 adopted to be effective August 4, 2024, 49 TexReg 5758.*

#### **Subchapter C** WITNESSES AND SUBPOENAS

##### **1 Tex. Admin. Code § 159.101** Subpoenas Generally {#sec-159.101 omnilex-key=us-tx-regs-official--title-1--159.101}

(a) Scope.

(1) A subpoena may command a person to give testimony for an ALR hearing and/or produce designated documents or tangible things in the actual possession of that person.

(2) A subpoena must be issued on the form provided at www.soah.texas.gov.

(3) The party that causes a subpoena to be issued must take reasonable steps to avoid imposing undue burden or expense on the person served.

(4) A party or attorney that violates the requirements of this subchapter will be subject to sanctions as determined by the judge, including, but not limited to, the loss of authority to issue subpoenas for ALR hearings.

(5) If a party that requests or issues a subpoena fails to timely appear at the hearing, any subpoenaed witnesses will be released from the subpoena and the subpoena will have no continuing effect.

(b) Attorney-issued subpoenas. An attorney who is authorized to practice law in the State of Texas may issue up to two subpoenas for witnesses to appear at a hearing. One subpoena may be issued to compel the appearance of the peace officer who was primarily responsible for the defendant's stop or initial detention and the other may be issued to compel the appearance of the peace officer who was primarily responsible for finding probable cause to arrest the defendant. If the same officer was primarily responsible for both the defendant's stop and arrest, the attorney may issue only one subpoena.

(c) Subpoena request filed with judge.

(1) Not later than ten days prior to the hearing, a party may file a subpoena request with SOAH that demonstrates good cause to compel a witness's appearance in person or by telephone or video conference, when:

(A) a party intends to call more than two peace officers to testify as witnesses;

(B) a party seeks to compel the appearance of witnesses who are not peace officers;

(C) a party seeks to compel the appearance of the breath test operator or technical supervisor and, by affidavit based on personal knowledge, has established a genuine issue concerning the validity of the breath test that requires the appearance of the witness to resolve; or

(D) a defendant, who is not represented by an attorney, seeks to compel the appearance of witnesses.

(2) A request for subpoena that is not granted prior to the hearing may be re-urged at the hearing. If the judge grants the request for a subpoena at the hearing, the hearing shall reconvene at a later date for the appearance of the witness.

(d) Judge's discretion. The decision to issue a subpoena, as described in subsection (c) of this section, shall be in the sound discretion of the judge assigned to the case. The judge shall refuse to issue a subpoena if:

(1) the testimony or documentary evidence is immaterial, irrelevant, or would be unduly repetitious; or

(2) good cause has not been demonstrated.

**History**
- *Source Note: The provisions of this §159.101 adopted to be effective January 20, 2009, 34 TexReg 330; amended to be effective May 30, 2010, 35 TexReg 4145; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.103** Issuance and Service of Subpoenas {#sec-159.103 omnilex-key=us-tx-regs-official--title-1--159.103}

(a) A party that issues or is granted a subpoena duces tecum shall be responsible for having the subpoena served, and may be required to advance the reasonable costs of reproducing any documents or tangible things requested.

(b) A subpoena must be served at least five days before the hearing, and must include a copy of the notice of hearing or other information that is sufficient to notify the witness of how to appear, including instructions and information for joining a videoconference or telephone conference call if applicable.

(c) Method of Service. A subpoena must be served by delivering a copy to the witness. The subpoena may be served at any place within the State of Texas by any sheriff or constable of the State of Texas, or any person who is not a party to the case and is 18 years of age or older. A subpoena is served by:

(1) hand-delivering a copy of the subpoena to the witness in-person;

(2) electronically transmitting a copy of the subpoena to the last known electronic address of the witness, with acknowledgment of receipt; or

(3) mailing a copy of the subpoena by certified mail with return receipt requested, or delivering a copy of the subpoena by express delivery service with signature required, to the last known address of the witness unless:

(A) the applicant for the subpoena requests in writing that the subpoena not be served by certified mail or express delivery; or

(B) there is insufficient time to ensure delivery of the subpoena to the witness five days before the hearing for which the witness is being subpoenaed.

(4) If the witness is a party and is represented by an attorney of record in the proceeding, then the subpoena may be served to the witness's attorney by a method described in this section.

(5) If the witness is a peace officer, then the subpoena may be served by an accepted method of alternative service established by a peace officer's law enforcement agency.

(d) After a subpoena is served upon a witness, the subpoena and the return of service of the subpoena must be filed at SOAH at least three days prior to the hearing. The return must show:

(1) the date, time, and manner of service, if served by hand delivery;

(2) the acknowledgment of receipt, if served by email;

(3) the return receipt if served by certified mail;

(4) the signed proof of delivery, if served by express delivery service; or

(5) other confirmation as appropriate, if served to a party's attorney or a peace officer's law enforcement agency.

(e) A subpoenaed witness whose assigned work location or residence is more than 150 miles from the designated hearing location is entitled to appear by telephone or videoconference.

(f) A party seeking the admission of subpoenaed documents or audiovisual evidence at the hearing must prefile the exhibits in advance of the hearing in the manner specified by §159.53 of this chapter.

(g) Service upon opposing party.

(1) A party that issues a subpoena must serve the opposing party with a copy of the subpoena on the same date it is issued.

(2) A party that requests a subpoena from a SOAH judge must serve the opposing party with a copy of the request at the time it is filed with SOAH.

(3) When a subpoena has been served, and not less than three days prior to the hearing, a party that has served a subpoena must provide the opposing party with a copy of the return of service.

(4) If a party fails to serve a copy of a subpoena or a subpoena return on the opposing party, the subpoena may be rendered unenforceable by the judge.

(h) Continuing effect. A properly issued subpoena remains in effect until the judge releases the witness or grants a motion to quash or for protective order. If a hearing is rescheduled and a subpoena is extended, and unless the judge specifically directs otherwise, the party that requested the continuance shall promptly notify any subpoenaed witnesses of the new hearing date and serve a copy of the notice on the opposing party.

**History**
- *Source Note: The provisions of this §159.103 adopted to be effective January 20, 2009, 34 TexReg 330; amended to be effective December 10, 2014, 39 TexReg 9515; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.104** Witness Fees {#sec-159.104 omnilex-key=us-tx-regs-official--title-1--159.104}

(a) Witness Fees. Upon the subpoenaed witness's appearance at the hearing, the party that issued the subpoena shall tender a witness fee check or money order in the amount of $10 to the witness, unless the witness waives the fee.

(b) Travel Reimbursement. If the witness traveled more than 25 miles round-trip to the hearing from the witness's office or residence, mileage reimbursement must also be tendered at the same time. The amount of mileage reimbursement will be determined in accordance with the travel rates established by the Comptroller of Public Accounts at https://fmx.cpa.state.tx.us/fm/travel/travelrates.

(c) If the witness is a peace officer, then any amounts for the witness fee and/or travel reimbursement shall be sent to the peace officer's attention at the peace officer's employing law enforcement agency.

(d) If the hearing is conducted by videoconference or telephone conference call, then the party who issued the subpoena shall mail the witness fee check or money order to the witness within one business day of the conclusion of the hearing unless the witness fails to appear at the hearing. Also within one business day of the conclusion of the hearing, the party shall file with SOAH a certification that the witness fee or money order was mailed to the witness. A copy of the certification must be sent to the opposing party at the time it is filed at SOAH.

(e) If a party who served a subpoena on a witness fails to appear at a hearing, that party shall mail the witness fee check or money order to the witness within one day from receipt of a default decision or any other order issued by the judge ordering payment of the fee and mileage reimbursement. Also within one day from receipt of the judge's order, the party shall file with SOAH a certification that the witness fee or money order was mailed to the witness. A copy of the certification must be sent to the opposing party at the time it is filed at SOAH.

(f) Procedures relating to witness fees and mileage reimbursement if a subpoena request is denied or a subpoena is quashed are governed by §159.105 of this chapter.

**History**
- *Source Note: The provisions of this §159.104 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.105** Motions to Quash or for Protective Order {#sec-159.105 omnilex-key=us-tx-regs-official--title-1--159.105}

(a) On behalf of a subpoenaed witness, a party may move to quash a subpoena or for a protective order. A party that moves to quash a subpoena must serve the motion on the other party at the time the motion is filed with SOAH.

(b) A party may seek an order from the judge at any time after the motion to quash or motion for protective order has been filed.

(c) In ruling on motions to quash or for protection, the judge must provide a person served with a subpoena an adequate time for compliance, protection from disclosure of privileged material or information, and protection from undue burden or expense. The judge also may impose reasonable conditions on compliance with a subpoena.

(d) If a subpoena request is denied or if a subpoena is quashed, any witness fee or mileage reimbursement fee that has been tendered to a witness shall be returned to the party that tendered the fees except that, if a subpoena is quashed after a witness has already appeared for a hearing, the party that subpoenaed the witness must tender the witness fee check to the witness.

**History**
- *Source Note: The provisions of this §159.105 adopted to be effective January 1, 2017, 41 TexReg 9459.*

#### **Subchapter D** DISCOVERY

##### **1 Tex. Admin. Code § 159.151** Prehearing Discovery {#sec-159.151 omnilex-key=us-tx-regs-official--title-1--159.151}

(a) A request for discovery may not be filed before SOAH acquires jurisdiction over a case involving a particular hearing request and the hearing is initially scheduled by SOAH.

(b) No party shall file copies of discovery requests with SOAH.

(c) Depositions, interrogatories, and requests for admission shall not be permitted in ALR proceedings, and the discovery rules of the Texas Rules of Civil Procedure requiring initial disclosures without awaiting a discovery request do not apply to an ALR proceeding.

(d) Both parties have the right to review, inspect, and obtain copies of any non-privileged documents or records in the other party's possession.

(e) A request for discovery must be on a separate document from other pleadings and notices and clearly labeled as a request for discovery.

(f) A defendant's request for discovery from DPS's ALR Division shall be served to the Department or the DPS attorney of record at the email address(es) reflected in eFile Texas. DPS's request shall be served on Defendant at the address of record.

(g) Except as provided in subsection (j) of this section, responses to discovery shall be sent to the requesting parties within five days after receipt of the request.

(h) If a party does not have any or all of the documents in its actual possession, it shall respond within five days of the request, stating that it does not have the documents in its actual possession. A party must supplement all its discovery responses within five days from the time the party receives the discoverable documents.

(i) If a document sought through discovery is received by the requesting party fewer than ten days before the scheduled hearing, the judge may grant a continuance on the request of either party.

(j) A defendant may request inspection, maintenance, and/or repair records for the instrument used to test the defendant's breath specimen for the period covering 30 days prior to the test date and 30 days following the test date. If the records are not in the actual possession of DPS, then DPS shall inform the defendant of the proper person or other third party entity from whom the defendant can obtain discovery, if known. If the records are in the actual possession of DPS, then DPS shall supply the records to the defendant within ten days of receipt of the request. If DPS fails to provide properly requested records after the defendant has paid reasonable copying charges for them, evidence of the breath specimen shall not be admitted into evidence.

(k) A party who seeks relevant, probative records from a third party may request issuance of a subpoena duces tecum pursuant to Subchapter C (relating to Witnesses and Subpoenas) to have the evidence produced for the hearing. A person subpoenaed to produce records need not appear at the hearing unless the person is also commanded to attend and give testimony. If a person subpoenaed under this section does not appear or otherwise respond to the subpoena, the judge may grant a continuance to allow for enforcement of the subpoena.

**History**
- *Source Note: The provisions of this §159.151 adopted to be effective January 20, 2009, 34 TexReg 333; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

#### **Subchapter E** HEARING AND PREHEARING

##### **1 Tex. Admin. Code § 159.201** Scheduling and Notice of Hearing {#sec-159.201 omnilex-key=us-tx-regs-official--title-1--159.201}

(a) On receipt of a timely request for hearing, DPS shall promptly refer the case to SOAH for a hearing to be conducted by a SOAH judge. After SOAH acquires jurisdiction over the matter in accordance with §159.51 of this title (relating to Jurisdiction), then SOAH has primary responsibility for the scheduling of a hearing.

(b) SOAH shall schedule hearings to be conducted at the earliest possible date, taking into consideration the availability and feasibility of videoconference technology as a means to promote the prompt, fair, and cost-effective resolution of ALR proceedings. To the extent possible, cases shall be scheduled by geographic region based on the defendant's county of arrest.

(c) Once the notice of hearing scheduling the hearing is issued, the hearing may be removed from that docket only upon timely request pursuant to §159.207 of this title (relating to Continuances), by order of the judge, or by agreement of the parties and with the ALJ's consent.

(d) It is a rebuttable presumption that the notice of the hearing was served to the defendant on the same date as the date listed in the notice.

(e) SOAH will provide timely access to ALR scheduling information on SOAH's website at www.soah.texas.gov.

**History**
- *Source Note: The provisions of this §159.201 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.203** Waiver or Dismissal of Hearing {#sec-159.203 omnilex-key=us-tx-regs-official--title-1--159.203}

(a) Waiver of Request for Hearing. The defendant may waive the request for hearing at any time before the administrative order is final. If the defendant requests a waiver after the notice of hearing is issued, the judge will enter an order accepting the waiver.

(b) Rescission of Notice of Suspension. If, after issuing a notice of hearing, DPS rescinds a notice of suspension, it shall immediately inform SOAH and the defendant of the rescission by the filing of a notice of rescission. A judge shall issue an order dismissing the case from SOAH's docket once the notice of suspension has been rescinded.

(c) Involuntary Dismissal. A judge may dismiss a case on his or her own motion if the record shows no activity by the filing of pleadings or otherwise has occurred for a period of 120 days, or the case has not been brought to hearing with due diligence after multiple continuances to allow the parties to prepare for hearing.

(1) Notice of the judge's intention to dismiss must be sent to the parties at least 15 days prior to the effective date of dismissal. The judge may, but is not required to, conduct a hearing on the dismissal. The order of dismissal shall:

(A) state the reason for dismissal;

(B) inform the parties of an opportunity to seek reinstatement of the case; and

(C) inform the parties that the case is dismissed unless:

(i) a party files a motion to reinstate the case on the docket not later than 15 days after the issuance of the order; and

(ii) the motion to reinstate specifies the basis for the motion and addresses the grounds for dismissal stated in the judge's order.

(2) The judge may grant a motion to reinstate the case if the moving party shows valid and compelling reasons for the delay or inaction, or the judge finds that extraordinary circumstances exist that require reinstatement of the case.

(3) In the event a timely motion for reinstatement is not decided by written order of the judge within 30 days after the dismissal order is signed, the motion shall be deemed overruled by operation of law.

(4) Dismissal under this section removes the case from the SOAH docket and rescinds the notice of suspension without a decision on the merits.

**History**
- *Source Note: The provisions of this §159.203 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.205** General Request for Relief {#sec-159.205 omnilex-key=us-tx-regs-official--title-1--159.205}

After a hearing has been scheduled before SOAH, any party making a request that requires an interim order must file a motion that describes the relief requested. The motion must contain a certificate of service and a certificate of conference stating whether the opposing party has agreed to the request. Motions must be filed no later than five days before the hearing date, but for good cause demonstrated in the motion, the judge may consider a motion filed after that time or presented orally at a hearing.

**History**
- *Source Note: The provisions of this §159.205 adopted to be effective January 20, 2009, 34 TexReg 334.*

##### **1 Tex. Admin. Code § 159.207** Continuances {#sec-159.207 omnilex-key=us-tx-regs-official--title-1--159.207}

(a) A request for continuance will be considered in accordance with the provisions of Texas Transportation Code § 524.032(b) and (c) (relating to rescheduling a hearing upon a defendant's request), § 524.039 (relating to appearance of technicians), and Texas Transportation Code § 724.041(g).

(b) A judge may grant a continuance if the motion is supported by good cause, consent of the parties, or operation of law.

(c) With the exception of a hearing that is rescheduled in accordance with Texas Transportation Code § 524.032(b), the granting of continuances shall be in the sound discretion of the judge, provided, however, that the judge shall expedite the hearings whenever possible. A party requesting a continuance may file a written motion or present the motion orally at the hearing. The motion shall include:

(1) the specific reason for the continuance;

(2) a statement of the number of motions for continuance previously filed in the case by each party; and

(3) for written motions, a certificate of service and a certificate of conference as required by §159.205 of this title (relating to General Request for Relief). Failure to include a certificate of service and a certificate of conference when filing a motion for continuance may result in denial of the continuance request or subsequent continuance requests in the same case.

(d) With the exception of a hearing that is rescheduled in accordance with Texas Transportation Code § 524.032(b), no party is excused from appearing at a hearing until notified by SOAH that a motion for continuance has been granted.

(e) Responses to a motion for continuance, if any, should be promptly submitted in writing, except a response to a motion for continuance made on the date of the hearing may be presented orally at the hearing.

**History**
- *Source Note: The provisions of this §159.207 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.209** Participation by Telephone or Videoconference {#sec-159.209 omnilex-key=us-tx-regs-official--title-1--159.209}

(a) Videoconference. Upon appropriate notice, SOAH may allow or require an ALR hearing to be conducted by videoconference.

(1) The notice for a videoconference hearing shall include log-in information for joining the videoconference and provide an option for participants to access the hearing audio by telephone.

(2) If a party files a written objection within a reasonable time after receiving notice of a videoconference hearing, and states good cause for the objection, the judge shall timely rule on the objection in a manner consistent with Rule 21d of the Texas Rules of Civil Procedure.

(3) The judge may require a witness to appear on camera as a condition of being allowed to testify in a videoconference hearing.

(b) Telephone Conference Call. After SOAH acquires jurisdiction, a party may file a consent motion or notice of agreement by the parties to conduct an ALR hearing by telephone conference call. The judge may grant the motion and schedule the hearing to be conducted by telephone conference call with proper notice to the parties.

(1) The notice shall include dial-in information or instructions for joining the telephone conference call and include instructions for submitting documents and evidence to be considered in the proceeding.

(2) Before a witness is allowed to give testimony by telephone, the judge will confirm that the witness is the person he or she has been represented to be, which may require the witness to provide reasonable verification of their identity under oath.

(c) Procedural Rights and Duties. All substantive and procedural rights and duties apply to telephone or videoconference hearings, subject only to the limitations of the physical arrangement. The parties shall contact their respective witnesses to assure their availability at the hearing.

**History**
- *Source Note: The provisions of this §159.209 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.210** Hearing on Written Submission {#sec-159.210 omnilex-key=us-tx-regs-official--title-1--159.210}

(a) A party may file a motion or notice of agreement by the parties to convert an oral proceeding to a hearing on written submission at any time after SOAH acquires jurisdiction. The motion should acknowledge that the moving party or parties have filed and served or exchanged copies of all evidence necessary for resolution of the case.

(b) To expedite resolution of the case, the judge shall liberally grant requests to conduct hearings on written submission.

(c) For hearings conducted on written submission, the opportunity for the presentation of oral testimony and the examination of witnesses is waived by the parties. The factual matters asserted and evidence presented for the judge's consideration shall consist solely of the pleadings, motions, admitted exhibits, and orders filed in the administrative record.

(d) The judge shall issue a written decision for a hearing conducted on written submission in the same manner as provided by §159.253 of this title (relating to Decision of the Judge). The parties may appeal the decision as provided by § 524.041 of the Texas Transportation Code.

**History**
- *Source Note: The provisions of this §159.210 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.211** Hearings {#sec-159.211 omnilex-key=us-tx-regs-official--title-1--159.211}

(a) Procedures.

(1) Hearings shall be conducted in accordance with the APA, Texas Government Code, Chapter 2001, when applicable, and with this chapter, provided that if there is a conflict between the APA and this chapter, this chapter shall govern. If a conflict exists between this chapter and the Texas Transportation Code, Chapters 522, 524, or 724, and these rules cannot be harmonized with those chapters, the applicable Texas Transportation Code provision controls.

(2) Once the hearing has begun, the parties may be off the record only when the judge permits. If a discussion off the record is pertinent, the judge will summarize it for the record.

(3) ALR hearings shall be conducted in a fair and expeditious manner. In the interest of justice and efficiency, the judge may determine the order in which cases are heard, impose reasonable conditions on the length of time required for a hearing, question witnesses, and protect witnesses from abusive, repetitious, or unreasonably prolonged questioning.

(4) The judge shall exclude testimony or any evidence which is irrelevant, immaterial, or unduly repetitious.

(b) Evidence. Except as otherwise provided by Texas Government Code § 2001.081, the rules of evidence as applied in a non-jury civil case in a district court of this state shall apply in ALR proceedings.

(c) Witnesses and affidavits.

(1) All witnesses shall testify under oath.

(2) An officer's sworn report of relevant information shall be admissible as a public record. However, the defendant shall have the right to subpoena the officer in accordance with §159.103 of this title (relating to Subpoenas). If the defendant timely subpoenas an officer and the officer fails to appear without good cause, information obtained from that officer shall not be admissible. In the alternative, if the party who requested the subpoena wants to seek enforcement of the subpoena, the judge may grant the party a continuance.

(3) The judge, on his or her own motion or on request of a party, may allow the testimony of any witness to be taken by telephone or videoconference, provided that all parties have the opportunity to participate in and hear the proceeding. All substantive and procedural rights apply to the telephone or videoconference appearance of a witness, subject to the limitations of the physical arrangement as described in §159.209(c) of this title (relating to Participation by Telephone or Videoconference).

(4) If a witness, in preparation for or during testimony, reviews any document that has not been prefiled and the opposing party requests an opportunity to review the document, the judge may allow the witness to present or read the document to the opposing party.

(d) Record of hearing.

(1) The judge shall make an accurate and complete recording of the oral proceedings of the hearing.

(2) SOAH will maintain a case file that includes the recording, pleadings, evidence, and the judge's decision.

(3) SOAH will maintain case files in accordance with the terms of its records retention schedule.

(e) Interpreters. When an interpreter will be needed for all or part of a proceeding, a party shall file a written request at least seven days before the hearing. If the defendant fails to make a timely request, the judge may provide an interpreter or may continue the hearing to secure an interpreter. SOAH shall provide and pay for:

(1) an interpreter for deaf or hearing impaired parties and subpoenaed witnesses in accordance with § 2001.055 of the APA;

(2) reader services or other communication services for blind and sight-impaired parties and witnesses; and

(3) a certified language interpreter for parties and witnesses who need that service.

(f) Simultaneous ALR Appearances. If defense counsel is scheduled to appear in more than one ALR proceeding at the same time, the attorney may request the judge to facilitate the attorney's appearance at both hearings by controlling the order in which cases are heard.

**History**
- *Source Note: The provisions of this §159.211 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.213** Failure to Attend Hearing and Default {#sec-159.213 omnilex-key=us-tx-regs-official--title-1--159.213}

(a) If a party fails to appear for the hearing, the judge, on his or her own motion or on request of the opposing party, may proceed in that party's absence on a default basis.

(b) For a telephone or videoconference hearing, the following may be considered a failure to appear and grounds for default, if the conditions exist for more than fifteen minutes after the scheduled time for hearing:

(1) failure to attend the telephone conference call or videoconference at the scheduled time; or

(2) failure to exercise due diligence to address a technical difficulty with attending a videoconference by contacting the SOAH Chief Clerk's Office for assistance or by utilizing the option to access the hearing audio by telephone.

(c) A default under this section must be supported by adequate proof that the notice of hearing was properly filed and served in accordance with §159.53 of this title (relating to Filing Documents) and §159.55 of this title (relating to Service of Documents on Parties).

(1) A rebuttable presumption that proper notice was given to a defendant is established by evidence that the notice of hearing was electronically served to the defendant, or if defendant has legal representation, to defense counsel, at the email address provided under §159.53 and §159.55 of this title, or at the email address as reflected on defendant's request for hearing. Alternatively, the judge may consider evidence that the notice of hearing was timely provided to defendant or if defendant has legal representation, to defense counsel, at the mailing address reflected on defendant's notice of suspension, driving record, or similar documentation presented by DPS.

(2) A rebuttable presumption that proper notice was given to DPS is established by evidence that information regarding the date, time, and location or method of appearance was electronically transmitted to the Department by the SOAH Chief Clerk's Office or issued by the judge to the DPS attorney of record at the email address(es) reflected in eFile Texas. Alternatively, the judge may consider evidence that notice of the scheduled hearing was published on SOAH's website and/or available to DPS through re:SearchTX.

(d) Defendant's Failure to Appear. A Defendant who requests a hearing and fails to appear without good cause waives the right to a hearing on the merits, and the judge will issue a decision and order authorizing the Department to suspend the Defendant's driver's license.

(e) Department's Failure to Appear. If the Department fails to appear through its attorney without good cause, the judge will issue an order dismissing the case without suspension or disqualification. A case dismissed under this subsection is dismissed with prejudice and may not be refiled.

(f) Within ten business days after the issuance of a default decision and order, the defaulting party may file a written motion with SOAH requesting that the default order be vacated because the party had good cause for failing to appear. In the motion, the party must state the grounds for their failure to appear and whether the motion is opposed. Regardless of whether the motion is opposed, the judge may rule on the motion without setting a hearing or may set a hearing to consider the motion. A hearing on a motion to vacate a default order may be held by videoconference or telephone conference call. If the judge finds good cause for the party's failure to appear, the judge shall vacate the default order and reset the case for a hearing.

**History**
- *Source Note: The provisions of this §159.213 adopted to be effective January 20, 2009, 34 TexReg 334; amended to be effective November 19, 2014, 39 TexReg 8958; amended to be effective January 1, 2017, 41 TexReg 9459; amended to be effective August 4, 2024, 49 TexReg 5758.*

#### **Subchapter F** DISPOSITION OF CASE

##### **1 Tex. Admin. Code § 159.251** Hearing Disposition {#sec-159.251 omnilex-key=us-tx-regs-official--title-1--159.251}

(a) If the judge finds that DPS proved the requisite facts as specified in Texas Transportation Code §§522.105, 524.035, or 724.042 by a preponderance of the evidence, the judge shall grant DPS's petition.

(b) If the judge finds that DPS did not prove all of the requisite facts by a preponderance of the evidence, the judge shall deny DPS's petition, and DPS shall not be authorized to suspend or deny the defendant's license or disqualify the defendant from receiving a license for the conduct at issue.

**History**
- *Source Note: The provisions of this §159.251 adopted to be effective January 20, 2009, 34 TexReg 335.*

##### **1 Tex. Admin. Code § 159.253** Decision of the Judge {#sec-159.253 omnilex-key=us-tx-regs-official--title-1--159.253}

(a) Upon conclusion of the hearing, the judge shall issue a written decision that includes findings of fact and conclusions of law.

(b) The decision of the judge is final and appealable. Except as authorized by §159.254 of this title (relating to Correction of Final Decision) no party shall file a motion for rehearing or request to modify a decision with SOAH.

(c) The judge's decision does not determine the effective dates of any suspension that may be enforced by DPS.

(d) Any automated case data exchanged by SOAH with DPS regarding the disposition of ALR proceedings is provided for the sole purpose of administrative convenience and is not part of the administrative record. The outcome of a particular proceeding as reflected by the judge's final written decision or order takes precedence over any conflicting data reported to the DPS Enforcement and Compliance Service.

(e) DPS is solely responsible for ensuring that the Department administers the defendant's driving record and any suspension in a manner that is consistent with the judge's final disposition of the case.

**History**
- *Source Note: The provisions of this §159.253 adopted to be effective January 20, 2009, 34 TexReg 335; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.254** Correction of Final Decision {#sec-159.254 omnilex-key=us-tx-regs-official--title-1--159.254}

(a) SOAH has no continuing jurisdiction to modify an ALR decision after it has been signed, except that the judge, on his or her own motion or on request of a party, may amend an ALR decision to:

(1) correct a clerical error in the original written decision, including, but not limited to, the unintentional entry of a decision using the wrong form or template; or

(2) conform the decision to reflect the correct statutory period of suspension.

(b) A request for correction must be filed as soon as possible after the error is discovered, but not later than 10 business days after the issuance of the original decision, and must specify the clerical error or period of suspension that is proposed for correction.

(c) The filing of a motion to correct a decision does not extend the deadline for appeal under Texas Transportation Code § 524.041 or stay any action that has been previously authorized.

(d) A corrected decision may only be issued if the error is apparent on the face of the record and a correction is required to accurately reflect the judge's intent at the time the original decision was entered. A corrected decision cannot be based on a request for reconsideration or new evidence or arguments that were not presented at the hearing on the merits, and may not be used to correct judicial error.

(e) The judge is not required to act on a request for correction of a final decision. Any corrected decision must be issued by the judge not later than the 29th day after the date the original ALR decision was signed.

**History**
- *Source Note: The provisions of this §159.254 adopted to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.255** Appeal of Judge's Decision {#sec-159.255 omnilex-key=us-tx-regs-official--title-1--159.255}

(a) Record on Appeal. Except as described by subsection (d) of this section, a person who appeals a SOAH decision is responsible for filing the record on appeal with the court. The record on appeal shall consist of the following:

(1) the file-marked or stamped copy of all parties' motions or other pleadings;

(2) all written orders or decisions issued by the judge and any evidence of transmittal to the parties;

(3) all exhibits admitted into evidence;

(4) all exhibits not admitted into evidence but made a part of the record by a party as an offer of proof or bill of exceptions; and

(5) a transcription of the proceedings electronically recorded by SOAH.

(b) Notice to SOAH Required. A person who appeals a decision shall file a copy of the petition of appeal with SOAH. The copy submitted for filing must be filed-stamped or certified by the clerk of the court in which the petition is filed. Filing under this section satisfies the requirements of Transportation Code, § 524.041(c) to provide SOAH with a copy of the petition.

(c) Appeal Transcript Requests. A person who intends to pursue the appeal a suspension may obtain a written transcript of the administrative hearing by filing a written request to SOAH, together with a filed-stamped or certified copy of the petition of appeal, within ten days of filing the appeal and paying the applicable fees. The fees shall not exceed the actual cost of preparing or copying the transcript, and upon receipt of the fees, SOAH shall promptly furnish both parties a certified copy of the record. SOAH is not required to prepare a written transcript for non-appealed cases, or to furnish a free transcript to a party who is unable to pay the applicable fee for preparation of the transcript.

(d) Essential Need or Occupational License Only. A person who appeals a suspension for the sole purpose of seeking an essential need or occupational driver's license may be excused from filing the record on appeal if the administrative record is not required by local rules of the court where the appeal is filed.

(e) Records Retention for Appealed Cases. For three years after notice of an appeal is filed, SOAH will maintain the file and original recording of proceedings. A copy of the file and recording will be available for review by the parties or a reviewing court, if needed.

(f) If a case is remanded for taking of additional evidence, the appellant must file with SOAH, within ten days of the signing of the reviewing court's remand order, a request for relief, including setting a hearing on remand. The request must include a copy of the remand order.

(g) A remand under this section does not stay the suspension of a driver's license.

**History**
- *Source Note: The provisions of this §159.255 adopted to be effective January 20, 2009, 34 TexReg 335; amended to be effective August 4, 2024, 49 TexReg 5758.*

##### **1 Tex. Admin. Code § 159.257** Disposition of Criminal Charges and Expunction of Records {#sec-159.257 omnilex-key=us-tx-regs-official--title-1--159.257}

(a) Except for acquittal of a criminal charge as provided by § 524.015(b) or § 724.048(c) of the Texas Transportation Code, the disposition or expunction of a criminal charge relating to an arrest that forms the basis of the ALR proceeding does not affect a driver's license suspension or bar any matter in issue in an ALR proceeding.

(b) The records of ALR proceedings at SOAH are subject to expunction only upon receipt by SOAH of a judicial court order of expunction that complies with the requirements of Texas Code of Criminal Procedure Article 55.06.

(c) A judicial court order of expunction based on the dismissal, and not the acquittal, of criminal charges does not require or authorize SOAH to expunge records relating to the ALR proceeding.

**History**
- *Source Note: The provisions of this §159.257 adopted to be effective August 4, 2024, 49 TexReg 5758.*

### **Chapter 160** GENERAL ADMINISTRATION

#### **Subchapter A** VENDOR PROTESTS OF PROCUREMENTS

##### **1 Tex. Admin. Code § 160.1** Applicability {#sec-160.1 omnilex-key=us-tx-regs-official--title-1--160.1}

(a) Purpose. The purpose of this chapter is to provide an internal protest procedure to be used by vendors to address protests of procurements by the State Office of Administrative Hearings.

(b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings:

(1) SOAH--The State Office of Administrative Hearings.

(2) Interested party or parties--Vendors who submitted bids or proposals for the contract or solicitation involved in the protest.

(3) Vendor--An actual or prospective bidder, offeror, proposer, or contractor aggrieved by a procurement action by the State Office of Administrative Hearings.

(c) Bid Protest by Vendors Related to Solicitation or Contract Award. A vendor who submitted a written response, or who is eligible to submit a written response, to a solicitation issued by SOAH may file a protest with SOAH's Chief Operating Officer or designee for actions taken by the agency on the following:

(1) the solicitation documents or actions associated with the publication of solicitation documents;

(2) the evaluation or method of evaluation for a solicitation; or

(3) the award of a contract.

**History**
- *Source Note: The provisions of this §160.1 adopted to be effective April 7, 2019, 44 TexReg 1713.*

##### **1 Tex. Admin. Code § 160.2** Filing the Bid Protest {#sec-160.2 omnilex-key=us-tx-regs-official--title-1--160.2}

(a) The protest must be submitted in writing and must be mailed or hand-delivered to the office of SOAH's Chief Operating Officer or designee and received:

(1) by the end of the posted solicitation period, if the protest concerns the solicitation documents or actions associated with the publication of solicitation documents;

(2) on or before the proposed date of award of a contract as posted for the solicitation, if the protest concerns the evaluation or method of evaluation for a solicitation; or

(3) no later than 10 calendar days after the notice of award, if the protest concerns the award.

(b) The protest must contain the following:

(1) a specific identification of the rule, statute, or regulation that the protesting vendor alleges the solicitation, contract award or tentative award violated;

(2) a specific description of each action that the protesting vendor alleges is a violation of the statutory or regulatory provision(s) identified in the protest;

(3) a precise statement of the relevant facts;

(4) a statement of the argument and authorities in support of the protest;

(5) an explanation of the requested subsequent action sought by the protesting vendor; and

(6) a statement confirming copies of the protest have been mailed or delivered by the protesting party to any other identifiable interested parties. Upon request, SOAH will provide the vendor with a list of interested parties as reflected by the records of the agency.

**History**
- *Source Note: The provisions of this §160.2 adopted to be effective April 7, 2019, 44 TexReg 1713.*

##### **1 Tex. Admin. Code § 160.3** Action by the Chief Operating Officer or Designee {#sec-160.3 omnilex-key=us-tx-regs-official--title-1--160.3}

(a) The Chief Operating Officer or designee will review the formal protest. Upon receipt of a protest, the Chief Operating Officer or designee may:

(1) dismiss the protest, if it is not timely or does not meet the requirements of SOAH's bid protest procedures;

(2) solicit written responses to the protest from interested parties or other affected vendors; or

(3) attempt to settle and resolve the protest by mutual agreement.

(b) The Chief Operating Officer or designee may request that the protesting party and other interested parties provide additional information and reasonable access to documents to allow SOAH to evaluate the protest. The failure of a protesting party or another interested party to timely respond to SOAH's written request(s) for information relating to the protest may result in dismissal of the protest and/or disqualification of that party from contract award.

(c) Status of Procurement During Protest at SOAH. If a timely protest that meets the requirements of SOAH's bid protest procedures is filed under this section, the Chief Operating Officer or designee may delay the solicitation or award of the contract during the pendency of the protest unless it is determined that the contract must be awarded without delay to protect the best interests of the state.

(d) Written Determination. If a protest concerning a solicitation is not resolved by mutual agreement, the Chief Operating Officer or designee will issue a written determination that resolves the protest.

(1) If the Chief Operating Officer or designee determines that no violation of applicable rules or statutes has occurred, the Chief Operating Officer or designee shall inform the protesting party and all other interested parties of that determination by letter, which shall set forth the reasons for the determination.

(2) If the Chief Operating Officer or designee determines that a violation of applicable rules or statutes has occurred in a case where a contract has not been awarded, the Chief Operating Officer or designee shall so inform the protesting party and all other interested parties of that determination by letter. The letter shall set forth the reasons for the determination and may set forth any appropriate remedial action.

(3) If the Chief Operating Officer or designee determines that a violation of applicable rules or statutes has occurred in a case where a contract has been awarded, the Chief Operating Officer or designee shall inform the protesting party and other interested parties of that determination by letter. The letter shall set forth the reasons for the determination and may set forth any appropriate remedial action, if required, which may include canceling or voiding the contract to the extent allowed by law.

**History**
- *Source Note: The provisions of this §160.3 adopted to be effective April 7, 2019, 44 TexReg 1713.*

##### **1 Tex. Admin. Code § 160.4** Appeal to the Chief Administrative Law Judge {#sec-160.4 omnilex-key=us-tx-regs-official--title-1--160.4}

(a) If a protest is based on a solicitation or contract award, the protesting party may appeal a determination of a protest to the Chief Administrative Law Judge. An appeal to the Chief Administrative Law Judge must be in writing and received by the Chief Administrative Law Judge's office not later than 10 calendar days after the date the Chief Operating Officer or designee sent written notice of their determination. The scope of the appeal is limited to review of the Chief Operating Officer's or designee's determination. The protesting party must mail or deliver to the other interested parties a copy of the appeal, which must contain a certified statement that such copies have been provided.

(b) The Chief Administrative Law Judge may refer the matter to a designee for consideration or issuance of a written decision that resolves the protest.

(c) A protest or appeal that is not filed timely or that does not meet the requirements of SOAH's protest procedures will not be considered unless good cause for delay is shown or it is determined, in the sole discretion of the Chief Administrative Law Judge or designee, that a protest or appeal raises issues significant to the agency's procurement practices or procedures.

(d) A written decision issued by the Chief Administrative Law Judge or designee is the final administrative action of the agency regarding the protest and appeal.

**History**
- *Source Note: The provisions of this §160.4 adopted to be effective April 7, 2019, 44 TexReg 1713.*

##### **1 Tex. Admin. Code § 160.5** Bid Protest Related to Vendor Performance Review {#sec-160.5 omnilex-key=us-tx-regs-official--title-1--160.5}

(a) SOAH is required by §2155.089 and §2262.055 of the Texas Government Code to review a vendor's performance under a contract after the contract is completed or otherwise terminated. Vendor performance must be reported to the comptroller using the comptroller's tracking system to rate vendors on an A through F scale, with A being the highest grade.

(b) A vendor who receives a grade lower than a C in the vendor performance tracking system may file a protest regarding the lower grade assigned to the vendor in the system. For protests related to the rating or score for a vendor performance review, SOAH will comply with the applicable statutes, rules, and written policies and guidelines issued by the comptroller.

**History**
- *Source Note: The provisions of this §160.5 adopted to be effective April 7, 2019, 44 TexReg 1713.*

##### **1 Tex. Admin. Code § 160.6** Standards for Maintaining Documentation {#sec-160.6 omnilex-key=us-tx-regs-official--title-1--160.6}

(a) SOAH shall maintain sufficient records and reports to facilitate compliance with applicable law, including:

(1) each contract entered into SOAH;

(2) all contract solicitation documents related to the contract;

(3) all documents that reflect and identify the basis for decisions relating to a procurement, including actions taken that deviate from requirements or recommendations in the state procurement manual or contract management guide;

(4) all purchase orders, change orders, and invoices associated with the contract;

(5) all contract amendments, renewals, or extensions executed by the agency; and

(6) all other documents necessary to record the full execution and completion of each contract.

(b) SOAH may destroy the contract and documents in accordance with applicable records retention requirements.

**History**
- *Source Note: The provisions of this §160.6 adopted to be effective April 7, 2019, 44 TexReg 1713.*

#### **Subchapter B** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 160.10** Employee Training and Education {#sec-160.10 omnilex-key=us-tx-regs-official--title-1--160.10}

(a) The agency may use state funds to provide education and training for its employees in accordance with the State Employees Training Act (Texas Government Code §§656.041 - 656.104).

(b) The education or training shall be related to the employee's current position or prospective job duties within the agency.

(c) The agency's education and training program benefits both the agency and the employees participating by:

(1) preparing for technological and legal developments;

(2) increasing work capabilities;

(3) increasing the number of qualified employees in areas for which the agency has difficulty in recruiting and retaining employees; and

(4) increasing the competence and professionalism of agency employees.

(d) Agency employees may be required to complete an education or training program related to the employee's duties or prospective duties as a condition of employment.

(e) Participation in an education or training program requires the appropriate approval prior to participation and is subject to the availability of funds within the agency's budget.

(f) As part of the agency's education and training program, employees may be eligible for reimbursement for a training, development, or education program offered by a state agency, an institution of higher education, or a private entity.

(g) Reimbursement of costs to an employee for completing a training, development, or education program offered by a state agency, an institution of higher education, or a private entity, requires the approval of the Chief Administrative Law Judge or the Chief Administrative Law Judge's designee. The agency shall only reimburse the expenses for a program course successfully completed by an employee.

(h) The employee education and training program for the agency may include:

(1) mandatory agency-sponsored training required for all employees;

(2) education relating to technical or professional certifications and licenses;

(3) education and training relating to the promotion of employee development;

(4) employee-funded external education;

(5) agency-funded external education, including continuing legal education, online courses, and courses not credited towards a degree; and

(6) other agency-sponsored education and training determined by the agency to fulfill the purposes of the State Employees Training Act.

(i) The Human Resources Manager for the State Office of Administrative Hearings is designated as the administrator of the agency's education and training program.

(j) The administrator, in conjunction with the agency executive management, shall develop policies for administering each of the components of the employee education and training program. These policies shall provide clear and objective guidelines and shall include, at a minimum, the following:

(1) eligibility requirements for participation;

(2) approval procedures for participation; and

(3) obligations of program participants.

(k) Approval to participate in any portion of the agency's education and training program shall not in any way affect an employee's at-will status or constitute a guarantee or indication of continued employment, nor shall it constitute a guarantee or indication of future employment in a current or prospective position.

(l) Permission to participate in any education and training program may be withdrawn if the agency determines, in its sole discretion, that participation would negatively impact the agency or the employee's job duties or performance.

**History**
- *Source Note: The provisions of this §160.10 adopted to be effective February 23, 2022, 47 TexReg 767.*

##### **1 Tex. Admin. Code § 160.11** Sick Leave Pool {#sec-160.11 omnilex-key=us-tx-regs-official--title-1--160.11}

(a) A sick leave pool is established to alleviate hardship caused to an employee and the employee's immediate family if a catastrophic injury or illness forces the employee to exhaust all eligible leave time earned by that employee and to lose compensation time from the state.

(b) The Human Resources Manager for the State Office of Administrative Hearings is designated as the pool administrator.

(c) The pool administrator shall develop and maintain a policy, operating procedures, and forms, as necessary, for the administration of the sick leave pool subject to approval by the Chief Administrative Law Judge.

(d) Operation of the sick leave pool shall be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §160.11 adopted to be effective February 23, 2022, 47 TexReg 767.*

##### **1 Tex. Admin. Code § 160.12** Family Leave Pool {#sec-160.12 omnilex-key=us-tx-regs-official--title-1--160.12}

(a) A family leave pool is established to provide eligible employees more flexibility in bonding with and caring for children during a child's first year following birth, adoption, or foster placement, and caring for a seriously ill family member or the employee's own serious illness, including pandemic-related illnesses or complications caused by a pandemic.

(b) All contributions by employees to the family leave pool are voluntary. There is no limitation on the amount or frequency of contributions. Employees who contribute accrued sick or vacation leave hours to the pool may not designate the contributed hours for use by a specific employee. An employee who contributes leave hours to the pool may not withdraw the contributed hours.

(c) An employee may only apply to withdraw time from the family leave pool if the employee has exhausted all eligible personal leave due to:

(1) the birth of a child;

(2) the placement of a foster child or adoption of a child under 18 years of age;

(3) the placement of any person 18 years of age or older requiring guardianship;

(4) a serious illness to an immediate family member of the employee, including pandemic-related illness;

(5) an extenuating circumstance created by an ongoing pandemic, including providing essential care to a family member; or

(6) a previous donation of time to the pool.

(d) The Human Resources Manager for the State Office of Administrative Hearings is designated as the pool administrator.

(e) The pool administrator shall develop and maintain a policy, operating procedures, and forms, as necessary, for the administration of the family leave pool subject to approval by the Chief Administrative Law Judge.

(f) Operation of the family leave pool shall be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §160.12 adopted to be effective February 23, 2022, 47 TexReg 767.*

### **Chapter 161** REQUESTS FOR RECORDS

##### **1 Tex. Admin. Code § 161.1** Charges for Copies of Public Records {#sec-161.1 omnilex-key=us-tx-regs-official--title-1--161.1}

(a) The charge to any person requesting copies of any public information held by the State Office of Administrative Hearings will be the charges established by the Office of the Attorney General, codified at 1 TAC §§70.1 - 70.12 of this title (relating to Cost of Copies of Public Information).

(b) The State Office of Administrative Hearings may waive these charges if there is a public benefit. The Chief Administrative Law Judge is authorized to determine whether a public benefit exists on a case by case basis.

**History**
- *Source Note: The provisions of this §161.1 adopted to be effective November 18, 1994, 19 TexReg 8763; amended to be effective June 20, 2006, 31 TexReg 4860; amended to be effective November 26, 2008, 33 TexReg 9459.*

### **Chapter 163** ARBITRATION PROCEDURES FOR CERTAIN ENFORCEMENT ACTIONS OF THE TEXAS DEPARTMENT OF AGING AND DISABILITY SERVICES REGARDING CONVALESCENT AND NURSING HOMES

#### **Subchapter A** GENERAL INFORMATION

##### **1 Tex. Admin. Code § 163.1** Definitions {#sec-163.1 omnilex-key=us-tx-regs-official--title-1--163.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative law judge or judge--An individual appointed by the chief administrative law judge of the State Office of Administrative Hearings (SOAH) under Government Code, §2003.041. The term shall also include any temporary administrative law judge appointed by the chief administrative law judge pursuant to Government Code, §2003.043.

(2) APA--Government Code, Chapter 2001.

(3) Authorized representative--An attorney authorized to practice law in the State of Texas or, where permitted by applicable law, a person designated by a party to represent the party.

(4) Chief judge--The chief administrative law judge or his or her designee for action under this chapter. Any designee shall be a person qualified to serve as an arbitrator.

(5) Code--Health and Safety Code, Chapter 242 as it may be amended from time to time.

(6) DADS--The Department of Aging and Disability Services.

(7) Facility--An institution as defined by the Code §242.002(10).

(8) Order--The award or final order issued by the arbitrator.

**History**
- *Source Note: The provisions of this §163.1 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.3** Construction of this Chapter {#sec-163.3 omnilex-key=us-tx-regs-official--title-1--163.3}

Unless otherwise expressly provided, the past, present, or future tense shall each include the other; the masculine, feminine, or neuter genders shall each include the other; and the singular and plural number shall each include the other.

**History**
- *Source Note: The provisions of this §163.3 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.5** Other SOAH Rules of Procedure {#sec-163.5 omnilex-key=us-tx-regs-official--title-1--163.5}

Unless specific applicable procedures are set out in this chapter, other SOAH rules of procedure found at Chapter 155 of this title (relating to Rules of Procedure), Chapter 157 of this title (relating to Temporary Administrative Law Judges), and Chapter 161 of this title (relating to Requests for Records) may apply in arbitration proceedings under this chapter. The rules that specifically apply include:

(1) 1 TAC 155, Subchapter A, §155.7 (relating to Computation of Time);

(2) 1 TAC 155, Subchapter C, §155.101 (relating to Filing Documents);

(3) 1 TAC 155, Subchapter C, §155.103 (relating to Service of Documents on Parties);

(4) 1 TAC 155, Subchapter D, §155.151 (relating to Assignment of Judges to Cases);

(5) 1 TAC 155, Subchapter D, §155.153 (relating to Powers and Duties);

(6) 1 TAC 155, Subchapter E, §155.201 (relating to Representation of Parties);

(7) 1 TAC 155, Subchapter I, §155.405 (relating to Participation by Telephone or Videoconference);

(8) 1 TAC 155, Subchapter I, §155.417 (relating to Stipulations);

(9) 1 TAC 155, Subchapter I, §155.425 (relating to Procedure at Hearing);

(10) 1 TAC 155, Subchapter I, §155.431 (relating to Conduct and Decorum);

(11) 1 TAC 155, Subchapter J, §155.503 (relating to Dismissal Proceedings);

(12) 1 TAC 157, §157.1 (relating to Temporary Administrative Law Judges); and

(13) 1 TAC 161, §161.1 (relating to Charges for Copies of Public Records).

**History**
- *Source Note: The provisions of this §163.5 adopted to be effective February 17, 2016, 41 TexReg 1111.*

#### **Subchapter B** ELECTION AND INITIATION OF ARBITRATION

##### **1 Tex. Admin. Code § 163.51** Opportunity to Elect Arbitration {#sec-163.51 omnilex-key=us-tx-regs-official--title-1--163.51}

(a) Except as otherwise prohibited by the Code, DADS or any affected facility may elect arbitration as an alternative to a contested case proceeding or to a judicial proceeding relating to any of the following disputes arising under the Code, Subchapter H-2:

(1) renewal of a license under §242.033;

(2) suspension, revocation, or denial of a license under §242.061;

(3) assessment of a civil penalty under §242.065; or

(4) assessment of a monetary penalty under §242.066; or

(5) assessment of a penalty as described in §32.021(n), Human Resources Code.

(b) Arbitration may not be elected if the facility has had an arbitration order levied against it in the previous five years.

(c) The election of arbitration is a representation that the party choosing arbitration is solvent and able to bear the costs of the proceeding. In cases where the facility is responsible for paying SOAH's costs and expenses, SOAH will require that an authorized representative of the facility provide:

(1) a deposit for the costs of the proceeding, based on SOAH's reasonable determination of the amounts expected to be incurred; and

(2) an affidavit acknowledging the facility's responsibility and duty to pay SOAH's costs and expenses.

(d) An election to engage in arbitration under this chapter is irrevocable and binding on the facility and DADS. However, an election does not preclude the parties from reaching an agreed resolution of a dispute that has been submitted for arbitration at any time during the arbitration process before the final order has been issued by the arbitrator.

**History**
- *Source Note: The provisions of this §163.51 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.53** Notice of Election of Arbitration {#sec-163.53 omnilex-key=us-tx-regs-official--title-1--163.53}

(a) Pursuant to Code §242.252(b), in an enforcement lawsuit filed in court:

(1) An affected facility may elect arbitration by filing a notice of election to arbitrate with the court in which the lawsuit is pending and sending copies to the office of the attorney general and to DADS or its designee.

(A) The notice of election must be filed no later than the tenth day after the date on which the answer is due or the date on which the answer is filed with the court, whichever is earlier.

(B) If a civil penalty is requested by an amended or supplemental pleading in a lawsuit, the affected facility must file its notice of election of arbitration not later than the tenth day after the date on which the amended or supplemental pleading is served on the affected facility or the facility's counsel.

(C) If the election of arbitration is challenged, the parties shall seek a prompt ruling from the court on the challenge. If a court finds SOAH has jurisdiction to conduct an arbitration, the Health and Human Services Appeal Division shall immediately file the court's order and the notice of election of arbitration at SOAH and request the arbitration be processed in the usual manner.

(2) DADS may elect arbitration by filing the election with the court in which the lawsuit is pending and by notifying the facility of the election not later than the date on which the facility may elect arbitration under paragraph (1) of this subsection.

(b) In an administrative enforcement proceeding originally docketed at SOAH:

(1) An affected facility may elect arbitration by filing a notice of election to arbitrate with the docket clerk at SOAH no later than the tenth day after receiving notice of hearing that complies with the requirements of the Administrative Procedure Act. A copy of this election shall be sent to DADS's representative of record in the relevant action and to DADS or its designee.

(2) DADS may elect arbitration under this chapter by filing a notice of election with the docket clerk at SOAH no later than the date that the facility may elect arbitration under paragraph (1) of this subsection and sending a copy of the notice of election to the facility's representative of record in the relevant action.

(c) The date of filing shall be the date affixed upon a notice of election by a date-stamp utilized by the docket clerk at the court for judicial proceedings, or by the docket clerk of SOAH for administrative proceedings.

(d) The notice of election shall include a written statement that contains:

(1) the nature of the action that is being submitted to arbitration, as listed in this Subchapter, §163.51(a);

(2) a brief description of the factual and/or legal controversy, including an estimate of the amount of any penalties sought;

(3) an estimate of the length of the arbitration hearing on the merits and the extensiveness of the record necessary to determine the matter;

(4) the remedy sought;

(5) a statement that the facility has not been the subject of an arbitration order within the previous five years;

(6) any special information that should be considered in selecting an arbitrator;

(7) if a hearing location other than Austin is requested, an explanation for requesting that location;

(8) the name, title, address, and telephone number of a designated contact person for the party who will be paying the costs of the arbitration; and

(9) a statement that arbitration is not otherwise prohibited by the Code.

**History**
- *Source Note: The provisions of this §163.53 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.55** Initiation of Arbitration {#sec-163.55 omnilex-key=us-tx-regs-official--title-1--163.55}

(a) When a notice of election of arbitration is filed at SOAH, the notice shall be date stamped and the file given a SOAH docket number that identifies it as a case submitted for arbitration. Parties shall include this docket number on all subsequent correspondence and documents filed with SOAH relating to the arbitration.

(b) The party that did not initiate the arbitration may file an answering statement with SOAH within ten days after receipt of the notice of election from the electing party. That answering statement should include a response to the claim and any challenge to the election of arbitration. If the party that did not initiate the arbitration does not file an answering statement, SOAH will presume that party denies the claim and does not challenge the election of arbitration. Failure to file an answering statement shall not operate to delay the arbitration.

**History**
- *Source Note: The provisions of this §163.55 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.57** Jurisdictional Challenges {#sec-163.57 omnilex-key=us-tx-regs-official--title-1--163.57}

(a) Parties who raise jurisdictional challenges to an election for arbitration in a judicial enforcement action are required to seek an expeditious ruling from the court in which the election was filed.

(b) Jurisdictional challenges brought to an election for arbitration in an administrative enforcement proceeding shall be decided by the presiding administrative law judge in the contested case.

**History**
- *Source Note: The provisions of this §163.57 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.59** Changes of Claim {#sec-163.59 omnilex-key=us-tx-regs-official--title-1--163.59}

If either party desires to make any new or different claim, it shall be made in writing and filed with SOAH. The other party may, within ten days from the date of such filing, file an answer with SOAH. After the arbitrator is appointed, however, no new or different claim may be submitted except with the arbitrator's consent.

**History**
- *Source Note: The provisions of this §163.59 adopted to be effective February 17, 2016, 41 TexReg 1111.*

#### **Subchapter C** FILING AND SERVICE OF DOCUMENTS

##### **1 Tex. Admin. Code § 163.101** Filing and Service of Documents {#sec-163.101 omnilex-key=us-tx-regs-official--title-1--163.101}

(a) All documents a party files with SOAH shall be governed by the provisions of 1 TAC §155.101 (relating to Filing Documents).

(b) All documents a party files with SOAH shall be simultaneously served on the other parties. Service of documents on parties shall be governed by the provisions of 1 TAC §155.103 (relating to Service of Documents on Parties).

(c) Except as provided herein, any oral or written communication, other than a communication authorized under subsection (a) of this section, from the parties to an arbitrator shall be directed to the association that is conducting the arbitration or, if there is no association conducting the arbitration, to SOAH, for transmittal to the arbitrator. After the arbitrator has been appointed in a case, materials may be filed directly with the arbitrator, if:

(1) the parties agree;

(2) the arbitrator agrees; and

(3) the service requirements of this section are met.

**History**
- *Source Note: The provisions of this §163.101 adopted to be effective February 17, 2016, 41 TexReg 1111.*

#### **Subchapter D** SELECTION OF ARBITRATOR AND COSTS

##### **1 Tex. Admin. Code § 163.151** Selection of Arbitrator {#sec-163.151 omnilex-key=us-tx-regs-official--title-1--163.151}

(a) The parties may agree upon an arbitrator qualified under this chapter and submit that individual's name with their initial statements.

(b) Arbitrators designated by the parties.

(1) Parties who agree to retain a qualified non-SOAH arbitrator shall notify the chief judge within ten days of the arbitrator's retention.

(2) The notice must include the name, address, and telephone number of the arbitrator selected; a statement that the parties have entered into an agreement with the arbitrator regarding the arbitrator's rate and method of compensation; and an affirmation that the arbitrator is qualified to serve according to the provisions of this chapter.

(3) The chief judge shall issue an order specifying the date by which the arbitration must be completed.

(c) If the parties do not agree on a non-SOAH arbitrator who is willing and available to serve, SOAH will provide a list of potential SOAH arbitrators.

(d) Any objections for cause pertaining to any name on the list shall be made in writing directed to the chief judge at SOAH within three days of receiving the list of potential SOAH arbitrators, with a copy served on all other parties. Such objections will be reviewed by the chief judge.

(e) SOAH will notify the parties of the arbitrator appointed.

(f) Until an arbitrator has been appointed, the chief judge may rule on pending matters, including dispositive motions.

**History**
- *Source Note: The provisions of this §163.151 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.153** Notice to and Acceptance of Appointment by Arbitrator Who Is Not a SOAH Judge {#sec-163.153 omnilex-key=us-tx-regs-official--title-1--163.153}

(a) Notice of the appointment of the arbitrator shall be sent to the arbitrator by SOAH, together with a copy of this chapter and an acceptance form for the arbitrator to sign and return. The signed acceptance of the arbitrator shall be filed with SOAH prior to the first pre-hearing conference or other meeting of the parties to the arbitration.

(b) The acceptance of the arbitrator shall state that the arbitrator is qualified and willing to serve as arbitrator in accordance with this chapter, and with the current Code of Ethics for Arbitrators in Commercial Disputes issued by the American Bar Association and the American Arbitration Association. It shall also state that the arbitrator foresees no difficulty in completing the arbitration according to the schedule set out in this chapter.

(c) A potential arbitrator must not accept appointment in or continue handling any matter in which the arbitrator believes or perceives that participation as an arbitrator would be a conflict of interest or create the impression of a conflict. The duty to disclose is a continuing obligation throughout the arbitration process.

(d) Upon objection of a party to the continued service of an arbitrator, the chief judge shall provide the arbitrator and all parties an opportunity to respond. After consideration of these responses, the chief judge shall determine whether the arbitrator should be disqualified and shall inform the parties of his/her decision, which shall be conclusive.

**History**
- *Source Note: The provisions of this §163.153 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.155** Vacancies {#sec-163.155 omnilex-key=us-tx-regs-official--title-1--163.155}

If for any reason an appointed arbitrator is unable to perform the duties of the office, the chief judge may, on proof satisfactory to the chief judge, declare the office vacant. The chief judge may fill a vacancy by appointing a SOAH arbitrator. Objections for cause to the appointed arbitrator shall be filed in accordance with this Subchapter, §163.151(d). During the period of a vacancy, the chief judge may rule on pending matters, including dispositive motions.

**History**
- *Source Note: The provisions of this §163.155 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.157** Qualifications of Arbitrators {#sec-163.157 omnilex-key=us-tx-regs-official--title-1--163.157}

(a) The chief judge may appoint as an arbitrator any SOAH administrative law judge.

(b) A potential arbitrator who is not a SOAH administrative law judge shall be on an approved list of a nationally recognized association that performs arbitration services or meet the following minimum standards:

(1) Have at least five years of experience in health care and/or the legal profession and/or alternative dispute resolution with recognized expertise in his/her profession(s).

(2) Have the attributes necessary to be a successful arbitrator, including expertise, honesty, integrity, impartiality, and the ability to manage the arbitration process.

(3) May not represent any plaintiff in a proceeding seeking monetary damages from the State of Texas or any of its agencies, and he/she must affirm that he/she will not undertake any such representation during the pendency of the arbitration proceeding.

(c) The chief judge may remove an arbitrator if she/he determines that the arbitrator no longer meets the qualifications listed in this section. The determination of the chief judge in this matter is conclusive.

**History**
- *Source Note: The provisions of this §163.157 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.159** Duties of the Arbitrator {#sec-163.159 omnilex-key=us-tx-regs-official--title-1--163.159}

The arbitrator shall:

(1) secure appropriate facilities for the hearing, giving preference to using state facilities;

(2) protect the interests of DADS and the facility;

(3) ensure that all relevant evidence has been disclosed to the arbitrator, DADS, and facility; and

(4) render an order consistent with applicable state and federal law, including the Code and this chapter.

**History**
- *Source Note: The provisions of this §163.159 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.161** Cost of Arbitration {#sec-163.161 omnilex-key=us-tx-regs-official--title-1--163.161}

(a) An arbitrator's fees and expenses shall not exceed the statutory daily maximum for case preparation, prehearing conferences, hearings, preparation of the order, and any other required post-hearing work. Rates charged for less than one day must bear a reasonable relationship to the daily maximum.

(b) There may also be incidental expenses connected with an arbitration proceeding which may be charged in addition to the arbitrator's fees and expenses. If a party requests that an arbitration hearing be held outside of Austin, and the arbitrator agrees to hold the arbitration in that location, incidental expenses would include the cost of renting a room for the hearing and the arbitrator's travel expenses.

(c) SOAH charges fees for the services provided by SOAH arbitrators at the hourly rate approved in the General Appropriations Act, but the total amount charged for a SOAH arbitrator's services in an arbitration proceeding conducted under these rules shall not exceed the statutory daily maximum.

(d) The party electing arbitration must pay the cost of the arbitration.

**History**
- *Source Note: The provisions of this §163.161 adopted to be effective February 17, 2016, 41 TexReg 1111.*

#### **Subchapter E** ARBITRATION PROCEEDINGS

##### **1 Tex. Admin. Code § 163.201** Exchange and Filing of Information {#sec-163.201 omnilex-key=us-tx-regs-official--title-1--163.201}

(a) Unless the arbitrator orders otherwise, by the 30th day after the date SOAH mailed notice to the parties of the name of the appointed arbitrator, the parties shall have exchanged the following information:

(1) List of witnesses that a party expects to call with a short summary of their expected testimony;

(2) Any and all documents or other tangible things that contain information relevant to the subject matter, including any documents that will be testified about at the hearing or that witnesses have reviewed in preparing for their testimony.

(b) Not later than the seventh day before the first day of the arbitration hearing, sooner if so directed by the arbitrator, DADS and the facility shall exchange and file with the arbitrator:

(1) all documentary evidence not previously exchanged and filed that is relevant to the dispute, with the relevant portions clearly indicated; and

(2) information relating to a proposed resolution of the dispute.

(c) The parties are responsible for identifying any material that is confidential by law and for taking appropriate measures, for example, redacting resident identities, to ensure that all such material remains confidential.

(d) Each producing party's documents shall be labeled by name or initials of the party and Bates-stamped or otherwise consecutively numbered in the lower right hand corner of each page.

**History**
- *Source Note: The provisions of this §163.201 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.203** Preliminary Conference {#sec-163.203 omnilex-key=us-tx-regs-official--title-1--163.203}

The arbitrator may set a preliminary conference and may require parties to file a statement of position prior to that conference. The statement of position shall include:

(1) stipulations of the parties to uncontested facts and applicable law;

(2) citation to the statutory and regulatory law, both state and federal, that controls the controversy;

(3) a list of the issues of fact and law that are in dispute between the parties, including a citation to legal authorities that each party relies on for its legal positions;

(4) proposals designed to expedite the arbitration proceedings, including minimizing preparation and decision time required of the arbitrator;

(5) a list of documents that the parties have exchanged and a schedule for the delivery of any additional relevant documents, indicating the approximate length of each document;

(6) the identification of witnesses expected to be called during the arbitration proceeding, with a short summary of their expected testimony; and

(7) other matters as specified by the arbitrator.

**History**
- *Source Note: The provisions of this §163.203 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.205** Discovery {#sec-163.205 omnilex-key=us-tx-regs-official--title-1--163.205}

Discovery is not allowed in a proceeding under this chapter, except by agreement with the other party or by order of the arbitrator upon a showing of good cause. Any discovery will be completed no later than 14 days before the opening of the arbitration hearing on the merits, unless otherwise ordered by the arbitrator. Discovery should not be filed with SOAH or the arbitrator unless there is a related dispute which must be resolved by the arbitrator. No more than four hours of deposition testimony may be taken by either party, unless otherwise ordered by the arbitrator.

**History**
- *Source Note: The provisions of this §163.205 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.207** Stenographic Record {#sec-163.207 omnilex-key=us-tx-regs-official--title-1--163.207}

An official stenographic record of the proceeding is not required, but DADS or the facility may make a stenographic record. The party that makes the stenographic record shall pay the expense of having the record made. A copy of any transcript prepared at the request of a party shall be provided to the arbitrator.

**History**
- *Source Note: The provisions of this §163.207 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.209** Electronic Record {#sec-163.209 omnilex-key=us-tx-regs-official--title-1--163.209}

DADS shall make an electronic recording of the proceeding. If there is no stenographic record of the proceeding, the original recording or a copy will be provided to the arbitrator at the close of the proceeding if the arbitrator so requests. At the arbitrator's request, DADS shall also record prehearing conferences.

**History**
- *Source Note: The provisions of this §163.209 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.211** Interpreters {#sec-163.211 omnilex-key=us-tx-regs-official--title-1--163.211}

When an interpreter will be needed for all or part of a proceeding, a party shall file a written request at least seven days before the setting. SOAH shall provide and pay for:

(1) an interpreter for deaf or hearing impaired parties and subpoenaed witnesses in accordance with the APA, §2001.055;

(2) reader services or other communication services for blind and sight impaired parties and witnesses; and

(3) a certified language interpreter for parties and witnesses who need that service.

**History**
- *Source Note: The provisions of this §163.211 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.213** Communication of Parties with Arbitrator {#sec-163.213 omnilex-key=us-tx-regs-official--title-1--163.213}

(a) DADS and the facility shall not communicate with the arbitrator other than at an oral hearing, or through properly filed documents, unless the parties and the arbitrator agree otherwise.

(b) Any oral or written communication from the parties, other than a communication authorized under subsection (a) of this section, shall be directed to SOAH for transmittal to the arbitrator.

**History**
- *Source Note: The provisions of this §163.213 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.215** Date, Time, and Place of Hearing {#sec-163.215 omnilex-key=us-tx-regs-official--title-1--163.215}

(a) The arbitration hearing shall be scheduled to begin no later than the 90th day after the date that the arbitrator is selected.

(b) The arbitrator shall set the date, time, and place for each hearing. She/he shall send a notice of hearing to the parties at least 30 days in advance of the hearing date, unless otherwise agreed to by the parties. A copy of such notice shall be simultaneously filed with SOAH by the arbitrator.

(c) The arbitrator may grant a continuance of the arbitration at the request of DADS or the facility. The arbitrator may not unreasonably deny a request for a continuance.

(d) Arbitration hearings normally will be held at SOAH's hearings facility in Austin, Texas. If a party seeks to have the arbitration hearing held elsewhere, the party shall submit a written request to the arbitrator and make a showing of good cause. The arbitrator shall have sole discretion to determine whether to grant such a request. If the arbitrator grants the request, the arbitrator shall determine how the incidental expenses of holding the arbitration hearing outside of Austin will be apportioned between the parties. Incidental expenses include the cost of renting a room for the hearing and the arbitrator's travel expenses. Preference will be given to using state facilities. The arbitrator may require that the incidental expenses be paid in advance of the arbitration hearing.

**History**
- *Source Note: The provisions of this §163.215 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.217** Representation {#sec-163.217 omnilex-key=us-tx-regs-official--title-1--163.217}

Any party may be represented by counsel or other authorized representative.

**History**
- *Source Note: The provisions of this §163.217 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.219** Attendance Required {#sec-163.219 omnilex-key=us-tx-regs-official--title-1--163.219}

(a) The arbitrator may proceed in the absence of any party or representative of a party who, after notice of the proceeding, fails to be present or to obtain a continuance.

(b) An arbitrator may not make an order solely on the default of a party and shall require the party who is present to submit evidence, as required by the arbitrator, before issuing an order.

**History**
- *Source Note: The provisions of this §163.219 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.221** Public Hearings and Confidential Material {#sec-163.221 omnilex-key=us-tx-regs-official--title-1--163.221}

Hearings held under this chapter shall be open to the public. The parties are responsible for identifying any material that is confidential by law and for taking appropriate measures to ensure that such material remains confidential during the hearing. All exhibits shall be returned to DADS following the issuance of the order by the arbitrator, where they shall be maintained in accordance with DADS' rules.

**History**
- *Source Note: The provisions of this §163.221 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.223** Order of Proceedings {#sec-163.223 omnilex-key=us-tx-regs-official--title-1--163.223}

(a) Opening statements. The arbitrator may ask each party to make an opening statement to clarify the issues involved.

(b) The complaining party shall then present evidence to support its claim. The defending party shall then present evidence to support its claim. Witnesses for each party shall answer questions propounded by the other party and the arbitrator.

(c) The arbitrator has the discretion to vary this procedure but shall afford a full and equal opportunity to all parties for the presentation of any material and relevant evidence within the time frames set by the arbitrator.

(d) Exhibits offered by either party may be received in evidence by the arbitrator.

(e) The parties may make closing statements as they desire, but the record may not remain open for written briefs unless ordered by the arbitrator. If the arbitrator requests briefs the arbitration hearing shall be deemed "closed" on the date that the last requested brief is filed.

**History**
- *Source Note: The provisions of this §163.223 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.225** Control of Proceedings {#sec-163.225 omnilex-key=us-tx-regs-official--title-1--163.225}

The arbitrator shall exercise reasonable control over the proceedings, including but not limited to the manner and order of interrogating witnesses and presenting evidence so as to:

(1) make the interrogation and presentation effective for the determination of the truth;

(2) avoid needless consumption of time; and

(3) protect witnesses from harassment or undue embarrassment.

**History**
- *Source Note: The provisions of this §163.225 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.227** Evidence {#sec-163.227 omnilex-key=us-tx-regs-official--title-1--163.227}

(a) The parties may offer evidence as they desire and shall produce additional evidence that the arbitrator considers necessary to understand and resolve the dispute. However, any documentary evidence not properly exchanged between the parties before the hearing will be excluded from consideration unless good cause is shown.

(b) The arbitrator is the judge of the relevance and materiality of the evidence offered. Strict conformity to the rules of judicial proceedings is not required. The Texas Rules of Evidence are not binding on the arbitrator but may be used as a guideline.

(c) Each party shall produce any witnesses under its control without the necessity of a subpoena. Individuals may be compelled by the arbitrator, as provided under the Texas General Arbitration Act, Texas Civil Practice and Remedies Code, §171.007, to attend and give testimony or to produce documents at the arbitration proceeding or at a deposition allowed under this Subchapter, §163.205.

**History**
- *Source Note: The provisions of this §163.227 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.229** Witnesses {#sec-163.229 omnilex-key=us-tx-regs-official--title-1--163.229}

Witnesses shall testify under oath. Testimony may be presented in a narrative, without strict adherence to a "question and answer" format.

**History**
- *Source Note: The provisions of this §163.229 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.231** Exclusion of Witnesses {#sec-163.231 omnilex-key=us-tx-regs-official--title-1--163.231}

Any party may request that the arbitrator exclude witnesses from the hearing except when they are testifying. If such a request is made, the arbitrator shall instruct the witnesses not to discuss the case outside the official hearing other than with the designated representatives or attorneys in the case. However, an individual who is a party or any other single party representative shall not be excluded under this rule. A witness or other person violating these instructions may be punished by the exclusion of evidence as the arbitrator deems appropriate.

**History**
- *Source Note: The provisions of this §163.231 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.233** Evidence by Affidavit {#sec-163.233 omnilex-key=us-tx-regs-official--title-1--163.233}

The arbitrator may receive and consider evidence of witnesses by affidavit. Affidavit testimony must be filed with the arbitrator and served on the other party no later than 30 days before the hearing. The other party will have 15 days to file any objection to the admissibility of the affidavit or to file controverting affidavits. The arbitrator shall give such evidence only such weight as the arbitrator deems it entitled to after consideration of any objection made to its admission.

**History**
- *Source Note: The provisions of this §163.233 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.235** Evidence Filed After the Hearing {#sec-163.235 omnilex-key=us-tx-regs-official--title-1--163.235}

If the parties agree or the arbitrator directs that documents or other evidence be submitted to the arbitrator after the hearing, all parties shall be afforded an opportunity to examine such documents or other evidence. Such materials shall be served as provided in Subchapter C of this Chapter, §163.101.

**History**
- *Source Note: The provisions of this §163.235 adopted to be effective February 17, 2016, 41 TexReg 1111.*

#### **Subchapter F** ARBITRATION ORDER

##### **1 Tex. Admin. Code § 163.251** Order {#sec-163.251 omnilex-key=us-tx-regs-official--title-1--163.251}

(a) The arbitrator may enter any order consistent with state and federal law applicable to a dispute described in Subchapter B of this Chapter, §163.51.

(b) The order shall be entered no later than the 60th day after the close of the arbitration hearing.

(c) The arbitrator shall base the order on the facts established in the arbitration proceeding, including stipulations of the parties; and on the state and federal statutes and formal rules and regulations, as properly applied to those facts.

(d) The order must:

(1) be in writing;

(2) be signed and dated by the arbitrator; and

(3) include a list of stipulations on uncontested issues and a statement of the arbitrator's decisions on all contested issues. If requested by either of the parties, the decision shall contain findings of fact and conclusions of law on controverted issues.

(e) The arbitrator shall file a copy of the order with SOAH and DADS or its designee and send a copy to the parties.

**History**
- *Source Note: The provisions of this §163.251 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.253** Effect of Order {#sec-163.253 omnilex-key=us-tx-regs-official--title-1--163.253}

An order of an arbitrator under this chapter is final and binding on all parties. A party's right to appeal is limited to the provisions of the Code.

**History**
- *Source Note: The provisions of this §163.253 adopted to be effective February 17, 2016, 41 TexReg 1111.*

##### **1 Tex. Admin. Code § 163.255** Clerical Error {#sec-163.255 omnilex-key=us-tx-regs-official--title-1--163.255}

For the purpose of correcting clerical errors, an arbitrator retains jurisdiction of the order for 20 days after the date of the order.

**History**
- *Source Note: The provisions of this §163.255 adopted to be effective February 17, 2016, 41 TexReg 1111.*

### **Chapter 165** RULES OF PROCEDURE FOR APPRAISAL REVIEW BOARD APPEALS

##### **1 Tex. Admin. Code § 165.1** Purpose and Scope {#sec-165.1 omnilex-key=us-tx-regs-official--title-1--165.1}

(a) This chapter governs the procedures of the State Office of Administrative Hearings (SOAH) concerning appeals by property owners from orders of an appraisal review board.

(b) These rules shall be construed to ensure the fair and expeditious determination of every action.

**History**
- *Source Note: The provisions of this §165.1 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.3** Definitions {#sec-165.3 omnilex-key=us-tx-regs-official--title-1--165.3}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative law judge or judge--An individual appointed to serve as a presiding officer by SOAH's chief administrative law judge under Texas Government Code, Chapter 2003.

(2) Appeal--An appeal brought under this chapter by a property owner from a board order determining a protest concerning appraisal or market value of property.

(3) Attorney's fees--An award of attorney's fees as provided for in Texas Tax Code, §42.29.

(4) Board--An appraisal review board.

(5) Board order--An order of a board determining a protest concerning the appraised or market value of property brought under Texas Tax Code, §41.41(a)(1) or (2), if the appraised or market value of the property that was the subject of the protest, as determined by the board order, is more than $1 million.

(6) Chief Judge--The chief administrative law judge of SOAH.

(7) Costs of Appeal--The costs to be paid by the appraisal district or the property owner under §165.25 of this title (relating to Determination). The costs of appeal include the time spent by a judge on a case referred under this chapter calculated at the rate of $100 per hour for services rendered, consistent with the rate approved by the Legislature in the General Appropriations Act. Costs also include travel expenses (including transportation, meals, and lodging expenses determined under state travel rules), postage, long distance telephone charges, court reporter charges and transcripts, and other similar expenses.

(8) Prevailing property owner--A property owner who achieves a reduction in the appraised or market value of the property that is the subject of the appeal.

(9) SOAH--The State Office of Administrative Hearings.

**History**
- *Source Note: The provisions of this §165.3 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.5** Applicability of Other SOAH Rules {#sec-165.5 omnilex-key=us-tx-regs-official--title-1--165.5}

(a) Other SOAH rules of procedure found at Chapters 155, 157, and 161 of this title (relating to Rules of Procedure; Temporary Administrative Law Judges; and Requests for Records) apply in appeals under this chapter unless specific applicable procedures are set out in this chapter. The rules in this chapter control to the extent there is a conflict with the rules in Chapters 155, 157, and 161 of this title. Except as inconsistent with this chapter, the rules from other chapters that specifically apply include:

(1) §155.7 of this title (relating to Computation of Time);

(2) §155.51 of this title (relating to Jurisdiction);

(3) §155.151 of this title (relating to Assignment of Judges to Cases);

(4) §155.153 of this title (relating to Powers and Duties);

(5) §155.155 of this title (relating to Orders);

(6) §155.157 of this title (relating to Sanctioning Authority);

(7) §155.423 of this title (relating to Making a Record of the Proceeding);

(8) §155.425 of this title (relating to Procedure at Hearing);

(9) §155.431 of this title (relating to Conduct and Decorum);

(10) §157.1 of this title (relating to Temporary Administrative Law Judges); and

(11) §161.1 of this title (relating to Charges for Copies of Public Information).

(b) The provisions of §155.351 of this title (relating to Mediation) do not apply to appeals under this chapter.

**History**
- *Source Note: The provisions of this §165.5 adopted to be effective January 17, 2010, 35 TexReg 203.*

##### **1 Tex. Admin. Code § 165.7** Board Orders that may be Appealed {#sec-165.7 omnilex-key=us-tx-regs-official--title-1--165.7}

A property owner may appeal a board order determining a protest concerning the appraised or market value of property under Texas Tax Code, §41.41(a)(1) or of the unequal appraisal under Texas Tax Code, §41.41(a)(2) if the following prerequisites are met:

(1) The appraised or market value of the property that was the subject of the protest is more than $1 million, as determined by the board order; and

(2) The board order at issue in the appeal concerns a determination of the appraised or market value of real or personal property other than industrial property.

**History**
- *Source Note: The provisions of this §165.7 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.9** Notice of Appeal by Property Owner {#sec-165.9 omnilex-key=us-tx-regs-official--title-1--165.9}

(a) To appeal a board order to SOAH, a property owner must:

(1) file with the chief appraiser of the appraisal district not later than the 30th day after the date the property owner received notice of the board order a completed notice of appeal as described in subsection (b) of this section; and

(2) file with the chief appraiser not later than the 90th day after the date the property owner received notice of the board order a deposit in the amount of $1,500 payable to SOAH.

(b) A completed notice of appeal by a property owner must be in the form prescribed by SOAH and include:

(1) a copy of the board order;

(2) a brief statement that explains the basis for the property owner's appeal of the order; and

(3) a statement of the property owner's opinion of the appraised or market value, as applicable, of the property that is the subject of the appeal.

(c) The form for the notice of appeal prescribed by SOAH may be found at www.soah.state.tx.us.

(d) At the hearing on the appeal, the property owner may be limited to 1-1/2 hours unless the property owner requests an extended hearing and specifies the additional time need.

(e) If the parties settle the dispute the deposit is refundable:

(1) less the filing fee if the property owner and the appraisal district settle before the hearing on the merits is convened; or

(2) less the filing fee and the costs of appeal if the property owner and the appraisal district settle after the hearing on the merits is convened.

(f) Three hundred dollars of the deposit represents the filing fee.

**History**
- *Source Note: The provisions of this §165.9 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.10** Failure to Pay Deposit {#sec-165.10 omnilex-key=us-tx-regs-official--title-1--165.10}

(a) The date, time, and place of the hearing on appeal shall not be set by the judge designated to hear the appeal until the deposit has been filed by the property owner as required under §165.9(a)(2) of this title (relating to Notice of Appeal by Property Owner).

(b) If the property owner fails to pay the deposit as required under §165.9(a)(2) of this title:

(1) SOAH shall dismiss the property owner's appeal; and

(2) the property owner is not entitled to file an appeal with SOAH in any subsequent tax year.

(c) The judge may issue an order of dismissal with or without a motion filed by a party.

**History**
- *Source Note: The provisions of this §165.10 adopted to be effective December 25, 2011, 36 TexReg 8503.*

##### **1 Tex. Admin. Code § 165.11** Request to Docket Case {#sec-165.11 omnilex-key=us-tx-regs-official--title-1--165.11}

(a) As soon as practicable, but no more than 30 days after receiving a notice of appeal from a property owner, the chief appraiser for the appraisal district shall:

(1) file with SOAH a completed request to docket case form as prescribed by SOAH;

(2) submit to SOAH the notice of appeal, and the board order;

(3) indicate, where appropriate, those entries in the records that are subject to the appeal; and

(4) request the appointment of a qualified judge to hear the appeal.

(b) The chief appraiser shall file the deposit with SOAH, as soon as practicable, but not more than 15 days after receiving the deposit from the property owner.

(c) The hearing on the appeal will typically be limited to 1-1/2 hours for each party unless the property owner or the appraisal district requests an extended hearing and specifies the additional time needed in accordance with §165.21(g) of this title (relating to Hearing).

**History**
- *Source Note: The provisions of this §165.11 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503.*

##### **1 Tex. Admin. Code § 165.15** Designation of Administrative Law Judge {#sec-165.15 omnilex-key=us-tx-regs-official--title-1--165.15}

As soon as practicable after receiving a notice of appeal and filing fee, SOAH shall designate a judge to hear the appeal.

**History**
- *Source Note: The provisions of this §165.15 adopted to be effective January 17, 2010, 35 TexReg 203.*

##### **1 Tex. Admin. Code § 165.17** Prehearing Orders {#sec-165.17 omnilex-key=us-tx-regs-official--title-1--165.17}

(a) As soon as practicable after a judge is designated, the judge shall by order set the date, time, and place of the hearing on the appeal. The order shall be issued at least 30 days prior to the hearing date. The prehearing order shall not be issued until the property owner has filed the deposit as required in §165.9(a)(2) of this title (relating to Notice of Appeal by Property Owner).

(b) The order shall state the statutes and administrative rules under which the hearing is to be conducted.

**History**
- *Source Note: The provisions of this §165.17 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.19** Venue {#sec-165.19 omnilex-key=us-tx-regs-official--title-1--165.19}

(a) The hearing shall be held in the following municipalities: Amarillo, Austin, Beaumont, Corpus Christi, El Paso, Fort Worth, Houston, Lubbock, Lufkin, McAllen, Midland, San Antonio, Tyler, and Wichita Falls.

(b) If all or part of the property that is the subject of the appeal is located in a municipality listed in subsection (a) of this section, the judge shall set the hearing in that municipality. If no part of the property that is the subject of the appeal is located in a municipality listed in subsection (a) of this section, the judge shall set the hearing in the listed municipality that is the nearest to the subject property.

(c) The hearing shall be held in a building owned or leased by SOAH. If SOAH does not have a building in the municipality where the hearing is required to be held, the hearing may be held in a public or privately-owned building in that municipality, preferably a building in which SOAH regularly conducts business. The hearing may not be held in a building or facility that is owned, leased, or under the control of an appraisal district.

**History**
- *Source Note: The provisions of this §165.19 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective March 27, 2014, 39 TexReg 2061.*

##### **1 Tex. Admin. Code § 165.21** Hearing {#sec-165.21 omnilex-key=us-tx-regs-official--title-1--165.21}

(a) The hearing of an appeal is a trial de novo. The judge may not admit into evidence the fact of previous action by the board, except as otherwise provided by this chapter.

(b) Texas Government Code, Chapter 2001, and the Texas Rules of Evidence do not apply to a hearing under this chapter.

(c) Prehearing discovery is limited to the exchange of documents the parties will rely on during the hearing. Any expert witness testimony must be reduced to writing and included in the exchange of documents.

(d) Except as otherwise ordered by the judge, all documents relied on by either party must be filed with SOAH and the other party at least ten days before the scheduled hearing. Documents that are not timely filed may be excluded from the record.

(e) Any relevant evidence is admissible, subject to the imposition of time limits and the parties' compliance with procedural requirements imposed by the judge, including a schedule for the prehearing exchange of documents.

(f) A judge may consider factors such as the hearsay nature of testimony, the qualifications of witnesses, and other restrictions on the admissibility of evidence under the Texas Rules of Evidence in assessing the weight to be given to the evidence admitted.

(g) A hearing will be limited to three hours unless otherwise ordered by the judge. A property owner may request an extended hearing on the date the notice of appeal is filed. An appraisal district may request an extended hearing on the date a request to docket case is filed. Any request for extended hearings made after those dates will be granted only for good cause as determined by the judge.

**History**
- *Source Note: The provisions of this §165.21 adopted to be effective January 17, 2010, 35 TexReg 203.*

##### **1 Tex. Admin. Code § 165.23** Representation of Parties {#sec-165.23 omnilex-key=us-tx-regs-official--title-1--165.23}

(a) A property owner may be represented at the hearing by:

(1) the property owner;

(2) an attorney who is licensed in Texas;

(3) a certified public accountant;

(4) a registered property tax consultant; or

(5) any other person who is not otherwise prohibited from appearing in a hearing held by SOAH.

(b) The appraisal district may be represented by the chief appraiser or a person designated by the chief appraiser.

(c) If more than one protest is filed relating to the same property, or if the property is owned in undivided or fractional interests, an authorized representative of a party may appear at the hearing as provided by Texas Tax Code, §41.45.

**History**
- *Source Note: The provisions of this §165.23 adopted to be effective January 17, 2010, 35 TexReg 203.*

##### **1 Tex. Admin. Code § 165.25** Determination {#sec-165.25 omnilex-key=us-tx-regs-official--title-1--165.25}

(a) As soon as practicable, but no later than the 30th day after the date the hearing is concluded, the judge shall issue a determination and send a copy to the property owner and the chief appraiser.

(b) The judge's determination:

(1) must include a determination of the appraised or market value, as applicable, of the property that is the subject of the appeal;

(2) must contain a brief analysis of the judge's rationale for, and set out the key findings in support of, the determination, but is not required to contain a detailed discussion of the evidence admitted or the contentions of the parties;

(3) may include any remedy or relief a court may order under Texas Tax Code, Chapter 42, in an appeal relating to the appraised or market value of property, including an award of attorney's fees to a prevailing property owner under Texas Tax Code, §42.29; and

(4) shall specify whether the appraisal district or property owner is required to pay the costs of appeal and the amount of those costs.

(c) If the judge determines that the appraised or market value, as applicable, of the property that is the subject of the appeal is nearer to the property owner's opinion of the appraised or market value, as applicable, of the property as stated in the notice of appeal submitted by the property owner than the value determine by the board:

(1) SOAH shall refund the property owner's deposit, including the filing fee;

(2) the appraisal district, on receipt of a copy of the decision, shall pay the costs of the appeal as specified in the decision; and

(3) the chief appraiser shall correct the appraised or market value, as applicable, of the property as shown in the appraisal roll to reflect the judge's determination.

(d) If the judge determines that the appraised or market value, as applicable, of the property that is the subject of the appeal is not nearer to the property owner's opinion of the appraised or market value, as applicable, of the property as stated in the property owner's notice of appeal, than the value determined by the board:

(1) SOAH shall apply the property owner's deposit, including the filing fee, to the costs of the appeal, and any amount in excess of the costs of the appeal shall be refunded to the property owner;

(2) The chief appraiser shall correct the appraised or market value, as applicable, of the property as shown in the appraisal roll to reflect the judge's determination if the value as determined by the judge is less than the value as determined by the board; and

(3) the property owner shall pay the difference between the costs of the appeal as specified in the determination and the property owner's deposit, including the filing fee.

**History**
- *Source Note: The provisions of this §165.25 adopted to be effective January 17, 2010, 35 TexReg 203; amended to be effective December 25, 2011, 36 TexReg 8503.*

##### **1 Tex. Admin. Code § 165.27** Objections to Determination {#sec-165.27 omnilex-key=us-tx-regs-official--title-1--165.27}

(a) A party may file written objections to any fact or conclusion in a determination. Objections must be filed within 15 days of the date of service of the determination. A party may file a reply to objections within 15 days of the filing of the objections.

(b) A judge may extend or shorten the time to file objections or replies.

(c) The judge shall review the objections and replies. The judge may issue an amended determination in response to the objections and replies, or correct any clerical errors in the determination. If the judge determines that no changes should be made to the determination, the judge shall so notify the parties in writing.

(d) If no objections are filed by the date objections are due, a determination or amended determination becomes final on the day that objections are due. If objections are timely filed, a determination or amended determination becomes final on the date that the judge notifies the parties in writing that no changes should be made to the determination or amended determination. If the judge does not notify the parties in writing, the determination becomes final by operation of law 45 days after the date of the last objection that was timely filed.

**History**
- *Source Note: The provisions of this §165.27 adopted to be effective January 17, 2010, 35 TexReg 203.*

##### **1 Tex. Admin. Code § 165.29** Delinquent Taxes {#sec-165.29 omnilex-key=us-tx-regs-official--title-1--165.29}

A property owner may not file an appeal to SOAH if the taxes on the property subject to the appeal are delinquent. A judge who determines that the taxes on the property subject to an appeal are delinquent shall dismiss the pending appeal with prejudice. If an appeal is dismissed under this section, SOAH shall retain the property owner's filing fee.

**History**
- *Source Note: The provisions of this §165.29 adopted to be effective January 17, 2010, 35 TexReg 203.*

## **Part 8** TEXAS JUDICIAL COUNCIL

### **Chapter 171** REPORTING REQUIREMENTS

##### **1 Tex. Admin. Code § 171.1** Authority to Adopt and Purpose of Rules {#sec-171.1 omnilex-key=us-tx-regs-official--title-1--171.1}

These rules are adopted under the authority granted by §71.019 of the Texas Government Code, which authorizes the Texas Judicial Council to adopt rules expedient for the administration of its functions; and §71.035 of the Texas Government Code, which authorizes the council to require a state justice, judge, clerk, or other court official, as an official duty, to comply with reasonable requirements for supplying statistics pertaining to the amount and character of the civil and criminal business transacted by the court or other information on the conduct, operation, or business of the court or the office of the clerk of the court.

**History**
- *Source Note: The provisions of this §171.1 adopted to be effective June 18, 2008, 33 TexReg 4663.*

##### **1 Tex. Admin. Code § 171.2** General Reporting Requirements {#sec-171.2 omnilex-key=us-tx-regs-official--title-1--171.2}

District clerks, county clerks, justices of the peace, and municipal judges shall submit a summary-level court activity report and other required reports each month to the Office of Court Administration (OCA) using the methods required by this chapter. Unless specifically provided otherwise in this chapter, all reports are due no later than 20 days following the end of the month reported. OCA shall maintain and update reporting instructions and forms initially approved by the Texas Judicial Council, and shall continually make the instructions and forms available by publishing them on its website and by other appropriate means.

**History**
- *Source Note: The provisions of this §171.2 adopted to be effective June 18, 2008, 33 TexReg 4663; amended to be effective January 7, 2010, 35 TexReg 62; amended to be effective September 1, 2016, 41 TexReg 5037.*

##### **1 Tex. Admin. Code § 171.3** Types of Cases to be Counted and Reported {#sec-171.3 omnilex-key=us-tx-regs-official--title-1--171.3}

(a) Criminal cases. Criminal cases include felony and misdemeanor cases. The number of criminal cases to be reported is based on the number of defendants named in the charging instrument. If a single charging instrument names more than one defendant, it is counted as more than one case. If the same defendant is charged in more than one charging instrument, it is counted as more than one case. If a charging instrument contains more than one count as provided by Article 21.24, Code of Criminal Procedure, it is reported as one case under the most serious offense alleged.

(b) Civil cases. Civil cases are counted and reported when an original petition is filed (no matter how many parties are involved) or when a case is added to the docket in a manner other than the filing of a new, original case, including but not limited to the following: the granting of a motion for new trial of a case previously disposed of; the transfer of a case from another county on change of venue; the remand of a case that had been appealed; the granting of a severance; and the docketing of a writ of garnishment or bill of review.

(c) Family law cases. Family law cases are counted and reported when an original petition is filed (no matter how many parties or children are involved), when a show cause motion, motion to modify, or similar motion is filed following entry of original judgment, or when any other case is filed under the Texas Family Code.

(d) Juvenile cases. Juvenile cases are counted and reported based on the number of respondents named in a petition for adjudication of a child alleged to have engaged in delinquent conduct or conduct indicating a need for supervision, as governed by Title 3 of the Texas Family Code. If the same respondent is charged in more than one petition, it is counted as more than one case. If one petition contains more than one count, it is counted as one case under the most serious offense alleged.

(e) Probate and guardianship cases. Probate and guardianship cases are counted and reported based on the number of proceedings filed or heard each month.

(f) Mental health cases. Mental health cases are counted and reported based on the number of applications filed or hearings held each month.

**History**
- *Source Note: The provisions of this §171.3 adopted to be effective June 18, 2008, 33 TexReg 4663.*

##### **1 Tex. Admin. Code § 171.4** District Court Reports {#sec-171.4 omnilex-key=us-tx-regs-official--title-1--171.4}

(a) Method. The district clerk of each county shall submit a district court activity report of the criminal, civil, family law and juvenile cases in the county's district courts. A separate report may be submitted for each district court or a single report may be submitted showing the combined activity of all the district courts in the county. Unless OCA grants a waiver for good cause, the district clerk shall submit the reports by electronic means approved by OCA. The maximum duration of a waiver is one year, but OCA may approve successive waivers.

(b) Reporting Categories.

(1) Criminal Cases.

(A) Criminal case type categories. The monthly report contains the following categories of felony case types: capital murder, murder, other homicides, aggravated assault or attempted murder, sexual assault of an adult, indecency with or sexual assault of a child, family violence assault, aggravated robbery or robbery, burglary, theft, automobile theft, drug sale or manufacture, drug possession, felony D.W.I., and other felonies; and a misdemeanor case type category for all misdemeanors.

(B) Criminal case activity categories. The monthly report contains sections for reporting cases on docket, dispositions, supplemental information and additional court activity.

(C) Report of a request for a hate crime finding. This section of the monthly report requests information pursuant to Article 2.211 of the Code of Criminal Procedure.

(D) Other Case Activity Reporting.

(i) Pursuant to Section 71.0353 of the Government Code, the clerk shall also report the number of cases filed for the following offenses:

(I) trafficking of persons under Sec. 20A.02, Penal Code;

(II) prostitution under Sec. 43.02, Penal Code; and

(III) compelling prostitution under Sec. 43.05, Penal Code.

(ii) The clerk shall also report the number of reports provided to the court under Art. 16.22(a)(1)(B) of the Code of Criminal Procedure.

(2) Civil Cases.

(A) Civil case type categories. The monthly report contains the following categories of civil cases: injury or damage--motor vehicle, injury or damage--medical malpractice, injury or damage--other professional malpractice, injury or damage--asbestos/silica product liability, injury or damage--other product liability, other injury or damage, real property--eminent domain, other real property, contract--consumer/commercial/debt, other contract, civil cases relating to criminal matters, other civil cases, and tax cases.

(B) Civil case activity categories. The monthly report contains sections for reporting cases on docket, dispositions and additional court activity.

(3) Family Law Cases.

(A) Family law case type categories. The monthly report contains the following categories of family law cases: divorce--children, divorce--no children, parent/child--no divorce, child protective services, termination of parental rights, adoption, protective orders--no divorce, Title IV-D--paternity, Title IV-D--support order, and Title IV-D--UIFSA, all other family law cases, and post-judgment actions for modification--custody, modification--other, enforcement, and Title IV-D.

(B) Family law case activity categories. The monthly report contains sections for cases on docket, dispositions and additional court activity section.

(4) Juvenile Cases.

(A) Juvenile case type categories. The monthly report contains a category for conduct indicating a need for supervision (C.I.N.S.) cases and the following categories of delinquent conduct cases: capital murder, murder, other homicides, aggravated assault or attempted murder, assault, indecency with a child or sexual assault, aggravated robbery or robbery, burglary, theft, automobile theft, felony drug offenses, misdemeanor drug offenses, D.W.I., contempt of court, and all other offenses.

(B) Juvenile case activity categories. The monthly report contains sections for reporting cases on docket, adjudications, dispositions and additional court activity.

**History**
- *Source Note: The provisions of this §171.4 adopted to be effective June 18, 2008, 33 TexReg 4663; amended to be effective September 1, 2016, 41 TexReg 5037; amended to be effective February 6, 2020, 45 TexReg 889.*

##### **1 Tex. Admin. Code § 171.5** Statutory County Court Reports {#sec-171.5 omnilex-key=us-tx-regs-official--title-1--171.5}

(a) Method. Each district clerk or county clerk who maintains the records for the statutory county courts (including statutory probate courts) of a county shall submit a court activity report of criminal, civil, family law, juvenile, probate and guardianship, and mental health cases for these courts. A separate report may be submitted for each statutory county court or a single report may be submitted for all statutory county courts in the county. Unless OCA grants a waiver for good cause, the clerk shall submit the reports by electronic means approved by the OCA. The maximum duration of a waiver is one year, but OCA may approve successive waivers.

(b) Reporting Categories.

(1) Criminal Cases.

(A) Criminal case type categories. The monthly report for criminal cases is divided into sections for misdemeanors and felonies.

(i) Misdemeanor case types. The report contains the following categories for reporting misdemeanor cases: D.W.I.--first offense, D.W.I.--second offense, theft, theft by check, drug possession--marijuana, drug offenses--other, family violence assault, other assault, traffic, D.W.L.S./D.W.L.I., and other misdemeanor cases.

(ii) Felony case types. The report contains the following categories for reporting felony cases: capital murder, murder, other felony homicides, aggravated assault or attempted murder, sexual assault of an adult, indecency with or sexual assault of a child, family violence assault, aggravated robbery or robbery, burglary, theft, automobile theft, drug sale or manufacture, drug possession, felony D.W.I., and other felonies.

(B) Criminal case activity categories. The monthly report contains sections for reporting cases on docket, dispositions, supplemental information and additional court activity.

(C) Report of a request for a hate crime finding. This section of the monthly report requests information pursuant to Article 2.211 of the Code of Criminal Procedure.

(D) Other Case Activity Reporting.

(i) Pursuant to Section 71.0353 of the Government Code, the clerk shall also report the number of cases filed for the following offenses:

(I) trafficking of persons under Sec. 20A.02, Penal Code;

(II) prostitution under Sec. 43.02, Penal Code; and

(III) compelling prostitution under Sec. 43.05, Penal Code.

(ii) The clerk shall also report the number of reports provided to the court under Art. 16.22(a)(1)(B) of the Code of Criminal Procedure.

(2) Civil Cases.

(A) Civil case type categories. The monthly report contains the following categories of civil cases: injury or damage--motor vehicle, injury or damage--medical malpractice, injury or damage--other professional malpractice, injury or damage--asbestos/silica product liability, injury or damage--other product liability, other injury or damage, real property--eminent domain, other real property, contract--consumer/commercial/debt, other contract, civil cases relating to criminal matters, all other civil cases, and tax cases.

(B) Civil case activity categories. The monthly report contains sections for reporting cases on docket, dispositions and additional court activity.

(3) Family Law Cases.

(A) Family law case type categories. The monthly report contains the following categories of family law cases: divorce--children, divorce--no children, parent/child--no divorce, child protective services, termination of parental rights, adoption, protective orders--no divorce, Title IV-D--paternity, Title IV-D--support order, Title IV-D--UIFSA, all other family law cases, and post-judgment actions for modification--custody, modification--other, enforcement, and Title IV-D.

(B) Family law case activity categories. The monthly report contains sections for reporting cases on docket, dispositions and additional court activity.

(4) Juvenile Cases.

(A) Juvenile case type categories. The monthly report contains a category for C.I.N.S. cases and the following categories of delinquent conduct cases: capital murder, murder, other homicides, aggravated assault or attempted murder, assault, indecency with a child or sexual assault, aggravated robbery or robbery, burglary, theft, automobile theft, felony drug offenses, misdemeanor drug offenses, D.W.I., contempt of court, and all other offenses.

(B) Juvenile case activity categories. The monthly report contains sections for reporting juvenile case activity for cases on docket, adjudications, dispositions and additional court activity.

(5) Probate and Guardianship Cases.

(A) Probate and guardianship case type categories. The monthly report contains the following categories for reporting probate and guardianship case types: decedents' estates (independent administration, dependent administration, and all other estate proceedings), guardianships (minor and adult), and other cases.

(B) Probate and guardianship activity categories. The monthly report contains activity report categories for cases on docket and additional information.

(6) Mental Health Cases.

(A) Mental health case type categories. The monthly report contains the following categories for reporting mental health cases: temporary mental health services, extended mental health services, modification--inpatient to outpatient, modification--outpatient to inpatient, and orders to authorize psychoactive medications.

(B) Mental health activity categories. The monthly report contains activity report categories for intake, hearings, and other information.

(C) Mental health commitments. Pursuant to Section 574.014 of the Health and Safety Code, the clerk shall report the number of applications for commitment orders for involuntary mental health services filed with the court and the disposition of those cases, including the number of commitment orders for inpatient and outpatient mental health services.

**History**
- *Source Note: The provisions of this §171.5 adopted to be effective June 18, 2008, 33 TexReg 4663; amended to be effective September 1, 2016, 41 TexReg 5037; amended to be effective February 6, 2020, 45 TexReg 889.*

##### **1 Tex. Admin. Code § 171.6** Constitutional County Courts Reports {#sec-171.6 omnilex-key=us-tx-regs-official--title-1--171.6}

(a) Method. County clerks shall submit a court activity report of criminal, civil, juvenile, probate and guardianship, and mental health cases for each constitutional county court. Unless OCA grants a waiver for good cause, county clerks shall submit the reports by electronic means approved by the OCA. The maximum duration of a waiver is one year, but OCA may approve successive waivers.

(b) Reporting Categories.

(1) Criminal Cases.

(A) Criminal case type categories. The monthly report contains the following categories of misdemeanor case types: D.W.I.--first offense, D.W.I.--second offense, theft, theft by check, drug possession--marijuana, drug offenses--other, family violence assault, other assault, traffic, D.W.L.S./D.W.L.I., and other misdemeanor cases.

(B) Criminal case activity categories. The monthly report contains sections for reporting cases on docket, dispositions, supplemental information and additional court activity.

(C) Report of a request for a hate crime finding. This section of the monthly report requests information pursuant to Article 2.211 of the Code of Criminal Procedure.

(D) Other Case Activity Reporting. The clerk shall also report the number of reports provided to the court under Art. 16.22(a)(1)(B) of the Code of Criminal Procedure.

(2) Civil Cases.

(A) Civil case type categories. The monthly report contains the following categories of civil cases: injury or damage--motor vehicle, other injury or damage, real property, contract--consumer/commercial/debt, contract--landlord/tenant, other contract, civil cases relating to criminal matters, and all other civil cases.

(B) Civil case activity categories. The monthly report contains sections for reporting cases on docket, dispositions and additional court activity.

(3) Juvenile Cases.

(A) Juvenile case type categories. The monthly report contains a category for C.I.N.S. cases and the following categories of delinquent conduct cases: capital murder, murder, other homicides, aggravated assault or attempted murder, assault, indecency with a child or sexual assault, aggravated robbery or robbery, burglary, theft, automobile theft, felony drug offenses, misdemeanor drug offenses, D.W.I., contempt of court, and all other offenses.

(B) Juvenile case activity categories. The monthly report contains sections for reporting cases on docket, adjudications, dispositions and additional court activity.

(4) Probate and Guardianship Cases.

(A) Probate and guardianship case type categories. The monthly report contains the following categories for reporting probate and guardianship case types: decedents' estates--independent administration, decedents' estates--dependent administration, and all other decedents' estate proceedings, guardianships--minor, guardianships--adult, and other cases.

(B) Probate and guardianship activity categories. The monthly report contains activity report categories for cases on docket and additional information.

(5) Mental Health Cases.

(A) Mental health case type categories. The monthly report contains the following categories for reporting mental health cases: temporary mental health services, extended mental health services, modification--inpatient to outpatient, modification--outpatient to inpatient, and orders to authorize psychoactive medications.

(B) Mental health activity categories. The monthly report contains the activity report categories for intake, hearings, and other information.

(C) Mental health commitments. Pursuant to Section 574.014 of the Health and Safety Code, the clerk shall report the number of applications for commitment orders for involuntary mental health services filed with the court and the disposition of those cases, including the number of commitment orders for inpatient and outpatient mental health services.

**History**
- *Source Note: The provisions of this §171.6 adopted to be effective June 18, 2008, 33 TexReg 4663; amended to be effective September 1, 2016, 41 TexReg 5037; amended to be effective February 6, 2020, 45 TexReg 889.*

##### **1 Tex. Admin. Code § 171.7** Justice Court Reports {#sec-171.7 omnilex-key=us-tx-regs-official--title-1--171.7}

(a) Method. Each justice of the peace shall submit a justice court activity report of the criminal and civil cases in the judge's court. Unless OCA grants a waiver for good cause, the justice of the peace shall submit the reports by electronic means approved by OCA. The maximum duration of a waiver is one year, but OCA may approve successive waivers.

(b) Reporting Categories.

(1) Criminal case type categories. The monthly report contains the following categories of criminal case types: traffic misdemeanors--subdivided into non-parking, parking, and county ordinance offenses; and non-traffic misdemeanors--subdivided into Penal Code violations, other state law violations, and county ordinance violations.

(2) Civil case type categories. The monthly report contains the following categories of civil case types: debt claim, landlord/tenant, and small claims suits.

(3) Juvenile/minor activity. The monthly report contains a section for reporting court activity related to juveniles and minors. Pursuant to Section 71.0352 of the Government Code, the report must include:

(A) the number of cases filed for:

(i) truant conduct under Sec. 65.003(a), Family Code; and

(ii) the offense of parent contributing to nonattendance under Sec. 25.093, Education Code; and

(B) in cases in which a child fails to obey an order of the court under circumstances that would constitute contempt of court, the number of incidents in which a child is:

(i) referred to juvenile court for delinquent conduct as provided under Art. 45.050(c)(1), Code of Criminal Procedure, or Sec. 65.251, Family Code; or

(ii) held in contempt, fined, or denied driving privileges as provided by Art. 45.050(c)(2), Code of Criminal Procedure, or Sec. 65.251, Family Code.

(4) Additional activity. The monthly report contains a section for reporting additional court activity such as magistrate activities and information on fines, court costs and fees collected or otherwise satisfied.

**History**
- *Source Note: The provisions of this §171.7 adopted to be effective January 7, 2010, 35 TexReg 62; amended to be effective September 1, 2013, 38 TexReg 4183; amended to be effective September 1, 2016, 41 TexReg 5037.*

##### **1 Tex. Admin. Code § 171.8** Municipal Court Reports {#sec-171.8 omnilex-key=us-tx-regs-official--title-1--171.8}

(a) Method. Each municipal court shall submit a municipal court activity report of the criminal and civil or administrative cases in the court. Unless OCA grants a waiver for good cause, the court shall submit the reports by electronic means approved by OCA. The maximum duration of a waiver is one year, but OCA may approve successive waivers.

(b) Reporting Categories.

(1) Criminal case type categories. The monthly report contains the following categories of criminal case types: traffic misdemeanors--subdivided into non-parking, parking, and city ordinance offenses; and non-traffic misdemeanors--subdivided into Penal Code violations, other state law violations, and city ordinance violations.

(2) Civil/administrative case type category. The monthly report contains a civil/administrative case type category for civil or administrative cases.

(3) Juvenile/minor activity. The monthly report contains a section for reporting court activity related to juveniles and minors. Pursuant to Section 71.0352 of the Government Code, the report must include:

(A) the number of cases filed for:

(i) truant conduct under Sec. 65.003(a), Family Code; and

(ii) the offense of parent contributing to nonattendance under Sec. 25.093, Education Code; and

(B) in cases in which a child fails to obey an order of the court under circumstances that would constitute contempt of court, the number of incidents in which a child is:

(i) referred to juvenile court for delinquent conduct as provided under Art. 45.050(c)(1), Code of Criminal Procedure, or Sec. 65.251, Family Code; or

(ii) held in contempt, fined, or denied driving privileges as provided by Art. 45.050(c)(2), Code of Criminal Procedure, or Sec. 65.251, Family Code.

(4) Additional activity. The monthly report contains a section for reporting additional court activity such as magistrate activities and information on fines, court costs and fees collected or otherwise satisfied.

**History**
- *Source Note: The provisions of this §171.8 adopted to be effective January 7, 2010, 35 TexReg 62; amended to be effective September 1, 2016, 41 TexReg 5037.*

##### **1 Tex. Admin. Code § 171.9** Other Reports Required from the Courts {#sec-171.9 omnilex-key=us-tx-regs-official--title-1--171.9}

(a) Judicial Appointments and Fees. The clerk of each court shall submit a monthly report to OCA in the format prescribed by OCA. The report must:

(1) pursuant to Section 36.004 of the Government Code, list every appointment made for an attorney ad litem, guardian ad litem, guardian, mediator, or competency evaluator and the compensation paid, if any. Appointments made by the court for positions exempted from reporting under Sec. 36.003, Tex. Gov't Code, are not required to be reported.

(2) The report shall include the case number and style, and the name of the judge and date of order approving compensation. The report is due no later than 15 days following the end of the month reported. If no appointments were made or fees were approved by the courts in the preceding month, the clerk shall file a report indicating that no appointments or payments were made in that month.

(b) Jury Charges and Sentences in Capital Cases. Pursuant to Section 72.087 of the Government Code, the judge or clerk of a court in which a capital case is heard must submit to OCA a written record of the case that includes the content of the trial court's charge to the jury and the sentence issued in the case. The information must be submitted no later than 30 days after the date of judgment of conviction or acquittal.

(c) Vexatious Litigants. Pursuant to Section 11.104 of the Civil Practice and Remedies Code, the clerk of each court shall submit to OCA within 30 days a copy of any order declaring a person a vexatious litigant and prohibiting the person from filing new litigation without the consent of the local administrative judge.

(d) Judicial Bypass. Pursuant to Section 33.003(l-1) of the Family Code, the district clerk or county clerk shall submit a report to OCA on a form prescribed by OCA the information required under Sec. 33.003(1-l) regarding a case in which a minor files an application for a court order authorizing the minor to consent to the performance of an abortion without notification and consent of a parent, managing conservator, or guardian.

(e) Court Security Incident. Pursuant to Article 102.017 of the Code of Criminal Procedure, the sheriff, constable or other law enforcement agency that provides security for a court is required to submit a report to OCA regarding any incident involving court security that occurs in or around a building housing a court for which the sheriff, constable, agency or entity provides security. The report is due no later than three business days after the date the incident occurred.

(f) Private Professional Guardians. Pursuant to Section 1104.306 of the Estates Code, the clerk of each county shall annually submit to the Judicial Branch Certification Commission the name and business address of each private professional guardian who has satisfied the registration requirements of Sec. 1104.303, Tex. Estates Code. The report is due no later than January 31 of each year.

(g) Writ of Attachment. Pursuant to Art. 2.212 of the Code of Criminal Procedure, not later than the 30th day after the court issues a writ of attachment, the clerk of a district, statutory county or county court shall report to OCA on a form prescribed by OCA the following regarding the issued writ of attachment:

(1) the date the attachment was issued;

(2) whether the attachment was issued in connection with a grand jury investigation, criminal trial, or other criminal proceeding;

(3) the names of the persons requesting and the judge issuing the attachment; and

(4) the statutory authority under which the attachment was issued.

(h) Regional Presiding Judges Report. Pursuant to Government Code Sec. 71.038, the presiding judges of the administrative judicial regions shall submit on a form approved by the Council information requested by the Council regarding the business transacted by the judges.

(i) Additional Reporting for Counties with a Population of 1 Million or More. Pursuant to Sec. 71.035 of the Government Code, for the reporting period beginning March 1, 2024, in addition to the other monthly reporting required under this chapter, the district and county clerks in counties with a population of 1 million or more as determined by the decennial census shall report to the OCA, in the form and manner prescribed by OCA, for each of the district and county courts the clerks support, the following:

(1) the number of cases assigned;

(2) the case clearance rate;

(3) the number of cases disposed;

(4) the number of jury panels empaneled;

(5) the number of orders of continuance for an attorney before the court or by the court;

(6) the number of pleas accepted;

(7) the number of cases tried by the judge of the court or before a jury; and

(8) the number of cases tried before a visiting or associate judge of the court.

**History**
- *Source Note: The provisions of this §171.9 adopted to be effective September 1, 2016, 41 TexReg 5037; amended to be effective February 6, 2020, 45 TexReg 889; amended to be effective February 29, 2024, 49 TexReg 1041.*

##### **1 Tex. Admin. Code § 171.10** Other Reports Required by Non-Court Personnel {#sec-171.10 omnilex-key=us-tx-regs-official--title-1--171.10}

Municipal Officers. Pursuant to Section 29.013(a) of the Government Code, the secretary of a municipality with a municipal court, including a municipal court of record, or the person responsible for maintaining the records of the municipality's governing body, shall submit the name of each person who is elected or appointed mayor, municipal court judge, or clerk of a municipal court and each person who vacates these offices. This information must be reported no later than 30 days after the person's election or appointment to the office or vacancy from office.

**History**
- *Source Note: The provisions of this §171.10 adopted to be effective September 1, 2016, 41 TexReg 5037; amended to be effective February 6, 2020, 45 TexReg 889.*

##### **1 Tex. Admin. Code § 171.11** Annual Performance Measure Reporting {#sec-171.11 omnilex-key=us-tx-regs-official--title-1--171.11}

(a) Pursuant to Sec. 72.083(b) of the Government Code, the district clerk and county clerk of each county who maintains the records for the district courts and county courts shall annually submit to OCA in the manner required by OCA the following activity for each district court, statutory county court, statutory probate court, and constitutional county court in the county:

(1) the court's clearance rate defined as the number of cases disposed of by a court divided by the number of cases added to the docket of the court;

(2) the average time a case is before the court from filing to disposition; and

(3) the age of the court's active pending caseload.

(b) The reporting time period for the first annual report due to OCA under this section must, at a minimum, include the information collected from March 1, 2024 through August 31, 2024.

**History**
- *Source Note: The provisions of this §171.11 adopted to be effective February 29, 2024, 49 TexReg 1041.*

### **Chapter 173** INDIGENT DEFENSE GRANTS

#### **Subchapter A** GENERAL FUNDING PROGRAM PROVISIONS

##### **1 Tex. Admin. Code § 173.101** Applicability {#sec-173.101 omnilex-key=us-tx-regs-official--title-1--173.101}

(a) The Texas Legislature authorized the Texas Indigent Defense Commission (Commission) to direct the Comptroller to distribute Fair Defense Account funds and other appropriated funds, including grants, to counties and other eligible entities enumerated in section 79.037, Government Code, to provide indigent defense services. It further authorized the Commission to monitor grants and enforce compliance with grant terms. Subchapters A - D of this chapter apply to all indigent defense grants and other funds awarded to counties or other eligible entities by the Commission. Subchapter A of this chapter covers the general provisions for funding. Subchapter B of this chapter addresses funding types, eligibility, and general provisions of grant funding. Subchapter C of this chapter sets out the rules related to administering grants. Subchapter D of this chapter specifies rules regarding fiscal and program monitoring and audits. A commission-funded grantee must comply with the provisions of Subchapters A - D of this chapter in effect on the date the grant is awarded by the Commission, unless a subsequent effective date is specified by the Commission in an original grant award or a grant adjustment. Grantees must comply with all applicable state and federal statutes, rules, regulations, and guidelines. In instances where both federal and state requirements apply to a grantee, the more restrictive requirement applies.

(b) Only counties in Texas and other eligible entities enumerated in section 79.037, Government Code, are eligible to receive grants or other funds from the Commission.

(c) The Commission may distribute grants in accordance with its policies and based on official submissions and reports provided by grantees. These funds must be used to support or improve indigent defense systems in Texas counties and are subject to all applicable conditions contained in this chapter.

**History**
- *Source Note: The provisions of this §173.101 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.102** Definitions {#sec-173.102 omnilex-key=us-tx-regs-official--title-1--173.102}

The following words and terms, when used in this chapter, will have the following meanings, unless otherwise indicated:

(1) "Applicant" is a county or other eligible entity that has submitted a grant application, grant renewal documentation, or other request for funding from the Commission.

(2) "Application" is any formal request for funding submitted to the Commission.

(3) "Program income" means gross income earned by the grantee that is directly generated by a supported activity of the grant or earned as a result of the grant award during the period of performance. Program income includes, but is not limited to, fees for services performed.

(4) "Crime" means

(A) a misdemeanor punishable by confinement; or

(B) a felony.

(5) "Defendant" means a person accused of a crime or a juvenile offense.

(6) "Improvement Grant" means discretionary funding awarded on a competitive basis to implement or expand new programs or processes in Texas counties designed to improve the quality of indigent defense services, promote and assist counties' compliance with the requirements of state law relating to indigent defense, or build the knowledge base regarding indigent defense through research, program evaluation, or pilot projects.

(7) "Extraordinary Disbursement Grant" means discretionary funding to reimburse a county for actual extraordinary expenses for providing indigent defense services in a case or series of cases causing a financial hardship for the county.

(8) "Fair Defense Account" is an account in the general revenue fund that may be appropriated to the Commission for the purpose of implementing the Texas Fair Defense Act.

(9) "Fiscal Monitor" is an employee of the Commission who monitors counties' fiscal processes and records to ensure that financial data reported to the Commission is accurate and that grant funds are spent appropriately in accordance with the Texas Fair Defense Act, the Texas Grant Management Standards promulgated by the Comptroller, and other applicable rules and standards.

(10) "Formula Grant" means funding awarded to counties through a formula approved by the Commission.

(11) "Grant" is a funding award made by the Commission to a Texas county or other eligible entity.

(12) "Grantee" means a county or other eligible entity that is the recipient of a grant or other funds from the Commission.

(13) "Juvenile offense" means conduct committed by a person while younger than 17 years of age that constitutes:

(A) a misdemeanor punishable by confinement; or

(B) a felony.

(14) "Special condition" means a prerequisite placed on a grant because of a need for information, clarification, or submission of an outstanding requirement of the grant that may result in a hold being placed on the Commission-funded portion of a grant project.

(15) "Sustainability Grant" means a type of Improvement Grant that is discretionary funding awarded to assist counties in maintaining regional public defender programs.

(16) "Technical Support Grant" means a type of Improvement Grant awarded for special projects to improve the quality of indigent defense services through research, program evaluation, or pilot projects that raise the knowledge base about indigent defense, and may establish processes that can be generalized to similar situations in other counties.

(17) "Texas Indigent Defense Commission" (Commission) is the governmental entity established and governed by §79.002 of the Texas Government Code.

(18) "TxGMS" means the Texas Grant Management Standards promulgated by the Office of the Comptroller.

**History**
- *Source Note: The provisions of this §173.102 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.103** Process for Submitting Applications for Grants and Other Funds {#sec-173.103 omnilex-key=us-tx-regs-official--title-1--173.103}

(a) The Commission shall publish notice of availability of grants and related policies on its website.

(b) Grant applications. The Commission will provide notice to each county judge of the availability of indigent defense grants. Applicants applying pursuant to a Request for Applications (RFA) must submit their applications according to the requirements provided in the RFA. The RFA will provide the following:

(1) information regarding deadlines for the submission of applications;

(2) the maximum and minimum amounts of funding available for a grant, if applicable;

(3) the starting and ending dates for grants;

(4) information regarding how applicants may access applications;

(5) information regarding where and how applicants must submit applications;

(6) submission and program requirements; and

(7) the priorities for funding as established by the Commission.

**History**
- *Source Note: The provisions of this §173.103 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.104** Grant Resolutions {#sec-173.104 omnilex-key=us-tx-regs-official--title-1--173.104}

(a) Each grant application from a county must include a resolution from the county commissioners' court that contains the following:

(1) authorization for the submission of the application to the Commission;

(2) provision giving the authorized official the power to apply for, accept, decline, modify, or cancel the grant; and

(3) written assurance that, in the event of loss or misuse of grant funds, the governing body will return all funds as required by the Commission.

(b) Each grant application from an eligible entity that is not a local government or state agency must submit a resolution adopted by the entity's governing board that contains the following:

(1) authorization for the submission of the application to the Commission;

(2) provision giving the authorized official the power to apply for, accept, decline, modify, or cancel the grant;

(3) designation of the financial officer for the grant, who may not be the same person as the authorized official; and

(4) written assurance that, in the event of loss or misuse of grant funds, the governing body will return all funds as required by the Commission.

**History**
- *Source Note: The provisions of this §173.104 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.105** Selection Process {#sec-173.105 omnilex-key=us-tx-regs-official--title-1--173.105}

(a) The Commission or its designees will review all applications and shall award grants from the Fair Defense Account or other funds appropriated by the Legislature.

(b) Upon reviewing an application, staff may require an applicant to submit, within a specified time, additional information to complete the review the application or to clarify or justify the application. Neither a request for additional information nor the issuance of a preliminary review report means that the Commission will fund an application.

(c) The Commission will inform applicants in writing or by electronic means of decisions through either a Statement of Grant Award or a notification of denial.

(d) If the Commission determines that an applicant has failed to submit the necessary information or has failed to comply with any Commission rule or other relevant statute, rule, or requirement, the Commission may hold a grantee's funds until the grantee has satisfied the requirements of a special condition imposed by the Commission. The Commission may reject the application and deny the grant for failure to satisfy the requirements.

**History**
- *Source Note: The provisions of this §173.105 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.106** Grant Funding Decisions {#sec-173.106 omnilex-key=us-tx-regs-official--title-1--173.106}

(a) The Commission or its designees will make decisions on applications for funding through the use of objective tools and comparative analysis. The Commission or its designees will first determine whether the applicant is eligible for funds in accordance with §173.101 of this chapter (relating to Applicability) and §173.201 of this chapter (relating to Eligibility).

(b) All funding decisions rest completely within the discretionary authority of the Commission or its designees. The receipt of an application for funding does not obligate the Commission to award funding, and the Commission may make grant awards that partially fund budget items or programmatic elements in grant applications.

(c) Making a grant award based on an application does not obligate the Commission to give any subsequent applications priority consideration or to obligate the Commission to make any additional, supplemental, continuing, or other award.

(d) Commission decisions regarding funding are subject to the availability of funds.

**History**
- *Source Note: The provisions of this §173.106 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.107** Improvement Grant Acceptance {#sec-173.107 omnilex-key=us-tx-regs-official--title-1--173.107}

The Statement of Grant Award constitutes obligation of funds for use by the grantee in execution of the program or project covered by the award. Each applicant must accept or reject an improvement grant award within 30 days of the date upon which the Commission issues a Statement of Grant Award. The executive director of the Commission or his designee may alter this deadline upon request from the applicant. The authorized official designated under §173.301 of this chapter (relating to Grant Officials) must formally accept the grant in writing before the grantee may receive any improvement grant funds. Funds shall not be disbursed until acceptance of the grant by the grantee's authorized official.

**History**
- *Source Note: The provisions of this §173.107 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.108** Adoptions by Reference {#sec-173.108 omnilex-key=us-tx-regs-official--title-1--173.108}

(a) Grantees must comply with all applicable state statutes, rules, regulations, and guidelines.

(b) The Commission adopts by reference the rules, documents, and forms listed below that relate to the administration of grants:

(1) Texas Grant Management Standards (TxGMS) adopted pursuant to the Uniform Grant and Contract Management Act, Chapter 783, Texas Government Code.

(2) The Commission forms, including the statement of grant award, grant adjustment notice, grantee's progress report, financial expenditure report, and property inventory report.

**History**
- *Source Note: The provisions of this §173.108 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.109** Use of the Internet {#sec-173.109 omnilex-key=us-tx-regs-official--title-1--173.109}

The Commission may require submission of applications for grants, progress reports, financial reports, and other information via the internet. Completion and submission of a progress report or financial report via the internet meets the relevant requirements contained within this chapter for submitting reports in writing.

**History**
- *Source Note: The provisions of this §173.109 adopted to be effective March 23, 2023, 48 TexReg 1549.*

#### **Subchapter B** ELIGIBILITY AND FUNDING REQUIREMENTS

##### **1 Tex. Admin. Code § 173.201** Eligibility {#sec-173.201 omnilex-key=us-tx-regs-official--title-1--173.201}

(a) The Commission may award grants to counties and other eligible entities enumerated in section 79.037, Government Code, that have complied with standards developed by the Commission and that have demonstrated commitment to compliance with the requirements of state law relating to indigent defense. Grants to non-county eligible entities will only be awarded for the purpose of supporting or improving indigent defense services in Texas counties.

(b) A county may not reduce the total amount of funds expended for indigent defense services in the county because of funds provided by the Commission.

(c) Entities eligible to apply for and receive grant funding from the Commission enumerated in section 79.037, Government Code that are not state agencies or local governments must provide the following items to the Commission in order to have a grant application considered for funding:

(1) The entity's articles of incorporation and bylaws;

(2) The list of officers and members of the entity's board of directors;

(3) Documentation of the organization's recognized nonprofit status, as applicable, including determination letters from the United States Internal Revenue Service; and

(4) Most recent single audit report.

(d) Entities eligible to apply for and receive grant funding from the Commission enumerated in section 79.037, Government Code that are not local governments must agree to follow the Uniform Assurances and Standard Financial Management Conditions and grant rules as detailed in TxGMS, unless exceptions are approved in writing by the Commission.

**History**
- *Source Note: The provisions of this §173.201 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.202** Use of Funds {#sec-173.202 omnilex-key=us-tx-regs-official--title-1--173.202}

Grants provided under this chapter may be used by counties for:

(1) Attorney fees for indigent defendants accused of crimes or juvenile offenses;

(2) Expenses for licensed investigators, experts, forensic specialists, or mental health experts working for the defense under derivative attorney-client privilege to assist in the criminal defense of indigent defendants;

(3) Other direct litigation costs related to the criminal defense of indigent defendants; and

(4) Other approved expenses allowed by the Request for Applications necessary for the operation of a funded program.

**History**
- *Source Note: The provisions of this §173.202 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.203** Expenditure Categories {#sec-173.203 omnilex-key=us-tx-regs-official--title-1--173.203}

(a) Allowable expenditure categories and any necessary definitions will be provided to the applicant as part of the application process.

(b) Expenditures may be allocated to the grant in accordance with the Texas Grant Management standards.

**History**
- *Source Note: The provisions of this §173.203 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.204** Program Income {#sec-173.204 omnilex-key=us-tx-regs-official--title-1--173.204}

(a) Rules governing the use of program income are included in the provisions of the TxGMS-adopted by reference in §173.108 of this chapter (relating to Adoptions by Reference).

(b) Grantees must use program income to supplement program costs or reduce program costs. Program income may only be used for allowable program costs. Grantees may not carry forward program income from one grant year to the next.

(c) Improvement grant reimbursements will be calculated based on net program expenditures after any program income has been applied.

**History**
- *Source Note: The provisions of this §173.204 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.205** Equipment {#sec-173.205 omnilex-key=us-tx-regs-official--title-1--173.205}

(a) Decisions by the Commission or its designees regarding requests to purchase equipment using Commission funds will be made based on the availability of funds, whether the grantee has demonstrated that the requested equipment is necessary and essential to the successful operation of the funded program, and whether the equipment is reasonable in cost.

(b) For grantees that receive a multi-year grant, the Commission will only fund equipment and other one-time start-up costs during the first year unless permission is granted in writing. Otherwise, equipment and other one-time costs will not factor in to the overall project costs after the first year of the grant.

(c) The Commission requires each grantee to maintain an inventory report of all equipment purchased with Commission funds. This report must comport with the final financial expenditure report. At least once each year during the award period, each grantee must complete a physical inventory of all property purchased with Commission funds and the grantee must reconcile the results with the purchased property records. For single-year awards, the inventory and reconciliation must be made at the end of the award period and submitted with the final report.

(d) Equipment purchased with Commission funds must be labeled and handled in accordance with the grantee's property management policies and procedures.

(e) Unless otherwise provided, equipment purchased is the property of the grantee after the end of the award period or termination of the operation of the funded program, whichever occurs last.

**History**
- *Source Note: The provisions of this §173.205 adopted to be effective March 23, 2023, 48 TexReg 1549.*

#### **Subchapter C** ADMINISTERING GRANTS

##### **1 Tex. Admin. Code § 173.301** Grant Officials {#sec-173.301 omnilex-key=us-tx-regs-official--title-1--173.301}

(a) Each grant must have the following designated to serve as grant officials:

(1) Financial officer. For grants to counties, this person must be the county auditor or county treasurer if the county does not have a county auditor. The Financial Officer should have knowledge of and access to the entity's financial records and processes. For grants to other eligible entities, the financial officer must be designated by the applicant in the grant resolution provided pursuant to §173.104 of this chapter (relating to Grant Resolutions).

(2) Authorized official. This person must be authorized by the county commissioners court or the board of directors of the eligible entity to apply for, accept, decline, modify, or cancel the grant for the applicant. A county judge or a designee authorized by the governing body in its resolution may serve as the authorized official. For grants to non-county eligible entities, the authorized official will be designated by the applicant and authorized by the applicant's governing body to bind the organization to third-party contracts.

(b) The Commission may require an applicant to designate a program director. This person must be the officer or employee responsible for program operation and who will serve as the point-of-contact regarding the program's day-to-day operations.

(c) The program director and the authorized official may be the same person. The financial officer may not serve as the program director or the authorized official.

(d) A grantee shall notify the Commission within 20 calendar days of any change in the:

(1) Designated project director, financial officer, or authorized official; or

(2) Mailing address, physical address, email address, fax number, or telephone number of each grant official.

**History**
- *Source Note: The provisions of this §173.301 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.302** Obligating Funds {#sec-173.302 omnilex-key=us-tx-regs-official--title-1--173.302}

The grantee may not obligate grant funds before the beginning or after the end of the grant period specified in an original grant award or a subsequent grant adjustment.

**History**
- *Source Note: The provisions of this §173.302 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.303** Retention of Records {#sec-173.303 omnilex-key=us-tx-regs-official--title-1--173.303}

(a) Grantees must maintain all financial records, supporting documents, statistical records, and all other records pertinent to the award for at least three years following the closure of the most recent audit report or submission of the final expenditure report. Records retention is required for the purposes of state examination and audit. Grantees may retain records in an electronic format. All records are subject to audit or monitoring during the entire retention period.

(b) Grantees must retain records for equipment, non-expendable personal property, and real property for a period of three years from the date of the item's disposition, replacement, or transfer.

(c) If any litigation, claim, or audit is started before the expiration of the three-year records retention period, the grantee must retain the records under review until the resolution of all litigation, claims, or audit findings.

**History**
- *Source Note: The provisions of this §173.303 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.304** Expenditure Reports {#sec-173.304 omnilex-key=us-tx-regs-official--title-1--173.304}

(a) Recipients of grants must submit program expenditure reports to the Commission in addition to the annual expenditure report required for all counties under Texas Government Code §79.036(e).

(b) The Commission will provide the appropriate forms and instructions for expenditure reports and deadlines for their submission. The financial officer shall be responsible for submitting the expenditure reports.

(c) Grantees must ensure that actual expenditures are comprehensively documented. Documentation may include, but is not limited to, ledgers, purchase orders, travel records, time sheets, earnings statements, bank statements, credit card statements, other payroll documentation, invoices, receipts, contracts, mileage records or maps, and other documentation that verifies the expenditure amount, allowability, and appropriateness to the funded program. Expenditure documentation must be provided to the Commission upon request.

**History**
- *Source Note: The provisions of this §173.304 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.305** Provision of Funds {#sec-173.305 omnilex-key=us-tx-regs-official--title-1--173.305}

(a) After a grant has been awarded, and if there are no deficiencies or special conditions that result in withholding of grant funds according to §173.307 or §173.401, the Commission may disburse funds to the grantee. Funds will be disbursed to the grantee quarterly unless specific permission for an alternative disbursement schedule is granted in writing from the executive director.

(b) Disbursement of funds is always subject to the availability of funds.

(c) Improvement grant funds will be paid on a reimbursement basis only after the expenditure report has been submitted. Funds must be expended, not merely obligated, before being included in the grant program expenditure report. Requests for exceptions to this section must be in writing and signed by the authorized official and may be approved by the executive director for good cause.

**History**
- *Source Note: The provisions of this §173.305 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.306** Improvement Grant Adjustments {#sec-173.306 omnilex-key=us-tx-regs-official--title-1--173.306}

(a) The authorized official must sign all requests for grant adjustments.

(b) Budget Adjustments. Grant adjustments consisting of reallocations of funds among or within budget categories in excess of $10,000 or ten percent of the original grant award, whichever is less, are considered budget adjustments, and are allowable only with prior approval of the executive director of the Commission. Grantees must notify the Commission in writing of reallocations of funds among or within budget categories below this threshold. If a reallocation of funds among or within budget categories results in the cumulative amount of budget changes within the same fiscal year reaching $10,000 or 10% of the original grant award, whichever is less, the adjustment is allowable only with the prior approval of the executive director of the Commission.

(c) Non-Budget Grant Adjustments. The following rules apply to other grant adjustments:

(1) Requests to revise the scope, target, or staffing of the project, or substantively alter project activities require advance written approval from the Commission.

(2) The grantee shall notify the Commission in writing of any change in the designated program director, financial officer, or authorized official within ten days following the change.

**History**
- *Source Note: The provisions of this §173.306 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.307** Remedies for Noncompliance {#sec-173.307 omnilex-key=us-tx-regs-official--title-1--173.307}

(a) If a grantee fails to comply with any term or condition of a grant, , rules, or any applicable statutes, the Commission may take one or more of the following actions:

(1) disallow all or part of the cost of the activity or action that is not in compliance and seek a return of the funds;

(2) impose administrative sanctions, other than fines, on the grantee;

(3) temporarily withhold grant payments pending correction of the deficiency by the grantee;

(4) withhold future grant payments from the program or grantee; or

(5) terminate the grant in whole or in part.

(b) The Commission shall provide reasonable notice prior to imposing a remedy under subsection (a) of this section. If a grantee disputes the finding, the authorized official may request that one or more representatives of the grantee appear before the Commission. If the Commission receives such a request, it will consider the grantee's presentation at the Commission's next scheduled meeting. The administrative determination rendered by the Commission is final.

**History**
- *Source Note: The provisions of this §173.307 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.308** Term of Grant {#sec-173.308 omnilex-key=us-tx-regs-official--title-1--173.308}

(a) The term of a grant shall be specified in the Statement of Grant Award or other funding document.

(b) If a grantee wishes to terminate a grant in whole or in part before the end of the award period, the grantee must notify the Commission in writing. The Commission or its designee will arrange with the grantee an early termination of the award, which may include transfer or disposal of property and return of unused funds.

(c) The Commission may terminate any grant, in whole or in part, when:

(1) the grantee and the executive director of the Commission agree to do so;

(2) the grantee fails to comply with any term, condition, statute, rule, regulation, or guideline;

(3) indigent defense funds are no longer available;

(4) operational conditions exist that make it unlikely that grant or program objectives will be accomplished; or

(5) The grantee has acted in bad faith.

(d) A grantee may submit a written request for an extension of the funding period. The Commission must receive requests for funding extensions at least 30 days prior to the end of the funding period. The executive director of the Commission may approve extensions of the funding period for up to six months. Requests to extend the funding period beyond six months of the original term must be approved by the Commission.

**History**
- *Source Note: The provisions of this §173.308 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.309** Violations of Laws {#sec-173.309 omnilex-key=us-tx-regs-official--title-1--173.309}

If the grantee has a reasonable belief that a criminal violation may have occurred in connection with Fair Defense Account funds, including the misappropriation of funds, fraud, theft, embezzlement, forgery, or any other serious irregularities indicating noncompliance with the requirements of a grant, the grantee must immediately notify the Commission in writing of the suspected violation or irregularity. The grantee may also notify the local prosecutor's office of any possible criminal violations. Grantees whose programs or personnel become involved in any litigation arising from the grant, whether civil or criminal, must immediately notify the Commission and forward a copy of any demand notices, lawsuits, or indictments to the Commission.

**History**
- *Source Note: The provisions of this §173.309 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.310** Progress Reports for Improvement Grants {#sec-173.310 omnilex-key=us-tx-regs-official--title-1--173.310}

Each grantee must submit reports regarding performance and progress towards goals and objectives in accordance with the instructions provided by the Commission or its designee. To remain eligible for funding, the grantee must be able to show the scope of services provided and the impact and quality of those services.

**History**
- *Source Note: The provisions of this §173.310 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.311** Contract Monitoring {#sec-173.311 omnilex-key=us-tx-regs-official--title-1--173.311}

Grantees that use grant funds to contract for services must develop and include in the contract provisions to monitor each contract that is for more than $10,000 per year. These provisions must include specific actions to be taken if the grantee discovers that the contractor's performance does not meet the operational or performance terms of the contract. In the case of contracts for public defender offices and managed assigned counsel programs, these provisions must include a review of utilization and activity, reporting of financial data to evaluate the contractor's performance within the budget required by statute for such programs. Commission staff must review each contract at least once every two years and notify the grantee if it is not sufficient.

**History**
- *Source Note: The provisions of this §173.311 adopted to be effective March 23, 2023, 48 TexReg 1549.*

#### **Subchapter D** MONITORING AND AUDITS

##### **1 Tex. Admin. Code § 173.401** Fiscal Monitoring {#sec-173.401 omnilex-key=us-tx-regs-official--title-1--173.401}

(a) The Commission or its designees will monitor the activities of grantees as necessary to ensure that Commission grant funds are used for authorized purposes in compliance with laws, regulations, and the provisions of grant agreements.

(b) The monitoring program may consist of formal audits, monitoring reviews, and technical assistance. The Commission or its designees may implement monitoring through on-site review at the grantee location or through a desk review based on grantee reports. In addition, the Commission or its designees may require grantees to submit relevant information to the Commission to support any monitoring review. The Commission may contract with an outside provider to conduct the monitoring.

(c) Grantees must make available to the Commission or its designees all requested records relevant to a monitoring review. The Commission or its designees may make unannounced monitoring visits at any time. Failure to provide adequate documentation upon request may result in disallowed costs or other remedies for noncompliance as detailed under §173.307 of this chapter (relating to Remedies for Noncompliance).

(d) After a monitoring review, the fiscal monitor shall issue a report to the authorized official and financial officer as soon as is practicable, but no later than 90 days following the final submission of requested county financial data, unless a documented exception is provided by the executive director. The report shall contain each finding of noncompliance.

(e) Within 60 days of the date the report is issued, the authorized official or financial officer shall respond in writing to each finding of non-compliance and shall describe the proposed corrective action to be taken by the grantee. The grantee may request the executive director to grant an extension of up to 60 days.

(f) The corrective action plan will include the:

(1) titles of the persons responsible for implementing the corrective action plan;

(2) corrective action to be taken; and

(3) anticipated completion date.

(g) If the grantee believes corrective action is not required for a noted deficiency, the response will include an explanation, specific reasons, and supporting documentation.

(h) The Commission or its designees will approve the corrective action plan and may require modifications prior to approval. The grantee's replies and the approved corrective action plan, if any, will become part of the final report.

(i) The grantee will correct deficiencies identified in the final report within the time frame specified in the corrective action plan.

(j) The fiscal monitor shall conduct an additional on-site visit or remote follow-up review when the fiscal monitor determines that the report includes significant noncompliance findings. The follow-up visit or desk review shall occur within 12 months following receipt of a county's response to the report. The fiscal monitor shall review a grantee's implementation of corrective actions and shall report to the grantee and Commission any remaining issues not corrected. Within 30 days of the date the follow-up report is issued by the fiscal monitor, the authorized director or financial officer shall respond in writing to each finding of noncompliance, and shall describe the proposed corrective action to be taken by the grantee. The grantee may request the director to grant an extension of up to 30 days.

(k) If a grantee fails to respond to a monitoring report or follow-up report within the required time, then a certified letter will be sent to the authorized official, financial officer, county judge, local administrative district court judge, local administrative statutory county court judge, and chair of the juvenile board notifying them that formula grant payments will be automatically withheld if no response to the report is received by the Commission within 10 days of receipt of the letter. The Commission may also authorize withholding of improvement grant funds. If funds are withheld under this section, then the funds will not be reinstated until the Commission or the Grants and Reporting Committee approves the release of the funds.

(l) If a grantee fails to correct any noncompliance findings, the Commission may impose a remedy under §173.307 of this title.

**History**
- *Source Note: The provisions of this §173.401 adopted to be effective March 23, 2023, 48 TexReg 1549.*

##### **1 Tex. Admin. Code § 173.402** Audits Not Performed by the Texas Indigent Defense Commission {#sec-173.402 omnilex-key=us-tx-regs-official--title-1--173.402}

(a) Grantees must submit to the Commission copies of the results of any single audit conducted in accordance with the single audit standards in the Texas Grant Management Standards. Grantees must ensure that single audit results, including the grantee's response and corrective action plan, if applicable, are submitted to the Commission within 30 days after grantee receipt of the audit results or nine months after the end of the audit period, whichever is earlier.

(b) All other audits performed by auditors independent of the Commission must be maintained at the grantee's administrative offices pursuant to §173.303 of this chapter (relating to Retention of Records) and be made available upon request by the Commission or its representatives. Grantees must notify the Commission of any audit results that may adversely impact the Commission grant funds.

(c) Nothing in this section should be construed so as to require a special or program-specific audit of a grantee's Indigent Defense grant program.

**History**
- *Source Note: The provisions of this §173.402 adopted to be effective March 23, 2023, 48 TexReg 1549.*

### **Chapter 174** INDIGENT DEFENSE POLICIES AND STANDARDS

#### **Subchapter A** MINIMUM CONTINUING LEGAL EDUCATION REQUIREMENTS

##### **1 Tex. Admin. Code § 174.1** Appointment in Criminal Cases {#sec-174.1 omnilex-key=us-tx-regs-official--title-1--174.1}

An Attorney who meets the requirements of this rule may be appointed to represent an indigent person arrested for or charged with a crime, if the attorney is otherwise eligible under the procedures developed under Article 26.04, Code of Criminal Procedure. Crime has the meaning assigned by §173.102(3). An attorney may be appointed under this rule only if an attorney:

(1) Completes a minimum of six hours of continuing legal education pertaining to criminal law during each 12-month reporting period. The judges of criminal courts of the county shall set the 12-month reporting period applicable to the jurisdiction. Continuing legal education may include activities accredited under Section 4, Article XII, State Bar Rules, self-study, teaching at an accredited continuing legal education activity, attendance at a law school class or legal research-based writing. The judges may require attorneys to complete more than the minimum number of hours of continuing legal education in criminal law in the procedures developed under Article 26.04, Code of Criminal Procedure; or

(2) Is currently certified in criminal law by the Texas Board of Legal Specialization.

**History**
- *Source Note: The provisions of this §174.1 adopted to be effective April 27, 2003, 28 TexReg 3493; amended to be effective January 10, 2018, 43 TexReg 229.*

##### **1 Tex. Admin. Code § 174.2** Appointment in Juvenile Cases {#sec-174.2 omnilex-key=us-tx-regs-official--title-1--174.2}

An attorney who meets the requirements of this rule may be appointed to represent an indigent juvenile detained for or accused of engaging in delinquent conduct or conduct indicating a need for supervision, if the attorney is otherwise eligible under the plan developed under Section 51.101, Family Code. An attorney may be appointed under this rule only if an attorney:

(1) Completes a minimum of six hours of continuing legal education pertaining to juvenile law during each 12-month reporting period. The juvenile board shall set the 12-month reporting period applicable to the jurisdiction. Continuing legal education may include activities accredited under Section 4, Article XII, State Bar Rules, self-study, teaching at an accredited continuing legal education activity, attendance at a law school class or legal research-based writing. A juvenile board may require an attorney to complete more than the minimum number of hours of continuing legal education in juvenile law in the plan developed under Section 51.101, Family Code; or

(2) Is currently certified in juvenile law by the Texas Board of Legal Specialization.

**History**
- *Source Note: The provisions of this §174.2 adopted to be effective April 27, 2003, 28 TexReg 3493.*

##### **1 Tex. Admin. Code § 174.3** Reporting Period {#sec-174.3 omnilex-key=us-tx-regs-official--title-1--174.3}

(a) Continuing legal education activity completed within a one-year period immediately preceding an attorney's initial reporting period may be used to meet the educational requirement for the initial year.

(b) Continuing legal education activity completed during any reporting period in excess of the minimum six-hour requirement for such period may be applied to the following period's requirement. The carryover provision applies to one year only.

**History**
- *Source Note: The provisions of this §174.3 adopted to be effective April 27, 2003, 28 TexReg 3493.*

##### **1 Tex. Admin. Code § 174.4** Emergency Appointment {#sec-174.4 omnilex-key=us-tx-regs-official--title-1--174.4}

If no attorney who meets the continuing legal education or board certification requirements contained in this subchapter is available by the time an attorney must be appointed in the case, another attorney may be appointed. The person making an appointment under this section shall give priority to an attorney with experience in criminal or juvenile law, respectively.

**History**
- *Source Note: The provisions of this §174.4 adopted to be effective April 27, 2003, 28 TexReg 3493.*

#### **Subchapter D** INDIGENT DEFENSE PROCEDURE REQUIREMENTS

##### **1 Tex. Admin. Code § 174.51** Indigent Defense Plan Requirements {#sec-174.51 omnilex-key=us-tx-regs-official--title-1--174.51}

The countywide procedures adopted under Art. 26.04(a), Code of Criminal Procedure, must provide a method to allow defendants to obtain the necessary forms for requesting appointment of counsel and to submit completed forms for requesting appointment of counsel at any time after the initiation of adversary judicial proceedings.

**History**
- *Source Note: The provisions of this §174.51 adopted to be effective April 13, 2015, 40 TexReg 2087.*

### **Chapter 176** METHODS FOR THE IMPROVEMENT OF THE ADMINISTRATION OF JUSTICE

##### **1 Tex. Admin. Code § 176.1** Admonishment by Court of Certain Persons Ineligible to Possess Firearm or Ammunition {#sec-176.1 omnilex-key=us-tx-regs-official--title-1--176.1}

(a) In this section, "Firearm" has the meaning assigned that term by Penal Code §46.01(3).

(b) When a person, by entry of an order or judgment, becomes by state law ineligible to possess a firearm or ammunition, the trial court must inform that person of the person's ineligibility to possess a firearm or ammunition.

(1) If the person is appearing before the court when the person is or becomes ineligible, the court must:

(A) orally admonish the person, in a manner the person can understand, that the person is ineligible to possess a firearm or ammunition; and

(B) provide the person with a written admonishment informing that person of the person's ineligibility to possess a firearm or ammunition.

(2) If the person is not appearing before the court when the person is or becomes ineligible, the court must provide the person, by a method reasonably likely to provide notice to the person, with a written admonishment informing that person of the person's ineligibility to possess a firearm or ammunition.

(c) The admonishment must clearly inform a person that possession of a firearm or ammunition could lead to additional charges.

(d) The Office of Court Administration shall publish on its website model admonishment language and a written model admonishment form approved by the Texas Judicial Council for use by a court and for distribution by a court to a person informing that person of the person's ineligibility to possess a firearm or ammunition.

(e) The Office of Court Administration must coordinate with the Court of Criminal Appeals and the judicial training entities to ensure that judges are provided adequate training regarding the admonishments required by this rule and by law.

**History**
- *Source Note: The provisions of this §176.1 adopted to be effective September 1, 2020, 45 TexReg 3759.*

##### **1 Tex. Admin. Code § 176.2** Voluntary Certification for Remote Issuance of Marriage Licenses {#sec-176.2 omnilex-key=us-tx-regs-official--title-1--176.2}

(a) A county clerk may apply for certification from the Office of Court Administration to use remote technology to receive applications for marriage licenses from, and to issue marriage licenses to, persons who are not in the county clerk's presence.

(b) The Office of Court Administration must certify a county clerk to issue marriage licenses remotely upon determining the county clerk:

(1) has posted in a prominent location on its website:

(A) contact information for scheduling a meeting through remote technology to apply for a marriage license;

(B) a copy of the marriage license application form required by Section 2.004 of the Family Code; and

(C) a list of the acceptable forms of proof of an applicant's identity and age as specified in Section 2.005 of the Family Code; and

(2) has access to:

(A) remote technology, such as a video teleconferencing system or other service that provides simultaneous, compressed full motion video and interactive communication of image and sound between the clerk, the applicant, any adult who appears on behalf of an absent applicant in accordance with Section 2.006 of the Family Code, and any other person necessary to process the application; and

(B) a method of electronically sending and receiving documents.

(c) A person who appears before a certified county clerk through remote technology fulfills the requirement of Section 2.002(1) of the Family Code.

**History**
- *Source Note: The provisions of this §176.2 adopted to be effective January 6, 2022, 46 TexReg 9236.*

##### **1 Tex. Admin. Code § 176.3** Verification of Age and Identity of Applicant for a Marriage License {#sec-176.3 omnilex-key=us-tx-regs-official--title-1--176.3}

(a) A county clerk must verify the age and identity and, if applicable, proof of the removal of disability of minority of an applicant who appears before the clerk through remote technology. The county clerk may do so by:

(1) examining via remote video an acceptable form of proof of age and identity specified in Section 2.005 of the Family Code and, if applicable, the court order described in Section 2.003 of the Family Code;

(2) examining an electronically transmitted copy of an acceptable form of proof of age and identity listed in Section 2.005 of the Family Code and, if applicable, the court order described in Section 2.003 of the Family Code;

(3) witnessing an oath by a notary who is in the applicant's presence verifying the authenticity of the applicant's proof of age and identity and, if applicable, a court order described in Section 2.003 of the Family Code; or

(4) collecting an affidavit of a notary swearing to the age, identity, and, if applicable, legal capacity of the applicant.

(b) A county clerk who has a reasonable basis to question the authenticity of any documentation offered to establish an applicant's age, identity, or legal capacity may decline to issue the license through remote technology.

**History**
- *Source Note: The provisions of this §176.3 adopted to be effective January 6, 2022, 46 TexReg 9236.*

### **Chapter 177** JUDICIAL COMMITTEE ON INFORMATION TECHNOLOGY

##### **1 Tex. Admin. Code § 177.1** Definitions {#sec-177.1 omnilex-key=us-tx-regs-official--title-1--177.1}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Court--Any judge who hears criminal cases or child support cases, and the office of the clerk that supports any such judge.

(2) Information Exchange Package Document (IEPD)--A specification for a data exchange which defines a particular data exchange between participating domains. An IEPD is a complete definition of an Information Exchange Package; it is generally composed of schemas (for data exchange) and documentation (for understanding the business context and usage).

(3) Justice agency--The Texas Department of Criminal Justice (TDCJ), the Department of Public Safety (DPS), the Texas Youth Commission (TYC), the Texas Juvenile Probation Commission (TJPC), the Office of Attorney General Child Support Division (OAG), the Office of Court Administration (OCA), the Department of Family and Protective Services (DFPS), any sheriff or local law enforcement agency that employs a peace officer as defined in art. 2.12, Code of Criminal Procedure, any community supervision and corrections department, any public defender office, any constable, any office of a county or district attorney or criminal district attorney, any private process server, and any agency that receives delinquent child support notifications from the Office of Attorney General Child Support Division or from a court.

(4) Justice information data exchanges--Exchanges of information pertaining to criminal, juvenile, and family law matters or cases.

(5) NIEM--The National Information Exchange Model, a reference model that is the result of a collaborative effort between the U.S. Department of Justice (DOJ) and the U.S. Department of Homeland Security (DHS) that extends the data exchange standards implemented by the DOJ Global Justice Information Sharing Initiative (the Global Justice XML Data Model). Further information is available at www.niem.gov.

(6) Texas Path to NIEM--The local and state justice agency collaborative work project for implementing NIEM in Texas.

(7) XML--Extensible markup language.

**History**
- *Source Note: The provisions of this §177.1 adopted to be effective July 21, 2008, 33 TexReg 5693.*

##### **1 Tex. Admin. Code § 177.2** NIEM Conformance {#sec-177.2 omnilex-key=us-tx-regs-official--title-1--177.2}

(a) Justice information data exchanges between courts or between a court and OCA shall conform with the IEPDs developed by Texas Path to NIEM.

(b) Justice agencies are encouraged to develop justice information systems whose data exchanges conform with the IEPDs developed by Texas Path to NIEM, and justice information data exchanges between justice agencies or between a court and a justice agency with such capabilities shall conform with those IEPDs.

(c) These standards apply to justice information data exchanges between systems whose development is initiated on or after September 1, 2009.

**History**
- *Source Note: The provisions of this §177.2 adopted to be effective July 21, 2008, 33 TexReg 5693.*

## **Part 10** DEPARTMENT OF INFORMATION RESOURCES

### **Chapter 201** GENERAL ADMINISTRATION

##### **1 Tex. Admin. Code § 201.1** Procedures for Vendor Protests and the Negotiation and Mediation of Certain Contract Disputes and Bid Submission, Opening and Tabulation Procedures {#sec-201.1 omnilex-key=us-tx-regs-official--title-1--201.1}

(a) Vendor Protest Procedure.

(1) Any actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract may formally protest to the position identified in the department's Vendor Protest Procedures. Such protests must be in writing and received in the appropriate office within 10 working days after the protesting party knows, or should have known, of the occurrence of the action which is protested. Formal protests must conform to the requirements of this subsection and paragraph (3) of this subsection, and shall be resolved in accordance with the procedure set forth in paragraphs (4) and (5) of this subsection. Copies of the protest must be mailed or delivered by the protesting party to the department and all respondents who have submitted bids, proposals or offers for the contract involved. Names and addresses of such respondents may be obtained by sending a written request for the information to the office identified in the department's Vendor Protest Procedures.

(2) In the event of a timely protest under paragraph (1) of this subsection, and an award has not been made, the department shall not proceed further with the solicitation or award of the contract unless the executive director, after consultation with the appropriate position as identified in the department's Vendor Protest Procedures makes a written determination that the award of contract without delay is necessary to protect substantial interests of the state.

(3) A formal protest must be sworn and contain:

(A) a specific identification of the statutory or regulatory provision(s) that the action complained of is alleged to have violated;

(B) a specific description of each act alleged to have violated the statutory or regulatory provision(s) identified in subparagraph (A) of this paragraph;

(C) a precise statement of the relevant facts;

(D) an identification of the issue(s) to be resolved;

(E) argument and authorities in support of the protest; and

(F) proof that copies of the protest have been mailed or delivered to all respondents who have submitted bids, proposals or offers for the contract involved. A certification that copies were supplied to all interested parties with a list of the addresses the protest was sent to will be accepted as proof of delivery of copies.

(4) The position identified in the department's Vendor Protest Procedures shall have the authority, prior to appeal to the executive director of the department, or his or her designee, to settle and resolve the dispute concerning the solicitation or award of a contract.

(5) The position identified in the department's Vendor Protest Procedures may solicit written responses to the protest from respondents who have submitted bids, proposals or offers for the contract involved and from other interested parties. Upon written request, the protesting party shall be given notice of the request and any written responses received.

(6) The position identified in the department's Vendor Protest Procedures may consult with legal counsel concerning the dispute.

(7) If the protest is not resolved by mutual agreement, the position identified in the department's Vendor Protest Procedures will issue a written determination on the protest.

(A) If the position identified in the department's Vendor Protest Procedures determines no violation of rules or statutes occurred, he or she shall so inform the protesting party and each respondent who submitted a bid, proposal or offer for the contract involved by letter. The letter shall set forth the reasons for the determination.

(B) In instances in which the contract has not been awarded, if the position identified in the department's Vendor Protest Procedures determines that a violation of the rules or statutes has occurred, he or she shall so inform the protesting party and each respondent who submitted a bid, proposal or offer for the contract involved by letter. The letter shall set forth the reasons for the determination and the appropriate remedial action.

(C) In instances in which the contract has been awarded, if the position identified in the department's Vendor Protest Procedures determines that a violation of the rules or statutes has occurred, he or she shall so inform the protesting party and each respondent who submitted a bid, proposal or offer for the contract by letter. The letter shall set forth the reasons for the determination and may conclude that the contract awarded is void.

(8) The determination of the position identified in the department's Vendor Protest Procedures on a protest may be appealed by the protesting party to the executive director of the department or his or her designee. An appeal of the determination of the position identified in the department's Vendor Protest Procedures must be written and must be received in the executive director's office no later than 10 working days after the date of the determination. The appeal shall be limited to review of the determination. A copy of the appeal must be mailed or delivered by the appealing party to the department and each respondent who submitted a bid, proposal or offer for the contract and must contain a certified statement that such copies have been provided. Failure of the protesting party to appeal the determination of the position identified in the department's Vendor Protest Procedures within 10 working days after the date of the determination renders the determination the final administrative action of the department on the protest.

(9) The executive director, or his or her designee, may confer with legal counsel in reviewing the matter appealed.

(10) The executive director, or his or her designee, shall review the protest petition, any requests for and written responses to the protest petition from any respondent who submitted a bid, proposal or offer for the contract or other interested parties, the determination and the appeal.

(11) The executive director, or his or her designee, may refer the matter to the board for consideration at a regularly scheduled open meeting or issue a written decision on the protest. If the matter is not referred to the board by the executive director, or his or her designee, the decision of the executive director, or his or her designee, is final.

(12) When a protest appealed under paragraph (8) of this subsection has been referred to the board under paragraph (11) of this subsection:

(A) Copies of the documents required by paragraph (10) of this subsection shall be mailed to the board.

(B) All interested parties who wish to make an oral presentation at the open meeting at which the board is scheduled to consider the protest shall notify the department general counsel at least 48 hours in advance of the open meeting.

(C) The board may consider oral presentations and written documents presented by staff and interested parties, including the protesting party and any respondent who submitted a bid, proposal or offer for the contract. The board chair shall set the order and length of time allowed for presentations.

(D) Board determination of the appeal shall be by duly adopted resolution reflected in the minutes of the open meeting, and shall be final.

(E) Unless good cause for delay is shown or the board determines that a protest or appeal raises issues significant to procurement practices or procedures, a protest or appeal that is not filed timely will not be considered.

(13) A decision issued by the board in open meeting, or in writing by the executive director, or his or her designee, or in writing by the position identified in the department's Vendor Protest Procedures, that is not appealed in a timely manner, shall be the final administrative action of the department.

(14) The department shall maintain all documentation on the purchasing process that is the subject of a protest or appeal in accordance with the retention schedule of the department.

(b) The department adopts by reference the rules of the Office of the Attorney General relating to the negotiation and mediation of certain contract disputes, as such rules may be amended from time to time. Such rules are codified in 1 TAC Chapter 68 and are located at the Office of the Secretary of State's website.

(c) The department adopts by reference the rule of the State of Texas Procurement authority relating to Bid Submission, Bid Opening and Tabulation, as such rule may be amended from time to time. The rule is codified in 34 TAC Chapter 20, §20.35 and is located at the Office of the Secretary of State's website.

**History**
- *Source Note: The provisions of this §201.1 adopted to be effective September 20, 2011, 36 TexReg 6141.*

##### **1 Tex. Admin. Code § 201.2** Historically Underutilized Business Program {#sec-201.2 omnilex-key=us-tx-regs-official--title-1--201.2}

Pursuant to Texas Government Code §2161.003, the department adopts by reference the Historically Underutilized Business Program rules of the State of Texas Procurement authority, as such rules may be amended by the authority from time to time. The rules may be found at 34 TAC Chapter 20, Subchapter B or may be obtained by contacting the department's HUB coordinator at (512) 475-4700 or through electronic mail at DIRINFO@dir.texas.gov.

**History**
- *Source Note: The provisions of this §201.2 adopted to be effective September 20, 2011, 36 TexReg 6141.*

##### **1 Tex. Admin. Code § 201.3** Assignment of Department Vehicles {#sec-201.3 omnilex-key=us-tx-regs-official--title-1--201.3}

(a) Purpose and Intent. The purpose of this rule is to implement the provisions of Texas Government Code §2171.1045.

(b) Department vehicles are available for conducting official department business. Vehicles may be assigned to specific field employees or available for checkout for use by employees conducting official department business.

(c) The department may assign a vehicle to an individual administrative or executive employee on a regular or everyday basis only if the department determines that the assignment is critical to the needs and mission of the department. The determination shall be documented and maintained in writing.

**History**
- *Source Note: The provisions of this §201.3 adopted to be effective September 20, 2011, 36 TexReg 6141; amended to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 201.4** Board Policies {#sec-201.4 omnilex-key=us-tx-regs-official--title-1--201.4}

(a) The executive director is hereby delegated authority by the board to grant a requesting state agency a compliance waiver from administrative rule, statewide standards, or other board policies. A state agency may request a compliance waiver from administrative rule, statewide standards or other board policy. The agency must clearly demonstrate to the department through written justification any performance or cost advantages to be gained and that the overall economic interests of the state are best served by granting the compliance waiver. The executive director of the department will notify the board when requests for waivers are received.

(b) The executive director is hereby delegated authority by the board to establish a sick leave pool program for employees of the department. The program must be consistent with the requirements of state law regarding state employee sick leave pools. The executive director is hereby appointed as the sick leave pool administrator. The executive director may designate another employee of the department to serve as the pool administrator under the supervision of the executive director. The pool administrator shall prescribe procedures relating to the operation of the sick leave pool program.

(c) The executive director is hereby delegated authority by the board to establish a family leave pool program for employees of the department and prescribe procedures relating to the operation of the family leave pool program. The executive director is hereby designated as the family leave pool administrator but may designate another employee of the department to serve as the pool administrator under the supervision of the executive director.

(d) In compliance with Chapter 2255, Texas Government Code, this subsection establishes the criteria, procedures and standards of conduct governing the relationship between the department and its officers and employees and private donors. This subsection authorizes the department to accept gifts and donations the department determines it is in the public interest to accept as a result of an emergency, including both natural and manmade disasters. The department is authorized to accept gifts and donations the department determines it is in the public interest to accept as a result of technology benefit including education, assessment or innovation.

(1) A private donor may make donations, including gifts, to the department to be spent or used for public purposes during times of emergency, including times of manmade and natural disasters or for any public purpose related to the duties of the department. Use by the department of the donation must be consistent with the mission and duties of the department. If the donor specifies the purpose for which the donation may be spent, the department must expend the donation only for that purpose.

(2) Monetary donations must be spent in accordance with the State Appropriations Act and shall be deposited in the state treasury unless statutorily exempted.

(3) The executive director is hereby delegated authority to coordinate all donations and may accept donations that do not exceed $250,000 in value on behalf of the department. Each donation accepted by the executive director must be acknowledged by the board at the board meeting following acceptance of the donation by the department. Donations that exceed $250,000 in value must be approved by the board prior to acceptance.

(4) Acceptance of the donation by either the board or the executive director of the department must be recorded in the board minutes, together with the name of the donor, description of the donation and a statement of the purpose of the donation.

(5) Donations may be accepted only if the executive director or board, as applicable, determines the donation will further the department's mission or duties, provide significant public benefit and not influence or reasonably appear to influence, the department in the performance of its duties.

(6) Execution of a donation agreement is required if the value of the donation exceeds $10,000 or if a written agreement is necessary, in the opinion of the department, to:

(A) indemnify the department as to ownership;

(B) prevent potential claims that could result from use of the donation, including access to confidential information;

(C) document donation terms or conditions;

(D) describe how the donation will further the department's mission or duties, provides a significant public benefit and is not made in an effort to influence action on the part of the department; or

(E) delete any information on a device donated to the department.

(7) Each donation agreement must include:

(A) a description of the donation, including a determination of its value;

(B) donor attestation of ownership rights in the donation;

(C) any restrictions or terms of use of the donation imposed by the donor;

(D) contact information for the donor;

(E) a statement that the department takes no position regarding and is not responsible for any tax-related representations by the donor and all value determinations are the responsibility of the donor and do not constitute affirmation of that value by the department.; and

(F) the signature of the executive director and the donor or an authorized representative of the donor if it is an entity rather than an individual.

(e) The board shall set a strategic direction for the department by:

(1) establishing a subcommittee for each major program area to monitor activities, major outsourced contracts, and new initiatives for and service offerings by the department;

(2) evaluating and approving new initiatives for, or categories of, services offered by the department under the department's various programs.

(f) The board shall regularly evaluate the extent to which the department fulfills the department's information resources technology mission by providing cost-effective services and meeting customer needs.

(g) The board shall regularly evaluate department operations, including an evaluation of analytical data and information regarding trends in department revenue and expenses, as well as performance information.

(h) The board shall maintain an audit subcommittee of the board. The subcommittee shall oversee the department's internal auditor and any other audit issues that the board considers appropriate. The subcommittee shall evaluate whether the internal auditor has sufficient resources to perform the auditor's duties and ensure that sufficient resources are available.

(i) A department employee may not:

(1) have an interest in, or in any manner be connected with, a contract or bid for a purchase of goods or services by the department; or

(2) in any manner, including by rebate or gift, directly or indirectly accept or receive from a person to whom a contract may be awarded anything of value or a promise, obligation, or contract for future reward or compensation.

(3) Each state agency employee or official who is involved in procurement or in contract management for a state agency shall disclose to the agency any potential conflict of interest specified by state law or agency policy that is known by the employee or official with respect to any contract with a private vendor or bid for the purchase of goods or services from a private vendor by the agency.

(4) A department employee who violates paragraph (1), (2), or (3) of this subsection is subject to disciplinary action, including dismissal.

(5) The department shall train staff in the requirements of this subsection and Government Code, Chapter 572, and incorporate the requirements into the contract management guide and the department's internal policies, including employee manuals.

(j) The department will not enter into a contract for the purchase of goods or services with a private vendor with whom any of the following department employees or officials have a financial interest:

(1) a member of the board;

(2) the executive director, general counsel, chief procurement officer, or procurement director of the department; or

(3) a family member related to an employee or official described by paragraph (1) or (2) of this subsection within the second degree by affinity or consanguinity.

(k) A department employee or official has a financial interest in a person if the employee or official:

(1) owns or controls, directly or indirectly, an ownership interest of at least one percent in the person, including the right to share in profits, proceeds, or capital gains; or

(2) could reasonably foresee that a contract with the person could result in a financial benefit to the employee or official.

(l) A financial interest prohibited by this section does not include a retirement plan not under direct control of a department employee or official (e.g. mutual funds), a blind trust, insurance coverage, or an ownership interest of less than one percent in a corporation.

**History**
- *Source Note: The provisions of this §201.4 adopted to be effective September 20, 2011, 36 TexReg 6141; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective June 25, 2017, 42 TexReg 3267; amended to be effective February 10, 2022, 47 TexReg 489.*

##### **1 Tex. Admin. Code § 201.5** Advisory Committees {#sec-201.5 omnilex-key=us-tx-regs-official--title-1--201.5}

(a) State Strategic Plan for Information Resources Management Advisory Committee.

(1) This advisory committee shall consist of at least nine and not more than 21 members appointed by the department Executive Director with the approval of the board. Members should have a demonstrated ability to think strategically and to work towards consensus building in a committee setting. The membership will include at least:

(A) two information resources managers, or a designee, from Texas state agencies other than a university system or institution of higher education as defined in Education Code, §61.003;

(B) one representative from a state university system or institution of higher education as defined in Education Code, §61.003;

(C) one member of the public;

(D) one representative from a local government organization in the state that is knowledgeable about computing and/or telecommunications;

(E) three representatives from the computing and/or telecommunications industry;

(F) one representative from a federal agency that is knowledgeable about computing and/or telecommunications.

(2) Should the Executive Director or board be unable to identify and approve an appropriate candidate in any of the categories as outlined in paragraph (1)(B) - (F) of this subsection, the Executive Director may select additional candidates from paragraph (1)(A) of this subsection.

(3) When determining the composition of the advisory committee, the Executive Director may not appoint a greater number of representatives from the private sector than the public sector.

(4) Once the board approves the membership of the advisory committee, no additional members may be added without board approval.

(5) This advisory committee shall be appointed after November 30 of every odd-numbered year for a term to expire on November 30 of the following odd-numbered year.

(6) This advisory committee shall:

(A) review and advise on the development of the State Strategic Plan for Information Resources Management as it is prepared for publication pursuant to the Information Resources Management Act, Texas Government Code Annotated, Chapter 2054;

(B) meet at least once during its term;

(C) develop a strategic direction of what the future of computing and telecommunications technology is for state government as a whole.

(7) The department may elect to provide professional facilitation for any meetings the Advisory Committee may hold.

(8) The department may elect to have department staff present at Advisory Committee meetings.

(9) The department will set the agenda of all Advisory Committee meetings.

(10) The department may reimburse committee members for travel expenses related to attending committee meetings pursuant to state law.

(b) Customer Advisory Committee

(1) This advisory committee is composed of representatives of customers who receive services from each of the department's key programs, including state agencies with fewer than 100 employees, and the public.

(2) In making appointments to the advisory committee, the board shall, to the extent practicable, ensure that the committee is composed of a cross-section of the department's customers, including representatives of primary customer groups, institutions of higher education, and the public.

(3) The advisory committee shall:

(A) report to and advise the board on the status of the department's delivery of critical statewide services;

(B) meet at least once each fiscal year.

**History**
- *Source Note: The provisions of this §201.5 adopted to be effective September 20, 2011, 36 TexReg 6141; amended to be effective March 19, 2014, 39 TexReg 1926.*

##### **1 Tex. Admin. Code § 201.6** Contract Approval Authority and Responsibilities {#sec-201.6 omnilex-key=us-tx-regs-official--title-1--201.6}

(a) Purpose. The purpose of this rule is to establish the approval authority and responsibilities for executing contracts required by the department.

(b) Applicability. This rule applies to all contracts entered into by the department.

(c) Definitions. As used in this section, the following terms shall have the following meanings, unless the context clearly indicates otherwise.

(1) Board--The governing board of the department.

(2) Contract--A written agreement between the department and a contractor for goods or services. As used in this section, "contract" includes the following: letters of agreement; interagency/interlocal agreements with other government entities; and other documents in which state funds or services allocated to the department are exchanged for the delivery of other goods or services.

(3) Major Outsourced Contract--A contract the department executes with entities other than this state or a political subdivision of this state that:

(A) is authorized under Government Code, Chapter 2054, Subchapter I or Subchapter L, or Chapter 2170; or

(B) exceeds the monetary threshold in subsection (d)(1)(A) of this section, other than those contracts described in subparagraph (A) of this paragraph.

(4) Value--The department adopts by reference the determination of contract value set forth in the State of Texas Contract Management Guide. The determination of contract value shall include, in addition to compensation to a contractor from funds allocated to the department, an amount deposited into the State general revenue fund or other state fund in a revenue sharing contract arrangement with a contractor.

(d) Approval Authority.

(1) Board Approval. The executive director or his/her designee shall present certain contracts to the board for approval. After a contractor is selected, a majority of the board shall provide final approval of the contract with the selected contractor. The board shall consider for final approval:

(A) any contract or amendment with a value expected to exceed $1,000,000;

(B) any major outsourced contract;

(C) any amendment to a major outsourced contract if the amendment has significant statewide impact. Significant statewide impact is defined as affecting critical state contractual objectives, assumptions or constraints , rising to the level of substantive impact fiscally, programmatically or otherwise at a statewide level and not as an isolated incident. Examples of situations with significant statewide impact include, but are not limited to, contract renewal, contract termination, and vendor changes. Examples of situations that do not rise to the level of significant statewide impact include but are not limited to, revisions to existing services, addition of optional services, contract language clarifications, changes in definitions, service provider locations, key personnel, and addition of new customers.

(D) any other contract deemed appropriate for board approval as determined by the executive director.

(2) Agency Approval.

(A) The board delegates authority to the executive director or his/her designee to approve all contracts not listed in paragraph (1) of this subsection.

(B) The board delegates authority to the executive director to approve a purchase request or contract listed in paragraph (1) of this subsection for an emergency as such is defined in 34 TAC §20.32, or to avoid undue material additional cost to the state. The executive director shall report any purchase requests or contracts executed by the executive director pursuant to the authority in this subsection to the board chair prior to execution of any such purchase requests or contracts subject to this rule.

(e) Authority to Execute Contracts. The board delegates authority to the executive director to execute all contracts for the department. This authority may be delegated by the executive director to the deputy executive director or other designee.

(f) Contract Planning.

(1) The department will present to the Board for approval a contract plan for the next fiscal year that outlines the agency's anticipated contracting actions that exceed $100,000.

(2) As deemed necessary by the executive director or his/her designee, updates to the contract plan will be provided to the board for approval periodically throughout the fiscal year.

(g) Contract Monitoring

(1) Each contract identified as a major outsourced contract under subsection (c)(3)(A) above shall be subject to enhanced contract and performance monitoring.

(2) Information about contracts subject to such monitoring shall be regularly presented to the board and the executive director of the department.

(3) The department will immediately notify the board of any serious issue or risk that is identified with a contract subject to such monitoring.

**History**
- *Source Note: The provisions of this §201.6 adopted to be effective March 6, 2012, 37 TexReg 1486; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective November 23, 2017, 42 TexReg 6505.*

##### **1 Tex. Admin. Code § 201.7** Negotiated Rulemaking and Alternative Dispute Resolution {#sec-201.7 omnilex-key=us-tx-regs-official--title-1--201.7}

(a) Policy. It is the department's policy to encourage the use of negotiated rulemaking and alternative dispute resolution procedures in appropriate situations.

(b) Negotiated Rulemaking. When the department finds that a rule to be proposed is likely to be complex, controversial, or affect disparate groups, the department may propose to engage in negotiated rulemaking in accordance with Government Code, Chapter 2008.

(1) When negotiated rulemaking is considered, the department's General Counsel, or designee, shall be the department's negotiated rulemaking convener.

(A) The convener shall assist in identifying persons who are likely to be affected by a proposed rule, including those who oppose issuance of a rule. The convener shall discuss with those persons or their representatives as provided in Government Code §2008.052(c).

(B) The convener shall then recommend to the department whether negotiated rulemaking is a feasible method to develop the proposed rule and shall report to the agency on the relevant considerations, including those listed in Government Code §2008.052(d).

(2) Upon the convener's recommendation to proceed, the department may initiate negotiated rulemaking according to the provisions of Government Code, Chapter 2008 and Government Code §2054.121(c)

(c) Alternative Dispute Resolution. The department encourages the fair and expeditious resolution of disputes through alternative dispute resolution (ADR) procedures.

(1) ADR procedures include any procedure or combination of procedures described by Civil Practice and Remedies Code, Chapter 154. ADR procedures are intended to supplement and not limit other dispute resolution procedures available for use by the department.

(2) Any ADR procedure used to resolve disputes with the department shall conform with Government Code, Chapter 2009, and, to the extent possible, the model guidelines for the use of ADR issued by the State Office of Administrative Hearings (SOAH).

(3) Upon receipt of notice of a dispute, the department's Executive Director, in consultation with the department's General Counsel, shall determine whether use of an ADR procedure is an appropriate method for resolving the dispute.

(4) If an ADR procedure is determined to be appropriate, the department's Executive Director shall recommend to the claimant the use of ADR to resolve the dispute. The department's General Counsel will collaborate with the claimant to select an appropriate procedure for dispute resolution and implement the agreed upon procedure consistent with SOAH's model guidelines.

(5) ADR for Breach of Contract Claims. Resolution of breach of certain contract claims brought by a contractor against the department shall conform to the requirements of Government Code, Chapter 2260. The department adopts by reference the Office of the Attorney General's rules regarding the negotiation and mediation of certain contract disputes (1 Texas Administrative Code Part 3, Chapter 68).

(6) The requirements of Government Code, Chapter 2260, and the Office of the Attorney General's model rules are required prerequisites to a contractor filing suit in accordance with Civil Practices and Remedies Code, Chapter 107.

(d) The department's General Counsel, or designee, shall coordinate the implementation of the policy set out in subsection (a) of this section in accordance with state law and provide necessary training. The department's General Counsel, or designee, is designated as the coordinator to implement the department's policy under this rule, provide necessary training, and collect data concerning the effectiveness of the implemented procedures.

**History**
- *Source Note: The provisions of this §201.7 adopted to be effective October 15, 2012, 37 TexReg 8197.*

##### **1 Tex. Admin. Code § 201.8** Plans and Reports Required of Institutions of Higher Education {#sec-201.8 omnilex-key=us-tx-regs-official--title-1--201.8}

(a) In compliance with Government Code, §2054.1211, an institution of higher education shall prepare and submit the following plans and reports to the department:

(1) Reports as set forth in §2054.052, Texas Government Code;

(2) Information Resources Managers' training and continuing education compliance reports as set forth in §2054.076, Texas Government Code;

(3) Vulnerability reports as set forth in §2054.077, Texas Government Code;

(4) Information Resources Deployment Review as set forth in §2054.0965, Texas Government Code, subject to the reporting limitation in §51.406, Texas Education Code;

(5) Information Security Plan as set forth in §2054.133, Texas Government Code;

(6) Network configuration information as set forth in §2054.203, Texas Government Code;

(7) Accessibility Survey as set forth in §2054.464, Texas Government Code.

(b) The department will coordinate with the Information Technology Council for Higher Education regarding the preparation or submission of such plans and reports by institutions of higher education, and will provide for the use of existing data where applicable.

**History**
- *Source Note: The provisions of this §201.8 adopted to be effective September 18, 2014, 39 TexReg 7563.*

##### **1 Tex. Admin. Code § 201.9** Petition for the Adoption of a Rule {#sec-201.9 omnilex-key=us-tx-regs-official--title-1--201.9}

(a) Purpose. This section provides procedures for any interested person (petitioner) to request the department to adopt a rule.

(b) Content of Petition.

(1) The petition must be in writing. No form is required but all information must be provided, or a reason why required information cannot be provided.

(2) The petition must contain the following:

(A) petitioner's name, address, organization or affiliation, if any, and the name of the person or entity on whose behalf the petition is filed, if different from the person submitting the petition;

(B) a plain and brief statement about why a rule or change in an existing rule is needed, required, or desirable, including the public good to be served and any effect on those who would be required to comply with the rule;

(C) an estimate of the fiscal impact on state and local government as a result of enforcing or administering the proposed rule, an estimate of the economic impact on persons required to comply with the proposed rule, whether there may be an effect on local employment, and the facts, assumptions and methodology used to prepare estimates and impacts required by this subparagraph;

(D) a statement on the department's authority to adopt the proposed rule;

(E) the proposed text of a new rule, or proposed changes to an existing rule; and

(F) a list of individuals, organizations or affiliations that may be interested or affected by the proposed rule, if known.

(c) Submission. A petition is submitted on the date it is received by the department. The petition must be mailed to the department, or hand delivered to the department in Austin, Texas.

(d) Review. The department will review the petition for compliance with the requirements of this section.

(e) Decision to Deny or Accept. The department will deny a petition for rulemaking, or accept, in whole or in part, a petition for rulemaking within 60 days from the date the petition is submitted.

(1) The department will notify the petitioner in writing if the petition is denied and state the reason or reasons for the denial.

(2) The department will refer an accepted petition to agency staff to initiate the rulemaking process under Chapter 2001, Subchapter B, of the Government Code. Agency staff may redraft the proposed text to conform to style, format and policy decisions of the agency.

(f) Repetitive petitions. The department may refuse to bring a petition for rulemaking to the board if, within the preceding year, the board has considered a previously submitted petition for the same rule.

(g) Board Petition Report. Prior the end of each fiscal year, the department will present to the board a report of all petitions received during the fiscal year. The report shall contain a summary of the petitions and the status or final determination of the petition review process.

**History**
- *Source Note: The provisions of this §201.9 adopted to be effective November 23, 2015, 40 TexReg 8191; amended to be effective June 25, 2017, 42 TexReg 3267.*

### **Chapter 203** MANAGEMENT OF ELECTRONIC TRANSACTIONS AND SIGNED RECORDS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 203.1** Applicable Terms and Technologies for Management of Electronic Transactions and Signed Records {#sec-203.1 omnilex-key=us-tx-regs-official--title-1--203.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Asymmetric cryptosystem--A computer-based system that employs two different but mathematically related keys with the following characteristics:

(A) one key encrypts a given message;

(B) one key decrypts a given message; and

(C) the keys have the property that, knowing one key, it is computationally infeasible to discover the other key.

(2) Certificate--A message which:

(A) identifies the certification authority issuing it;

(B) names or identifies its subscriber;

(C) contains the subscriber's public key;

(D) identifies its operational period;

(E) is digitally signed by the certification authority issuing it; and

(F) conforms to ISO X.509 Version 3 standards.

(3) Certificate Manufacturer--A person that provides operational services for a Certification Authority or PKI Service Provider. The nature and scope of the obligations and functions of a Certificate Manufacturer depend on contractual arrangements between the Certification Authority or other PKI Service Provider and the Certificate Manufacturer.

(4) Certificate Policy--A document prepared by a Policy Authority that describes the parties, scope of business, functional operations, and obligations between and among PKI Service Providers and End Entities who engage in electronic transactions in a Public Key Infrastructure.

(5) Certification Authority--A person who issues a certificate.

(6) Certification practice statement--Documentation of the practices, procedures, and controls employed by a Certification Authority.

(7) Digital signature-- An electronic identifier that currently provides higher levels of security and universal acceptance. Digital signatures are based on Public Key Infrastructure (PKI) technology, and guarantee signer identity and intent, data integrity, and the non-repudiation of signed records. The digital signature cannot be copied, tampered with or altered.

(8) Digitally signed communication--A message that has been processed by a computer in such a manner that ties the message to the individual that signed the message.

(9) Electronic--Relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(10) Electronic record--A record created, generated, sent, communicated, received, or stored by electronic means.

(11) Electronic signature--An electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. Digital signatures are a subset of electronic signatures.

(12) End Entities--Subscribers or Signers and Relying Parties.

(13) Escrow agent--A person who holds a copy of a private key at the request of the owner of the private key in a trustworthy manner.

(14) Expert--A person with demonstrable skill and knowledge based on training and experience who would qualify as an expert under Rule 702 of the Texas Rules of Evidence.

(15) Handwriting measurements--The metrics of the shapes, speeds and/or other distinguishing features of a signature as the person writes it by hand with a pen or stylus on a flat surface.

(16) Key pair--A private key and its corresponding public key in an asymmetric cryptosystem. The keys have the property that the public key can verify a digital signature that the private key creates.

(17) Local government--A county, municipality, special district, or other political subdivision of this state or another state, or a combination of two or more of those entities, but excluding an agency in the judicial branch of local government.

(18) Message--A digital representation of information.

(19) Person--An individual, state agency, institution of higher education, local government, corporation, partnership, association, organization, or any other legal entity.

(20) PKI--Public Key Infrastructure; A set of policies, processes, server platforms, software and workstations used for the purpose of administering certificates and public-private key pairs, including the ability to issue, maintain, and revoke public key certificates.

(21) PKI Service Provider--A Certification Authority, Certificate Manufacturer, Registrar, or any other person that performs services pertaining to the issuance or verification of certificates.

(22) Policy Authority--A person with final authority and responsibility for specifying a Certificate Policy.

(23) Private key-- The secret part of an asymmetric key pair that is used to digitally sign or decrypt data.

(24) Proof of Identification--The document or documents or other evidence presented to a Certification Authority to establish the identity of a subscriber.

(25) Public key-- The public part of an asymmetric key pair that is used to verify signatures or encrypt data.

(26) Public Key Cryptography--A type of cryptographic technology that employs an asymmetric cryptosystem.

(27) Record--Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(28) Registrar--A person that gathers evidence necessary to confirm the accuracy of information to be included in a Subscriber's certificate.

(29) Relying Party--A state agency, including an institution of higher education, that has received an electronic message that has been signed with a digital signature and is in a position to rely on the message and signature.

(30) Role-based key--A key pair issued to a person to use when acting in a particular business or organizational capacity.

(31) Signer--The person who signs a digitally signed communication with the use of an acceptable technology to uniquely link the message with the person sending it.

(32) Subscriber--A person who:

(A) is the subject listed in a certificate;

(B) accepts the certificate; and

(C) holds a private key which corresponds to a public key listed in that certificate.

(33) Technology--The computer hardware and/or software-based method or process used to create digital signatures.

(34) Transaction--An action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs, where one of the persons is a state agency, including an institution of higher education.

(35) Written electronic communication--A message that is sent by one person to another person.

**History**
- *Source Note: The provisions of this §203.1 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective September 20, 2011, 36 TexReg 6143; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective November 23, 2017, 42 TexReg 6505.*

##### **1 Tex. Admin. Code § 203.2** Institution of Higher Education {#sec-203.2 omnilex-key=us-tx-regs-official--title-1--203.2}

A university system or institution of higher education as defined by §61.003, Education Code.

**History**
- *Source Note: The provisions of this §203.2 adopted to be effective November 28, 2004, 29 TexReg 10710.*

##### **1 Tex. Admin. Code § 203.3** State Agency {#sec-203.3 omnilex-key=us-tx-regs-official--title-1--203.3}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §203.3 adopted to be effective November 28, 2004, 29 TexReg 10710.*

#### **Subchapter B** STATE AGENCY USE OF ELECTRONIC TRANSACTIONS AND SIGNED RECORDS

##### **1 Tex. Admin. Code § 203.20** Guidelines {#sec-203.20 omnilex-key=us-tx-regs-official--title-1--203.20}

Pursuant to the Texas Business and Commerce Code, §322.017, the department and the Texas State Library and Archives Commission jointly formed the Uniform Electronic Transactions Act Task Force to create rules and develop the Guidelines for the Management of Electronic Transactions and Signed Records. The Guidelines for the Management of Electronic Transactions and Signed Records are applicable to state agencies that send and accept electronic records and electronic signatures to and from other persons and to state agencies that otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures. These guidelines are available on the department's website.

**History**
- *Source Note: The provisions of this §203.20 adopted to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.22** Contents {#sec-203.22 omnilex-key=us-tx-regs-official--title-1--203.22}

(a) The Guidelines for the Management of Electronic Transactions and Signed Records shall describe

(1) Electronic transactions and signed records, including:

(A) Electronic records;

(B) Electronic signatures; and

(C) Trustworthy records;

(2) Risks pertaining to electronic transactions and signed records, including:

(A) Common types of risks;

(B) Assessments of risk;

(C) Cost-benefit analysis; and

(D) Risk mitigation and security relating to electronic records and signatures; and

(3) Records management issues, including:

(A) Records life cycle and system development life cycle;

(B) Preserving trustworthy records;

(C) Records managers and auditors; and

(D) Other records management issues.

(b) The Guidelines shall include the following appendices:

(1) Current electronic signature technologies;

(2) Checklist for evaluating electronic signatures;

(3) Technical considerations of various electronic signature alternatives; and

(4) Comments on the International Organization for Standardization nonrepudiation model.

**History**
- *Source Note: The provisions of this §203.22 adopted to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.23** Digital Signatures {#sec-203.23 omnilex-key=us-tx-regs-official--title-1--203.23}

(a) This section applies to all written electronic communications which are sent to a state agency over the Internet or other electronic network or by another means that is acceptable to the state agency, for which the identity of the sender or the contents of the message must be authenticated, and for which no prior agreement between the sender and the receiving state agency regarding message authentication existed as of the effective date of this section. This section does not apply to or supersede the use and expansion of existing systems:

(1) for the receipt of electronically filed documents pursuant to the Texas Business and Commerce Code or other applicable statutory law where the purpose of the written electronic communication is to comply with statutory filing requirements and the receiving state agency or local government is not a party to the underlying transaction which is the subject of the communication; or

(2) for the electronic approval of payment vouchers under rules adopted by the comptroller of public accounts pursuant to applicable law.

(b) Prior to accepting an electronic signature, a state agency shall ensure that the level of security used to identify the signer of a message and to transmit the signature is sufficient for the transaction being conducted. A state agency that accepts digital signatures may not effectively discourage the use of electronic signatures by imposing unreasonable or burdensome requirements on persons wishing to use electronic signatures to authenticate written electronic communications sent to the state agency.

(c) A state agency that accepts electronic signatures shall not be required to accept a digital signature that has been created by means of a particular acceptable technology described in §203.24 of this chapter.

(d) A state agency shall review and consider any applicable guidelines as described in §203.20 of this chapter and recommendations that have been adopted by the department in determining whether and for what purposes the state agency shall accept a digital signature. A copy of such guidelines and recommendations may be obtained directly from the department, or may be obtained electronically via the department's website.

(e) A state agency shall ensure that all written electronic communications received by the state agency and authenticated by means of a digital signature in accordance with this section, as well as any information resources necessary to permit access to the written electronic communications, are retained by the state agency as necessary to comply with applicable law pertaining to audit and records retention requirements.

**History**
- *Source Note: The provisions of this §203.23 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective September 20, 2011, 36 TexReg 6143; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective November 23, 2017, 42 TexReg 6506.*

##### **1 Tex. Admin. Code § 203.24** Acceptable Digital Signature Technology {#sec-203.24 omnilex-key=us-tx-regs-official--title-1--203.24}

(a) Digital Signatures must be created by an Acceptable Technology. For a digital signature to be valid for use by a state agency, it must be created by a technology that is accepted for use by the department pursuant to this section.

(b) Criteria for Determining if a Digital Signature Technology is Acceptable. An acceptable technology must be capable of creating signatures that conform to requirements set forth in §2054.060, Texas Government Code and the requirements of this section.

(c) List of Acceptable Technologies. The technology known as Public Key Cryptography is an acceptable technology for use by state agencies, provided that the digital signature is created consistent with the following:

(1) A public key-based digital signature must be unique to the person using it. Such a signature may be considered unique to the person using it if:

(A) the private key used to create the signature on the message is known only to the signer or, in the case of a role-based key, known only to the signer and an escrow agent acceptable to the signer and the state agency; and

(B) the digital signature is created when a person runs a message through a one-way function, creating a message digest, then encrypting the resulting message digest using an asymmetric cryptosystem and the signer's private key; and

(C) although not all digitally signed communications will require the signer to obtain a certificate, the signer is capable of being issued a certificate to certify that he or she controls the key pair used to create the signature; and

(D) it is computationally infeasible to derive the private key from knowledge of the public key.

(2) A public-key based digital signature must be capable of independent verification. Such a signature may be considered capable of independent verification if:

(A) the relying party can verify the message was digitally signed by using the signer's public key to decrypt the message; and

(B) if a certificate is a required component of a transaction with a state agency, the issuing PKI Service Provider, either through a certification practice statement, certificate policy, or through the content of the certificate itself, has identified what, if any, proof of identification it required of the signer prior to issuing the certificate.

(3) The private key of public-key based digital signature must remain under the sole control of the person using it, or in the case of a role-based key, that person and an escrow agent acceptable to that person and the state agency. Whether a signature is accompanied by a certificate or not, the person who holds the key pair, or the subscriber identified in the certificate, must exercise reasonable care to retain control of the private key and prevent its disclosure to any person not authorized to create the subscriber's digital signature.

(4) The digital signature must be linked to the message of the document in such a way that it would be computationally infeasible to change the data in the message or the digital signature without invalidating the digital signature.

(5) An organization may use a PKI that is operated by the Department of Defense (DoD) PKI Program Management Office (PMO), and is certified and accredited in accordance with DoD Instruction 8510.01 "DoD Information Assurance Certification and Accreditation Process (DIACAP)".

**History**
- *Source Note: The provisions of this §203.24 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.25** Acceptable PKI Service Providers {#sec-203.25 omnilex-key=us-tx-regs-official--title-1--203.25}

(a) The department shall maintain an "Approved List of PKI Service Providers" authorized to issue certificates for digitally signed communications sent to state agencies or otherwise provide services in connection with the issuance of certificates. The list may include, but shall not necessarily be limited to, Certification Authorities, Certificate Manufacturers, Registrars, and/or other PKI Service Providers accepted and approved for use in connection with electronic messages transmitted to other state or federal governmental entities. A copy of such list may be obtained directly from the department, or may be obtained electronically via the department's website.

(b) State agencies shall only procure, or otherwise implement, certificates from PKI Service Providers that appear on the "Approved List of PKI Service Providers."

(c) The department shall determine whether to place a PKI Service Provider on the "Approved List of PKI Service Providers" after the PKI Service Provider provides the department with a copy of its current certification practice statement, if any, and a copy of an examination report performed in accordance with standards set in the American Institute of Certified Public Accountants (AICPA) Statement on Standards for Attestation Engagement No. 16 (SSAE 16) (or a successor AICPA standard) to ensure that the PKI Service Provider's practices and policies are consistent with the requirements of the PKI Service Provider's certification practice statement, if any, and the requirements of this section.

(d) In order to be placed on the "Approved List of PKI Service Providers" a PKI Service Provider that has been in operation for one year or less shall undertake a SSAE 16 Service Organization Control (SOC) 2 Type 1 examination (or a successor AICPA standard) and the results of the examination must be deemed satisfactory by the department.

(e) In order to be placed on the "Approved List of PKI Service Providers" a PKI Service Provider that has been in operation for longer than one year shall undertake a SSAE 16 Service Organization Control (SOC) 2 Type 2 examination (or a successor AICPA standard) and the results of the examination must be deemed satisfactory by the department.

(f) In lieu of the examination requirements of subsections (d) and (e) of this section, a PKI Service Provider may be placed on the "Approved List of PKI Service Providers" upon providing the department with documentation issued by a person independent of the PKI Service Provider that is indicative of the security policies and procedures actually employed by the PKI Service Provider and that is acceptable to the department in its sole discretion. The department may request additional documentation relating to policies and practices employed by the PKI Service Provider indicating the trustworthiness of the technology employed and compliance with applicable department guidelines.

(g) To remain on the "Approved List of PKI Service Providers" a Certification Authority must provide proof of compliance with the examination requirements or other acceptable documentation to the department every two years after initially being placed on the list. In addition, a Certification Authority must provide a copy of any changes to its certification practice statement to the department promptly following the adoption by the Certification Authority of such changes.

(h) If the department is informed that a PKI Service Provider is no longer in full compliance following a required examination and the non-compliance is deemed to be material by the department, or if the department obtains credible information that the technology employed by the PKI Service Provider can no longer reasonably be relied upon, the PKI Service Provider may be removed from the "Approved List of PKI Service Providers" by the department. The effect of the removal of a PKI Service Provider from the "Approved List of PKI Service Providers" shall be to prohibit state agencies from thereafter accepting digital signatures for which the PKI Service Provider issued a certificate or provided services in connection with such issuance for so long as the PKI Service Provider is removed from the list. The removal of a PKI Service Provider from the "Approved List of PKI Service Providers" shall not, in and of itself, invalidate a digital signature for which a PKI Service Provider issued the certificate prior to its removal from the list.

**History**
- *Source Note: The provisions of this §203.25 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective September 20, 2011, 36 TexReg 6143; amended to be effective March 4, 2013, 38 TexReg 1353.*

##### **1 Tex. Admin. Code § 203.27** Adding New Technologies {#sec-203.27 omnilex-key=us-tx-regs-official--title-1--203.27}

Provisions for Adding New Technologies to the List of Acceptable Technologies.

(1) Any person may, by providing a written request that includes a full explanation of a proposed technology which meets the requirements of this section, petition the department to review the technology. If the department determines that the technology is acceptable for use by state agencies, the department shall draft rules to add the proposed technology to the list of acceptable technologies.

(2) The department has 90 days from the date of the request to review the petition and either accept or deny it. If the department does not approve the request within 90 days, the petitioner's request shall be considered denied. If the department denies the petition, it shall notify the petitioner in writing of the reasons for denial. The petitioner may appeal the department's denial of the petition at the next board meeting.

**History**
- *Source Note: The provisions of this §203.27 adopted to be effective November 28, 2004, 29 TexReg 10710.*

#### **Subchapter C** INSTITUTIONS OF HIGHER EDUCATION USE OF ELECTRONIC TRANSACTIONS AND SIGNED RECORDS

##### **1 Tex. Admin. Code § 203.40** Guidelines {#sec-203.40 omnilex-key=us-tx-regs-official--title-1--203.40}

Pursuant to the Texas Business and Commerce Code, §322.017, the department and the Texas State Library and Archives Commission jointly formed the Uniform Electronic Transactions Act Task Force to create rules and develop the Guidelines for the Management of Electronic Transactions and Signed Records. The Guidelines for the Management of Electronic Transactions and Signed Records are applicable to institutions of higher education that send and accept electronic records and electronic signatures to and from other persons and to other institutions of higher education and state agencies that otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures. These guidelines are available on the department's website.

**History**
- *Source Note: The provisions of this §203.40 adopted to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.42** Contents {#sec-203.42 omnilex-key=us-tx-regs-official--title-1--203.42}

(a) The Guidelines for the Management of Electronic Transactions and Signed Records shall describe

(1) Electronic transactions and signed records, including:

(A) Electronic records;

(B) Electronic signatures; and

(C) Trustworthy records;

(2) Risks pertaining to electronic transactions and signed records: including

(A) Common types of risks;

(B) Assessments of risk;

(C) Cost-benefit analysis; and

(D) Risk mitigation and security relating to electronic records and signatures; and

(3) Records management issues, including:

(A) Records life cycle and system development life cycle;

(B) Preserving trustworthy records;

(C) Records managers and auditors; and

(D) Other records management issues.

(b) The Guidelines shall include the following appendices:

(1) Current electronic signature technologies;

(2) Checklist for evaluating electronic signatures;

(3) Technical considerations of various electronic signature alternatives; and

(4) Comments on the International Organization for Standardization nonrepudiation model.

**History**
- *Source Note: The provisions of this §203.42 adopted to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.43** Digital Signatures {#sec-203.43 omnilex-key=us-tx-regs-official--title-1--203.43}

(a) This section applies to all written electronic communications which are sent to an institution of higher education over the Internet or other electronic network or by another means that is acceptable to the institution of higher education, for which the identity of the sender or the contents of the message must be authenticated, and for which no prior agreement between the sender and the receiving institution of higher education regarding message authentication existed as of the effective date of this section. This section does not apply to or supersede the use and expansion of existing systems:

(1) for the receipt of electronically filed documents pursuant to the Texas Business and Commerce Code or other applicable statutory law where the purpose of the written electronic communication is to comply with statutory filing requirements and the receiving institution of higher education is not a party to the underlying transaction which is the subject of the communication; or

(2) for the electronic approval of payment vouchers under rules adopted by the comptroller of public accounts pursuant to applicable law.

(b) Prior to accepting an electronic signature, an institution of higher education shall ensure that the level of security used to identify the signer of a message and to transmit the signature is sufficient for the transaction being conducted. An institution of higher education that accepts electronic signatures may not effectively discourage the use of electronic signatures by imposing unreasonable or burdensome requirements on persons wishing to use electronic signatures to authenticate written electronic communications sent to the institution of higher education.

(c) An institution of higher education that accepts electronic signatures shall not be required to accept a digital signature that has been created by means of a particular acceptable technology described in §203.44 of this chapter.

(d) An institution of higher education shall review and consider any applicable guidelines as described in §203.40 of this chapter and recommendations that have been adopted by the department in determining whether and for what purposes the institution of higher education shall accept a digital signature. A copy of such guidelines and recommendations may be obtained directly from the department, or may be obtained electronically via the department's website.

(e) An institution of higher education shall ensure that all written electronic communications received by it and authenticated by means of a digital signature in accordance with this section, as well as any information resources necessary to permit access to the written electronic communications, are retained by the institution of higher education as necessary to comply with applicable law pertaining to audit and records retention requirements.

(f) To the extent of any conflict of rules and procedures adopted under the Texas Education Code Section 51.9336 with that of rules adopted under 1 TAC 203, the former will prevail.

**History**
- *Source Note: The provisions of this §203.43 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective September 20, 2011, 36 TexReg 6143; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective November 23, 2017, 42 TexReg 6506.*

##### **1 Tex. Admin. Code § 203.44** Acceptable Digital Signature Technology {#sec-203.44 omnilex-key=us-tx-regs-official--title-1--203.44}

(a) Digital Signatures must be created by an Acceptable Technology. For a digital signature to be valid for use by an institution of higher education, it must be created by a technology that is accepted for use by the department pursuant to this section.

(b) Criteria for Determining if a Digital Signature Technology is Acceptable. An acceptable technology must be capable of creating signatures that conform to requirements set forth in §2054.060, Texas Government Code and the requirements of this section.

(c) List of Acceptable Technologies. The technology known as Public Key Cryptography is an acceptable technology for use by institutions of higher education provided that the digital signature is created consistent with the following:

(1) A public key-based digital signature must be unique to the person using it. Such a signature may be considered unique to the person using it if:

(A) the private key used to create the signature on the message is known only to the signer or, in the case of a role-based key, known only to the signer and an escrow agent acceptable to the signer and the institution of higher education; and

(B) the digital signature is created when a person runs a message through a one-way function, creating a message digest, then encrypting the resulting message digest using an asymmetric cryptosystem and the signer's private key; and

(C) although not all digitally signed communications will require the signer to obtain a certificate, the signer is capable of being issued a certificate to certify that he or she controls the key pair used to create the signature; and

(D) it is computationally infeasible to derive the private key from knowledge of the public key.

(2) A public-key based digital signature must be capable of independent verification. Such a signature may be considered capable of independent verification if:

(A) the relying party can verify the message was digitally signed by using the signer's public key to decrypt the message; and

(B) if a certificate is a required component of a transaction with a institution of higher education, the issuing PKI Service Provider, either through a certification practice statement, certificate policy, or through the content of the certificate itself, has identified what, if any, proof of identification it required of the signer prior to issuing the certificate.

(3) The private key of public-key based digital signature must remain under the sole control of the person using it, or in the case of a role-based key, that person and an escrow agent acceptable to that person and the institution of higher education. Whether a signature is accompanied by a certificate or not, the person who holds the key pair, or the subscriber identified in the certificate, must exercise reasonable care to retain control of the private key and prevent its disclosure to any person not authorized to create the subscriber's digital signature.

(4) The digital signature must be linked to the message of the document in such a way that it would be computationally infeasible to change the data in the message or the digital signature without invalidating the digital signature.

(5) An organization may use a PKI that is operated by the Department of Defense (DoD) PKI Program Management Office (PMO), and is certified and accredited in accordance with DoD Instruction 8510.01 "DoD Information Assurance Certification and Accreditation Process (DIACAP)".

**History**
- *Source Note: The provisions of this §203.44 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective November 23, 2015, 40 TexReg 8191.*

##### **1 Tex. Admin. Code § 203.45** Acceptable PKI Service Providers {#sec-203.45 omnilex-key=us-tx-regs-official--title-1--203.45}

(a) The department shall maintain an "Approved List of PKI Service Providers" authorized to issue certificates for digitally signed communications sent to institutions of higher education or otherwise provide services in connection with the issuance of certificates. The list may include, but shall not necessarily be limited to, Certification Authorities, Certificate Manufacturers, Registrars, and/or other PKI Service Providers accepted and approved for use in connection with electronic messages transmitted to other state or federal governmental entities. A copy of such list may be obtained directly from the department, or may be obtained electronically via the department's website.

(b) Institutions of higher education shall only procure, or otherwise implement, certificates from PKI Service Providers that appear on the "Approved List of PKI Service Providers."

(c) The department shall determine whether to place a PKI Service Provider on the "Approved List of PKI Service Providers" after the PKI Service Provider provides the department with a copy of its current certification practice statement, if any, and a copy of an examination report performed in accordance with standards set in the American Institute of Certified Public Accountants (AICPA) Statement on Standards for Attestation Engagement No. 16 (SSAE 16) (or a successor AICPA standard) to ensure that the PKI Service Provider's practices and policies are consistent with the requirements of the PKI Service Provider's certification practice statement, if any, and the requirements of this section.

(d) In order to be placed on the "Approved List of PKI Service Providers" a PKI Service Provider that has been in operation for one year or less shall undertake a SSAE 16 Service Organization Control (SOC) 2 Type 1 examination (or a successor AICPA standard) and the results of the examination must be deemed satisfactory by the department.

(e) In order to be placed on the "Approved List of PKI Service Providers" a PKI Service Provider that has been in operation for longer than one year shall undertake a SSAE 16 Service Organization Control (SOC) 2 Type 2 examination (or a successor AICPA standard) and the results of the examination must be deemed satisfactory by the department.

(f) In lieu of the examination requirements of subsections (d) and (e) of this section, a PKI Service Provider may be placed on the "Approved List of PKI Service Providers" upon providing the department with documentation issued by a person independent of the PKI Service Provider that is indicative of the security policies and procedures actually employed by the PKI Service Provider and that is acceptable to the department in its sole discretion. The department may request additional documentation relating to policies and practices employed by the PKI Service Provider indicating the trustworthiness of the technology employed and compliance with applicable department guidelines.

(g) To remain on the "Approved List of PKI Service Providers" a Certification Authority must provide proof of compliance with the examination requirements or other acceptable documentation to the department every two years after initially being placed on the list. In addition, a Certification Authority must provide a copy of any changes to its certification practice statement to the department promptly following the adoption by the Certification Authority of such changes.

(h) If the department is informed that a PKI Service Provider is no longer in full compliance following a required examination and the non-compliance is deemed to be material by the department, or if the department obtains credible information that the technology employed by the PKI Service Provider can no longer reasonably be relied upon, the PKI Service Provider may be removed from the "Approved List of PKI Service Providers" by the department. The effect of the removal of a PKI Service Provider from the "Approved List of PKI Service Providers" shall be to prohibit institutions of higher education from thereafter accepting digital signatures for which the PKI Service Provider issued a certificate or provided services in connection with such issuance for so long as the PKI Service Provider is removed from the list. The removal of a PKI Service Provider from the "Approved List of PKI Service Providers" shall not, in and of itself, invalidate a digital signature for which a PKI Service Provider issued the certificate prior to its removal from the list.

**History**
- *Source Note: The provisions of this §203.45 adopted to be effective November 28, 2004, 29 TexReg 10710; amended to be effective September 20, 2011, 36 TexReg 6143; amended to be effective March 4, 2013, 38 TexReg 1353.*

### **Chapter 205** GEOGRAPHIC INFORMATION STANDARDS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 205.1** Definitions for Geographic Information Standards {#sec-205.1 omnilex-key=us-tx-regs-official--title-1--205.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Geographic information system (GIS)--A system of computer hardware, software and procedures used to store, analyze and display geographic data and related tabular data in a geographic context to solve complex planning and management problems in a wide variety of applications.

(2) Geographic dataset--Digital data which illustrates and describes some characteristic of the earth's surface or a region near the earth's surface. A geographic dataset employs a defined, earth-based coordinate system which allows its use in a geographic information system. For the purposes of this rule, geospatial shall have the same meaning as geographic.

(3) Geographic dataset enhancement--Substantial alteration of a geographic dataset which increases its usefulness through the addition or modification of attribute (tabular) data fields, improvements in spatial accuracy, or extension of geographic coverage.

(4) Geospatial metadata--A description of the characteristics of a geographic dataset, recorded in a standard format. Characteristics include data content, quality, purpose, condition, format, spatial coordinate system, availability, etc. The Federal Geographic Data Committee has defined a formal content standard for digital geospatial metadata for use by federal agencies.

(5) GIS map product--A geographic representation, in paper or electronic format, displaying features from one or more geographic datasets. Small scale images that are clearly intended only for graphic illustration within a larger publication are not considered to be GIS map products.

(6) High priority imagery and datasets (HPIDS)--HPIDS are geographic datasets identified by the state Geographic Information Officer as high priority for acquisition or enhancement, developed or acquired by state agencies, and intended for sharing and integration into a single statewide compilation.

(7) State Geographic Information Officer (GIO)--The official coordinating, establishing, supporting, and monitoring geographic information technology in Texas pursuant to Water Code §16.021(c). The GIO serves as director of the Texas Natural Resources Information System (TNRIS) within the Texas Water Development Board.

**History**
- *Source Note: The provisions of this §205.1 adopted to be effective June 12, 2014, 39 TexReg 4643.*

##### **1 Tex. Admin. Code § 205.2** Institution of Higher Education {#sec-205.2 omnilex-key=us-tx-regs-official--title-1--205.2}

A university system or institution of higher education as defined by §61.003, Education Code.

**History**
- *Source Note: The provisions of this §205.2 adopted to be effective June 12, 2014, 39 TexReg 4643.*

##### **1 Tex. Admin. Code § 205.3** State Agency {#sec-205.3 omnilex-key=us-tx-regs-official--title-1--205.3}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §205.3 adopted to be effective June 12, 2014, 39 TexReg 4643.*

#### **Subchapter B** STATE AGENCY GEOGRAPHIC INFORMATION STANDARDS

##### **1 Tex. Admin. Code § 205.10** State Agency Geographic Information Standards {#sec-205.10 omnilex-key=us-tx-regs-official--title-1--205.10}

(a) Applicability. All users and developers of geographic datasets and geographic information systems in state agencies must comply with the technical standards specified in this section. Activities conducted by a registered professional land surveyor while engaged in the practice of professional surveying, as defined in the Professional Land Surveying Practices Act (Art. 5282c, VTCS) are exempt from these standards.

(b) Implementation guidance. Pursuant to Water Code §16.021(c), the GIO provides guidance to the Executive Administrator of the Texas Water Development Board and to the Department of Information Resources (the department). The guidance provided by the GIO to the department relates to technology standards developed by the department for geographic datasets pursuant to Water Code §16.021(e)(4).

(c) Geographic Information Standards.

(1) Geographic dataset acquisition and development.

(A) Standard. An agency planning to acquire, develop, or enhance a geographic dataset that may correspond to an HPIDS dataset shall coordinate such activity with the GIO to determine potential use of the HPIDS master contract.

(B) Procurement of public domain geographic datasets. An agency that procures a copy of a federal or other public domain geographic dataset shall make the dataset available to the Texas Natural Resources Information System (TNRIS). TNRIS will make these datasets available to other agencies, institutions of higher education, and to the public.

(2) Geographic dataset exchange: Data format. An agency that originates or adds data content to a non-proprietary geographic dataset and distributes the dataset to another state agency, institution of higher education, or the public must make the dataset available in at least one digital format that is recognized by the most commonly used geographic information systems. This requirement does not preclude the agency from offering the dataset in other data formats. The GIO provides guidance on acceptable formats for data exchange.

(3) Geographic dataset documentation.

(A) Preparation. An agency shall prepare documentation for each geographic dataset that it both:

(i) originates and/or adds data content to; and

(ii) distributes as a standard product to another state agency, institution of higher education, or the public.

(B) Statement of Purpose. Documentation shall include a statement of the purpose or intended use of the dataset and a disclaimer warning against unintended uses of the dataset. If an agency is aware of specific inappropriate uses of the dataset which some users may be inclined to make, the dataset disclaimer shall specifically warn against those uses.

(C) Format. This documentation shall be in a geospatial metadata format specified by the GIO.

(D) Delivery. In responding to a request for a geographic dataset, an agency shall provide the requestor a copy of the documentation.

(4) GIS map product disclaimer. Any map product, in paper or electronic format, produced using geographic information system technology and intended for official use and/or distribution outside the agency, shall include a disclaimer statement advising against inappropriate use. If the nature of the map product is such that a user could incorrectly consider it to be a survey product, the disclaimer shall clearly state that the map is not a survey product.

**History**
- *Source Note: The provisions of this §205.10 adopted to be effective June 12, 2014, 39 TexReg 4643.*

#### **Subchapter C** INSTITUTIONS OF HIGHER EDUCATION GEOGRAPHIC INFORMATION STANDARDS

##### **1 Tex. Admin. Code § 205.20** Institutions of Higher Education Geographic Information Standards {#sec-205.20 omnilex-key=us-tx-regs-official--title-1--205.20}

(a) Applicability. All users and developers of geographic datasets and geographic information systems in institutions of higher education must comply with the technical standards specified in this section. Institutions of higher education are exempt from these standards when geographic information systems are acquired or geographic datasets developed, solely for research or instructional purposes. Activities conducted by a registered professional land surveyor while engaged in the practice of professional surveying, as defined in the Professional Land Surveying Practices Act (Art. 5282c, VTCS) are exempt from these standards.

(b) Implementation guidance. Pursuant to Water Code §16.021(c), the GIO provides guidance to the executive administrator of the Texas Water Development Board and to the Department of Information Resources (the department). The guidance provided by the GIO to the department relates to technology standards developed by the department for geographic datasets pursuant to Water Code §16.021(e)(4).

(c) Geographic Information Standards.

(1) Geographic dataset acquisition and development.

(A) Standard. An institution of higher education planning to acquire, develop, or enhance a geographic dataset that may corresponds to an HPIDS dataset shall coordinate such activity with the GIO to determine potential use of the HPIDS master contract.

(B) Procurement of public domain geographic datasets. An institution of higher education that procures a copy of a federal or other public domain geographic dataset shall make the dataset available to the Texas Natural Resources Information System (TNRIS). TNRIS will make these datasets available to other institutions of higher education, state agencies, and to the public.

(2) Geographic dataset exchange: Data format. An institution of higher education that originates or adds data content to a non-proprietary geographic dataset and distributes the dataset to another state agency, institution of higher education, or the public must make the dataset available in at least one digital format that is recognized by the most commonly used geographic information systems. This requirement does not preclude the institution of higher education from offering the dataset in other data formats. The GIO provides guidance on acceptable formats for data exchange.

(3) Geographic dataset documentation.

(A) Preparation. An institution of higher education shall prepare documentation for each geographic dataset that it both:

(i) originates and/or adds data content to; and

(ii) distributes as a standard product to another state agency, institution of higher education, or the public.

(B) Statement of Purpose. Documentation shall include a statement of the purpose or intended use of the dataset and a disclaimer warning against unintended uses of the dataset. If an institution of higher education is aware of specific inappropriate uses of the dataset which some users may be inclined to make, the dataset disclaimer shall specifically warn against those uses.

(C) Format. This documentation shall be in a geospatial metadata format specified by the GIO.

(D) Delivery. In responding to a request for a geographic dataset, an institution of higher education shall provide the requestor a copy of the documentation.

(4) GIS map product disclaimer. Any map product, in paper or electronic format, produced using geographic information system technology and intended for official use and/or distribution outside the institution of higher education, shall include a disclaimer statement advising against inappropriate use. If the nature of the map product is such that a user could incorrectly consider it to be a survey product, the disclaimer shall clearly state that the map is not a survey product.

**History**
- *Source Note: The provisions of this §205.20 adopted to be effective June 12, 2014, 39 TexReg 4643.*

### **Chapter 206** STATE WEBSITES

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 206.1** Applicable Terms and Technologies for State Websites {#sec-206.1 omnilex-key=us-tx-regs-official--title-1--206.1}

The following words and terms, when used in this chapter, must have the following meanings, unless the context clearly indicates otherwise.

(1) Section 508--The technical standards issued by the US Access Board implementing Section 508 of the Rehabilitation Act of 1973 as amended, 29 U.S.C. §794(d). In particular, the standards related to web accessibility (WCAG 2.0 AA) contained in 36 CFR Part 1194.

(2) Accessible--A web page that can be used in a variety of ways and does not depend on a single sense or ability.

(3) Agency head--The top-most senior executive with operational accountability for an agency, department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, that is created by the constitution or a statute of the state; or institutions of higher education, as defined in §61.003, Education Code.

(4) Alternate formats--Alternate formats usable by people with disabilities may include, but are not limited to, Braille, ASCII text, large print, recorded audio, and electronic formats that comply with this chapter.

(5) Alternate methods--Different means of providing information, including product documentation, to people with disabilities. Alternate methods may include, but are not limited to, voice, fax, relay service, TTY, Internet posting, captioning, text-to-speech synthesis, and audio description.

(6) Assistive Technologies---Any item, piece of equipment, or system, whether acquired commercially, modified, or customized, that is commonly used to increase, maintain, or improve functional capabilities of individuals with disabilities.

(7) Contact information--A list of key personnel, positions, or program names, with corresponding phone numbers and/or email addresses for each; and other information deemed necessary by the agency or institution of higher education for facilitating public access.

(8) Compact With Texans--Customer service standards and performance measures required of state agencies, including institutions of higher education, by §2113.006 and §2114.006, Texas Government Code.

(9) Electronic and information resources---Includes information technology and any equipment or interconnected system or subsystem of equipment used to create, convert, duplicate, store or deliver data or information. EIR includes telecommunications products, information kiosks and transaction machines, web sites, multimedia, and office equipment such as copiers and fax machines. The term does not include any equipment that contains embedded information technology that is used as an integral part of the product, but the principal function of which is not the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. For example, equipment such as thermostats or temperature control devices, and medical equipment that contain information technology that is integral to its operation, are not information technology. If the embedded information technology has an externally available web or computer interface, that interface is considered EIR. Other terms such as, but not limited to, Information and Communications Technology (ICT), Electronic Information Technology (EIT), etc. can be considered interchangeable terms with EIR for purposes of applicability or compliance with this chapter.

(10) Exception--A justified, documented non-conformance with one or more standards or specifications of Chapter 206 and/or Chapter 213 of this title, which has been approved by the agency head.

(11) Exemption--A justified, documented non-conformance with one or more standards or specifications of Chapter 206 and/or Chapter 213 of this title, which has been approved by the Department and which is applicable statewide.

(12) High-value data set--Information that can be used to increase state agency accountability and responsiveness, improve public knowledge of the agency and its operations, further the core mission of the agency, create economic opportunity, or respond to need and demand as identified through public consultation. The term does not include information that is confidential or protected from disclosure under state or federal law.

(13) Home page--The initial page that serves as the front door or entry point to a state website.

(14) Internet--An electronic communications network that connects computer networks and computer facilities around the world.

(15) Intranet--A computer network operating like the Internet but having access restricted to a limited group of authorized users such as employees of an agency or an institution of higher education.

(16) Key public entry point--A web page on a state website that is frequently accessed directly by members of the public, which a state agency or institution of higher education has specifically designed to enable direct access to official agency or institution of higher education information.

(17) Open standard format--Stable, published formats for data that are nonproprietary, free from licensing restrictions, independent of any individual vendor, and free to use, reuse, and redistribute.

(18) Personal identifying information--Information that could serve to identify an individual as defined by §521.002, Texas Business and Commerce Code.

(19) Site policies page--A web page containing the website policies of the state agency or institution of higher education, or a link to each policy.

(20) State website--A website that is connected to the Internet and is owned, funded, or operated by or for a state agency or institution of higher education, including key public entry points.

(21) TRAIL--Texas Records and Information Locator or its successor, providing a method to do a statewide search.

(22) Transaction Risk Assessment--An evaluation of the security and privacy required for an interactive web session providing public access to government information and services. Additional information and guidelines are included in Part 2: Risks Pertaining to Electronic Transactions and Signed Records in "The Guidelines for the Management of Electronic Transactions and Signed Records" available on the Department's website.

(23) Worldwide Web Consortium Web Content Accessibility Guidelines 2.0--a referenceable, international technical standard containing 12 guidelines that are organized under 4 principles: perceivable, operable, understandable, and robust. For each guideline, there are testable success criteria, which are at three levels: A, AA, and AAA. Also known as ISO/IEC International Standard ISO/IEC 40500:2012.

(24) Web page--Presentation of state website content, including documents and files containing text, graphics, sounds, video, or other content, that is accessed through a web browser.

**History**
- *Source Note: The provisions of this §206.1 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective February 15, 2018, 43 TexReg 753.*

##### **1 Tex. Admin. Code § 206.2** Institution of Higher Education {#sec-206.2 omnilex-key=us-tx-regs-official--title-1--206.2}

A university system or institution of higher education as defined by §61.003, Education Code.

**History**
- *Source Note: The provisions of this §206.2 adopted to be effective March 7, 2012, 37 TexReg 1487.*

##### **1 Tex. Admin. Code § 206.3** State Agency {#sec-206.3 omnilex-key=us-tx-regs-official--title-1--206.3}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §206.3 adopted to be effective March 7, 2012, 37 TexReg 1487.*

#### **Subchapter B** STATE AGENCY WEBSITES

##### **1 Tex. Admin. Code § 206.50** Accessibility {#sec-206.50 omnilex-key=us-tx-regs-official--title-1--206.50}

(a) Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this title, all new or changed web pages must comply with:

(1) the standards referenced in US Section 508 Appendix C Chapter 7 §702.10 (WCAG 2.0 Level AA excluding Guideline1.2 Time Based Media):

(A) Agencies shall consider the use of these standards for new websites or web applications prior to the effective date; or

(B) may continue to use US Section 508 standards published in the *Federal Register* on December 21, 2000, subpart B §1194.22, paragraphs (a) through (p), excluding paragraphs (b) and (k) prior to the effective date;

(2) the standards and specifications described in this section; and

(3) the standards and specifications applicable to a state agency's accessibility policy described in §213.21 of this title.

(b) Based on a request for accommodation of a webcast of a live/real time open meeting (Open Meetings Act, Texas Government Code, Chapter 551) or training and informational video productions which support the agency's mission, each state agency must consider captioning and alternative forms of accommodation for videos posted on state websites. Refer to §206.1 of this chapter for definitions for Alternate Formats and Alternate Methods.

(c) When compliance cannot be accomplished for an EIR, an alternative version of the page, form, application, document, or other EIR with equivalent information or functionality, must be provided to make a website comply with the provisions of this section. The alternative version must remain synchronized to the primary EIR and updated whenever the primary EIR changes.

(d) Effective September 1, 2006, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this title, all new or changed web page/site designs must be tested by the state agency using one or more EIR accessibility validation tools, including but not limited to the use of automated methods, manual methods or assistive technologies to validate compliance with this chapter.

(e) A state agency must establish an accessibility policy as described in §213.21 of this title which must include criteria for monitoring its website for compliance with the standards and specifications of this chapter.

(f) State websites and web applications should be designed to support:

(1) variations in internet connection speeds and emerging communications protocols and technologies; and

(2) the ability to adapt content to end user devices such as mobile phone, tablets, or other devices which are available to the general public.

(g) The department shall assist with establishing statewide agency website accessibility compliance goals, and track agency progress towards achieving those goals.

**History**
- *Source Note: The provisions of this §206.50 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective February 15, 2018, 43 TexReg 753.*

##### **1 Tex. Admin. Code § 206.51** Translation {#sec-206.51 omnilex-key=us-tx-regs-official--title-1--206.51}

(a) Each state agency must make a reasonable effort to ensure that Spanish-speaking persons of limited English proficiency can meaningfully access state agency website information in accordance with provisions of Texas Government Code §2054.116.

(b) To facilitate the use of state websites by people with limited English proficiency, in addition to English language content, and the provisions set forth in subsection (a) of this section, agencies should consider providing the content of their websites in the primary language or languages used by the people using the website.

(c) An agency should use reasonable efforts in determining the parts of its website that should be translated into languages in addition to English. An agency should consider:

(1) the number or proportion of people in the eligible service population with limited English proficiency;

(2) the frequency with which those individuals contact the program;

(3) the importance of the services provided; and

(4) the resources available to the recipient agency and costs.

**History**
- *Source Note: The provisions of this §206.51 adopted to be effective March 7, 2012, 37 TexReg 1487.*

##### **1 Tex. Admin. Code § 206.52** Privacy {#sec-206.52 omnilex-key=us-tx-regs-official--title-1--206.52}

(a) Each state agency must protect the privacy and personal identifying information of members of the public who provide or receive information from or through the state agency website.

(b) Each state agency must publish a privacy notice that describes applicable provisions of its privacy policy on its home page and all key public entry points or its site policies page.

(c) The privacy notice:

(1) Must describe the practices employed by the state agency to protect personal identifying information.

(2) Must conform to requirements of Chapters 552 and 559, Texas Government Code.

(3) Must be consistent with the State Website Linking and Privacy Policy published on the Department's website.

(d) Prior to providing access to information or services on a state website that requires personal identifying information, each state agency must conduct a transaction risk assessment, and implement appropriate privacy and security safeguards that conform to requirements of Chapter 202 of this title.

(e) Any web based form on a state agency's website that requests information from the public must have a link to the state agency's website privacy notice.

(f) Web pages designed for children must comply with all applicable federal and state laws, including provisions of the Children's Online Privacy Protection Act of 1998 and Texas Penal Code Chapter 33, intended to protect minors.

**History**
- *Source Note: The provisions of this §206.52 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective February 15, 2018, 43 TexReg 753.*

##### **1 Tex. Admin. Code § 206.53** Linking {#sec-206.53 omnilex-key=us-tx-regs-official--title-1--206.53}

(a) Each state agency must publish a linking notice to inform members of the public of the state's policy, and the state agency's policy, that govern the use of, copying information from, or linking to a state website.

(b) Each state agency must publish the linking notice on its home page and all key public entry points, or on its site policies page.

(c) The linking notice:

(1) Must be consistent with the State Website Linking and Privacy Policy published on the Department's website.

(2) Must include the agency's standards and criteria for linking to a third party website.

**History**
- *Source Note: The provisions of this §206.53 adopted to be effective March 7, 2012, 37 TexReg 1487.*

##### **1 Tex. Admin. Code § 206.54** Indexing {#sec-206.54 omnilex-key=us-tx-regs-official--title-1--206.54}

(a) All new or changed documents on a state agency website that meet the criteria of a "state publication" as defined by the Texas State Library and Archives Commission must include the meta tags required by 13 TAC §3.3, Standard Deposit and Reporting Requirement, when technically feasible.

(b) The home page of a state agency website must incorporate TRAIL meta data and must include links to the following State of Texas resources:

(1) State electronic Internet portal, Texas.gov;

(2) Texas Homeland Security website;

(3) TRAIL, statewide search website; and

(4) State Auditor's Office Fraud, Waste, or Abuse Hotline, and agency fraud policy, if applicable.

(c) The home page or site policies page of a state agency website must include links to the following agency resources:

(1) Agency linking notice;

(2) Agency privacy notice;

(3) Contact information;

(4) Agency policy and procedures relating to Open Records/Public Information Act;

(5) Compact with Texans; and

(6) Agency electronic and information resources accessibility:

(A) Policy; and

(B) Coordinator contact information.

(d) Key public entry points must include links to the following agency resources:

(1) Home page;

(2) Site policies page or contact information;

(3) Site policies page or linking notice;

(4) Site policies page or privacy notice; and

(5) Agency electronic and information resources accessibility:

(A) Policy; and

(B) Coordinator contact information.

(e) A state agency must post on the agency's Internet website:

(1) For agency-awarded state grants in an amount greater than $25,000, the purposes for which the grant was awarded, as specified in Texas Government Code, §403.0245.

(2) Agency information regarding accepted gifts, grants, donations or other consideration for any salary supplement for an agency employee, as specified in Texas Government Code, §659.0201.

(3) Agency information regarding staff compensation, as specified in Texas Government Code, §659.026.

(4) The agency's approved internal audit plan and agency annual report, including any required updates, as specified in Texas Government Code, §2102.015.

**History**
- *Source Note: The provisions of this §206.54 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective June 12, 2014, 39 TexReg 4645; amended to be effective September 29, 2019, 44 TexReg 5389.*

##### **1 Tex. Admin. Code § 206.55** High-Value Data Sets {#sec-206.55 omnilex-key=us-tx-regs-official--title-1--206.55}

(a) A state agency shall post high-value data set(s) it creates or maintains on a generally accessible Internet website maintained by or for the agency, if the agency:

(1) can do so using existing resources at no additional cost to the state;

(2) enters into a contract advantageous to the state under which the contractor posts the data set on the Internet website at no additional cost to the state; or

(3) receives a gift or grant specifically for the purpose of posting one or more of the agency's high-value data sets on the Internet website.

(b) A high-value data set posted by a state agency under subsection (a) of this section must be raw data in open standard format that allows the public to search, extract, organize, and analyze the information.

(c) A state agency posting high-value data set(s) under subsection (a) of this section must:

(1) have a conspicuously displayed link on either the agency's Internet website home page or another intuitive location accessible from the agency's Internet website home page.

(2) provide a brief description of the data set(s) and a link to the data set(s) to the Department to post on the state electronic Internet portal, Texas.gov.

(d) If a high-value data set is posted on the state agency's website, the web page on which the high-value data set is posted must use the agency's Internet website home page address and include the uniform resource locator suffix "data."

**History**
- *Source Note: The provisions of this §206.55 adopted to be effective March 19, 2014, 39 TexReg 1926.*

##### **1 Tex. Admin. Code § 206.56** Suggestions for Agency Cost Savings {#sec-206.56 omnilex-key=us-tx-regs-official--title-1--206.56}

To the extent possible using available resources, a state agency with 1,500 or more employees shall provide on the agency's intranet or internet website an electronic form or link to a tool by which an employee may submit suggestions and ideas for cost savings.

(1) A state agency must provide an employee the options of submitting the suggestion or idea with attribution or anonymously.

(A) An anonymous suggestion may not be traceable to the employee; and

(B) The system or tool by which an anonymous suggestion is submitted shall not record any data that would link the suggestion or idea to the computer used for the submission.

(2) A state agency shall provide a means by which the public may:

(A) monitor, in real time or on a weekly, monthly, or quarterly basis, submissions made under this rule; and

(B) vote for a favorite submission.

(3) Suggestions or ideas submitted under this rule shall be moderated by or on behalf of the agency to exclude, at a minimum, overtly political or offensive language.

**History**
- *Source Note: The provisions of this §206.56 adopted to be effective March 19, 2014, 39 TexReg 1926.*

#### **Subchapter C** INSTITUTION OF HIGHER EDUCATION WEBSITES

##### **1 Tex. Admin. Code § 206.70** Accessibility {#sec-206.70 omnilex-key=us-tx-regs-official--title-1--206.70}

(a) Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this title, all new or changed web pages must comply with:

(1) the standards referenced in US Section 508 Appendix C Chapter7 §702.10 (WCAG 2.0 Level AA excluding Guideline 1.2 Time Based Media):

(A) Agencies shall consider the use of these standards for new websites or web applications prior to the effective date; or

(B) may continue to use US Section 508 standards published in the *Federal Register* on December 21, 2000, subpart B §1194.22, paragraphs (a) through (p), excluding paragraphs (b) and (k) prior to the effective date;

(2) the standards and specifications described in this section; and

(3) the standards and specifications applicable to a state agency's accessibility policy described in §213.41 of this title.

(b) Based on a request for accommodation of a webcast of a live/real time open meeting (Open Meetings Act, Texas Government Code, Chapter 551) or training and informational video productions which support the institution of higher education's mission, each institution of higher education must consider captioning and alternative forms of accommodation for videos posted on state websites. Refer to §206.1 of this chapter for definitions for Alternate Formats and Alternate Methods.

(c) When compliance cannot be accomplished for an EIR, an alternative version of the page, form, application, document, or other EIR with equivalent information or functionality, must be provided to make a website comply with the provisions of this section. The alternative version must remain synchronized to the primary EIR and updated whenever the primary EIR changes.

(d) Effective September 1, 2006, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.37 of this title, all new or changed web page/site designs must be tested by the institution of higher education using one or more EIR accessibility validation tools, including but not limited to the use of automated methods, manual methods or assistive technologies to validate compliance with this chapter.

(e) An institution of higher education must establish an accessibility policy as described in §213.41 of this title which must include criteria for monitoring its website for compliance with the standards and specifications of this chapter.

(f) Institutions of higher education websites and web applications should be designed to support:

(1) variations in internet connection speeds and emerging communications protocols and technologies; and

(2) the ability to adapt content to end user devices such as mobile phone, tablets, or other devices which are available to the general public.

(g) The Department shall assist in consultation with ITCHE with establishing statewide agency website accessibility compliance goals for institutions of higher education, and track progress towards achieving those goals.

**History**
- *Source Note: The provisions of this §206.70 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective February 15, 2018, 43 TexReg 753.*

##### **1 Tex. Admin. Code § 206.71** Translation {#sec-206.71 omnilex-key=us-tx-regs-official--title-1--206.71}

(a) Each institution of higher education must make a reasonable effort to ensure that Spanish-speaking persons of limited English proficiency can meaningfully access institution of higher education website information in accordance with provisions of Texas Government Code §2054.116.

(b) To facilitate the use of state websites by people with limited English proficiency, in addition to English language content, and the provisions set forth in subsection (a) of this section, institutions of higher education should consider providing the content of their websites in the primary language or languages used by the people using the website.

(c) An institution of higher education should use reasonable efforts in determining the parts of its website that should be translated into languages in addition to English. An institution of higher education should consider:

(1) the number or proportion of people in the eligible service population with limited English proficiency;

(2) the frequency with which those individuals contact the program;

(3) the importance of the services provided; and

(4) the resources available to the recipient institution of higher education and costs.

**History**
- *Source Note: The provisions of this §206.71 adopted to be effective March 7, 2012, 37 TexReg 1487.*

##### **1 Tex. Admin. Code § 206.72** Privacy {#sec-206.72 omnilex-key=us-tx-regs-official--title-1--206.72}

(a) Each institution of higher education must protect the privacy and personal identifying information of members of the public who provide or receive information from or through the institution of higher education website.

(b) Each institution of higher education must publish a privacy notice that describes applicable provisions of its privacy policy on its home page and all key public entry points or its site policies page.

(c) The privacy notice:

(1) Must describe the practices employed by the institution of higher education to protect personal identifying information.

(2) Must conform to requirements of Chapters 552 and 559, Texas Government Code.

(3) Must be consistent with the State Website Linking and Privacy Policy published on the Department's website.

(d) Prior to providing access to information or services on a state website that requires personal identifying information, each institution of higher education must conduct a transaction risk assessment, and implement appropriate privacy and security safeguards that conform to requirements of Chapter 202 of this title.

(e) Any web based form on an institution of higher education's website that requests information from the public must have a link to the institution of higher education's website privacy notice.

(f) Web pages designed for children must comply with all applicable federal and state laws, including provisions of the Children's Online Privacy Protection Act of 1998 and Texas Penal Code Chapter 33, intended to protect minors.

**History**
- *Source Note: The provisions of this §206.72 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective February 15, 2018, 43 TexReg 753.*

##### **1 Tex. Admin. Code § 206.73** Linking {#sec-206.73 omnilex-key=us-tx-regs-official--title-1--206.73}

(a) Each institution of higher education must publish a linking notice to inform members of the public of the state's policy, and the institution of higher education's policy, that govern the use of, copying information from, or linking to a state website.

(b) Each institution of higher education must publish the linking notice on its home page and all key public entry points, or on its site policies page.

(c) The linking notice:

(1) Must be consistent with the State Website Linking and Privacy Policy published on the Department's website.

(2) Must include the institution of higher education's standards and criteria for linking to a third party website.

**History**
- *Source Note: The provisions of this §206.73 adopted to be effective March 7, 2012, 37 TexReg 1487.*

##### **1 Tex. Admin. Code § 206.74** Indexing {#sec-206.74 omnilex-key=us-tx-regs-official--title-1--206.74}

(a) All new or changed documents on an institution of higher education website that meet the criteria of a "state publication" as defined by the Texas State Library and Archives Commission must include the meta tags required by 13 TAC §3.3, Standard Deposit and Reporting Requirement, when technically feasible.

(b) The home page of an institution of higher education website must incorporate TRAIL meta data and must include links to the following State of Texas resources:

(1) State electronic Internet portal, Texas.gov;

(2) Texas Homeland Security website;

(3) TRAIL, statewide search website; and

(4) State Auditor's Office Fraud, Waste, or Abuse Hotline, and agency fraud policy, if applicable.

(c) The home page or site policies page of an institution of higher education website must include links to the following institution of higher education resources:

(1) Institution of higher education linking notice;

(2) Institution of higher education privacy notice;

(3) Contact information;

(4) Institution of higher education policy and procedures relating to Open Records/Public Information Act;

(5) Compact with Texans; and

(6) Institution of higher education electronic and information resources accessibility:

(A) Policy; and

(B) Coordinator contact information.

(d) Key public entry points must include links to the following institution of higher education resources:

(1) Home page;

(2) Site policies page or contact information;

(3) Site policies page or linking notice;

(4) Site policies page or privacy notice; and

(5) Institution of higher education electronic and information resources accessibility:

(A) Policy; and

(B) Coordinator contact information.

(e) An institution of higher education must post on the institution's Internet website:

(1) For institution-awarded state grants in an amount greater than $25,000, the purposes for which the grant was awarded, as specified in Texas Government Code, §403.0245.

(2) Institution information regarding accepted gifts, grants, donations or other consideration for any salary supplement for an institution employee, as specified in Texas Government Code, §659.0201.

(3) Institution information regarding staff compensation, as specified in Texas Government Code, §659.026.

(4) The institution's approved internal audit plan and agency annual report, including any required updates, as specified in Texas Government Code, §2102.015.

**History**
- *Source Note: The provisions of this §206.74 adopted to be effective March 7, 2012, 37 TexReg 1487; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective June 12, 2014, 39 TexReg 4645; amended to be effective September 29, 2019, 44 TexReg 5389.*

##### **1 Tex. Admin. Code § 206.75** High-Value Data Sets {#sec-206.75 omnilex-key=us-tx-regs-official--title-1--206.75}

(a) An institution of higher education shall post high-value data set(s) it creates or maintains on a generally accessible Internet website maintained by or for the institution of higher education, if the institution:

(1) can do so using existing resources at no additional cost to the state;

(2) enters into a contract advantageous to the state under which the contractor posts the data set on the Internet website at no additional cost to the state; or

(3) receives a gift or grant specifically for the purpose of posting one or more of the institution of higher education's high-value data sets on the Internet website.

(b) A high-value data set posted by an institution of higher education under subsection (a) of this section must be raw data in open standard format that allows the public to search, extract, organize, and analyze the information.

(c) An institution of higher education posting high-value data set(s) under subsection (a) of this section must:

(1) have a conspicuously displayed link on either the institution's Internet website home page or another intuitive location accessible from the institution of higher education's Internet website home page.

(2) provide a brief description of the data set(s) and a link to the data set(s) to the Department to post on the state electronic Internet portal, Texas.gov.

(d) If a high-value data set is posted on the institution of higher education's website, the web page on which the high-value data set is posted must use the institution's Internet website home page address and include the uniform resource locator suffix "data."

**History**
- *Source Note: The provisions of this §206.75 adopted to be effective March 19, 2014, 39 TexReg 1926.*

### **Chapter 207** TELECOMMUNICATIONS SERVICES

#### **Subchapter A** GENERAL PURPOSE AND DEFINITIONS

##### **1 Tex. Admin. Code § 207.1** General Purpose {#sec-207.1 omnilex-key=us-tx-regs-official--title-1--207.1}

The department is responsible for:

(1) the management of a system of telecommunications services, Texas Agency Network (TEX-AN) to meet all state agencies intercity and intracity telecommunications requirements to the extent possible and to the extent that funds appropriated are available for that purpose;

(2) the provision of centralized telephone service for state agencies, each house of the legislature, and legislative agencies in the capitol complex telephone system (CCTS);

(3) the acquisition of any or all of the facilities, telecommunications services and/or equipment necessary to provide telecommunications and CCTS services;

(4) promulgation and dissemination of appropriate guidelines, and operating procedures, and publication of CCTS telephone directories to insure efficient operation of telecommunications and CCTS services;

(5) operation of a system of billings and charges for services provided in operating and administering telecommunications and CCTS services; and

(6) the provision of network security services to state agencies and other entities as provided by §2059.051, Government Code.

**History**
- *Source Note: The provisions of this §207.1 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.2** Applicable Terms and Technologies for Telecommunications Services {#sec-207.2 omnilex-key=us-tx-regs-official--title-1--207.2}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative cost--Indirect personnel costs and other support costs.

(2) Bill rate intervention--The cost of legal representation provided by the Office of the Attorney General on behalf of the department before regulatory bodies with jurisdiction over telecommunications.

(3) CCTS--Capitol Complex Telephone System. The centralized telephone service for CCTS users in the capitol complex.

(4) CCTS users--State agencies, each house of the legislature, legislative agencies and other authorized government entities that contract to utilize CCTS services.

(5) The Department--Department of Information Resources.

(6) Local government--Counties, cities, districts, and other political subdivisions.

(7) New telephone equipment--The department inventory of telephone equipment never used.

(8) Network Security--The protection of computer systems and technology assets as defined by §2059.001, Government Code.

(9) Operational cost--All telecommunications services operational costs, including without limitation, staff salaries and contracted services.

(10) Reconditioned telephone equipment--Telephone equipment that is not new, has been repaired, and is warranted as if it is new.

(11) Telecommunications--The means of transmission, emission, or reception of signals as defined by §2054.003, Government Code.

(12) Telecommunications equipment--Devices or apparatus used for various modes of telecommunications services.

(13) Telecommunications service provider--Business entities or other organizations competitively selected by the department to provide telecommunications equipment or services.

(14) Telecommunications service--Any service as defined by §2170.001, Government Code.

(15) Telecommunications Services user--User of telecommunication services provided by the department including, but not limited to, CCTS, TEX-AN and Network Security Services.

(16) Telecommunications revolving account--An account in the Texas State Treasury into which funds received from telecommunications services users and CCTS users are transferred.

(17) TEX-AN--Texas Agency Network. The statewide system of telecommunications services serving authorized users.

(18) Usage sensitive services--Telecommunications services, which are billed on the basis of quantity used such as long distance per minute charges, bandwidth charges for internet services, etc.

**History**
- *Source Note: The provisions of this §207.2 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.3** Institution of Higher Education {#sec-207.3 omnilex-key=us-tx-regs-official--title-1--207.3}

A university system or institution of higher education as defined by §61.003, Education Code.

**History**
- *Source Note: The provisions of this §207.3 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.4** State Agency {#sec-207.4 omnilex-key=us-tx-regs-official--title-1--207.4}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §207.4 adopted to be effective March 4, 2013, 38 TexReg 1355.*

#### **Subchapter B** TELECOMMUNICATIONS SERVICES FOR STATE AGENCIES

##### **1 Tex. Admin. Code § 207.10** Telecommunications Services Usage; Requests for Telecommunications Services {#sec-207.10 omnilex-key=us-tx-regs-official--title-1--207.10}

(a) Authorized Users. The following categories of entities are authorized telecommunications services users:

(1) State agencies, which must use telecommunications services to the fullest extent possible;

(2) Each house of the legislature and legislative agencies, which may contract with the department for telecommunications services;

(3) Local governments; and

(4) An assistance organization, as defined by §2175.001, Government Code.

(b) Requests for telecommunications services. All requests for telecommunications services must be addressed to the department and documented as prescribed in the department procedures. Local Government must contract with the department pursuant to the Interlocal Cooperation Act, Chapter 791, Government Code.

**History**
- *Source Note: The provisions of this §207.10 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.11** Telecommunications Services Billing {#sec-207.11 omnilex-key=us-tx-regs-official--title-1--207.11}

(a) Each telecommunications services user shall be billed for its respective use of telecommunications goods and services on a monthly basis. Telecommunications services users will be billed for the following:

(1) variable recurring costs for usage sensitive services;

(2) fixed recurring costs for non-usage sensitive services;

(3) telecommunications services user's proportionate use of common telecommunications services, operational costs, administrative costs and/or equipment for said services provided to all or some users;

(4) telecommunications services user's nonrecurring charges for any telecommunications services and/or equipment provided by the department;

(5) employee fringe benefits; and

(6) bill rate intervention.

(b) Each telecommunications services user shall notify the department in writing within twenty-one (21) days of receipt of a billing of any errors in the bill, including all requests for additional time to research billing issues. All telecommunications services user requests for additional time beyond the twenty-one (21) day period are subject to written approval by the Chief Financial Officer of the department, or designee. The notice must provide details as to the nature of the error and all information the user may have to assist in resolution of the error(s). All allegations of errors in bills must be based on a good-faith belief that the charges in question are not the responsibility of the user. Each telecommunications services user shall make payment in the amount of the bill not found to be in error within thirty (30) days of receipt pursuant to the Prompt Payment Act, Chapter 2251, Government Code. Upon resolution of the alleged error(s), if the telecommunications services user owes the department, the payment shall be paid within ten (10) days of the date of resolution. Upon resolution of the alleged error, if the billing was found to be in error, the department shall make a notation in the user's billing record and no further collection attempts shall be undertaken against the user.

(c) In order to maintain sufficient amounts in the telecommunications revolving account to make timely payments to the telecommunications service providers, the department may require any telecommunications services users to make advance payments based on 80% of the average of each user's prior three-month billing exclusive of charges described in subsection (a)(4) of this section. Advance payments which are not equal to the actual amount due for the subsequent payment period will be adjusted accordingly.

**History**
- *Source Note: The provisions of this §207.11 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.12** Telecommunications Services User Responsibilities {#sec-207.12 omnilex-key=us-tx-regs-official--title-1--207.12}

(a) Each telecommunications services user shall provide the department with the name, title, postal and electronic mailing addresses, and all telephone numbers of the employee(s) authorized to initiate, change, modify, amend or terminate telecommunications services.

(b) Each telecommunications services user is responsible for insuring that telecommunications services are used solely in compliance with applicable law, policy and procedures.

(c) A telecommunications services user shall submit a request to the department to initiate telecommunications services changes, modifications or terminate telecommunications services, in accordance with the department procedures.

**History**
- *Source Note: The provisions of this §207.12 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.13** CCTS User Responsibility {#sec-207.13 omnilex-key=us-tx-regs-official--title-1--207.13}

(a) Each CCTS user shall provide the department with the name, title, postal and electronic mailing addresses, and all telephone numbers of the employee(s) authorized to initiate, change, modify, amend or terminate CCTS service, or listings in the CCTS directory.

(b) Each CCTS user is responsible for insuring that CCTS services are used solely in compliance with applicable law, policy and procedures.

(c) CCTS users shall submit a request to the department to initiate CCTS changes, modifications, or terminate CCTS services or listings in the CCTS directory, in accordance with the department procedures.

(d) CCTS users may procure their own telephone equipment from other sources, but the telephone equipment must be compatible with the CCTS. Equipment provided by a CCTS user may not have an effect on charges for CCTS services.

**History**
- *Source Note: The provisions of this §207.13 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.14** CCTS Billing {#sec-207.14 omnilex-key=us-tx-regs-official--title-1--207.14}

(a) Each CCTS user shall be billed monthly as follows:

(1) variable recurring costs for usage sensitive services;

(2) fixed recurring costs for non-usage sensitive services;

(3) CCTS user's proportionate use of common telecommunications services, operational costs, administrative cost and/or equipment for said services provided to all or some CCTS users;

(4) CCTS user's nonrecurring charges for any telecommunications services provided by the department;

(5) employee fringe benefits; and

(6) bill rate intervention.

(b) Each CCTS user shall notify the department in writing within twenty-one (21) days of receipt of a billing of any errors in the bill, including all requests for additional time to research billing issues. All CCTS user requests for additional time beyond the twenty-one (21) day period are subject to written approval by the Chief Financial Officer of the department, or designee. The notice must provide details as to the nature of the error and all information the user may have to assist in resolution of the error(s). All allegations of errors in bills must be based on a good-faith belief that the charges in question are not the responsibility of the user. Each CCTS user shall make payment in the amount of the bill not found to be in error within thirty (30) days of receipt pursuant to the Prompt Payment Act, Chapter 2251, Government Code. Upon resolution of the alleged error(s), if the CCTS user owes the department, the payment shall be paid within ten (10) days of the date of resolution. Upon resolution of the alleged error, if the billing was found to be in error, the department shall make a notation in the user's billing record and no further collection attempts shall be undertaken against the user.

(c) In order to maintain sufficient amounts in the telecommunications revolving account to make timely payments to the telecommunications service providers, the department may require any CCTS user to make advance payments based on 80% of the average of each CCTS user's prior three month billing, exclusive of charges described in subsection (a)(4) of this section. Advance payments, that are not equal to the actual amount due for the subsequent payment period, will be adjusted accordingly.

(d) CCTS records shall be maintained by the department as required by law.

**History**
- *Source Note: The provisions of this §207.14 adopted to be effective March 4, 2013, 38 TexReg 1355.*

#### **Subchapter C** TELECOMMUNICATIONS SERVICES FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 207.30** Telecommunications Services Usage; Requests for Telecommunications Services {#sec-207.30 omnilex-key=us-tx-regs-official--title-1--207.30}

(a) Authorized Users. The following categories of entities are authorized telecommunications services users:

(1) Institutions of higher education; institutions of higher education may allow the use of the institution's telecommunications services purchased through the department to students who reside in the institution's housing;

(2) private institutions of higher education, as defined by §61.003(15), Education Code, that:

(A) engage in distance learning, as defined by §57.021, Utilities Code;

(B) receive federal funds for distance learning initiatives; and

(C) complete an application form provided by the department, which is found to be true and correct.

(b) Requests for telecommunications services. All requests for telecommunications services must be addressed to the department and documented as prescribed in the department procedures.

**History**
- *Source Note: The provisions of this §207.30 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.31** Telecommunications Services Billing {#sec-207.31 omnilex-key=us-tx-regs-official--title-1--207.31}

(a) Each telecommunications user shall be billed for its respective use of telecommunications goods and services on a monthly basis. Telecommunications users will be billed for the following:

(1) variable recurring costs for usage sensitive services;

(2) fixed recurring costs for non-usage sensitive services;

(3) telecommunications user's proportionate use of common telecommunications services, operational costs, administrative costs and/or equipment for said services provided to all or some users;

(4) telecommunications user's nonrecurring charges for any telecommunications services and/or equipment provided by the department;

(5) employee fringe benefits; and

(6) bill rate intervention.

(b) Each telecommunications user shall notify the department in writing within twenty-one (21) days of receipt of a billing of any errors in the bill, including all requests for additional time to research billing issues. All telecommunications user requests for additional time beyond the twenty-one (21) day period are subject to written approval by the Chief Financial Officer of the department, or designee. The notice must provide details as to the nature of the error and all information the user may have to assist in resolution of the error(s). All allegations of errors in bills must be based on a good-faith belief that the charges in question are not the responsibility of the user. Each telecommunications user shall make payment in the amount of the bill not found to be in error within thirty (30) days of receipt pursuant to the Prompt Payment Act, Chapter 2251, Government Code. Upon resolution of the alleged error(s), if the telecommunications user owes the department, the payment shall be paid within ten (10) days of the date of resolution. Upon resolution of the alleged error, if the billing was found to be in error, the department shall make a notation in the user's billing record and no further collection attempts shall be undertaken against the user.

(c) Any institution of higher education extending telecommunications service to students purchased through the department is responsible for payment directly to the department of the total charges billed within thirty (30) days of receipt, regardless of whether it is able to collect the student's contribution of the payment.

(d) In order to maintain sufficient amounts in the telecommunications revolving account to make timely payments to the telecommunications service providers, the department may require any telecommunications users to make advance payments based on 80% of the average of each user's prior three-month billing exclusive of charges described in subsection (a)(4) of this section. Advance payments which are not equal to the actual amount due for the subsequent payment period will be adjusted accordingly.

**History**
- *Source Note: The provisions of this §207.31 adopted to be effective March 4, 2013, 38 TexReg 1355.*

##### **1 Tex. Admin. Code § 207.32** Telecommunications Services User Responsibilities {#sec-207.32 omnilex-key=us-tx-regs-official--title-1--207.32}

(a) Each telecommunications services user shall provide the department with the name, title, postal and electronic mailing addresses, and all telephone numbers of the employee(s) authorized to initiate, change, modify, amend or terminate telecommunications service.

(b) Each telecommunications services user is responsible for insuring that telecommunications services are used solely in compliance with applicable law, policy and procedures.

(c) A telecommunications services user shall submit a request to the department to initiate telecommunications services changes, modifications or terminate telecommunications services, in accordance with the department procedures.

**History**
- *Source Note: The provisions of this §207.32 adopted to be effective March 4, 2013, 38 TexReg 1355.*

### **Chapter 209** MINIMUM STANDARDS FOR MEETINGS HELD BY VIDEOCONFERENCE

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 209.1** Applicable Terms and Technologies for Meetings Held by Videoconference {#sec-209.1 omnilex-key=us-tx-regs-official--title-1--209.1}

The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Computer-Based Videoconferencing Application--a commercially-available application designed to facilitate videoconferencing between a Personal Computer to another Personal Computer or mobile device either one-to-one or in a group environment.

(2) Dedicated Video Room Environment--a room that is specifically and exclusively built for the purpose of videoconferencing with specific acoustics, permanent microphone and camera placement, dedicated camera and system equipment, and other equipment that is permanently fixed in the room for videoconferencing. A dedicated video room environment generally uses specific, proprietary software to connect participants at remote locations through a private data network or through a proprietary software connection with the primary dedicated video room environment; this software is typically only compatible with the video room equipment that is used in the primary dedicated video room environment. This definition does not include a room that has nonpermanent connections set up to permit an institution of higher education or governmental body to bring their own electronics into the room and connect them therein.

(3) ITU--International Telecommunication Union.

(4) Meeting--shall have the same meaning as set forth in Texas Government Code Chapter 551.

(5) Videoconference--a communication conducted between two or more persons in which one or more of the participants communicate with the other participants through audio and video signals transmitted over a telephone network, a data network, or the Internet.

**History**
- *Source Note: The provisions of this §209.1 adopted to be effective September 20, 2011, 36 TexReg 6145; amended to be effective September 18, 2014, 39 TexReg 7563; amended to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.2** Institution of Higher Education {#sec-209.2 omnilex-key=us-tx-regs-official--title-1--209.2}

A university system or institution of higher education as defined by Texas Education Code §61.003.

**History**
- *Source Note: The provisions of this §209.2 adopted to be effective September 20, 2011, 36 TexReg 6145; amended to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.3** Governmental Body {#sec-209.3 omnilex-key=us-tx-regs-official--title-1--209.3}

A governmental body as defined by Texas Government Code §551.001(3).

**History**
- *Source Note: The provisions of this §209.3 adopted to be effective September 20, 2011, 36 TexReg 6145; amended to be effective September 18, 2014, 39 TexReg 7563; amended to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.4** Open Meetings Act Requirements for Meetings Held by Videoconference {#sec-209.4 omnilex-key=us-tx-regs-official--title-1--209.4}

No requirements found in subchapters B or C of this chapter shall be interpreted to overrule any section of Texas Government Code Chapter 551 or any rules adopted or opinions issued by the Office of the Attorney General interpreting Texas Government Code Chapter 551.

**History**
- *Source Note: The provisions of this §209.4 adopted to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.5** Guidelines {#sec-209.5 omnilex-key=us-tx-regs-official--title-1--209.5}

(a) At its discretion, the department may promulgate guidelines establishing technical standards pertaining to rapidly emerging technologies or technological issues or advancement. The department will publish any such guidelines to the department's website.

(b) Governmental bodies and institutions of higher education conducting open or closed meetings by videoconference call shall review and consider any applicable guidelines promulgated by the department.

**History**
- *Source Note: The provisions of this §209.5 adopted to be effective September 15, 2022, 47 TexReg 5479.*

#### **Subchapter B** VIDEOCONFERENCES HELD BY GOVERNMENTAL BODIES, EXCLUDING INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 209.10** Minimum Standards for Meetings Held by Computer-Based Videoconferencing Applications by a Governmental Body {#sec-209.10 omnilex-key=us-tx-regs-official--title-1--209.10}

(a) All computer-based videoconferencing applications shall employ a minimum bandwidth transmission speed and/or adequate data compression algorithm to produce a sufficient quality for audio and video such that audio volume and clarity and video clarity are sufficient to hear and view all speaking participants on the videoconference clearly.

(b) Computer-based videoconferencing applications may specify unique minimum requirements for computer central processing units, memory, and video capability to run the computer-based videoconferencing application. A governmental body shall comply with these minimum requirements.

(c) If the videoconference call hosts a public audience at a location or locations specified by the official notice of the open meeting posted by the governmental body in compliance with Open Meetings Act requirements, then the governmental body shall establish a minimum of one host computer at the location(s) that will run the computer-based videoconferencing application. This host computer shall then be connected to:

(1) either a separate video monitor of size proportional to the room and clearly visible to all in the room or multiple video monitors so that all attendees may clearly view the videostream; and

(2) external speakers of suitable volume and sound quality such that all meeting attendees at the host location may clearly hear the meeting.

(d) Any personal computer used by a governmental body member for the purpose of videoconferencing for an open meeting subject to the Open Meetings Act shall contain a camera and speakers of sufficient quality to permit all meeting attendees to see the individual who is using the personal computer and for the individual to hear all speaking attendees.

**History**
- *Source Note: The provisions of this §209.10 adopted to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.11** Minimum Standards for Meetings Hosted from Dedicated Video Room Environment to Dedicated Video Room Environment by a Governmental Body {#sec-209.11 omnilex-key=us-tx-regs-official--title-1--209.11}

(a) Videoconferencing equipment used in a dedicated video room environment shall meet the below ITU standards for the respective medium of transmission:

(1) ITU H.320 or H.324 for videoconferencing over a public switched telephone network (PSTN), private line facility, or integrated switched digital network (ISDN);

(2) ITU H.323/SIP (Session Initiation Protocol) for videoconferencing over the Internet; or

(3) Proprietary vendor protocols as long as the governmental body has received certification from the vendor stating that the vendor's equipment and proprietary software protocol release version meet or exceed the required ITU standards.

(b) When using a computer web conferencing system at the primary dedicated video room environment site, a large monitor and adequate speakers shall be used.

(c) Audio signals from a remote dedicated video room environment(s) shall be of similar quality and volume as the local audio at the primary dedicated video room environment.

(d) At least one monitor shall be available at the primary dedicated video room environment site for the audience to easily see remote meeting participants. When using a computer web conferencing system at the primary site, a large monitor and adequate speakers shall be used. The audience and members of the governmental body shall have full view of at least one monitor at each meeting location. Additional monitors shall be placed, as necessary, to ensure a clear view by all in attendance.

(e) If a governmental body uses a dedicated video room environment for the dedicated camera and speaker equipment but is using a computer-based videoconferencing application that is not part of the proprietary dedicated video room equipment setup, then the entity must comply with all minimum standards for computer-based application software and is not subject to the requirements of a dedicated video room environment.

**History**
- *Source Note: The provisions of this §209.11 adopted to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.12** Security Requirements for Open Meetings Held by Videoconference {#sec-209.12 omnilex-key=us-tx-regs-official--title-1--209.12}

(a) Each governmental body subject to the Open Meetings Act shall review and comply with any additional internal security requirements of their governmental body that may apply to a meeting held by videoconference.

(b) If 1 Texas Administrative Code Chapter 202 applies to the governmental body, then the governmental body shall ensure compliance with any information security standards promulgated regarding the transmission of data through a public or data/IP network.

**History**
- *Source Note: The provisions of this §209.12 adopted to be effective September 15, 2022, 47 TexReg 5479.*

#### **Subchapter C** VIDEOCONFERENCES HELD BY INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 209.30** Minimum Standards for Meetings Held by Computer-Based Videoconferencing Applications by an Institution of Higher Education {#sec-209.30 omnilex-key=us-tx-regs-official--title-1--209.30}

(a) All computer-based videoconferencing applications shall employ a minimum bandwidth transmission speed and/or adequate data compression algorithm to produce a sufficient quality such that audio volume and clarity and video clarity are sufficient to hear and view all speaking participants on the videoconference clearly.

(b) Computer-based videoconferencing applications may specify unique minimum requirements for computer central processing unit, memory, and video capability to run the computer-based videoconferencing application. An institution of higher education shall comply with these minimum requirements.

(c) If the videoconference call hosts a public audience at a location or locations specified by the official notice of the open meeting posted by the institution of higher education in compliance with Open Meetings Act requirements, then the institution of higher education shall establish a minimum of one host computer at such location(s) that will run the computer-based videoconferencing application. This host computer shall then be connected to:

(1) either a separate video monitor of size proportional to the room and clearly visible to all in the room or multiple video monitors so that all attendees may clearly view the videostream; and

(2) external speakers of suitable volume and sound quality such that all meeting attendees at the host location may clearly hear the meeting.

(d) Any personal computer used by a governing body member of an institution of higher education for the purpose of videoconferencing for an open meeting subject to the Open Meetings Act shall contain a camera and speakers of sufficient quality to permit all meeting attendees to see the individual who is using the personal computer and for the individual to hear all speaking attendees.

**History**
- *Source Note: The provisions of this §209.30 adopted to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.31** Minimum Standards for Meetings Hosted from Dedicated Video Room Environment to Dedicated Video Room Environment by Institutions of Higher Education {#sec-209.31 omnilex-key=us-tx-regs-official--title-1--209.31}

(a) Videoconferencing equipment used in a dedicated video room environment shall meet the below ITU standards for the respective medium of transmission:

(1) ITU H.320 or H.324 for videoconferencing over a public switched telephone network (PSTN), private line facility, or integrated switched digital network (ISDN);

(2) ITU H.323/SIP (Session Initiation Protocol) for videoconferencing over the Internet; or

(3) Proprietary vendor protocols as long as the institution of higher education has received certification from the vendor stating that the vendor's equipment and proprietary software protocol release version meet or exceed the required ITU standards.

(b) When using a computer web conferencing system at the primary dedicated video room environment site, a large monitor and adequate speakers shall be used.

(c) Audio signals from the remote dedicated video room environment(s) shall be of similar quality and volume as the local audio at the primary dedicated video room environment.

(d) At least one monitor shall be available at the primary dedicated video room environment site for the audience to easily see remote meeting participants. When using a computer web conferencing system at the primary site, a large monitor and adequate speakers shall be used. The audience and members of the institution of higher education shall have full view of at least one monitor at each meeting location. Additional monitors shall be placed, as necessary, to ensure a clear view by all in attendance.

(e) If an institution of higher education uses a dedicated video room environment for the dedicated camera and speaker equipment but is using a computer-based videoconferencing application that is not part of the proprietary dedicated video room equipment setup, then the institution of higher education must comply with all minimum standards for computer-based application software and is not subject to the requirements of a dedicated video room environment.

**History**
- *Source Note: The provisions of this §209.31 adopted to be effective September 15, 2022, 47 TexReg 5479.*

##### **1 Tex. Admin. Code § 209.32** Security Requirements for Open Meetings Held by Videoconference {#sec-209.32 omnilex-key=us-tx-regs-official--title-1--209.32}

(a) Each institution of higher education subject to the Open Meetings Act shall review any additional internal security requirements of their institution of higher education.

(b) If 1 Texas Administrative Code Chapter 202 applies to the institution of higher education, then the institution of higher education shall ensure compliance with any information security standards promulgated regarding the transmission of data through a public or data/IP network.

**History**
- *Source Note: The provisions of this §209.32 adopted to be effective September 15, 2022, 47 TexReg 5479.*

### **Chapter 210** STATE ELECTRONIC INTERNET PORTAL

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 210.1** Applicable Terms and Technologies for the State Electronic Internet Portal {#sec-210.1 omnilex-key=us-tx-regs-official--title-1--210.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) License holder--Individuals for whom and entities for which a profile system is required to be or may be established by state agency licensing entities.

(2) Licensing entity--A department, commission, board, office or other agency of the state or a political subdivision of the state that issues an occupational license.

(3) Occupational license--A license, certificate, registration, permit, or other form of authorization, including a renewal of the authorization, that a person must obtain to practice or engage in a particular business, occupation, or profession; or a facility must obtain before a particular business, occupation, or profession is practiced or engaged in within the facility.

(4) Profile system--An electronic system established by a licensing entity that is required by §2054.2606(a), Texas Government Code, or opts pursuant to §2054.2602, Texas Government Code, to establish an electronic system containing at least the licensee information prescribed by §2054.2606(c), Texas Government Code.

(5) Profiling licensing entities--The state agencies listed in §2054.2606(a) and licensing entities that opt to provide a profile system pursuant to §2054.2606(b).

(6) State Electronic Internet Portal--Means the electronic government project implemented under Subchapter I, Chapter 2054, Texas Government Code.

**History**
- *Source Note: The provisions of this §210.1 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.2** Institution of Higher Education {#sec-210.2 omnilex-key=us-tx-regs-official--title-1--210.2}

A university system or institution of higher education as defined by §61.003, Education Code.

**History**
- *Source Note: The provisions of this §210.2 adopted to be effective November 17, 2011, 36 TexReg 7661.*

##### **1 Tex. Admin. Code § 210.3** State Agency {#sec-210.3 omnilex-key=us-tx-regs-official--title-1--210.3}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §210.3 adopted to be effective November 17, 2011, 36 TexReg 7661.*

#### **Subchapter B** STATE AGENCY USE OF THE STATE ELECTRONIC INTERNET PORTAL

##### **1 Tex. Admin. Code § 210.30** License Holder Profile Fees {#sec-210.30 omnilex-key=us-tx-regs-official--title-1--210.30}

(a) Each licensing entity identified in §2054.2606(a), Government Code that is required to establish a license holder profile system may collect a fee approved by the department from license holders listed in §2054.2606(a), Government Code that are applying for an initial license or are renewing an existing license. The fee may be collected through increasing the license issuance and renewal fees, by the licensing entity covering the fee from other revenues rather than increasing license issuance and renewal fees, or by a combination of increasing license issuance and renewal fees by less than the specified fee per license holder and covering a portion of the fee per license holder from other revenues of the licensing entity. Any fees to cover the costs of providing the license holder profile system shall be processed by the licensing entity pursuant to guidelines established by the department and the Office of the Comptroller of Public Accounts.

(b) Each state agency licensing entity that opts to establish a license holder profile system pursuant to §2054.2606(b), Government Code, may collect five dollars annually per license issuance or renewal fee payable by each license holder about whom or which information is available through the profile system. The five dollar fee may be collected through increasing the license issuance and renewal fees by five dollars per license holder, by the licensing entity covering the fee from other revenues rather than by increasing license issuance and renewal fees, or by a combination of increasing license issuance and renewal fees by less than five dollars per license holder and covering a portion of the five dollars per license holder from other revenues of the licensing entity.

**History**
- *Source Note: The provisions of this §210.30 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.31** Electronic Grant System Applicability, Purpose and Agency Responsibilities {#sec-210.31 omnilex-key=us-tx-regs-official--title-1--210.31}

(a) Unless granted an exemption by the department based on the requirements in §210.33 of this chapter, each state agency, other than institutions of higher education and those state agencies defined in §531.001(4), Government Code, shall develop and electronically announce synopses of all funding opportunities under financial assistance programs that award discretionary grants, loans, and cooperative agreements using a standard format and a set of common data elements established statewide and posted on the State Electronic Internet Portal. The standard format and common data elements shall provide potential applicants with:

(1) Enough information about the funding opportunity to decide whether they are interested in viewing the full announcement;

(2) One or more ways to get the full announcement with the detailed information; and

(3) The capability to search for state grant opportunities by using one or more of the following: key word(s), date, funding opportunity number, specific agency or name of agency.

(b) The state agency head or his or her designated representative(s) shall:

(1) Issue any needed direction to offices that award discretionary grants and cooperative agreements on the requirement to post a synopsis on the department's website, including the standard data elements and format;

(2) Require that synopses follow the format to ensure all required data elements are included;

(3) Ensure the synopsis posted on the State Electronic Internet Portal will have full instructions regarding where to obtain the full announcement for the funding opportunity; and

(4) Announce the funding opportunity in the *Texas Register* if necessary to further satisfy statutory, regulatory, or the agency's policy requirements.

**History**
- *Source Note: The provisions of this §210.31 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.32** Electronic Grant System Data Elements and Format {#sec-210.32 omnilex-key=us-tx-regs-official--title-1--210.32}

Unless granted an exemption by the department, state agencies, other than institutions of higher education and those state agencies defined in §531.001(4), Government Code, shall follow the standards and use the data elements and funding opportunity announcement format approved by the department and posted on the State Electronic Internet Portal. State agencies shall continue to post their full announcement at location(s) consistent with applicable statutory requirements and policies. The synopsis shall be posted with universal resource locator (URL) links through which the full announcement can be obtained.

**History**
- *Source Note: The provisions of this §210.32 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.33** Electronic Grant System Exemption {#sec-210.33 omnilex-key=us-tx-regs-official--title-1--210.33}

(a) The department may determine it reasonable to grant an exemption to a state agency from the requirements of §210.31 and §210.32 of this chapter. A state agency may be exempt from the requirement to post funding opportunities under financial assistance programs for:

(1) Announcements of funding opportunities for public assistance; or

(2) Single source announcements of funding opportunities issued by an agency which are not specifically directed to a known recipient.

(b) A state agency seeking an exemption from posting the funding opportunities to the Electronic Grant System shall submit a written request to the department at the beginning of each fiscal year. The state agency shall not take any action on the posting until the requested exemption is approved or denied by the department.

(c) The exemption request must include sufficient documentation to support the validity of the request. The department may request additional information to determine whether the proposed exemption is in the best interest of the state.

(d) Upon review of the request for exemption, the department shall approve or deny the request, in writing. If approved, the approval shall include all pertinent terms and conditions of the exemption. If denied, the department shall provide the basis for its denial.

(e) If the department has not issued a written denial of the exemption request within thirty (30) calendar days of receipt of the request for exemption, the request is deemed approved.

**History**
- *Source Note: The provisions of this §210.33 adopted to be effective November 17, 2011, 36 TexReg 7661.*

##### **1 Tex. Admin. Code § 210.34** Payment Security Compliance {#sec-210.34 omnilex-key=us-tx-regs-official--title-1--210.34}

State agencies and local governments that contract to use the State Electronic Internet Portal for financial transactions must comply with payment security requirements such as the Payment Card Industry Data Security Standard (PCI DSS) identified or referenced in the policies and procedures manual for the State Electronic Internet Portal.

**History**
- *Source Note: The provisions of this §210.34 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.35** State Agency Infrastructure {#sec-210.35 omnilex-key=us-tx-regs-official--title-1--210.35}

A state agency may not duplicate an infrastructure component that is listed in the State Electronic Internet Portal policies and procedures manual, unless the department approves the duplication of an infrastructure component.

**History**
- *Source Note: The provisions of this §210.35 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

##### **1 Tex. Admin. Code § 210.36** State Electronic Internet Portal Policies and Procedures Manual {#sec-210.36 omnilex-key=us-tx-regs-official--title-1--210.36}

A policies and procedures manual will be developed and maintained for the State Electronic Internet Portal. This manual will be approved by the department and posted on the department's website.

**History**
- *Source Note: The provisions of this §210.36 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

#### **Subchapter C** INSTITUTION OF HIGHER EDUCATION USE OF THE STATE ELECTRONIC INTERNET PORTAL

##### **1 Tex. Admin. Code § 210.54** Institutions of Higher Education Payment Security Compliance {#sec-210.54 omnilex-key=us-tx-regs-official--title-1--210.54}

Institutions of higher education that contract to use the State Electronic Internet Portal for financial transactions must comply with payment security requirements such as the Payment Card Industry Data Security Standard (PCI DSS) identified or referenced in the policies and procedures manual for the State Electronic Internet Portal.

**History**
- *Source Note: The provisions of this §210.54 adopted to be effective November 17, 2011, 36 TexReg 7661; amended to be effective March 16, 2017, 42 TexReg 1117.*

### **Chapter 211** INFORMATION RESOURCES MANAGERS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 211.1** Applicable Terms and Technologies for Information Resources Managers {#sec-211.1 omnilex-key=us-tx-regs-official--title-1--211.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Board--The governing board of the Department of Information Resources.

(2) Department--The Department of Information Resources.

(3) Executive head--The top-most senior executive with operational accountability for a state agency as defined by §211.3 of this subchapter or an institution of higher education as defined by §211.2 of this subchapter.

(4) Information resources--The procedures, equipment, and software that are employed, designed, built, operated, and maintained to collect, record, process, store, retrieve, display, and transmit information, and associated personnel including consultants and contractors.

(5) Information Resources Manager--A senior official who is part of executive management within the organization, reports to the executive head or deputy executive head, is accountable for, coordinates, and oversees information resources policies and activities within a state agency or institution of higher education, including the acquisition and use of information technology within a state agency or institution of higher education, and ensures that all information resources are acquired appropriately, implemented effectively, and in compliance with relevant regulations and policies. References herein to Information Resources Managers shall refer to both Information Resources Managers and to Joint Information Resources Managers, unless otherwise explicitly stated.

(6) Information resources technologies--Data processing and telecommunications hardware, software, services, supplies, personnel, facility resources, maintenance, and training.

(7) Joint Information Resources Manager--A person who is a senior official and part of executive management and designated as an Information Resources Manager with the employing organization that is designated by more than one state agency or institution of higher education and approved by the department to simultaneously serve as the information resources manager for each of the designating agencies or institutions of higher education.

**History**
- *Source Note: The provisions of this §211.1 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective January 5, 2006, 30 TexReg 8852; amended to be effective November 23, 2015, 40 TexReg 8193; amended to be effective March 8, 2023, 48 TexReg 1279.*

##### **1 Tex. Admin. Code § 211.2** Institution of Higher Education {#sec-211.2 omnilex-key=us-tx-regs-official--title-1--211.2}

A university system or institution of higher education as defined by Texas Education Code § 61.003.

**History**
- *Source Note: The provisions of this §211.2 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective March 8, 2023, 48 TexReg 1279.*

##### **1 Tex. Admin. Code § 211.3** State Agency {#sec-211.3 omnilex-key=us-tx-regs-official--title-1--211.3}

A department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, other than an institution of higher education, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §211.3 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective March 8, 2023, 48 TexReg 1279.*

#### **Subchapter B** STATE AGENCY INFORMATION RESOURCES MANAGERS

##### **1 Tex. Admin. Code § 211.10** Selection of Information Resources Managers {#sec-211.10 omnilex-key=us-tx-regs-official--title-1--211.10}

(a) The executive head of each state agency is ultimately responsible for the management of state information resources.

(b) The executive head or deputy executive head of a state agency or the designated representative of the executive head or deputy executive head shall designate an Information Resources Manager or, in the case of a Joint Information Resources Manager, identify a designated Information Resources Manager from another state agency or institution of higher education to serve on the agency's behalf.

(c) The state agency's designation of an Information Resources Manager must contain the following in the format prescribed by the department:

(1) the name, title, and contact information of the Information Resources Manager;

(2) the organization's biennial information technology budget;

(3) an organizational chart showing the position of the Information Resources Manager within the organization; and

(4) an acknowledgment that the state agency understands the statutory and rule requirements establishing Information Resources Manager responsibilities.

(d) In the case of a person designated as a Joint Information Resources Manager, the state agency's designation shall comply with the requirements of Texas Government Code § 2054.071(b) and include the name of the state agency or institution of higher education that employs the designated Information Resources Manager.

(e) Designation of a Joint Information Resources Manager requires prior approval by the department.

(f) The department must acknowledge the receipt of the designation of the Information Resources Manager within 30 days after receipt of the designation.

**History**
- *Source Note: The provisions of this §211.10 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective January 4, 2006, 30 TexReg 8852; amended to be effective March 8, 2023, 48 TexReg 1279.*

##### **1 Tex. Admin. Code § 211.11** Initial Training and Continuing Education Requirements {#sec-211.11 omnilex-key=us-tx-regs-official--title-1--211.11}

Any person who is designated as the Information Resources Manager must meet training and continuing education requirements.

(1) Each designated state agency Information Resources Manager shall complete initial training and continuing education requirements as specified by the guidelines established by the department with the review of the board of the department. The head of each agency is responsible for ensuring their designee remains qualified to serve as Information Resources Manager.

(2) The department may provide education programs, including educational materials and seminars.

**History**
- *Source Note: The provisions of this §211.11 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective January 4, 2006, 30 TexReg 8852; amended to be effective November 23, 2015, 40 TexReg 8193; amended to be effective March 8, 2023, 48 TexReg 1279.*

#### **Subchapter C** INSTITUTION OF HIGHER EDUCATION INFORMATION RESOURCES MANAGERS

##### **1 Tex. Admin. Code § 211.20** Selection of Information Resources Managers {#sec-211.20 omnilex-key=us-tx-regs-official--title-1--211.20}

(a) The executive head of each institution of higher education is ultimately responsible for the management of state information resources.

(b) The executive head or deputy executive head of an institution of higher education or the designated representative of the executive head or deputy executive head shall designate an Information Resources Manager or, in the case of a Joint Information Resources Manager, identify a designated Information Resources Manager from another state agency or institution of higher education to serve on their behalf.

(c) The institution of higher education's designation of an Information Resources Manager must contain the following in the format prescribed by the department:

(1) the name, title, and contact information of the Information Resources Manager;

(2) the organization's biennial information technology resources budget;

(3) an organizational chart showing the position of the Information Resources Manager within the organization; and

(4) an acknowledgment that the institution of higher education understands the statutory and rule requirements establishing Information Resources Manager responsibilities.

(d) In the case of a person designated as a Joint Information Resources Manager, the institution of higher education's designation shall comply with the requirements of Texas Government Code § 2054.071(b) and include the name of the state agency or institution of higher education that employs the designated Information Resources Manager.

(e) Designation of a Joint Information Resources Manager requires prior approval by the department.

(f) The department must acknowledge receipt of the designation of the institution of higher education's Information Resources Manager within 30 days after receipt of the designation.

**History**
- *Source Note: The provisions of this §211.20 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective January 4, 2006, 30 TexReg 8853; amended to be effective November 23, 2015, 40 TexReg 8193; amended to be effective March 8, 2023, 48 TexReg 1279.*

##### **1 Tex. Admin. Code § 211.21** Initial Training and Continuing Education Requirements {#sec-211.21 omnilex-key=us-tx-regs-official--title-1--211.21}

Any person who is designated as the Information Resources Manager must meet training and continuing education requirements.

(1) Each designated institution of higher education Information Resources Manager shall complete initial training and continuing education requirements as specified by the guidelines established by the department with the review of the board of the department. The head of each institution of higher education is responsible for ensuring their designee remains qualified to serve as Information Resources Manager.

(2) The department may provide education programs, including educational materials and seminars.

**History**
- *Source Note: The provisions of this §211.21 adopted to be effective November 29, 2004, 29 TexReg 10911; amended to be effective January 4, 2006, 30 TexReg 8853; amended to be effective November 23, 2015, 40 TexReg 8193; amended to be effective March 8, 2023, 48 TexReg 1279.*

### **Chapter 212** PURCHASES OF COMMODITY ITEMS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 212.1** Commodity Items Definitions {#sec-212.1 omnilex-key=us-tx-regs-official--title-1--212.1}

Words and terms defined in chapter 217 shall have those same meanings when used in this chapter. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Commodity items--as defined by Texas Government Code §2157.068(a).

(2) Contract--a binding agreement, including optional extensions or renewals to such an agreement, between a vendor and DIR customer pursuant to a cooperative contract issued by the department under the authority of Texas Government Code §2157.068. All contracts shall be subject to the terms and requirements of the underlying cooperative contract.

(A) Any of the following will constitute a contract:

(i) The DIR customer's fully executed purchase order; and

(ii) Purchase order change notice.

(B) Any of the following do not constitute a contract for purposes of determining dollar value:

(i) Documents executed for purposes of encumbering funds but not constituting a binding transaction; and

(ii) Any related document without an accompanying purchase order, including but not limited to statements of work, license agreements, maintenance agreements, or service agreements.

(3) Software--all or part of the programs, procedures, rules, and other components of an information resources system. The term includes application software, system software, supporting documentation, media on which the software may be contained or stored, related materials, modifications, versions, upgrades, enhancements, updates, or replacements. The term does not include hardware.

(4) Hardware--the physical technology used to process, manage, store, transmit, receive, or deliver information. The term does not include software.

(5) Purchase--to obtain ownership, any rights with respect to the use, transfer of ownership, or delivery of commodity items through acquisition, lease, or any other method.

(6) Request for pricing--An invitation for a vendor to submit competitive prices for an existing contract, under the existing terms and conditions, or for a prospective contract. A state agency may request additional information to evaluate the vendor and its response.

(7) State agency--a department, commission, board, office, council, authority, or other agency in the executive branch or judicial branch of state government that is created by the constitution or a statute of the state. The term does not include institutions of higher education, as defined in Texas Education Code §61.003, unless an institution has been determined to be out of compliance with the purchasing standards required under Texas Education Code §51.9337.

(8) Statement of Work--as defined by Texas Government Code §2157.0685. A statement of work is not applicable to:

(A) contracts exclusively for hardware or software and not including services; and

(B) the vendors' standard commercially available support, maintenance, and warranties as documented in the DIR cooperative contract or modified in accordance with the DIR cooperative contract provision addressing modification of contract terms and/or amendments.

(9) Board--the governing board of the Department of Information Resources.

(10) Director--the Executive Director of the Department of Information Resources.

**History**
- *Source Note: The provisions of this §212.1 adopted to be effective September 22, 2005, 30 TexReg 5945; amended to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

#### **Subchapter B** REQUIRED PURCHASES

##### **1 Tex. Admin. Code § 212.10** Scope of Requirement {#sec-212.10 omnilex-key=us-tx-regs-official--title-1--212.10}

Each state agency, excluding public, private, or independent institutions of higher education, must purchase any commodity items that are listed under the commodity codes under the department's responsibility in accordance with a contract developed by the department, unless the state agency first:

(1) obtains an exemption from this requirement as described by Subchapter C of this chapter;

(2) obtains express prior approval from the Legislative Budget Board for the expenditure necessary for the purchase; or

(3) obtains a certification from the department, as described by Subchapter D of this chapter, that the commodity item is not available for purchase under an existing contract developed by the department unless the value of that contract exceeds $10 million dollars.

**History**
- *Source Note: The provisions of this §212.10 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective March 19, 2014, 39 TexReg 1927; amended to be effective November 23, 2015, 40 TexReg 8195; amended to be effective May 28, 2018, 43 TexReg 3344; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.11** List of Commodity Items {#sec-212.11 omnilex-key=us-tx-regs-official--title-1--212.11}

(a) The department shall compile and maintain a list of commodity items available for purchase through the department. The department shall make the list available on the department's website.

(b) A state agency shall comply with the requirements of Texas Government Code §2157.068 when contracting to purchase commodity items. The value of a contract shall be calculated in accordance with the definition found in §212.1(2) of this chapter.

(c) For a contract with a value of more than $5 million but not more than $10 million, a state agency may purchase a commodity item using a purchasing method designated by the comptroller under Texas Government Code §2157.006(a)(2).

(d) Amendments proposed in calendar year 2021 to the definition of contract found in §212.1 of this chapter that impact how a state agency determines dollar value of a contract apply only to a contract for which a state agency first advertises or otherwise solicits offers, bids, proposals, qualifications, or other applicable expressions of interest on or after the effective date of the adopted rule amendment. Contracts that solicit offers, bids, proposals, qualifications, or other applicable expressions of interest prior to the effective date of this adopted rule are subject to the previous version of these rules.

**History**
- *Source Note: The provisions of this §212.11 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective November 23, 2015, 40 TexReg 8195; amended to be effective November 20, 2017, 42 TexReg 6506; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.12** Emerging Technologies {#sec-212.12 omnilex-key=us-tx-regs-official--title-1--212.12}

The board finds that information technology innovations occur at such a rapid pace that it hereby instructs the director to implement guidelines and update the commodity items list to apply to emerging information technologies as they become available in the marketplace.

**History**
- *Source Note: The provisions of this §212.12 adopted to be effective September 22, 2005, 30 TexReg 5948.*

#### **Subchapter C** EXEMPTIONS

##### **1 Tex. Admin. Code § 212.20** Written Request and Approval Process {#sec-212.20 omnilex-key=us-tx-regs-official--title-1--212.20}

(a) A state agency may submit a written request to the department for an exemption from the commodity items purchasing requirement described in Subchapter B of this chapter. The state agency shall not take any action on the contemplated purchase until the request for exemption is either approved or denied by the department.

(b) A request for an exemption must be in writing and include sufficient documentation to support the validity of the request. The department may request additional information in order to determine whether the proposed purchase is in the best interest of the state. The department shall not issue an exemption approval for a purchase that has already taken place. The department shall not issue an exemption approval solely on the basis that a solicitation has already been issued.

(c) Upon review of a written request for exemption, the department shall issue, in writing, either an approval or denial. A written approval shall include all pertinent terms and conditions of the exemption, including but not limited to, the dollar limit, expiration date, the quantity, list of specific commodity items, and any other conditions related to the proposed purchase. A written denial shall include the basis for the denial.

(d) If the department has not issued a written denial of the exemption request within fifteen (15) business days following the date of its receipt of the request, or the date of receipt of requested additional information, the request for the exemption shall be deemed to have been approved for an amount equal to the total dollar amount of the proposed purchase or for the period of time described in the exemption request.

**History**
- *Source Note: The provisions of this §212.20 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective November 23, 2015, 40 TexReg 8195.*

##### **1 Tex. Admin. Code § 212.21** Expedited Requests {#sec-212.21 omnilex-key=us-tx-regs-official--title-1--212.21}

(a) In the event a state agency experiences an unforeseeable circumstance that requires immediate attention but is not considered an Emergency Procurement as defined in 34 Texas Administrative Code §20.25(21) or future section that supersedes or amends the referenced section, the state agency may submit an expedited exemption request. The department shall issue a written approval or denial of an exemption request within a maximum of three business days of receipt of the expedited exemption request.

(b) The expedited exemption request must include a statement from the head of the requesting state agency or their designee describing the circumstances and justification for expedited review by the department.

**History**
- *Source Note: The provisions of this §212.21 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.22** Blanket Exemptions {#sec-212.22 omnilex-key=us-tx-regs-official--title-1--212.22}

The department may determine that under certain circumstances it is reasonable to grant a blanket exemption to state agencies from the commodity items purchasing requirements described Subchapter B of this chapter. All blanket exemptions shall be posted on the department's website in writing.

**History**
- *Source Note: The provisions of this §212.22 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.23** Instructions for Requests {#sec-212.23 omnilex-key=us-tx-regs-official--title-1--212.23}

The department shall make available on the department's website:

(1) instructions for a state agency submission of a written request for an exemption;

(2) procedures for evaluating a state agency's written request for an exemption; and

(3) any requirements related to a blanket exemption granted by the department.

**History**
- *Source Note: The provisions of this §212.23 adopted to be effective September 22, 2005, 30 TexReg 5948; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective February 10, 2022, 47 TexReg 490.*

#### **Subchapter D** CERTIFICATION TO PURCHASE FROM LOCAL GOVERNMENT PURCHASING COOPERATIVES

##### **1 Tex. Admin. Code § 212.30** Written Request and Certification Process {#sec-212.30 omnilex-key=us-tx-regs-official--title-1--212.30}

(a) A state agency may submit a written request to the department for a written certification that a commodity item is not available for purchase under an existing contract developed by the department, so that the state agency may purchase the commodity item through a contract developed by a local government purchasing cooperative under Texas Government Code Chapter 791. The state agency shall not take any action on the contemplated purchase until the request for certification is either issued or denied by the department.

(b) A request for certification must be in writing and include sufficient documentation to support the validity of the request. The department may request additional information in order to determine whether the certification should be issued or denied if the commodity item is available for purchase under an existing contract developed by the department.

(c) Upon review of a written request for certification, the department shall issue, in writing, either a certification or denial. A written certification shall include all pertinent terms and conditions of the certification, including but not limited to, the specific commodity item, expiration date, and quantity, as applicable, and any other conditions related to the proposed purchase. A written denial shall include the basis for the denial.

(d) If the department has not issued a written denial of the request for certification within fifteen business days following the date of its receipt of the request or the date of receipt of requested additional information, the certification shall be deemed to have been issued for the period of time described in the certification request.

**History**
- *Source Note: The provisions of this §212.30 adopted to be effective March 19, 2014, 39 TexReg 1927; amended to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.31** Expedited Requests {#sec-212.31 omnilex-key=us-tx-regs-official--title-1--212.31}

(a) In the event a state agency experiences an unforeseeable circumstance that requires immediate attention but is not considered an Emergency Procurement as defined in 34 Texas Administrative Code §20.25(21) or future section that supersedes or amends the referenced section, the state agency may submit an expedited request for certification. The department shall issue a written certification or denial within a maximum of three business days of receipt of the expedited request for certification.

(b) The expedited request for certification must include a statement from the head of the requesting state agency or their designee describing the circumstances and justification for expedited review by the department.

(c) If the department has not issued a written denial of the expedited request for certification within three business days following the date of its receipt of the request or the date of receipt of requested additional information, the expedited request for certification shall be deemed to have been issued for the period of time described in the expedited exemption request.

**History**
- *Source Note: The provisions of this §212.31 adopted to be effective March 19, 2014, 39 TexReg 1927; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.32** Required State Agency Contract Provisions Apply {#sec-212.32 omnilex-key=us-tx-regs-official--title-1--212.32}

When used by a state agency, a contract developed by a local government purchasing cooperative under Texas Government Code Chapter 791 is subject to all provisions required by applicable law to be included in a state agency contract without regard to whether:

(1) the provision appears on the face of the contract; or

(2) the contract includes any provision to the contrary.

**History**
- *Source Note: The provisions of this §212.32 adopted to be effective March 19, 2014, 39 TexReg 1927.*

##### **1 Tex. Admin. Code § 212.33** Instructions for Requests {#sec-212.33 omnilex-key=us-tx-regs-official--title-1--212.33}

The department shall make available on the department's website the:

(1) instructions for state agency submission of a written request for certification; and

(2) procedures for evaluating a state agency's written request for certification.

**History**
- *Source Note: The provisions of this §212.33 adopted to be effective March 19, 2014, 39 TexReg 1927.*

#### **Subchapter E** APPROVAL OF STATEMENT OF WORK

##### **1 Tex. Admin. Code § 212.41** Statement of Work {#sec-212.41 omnilex-key=us-tx-regs-official--title-1--212.41}

(a) For a contract awarded by the department under Texas Government Code §2157.068 that requires a state agency to develop and execute a statement of work to initiate services under the contract, the state agency must consult with the department before the submission of a statement of work to a vendor as follows:

(1) Submit a completed statement of work to the department for review at least thirty business days prior to submission of the statement of work to vendors to allow sufficient time for department review;

(2) Provide statement of work contents, including but not limited to, scope of the project, milestones, deliverables description, schedule, and acceptance criteria; and

(3) Provide the list of department cooperative contracts to which the statement of work will be advertised.

(b) The department may accept or reject the submitted statement of work. A state agency shall not submit the statement of work to vendors until the department has issued written approval. If rejected, the state agency may resubmit with required modifications.

(c) Following execution of the final statement of work by the state agency and vendor, the state agency must submit the signed statement of work to the department for its signature. The department will review the statement of work and determine whether it will be signed or rejected. If the department rejects the statement of work, the department will notify the state agency of the reason(s) for rejection. The department must sign the statement of work before it becomes valid and any money is paid to a vendor. The department signature affixed to the statement of work will verify only that the scope of work is within the scope of the DIR contract being utilized. The department signature does not make the department a party to the agreement, and the department will not be responsible for any other state agency's obligations. The department signature does not verify or assure any other relevant fact including but not limited to the following:

(1) That funding is appropriate or sufficiently available;

(2) That the appropriate methodology was chosen by the state agency;

(3) That the appropriate vendor was selected; or

(4) That the scope of work documented by the state agency will successfully achieve a goal or projected outcome.

(d) Upon execution of a statement of work for services over $50,000, each statement of work entered into by the state agency shall be posted on the state agency's internet website as follows:

(1) Post the statement of work in its entirety, subject to the exceptions in the Texas Public Information Act and opinions of the Office of Attorney General;

(2) Maintain the posting, at a minimum, throughout the term of the statement of work including any renewals or extensions;

(3) Maintain a listing of the statements of work in alphabetical order by vendor name or numerical order by contract number in a central location; and

(4) Maintain a current state agency contact person with related email address and phone number to contact for information regarding the statement of work.

**History**
- *Source Note: The provisions of this §212.41 adopted to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.42** Expedited Requests for Review of a Statement of Work {#sec-212.42 omnilex-key=us-tx-regs-official--title-1--212.42}

(a) In the event a state agency experiences an unforeseeable circumstance that requires immediate attention but is not considered an Emergency Procurement as defined in 34 Texas Administrative Code §20.25(21) or future section that supersedes or amends the referenced section, the state agency may submit an expedited request for review.

(b) The expedited request for review must include a statement from the head of the requesting state agency, or his/her designee, describing the circumstances and justification for expedited review by the department.

**History**
- *Source Note: The provisions of this §212.42 adopted to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

##### **1 Tex. Admin. Code § 212.43** Expedited Requests for Signature of a Statement of Work {#sec-212.43 omnilex-key=us-tx-regs-official--title-1--212.43}

(a) In the event a state agency experiences an unforeseeable circumstance that requires immediate attention but is not considered an Emergency Procurement as defined in 34 Texas Administrative Code §20.25(21) or future section that supersedes or amends the referenced section, the state agency may submit an expedited request for signature.

(b) The expedited request for signature must include a statement from the head of the requesting state agency or their designee describing the circumstances and justification for expedited signature by the department.

**History**
- *Source Note: The provisions of this §212.43 adopted to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

#### **Subchapter F** INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 212.50** Institutions of Higher Education {#sec-212.50 omnilex-key=us-tx-regs-official--title-1--212.50}

An institution of higher education must notify the department in writing within thirty calendar days if:

(1) the institution is determined to be out of compliance with the purchasing standards required under Texas Education Code §51.9337; or

(2) the institution is determined to have regained its acquisition authority under Texas Education Code §51.9335.

**History**
- *Source Note: The provisions of this §212.50 adopted to be effective November 23, 2015, 40 TexReg 8195; amended to be effective February 10, 2022, 47 TexReg 490.*

### **Chapter 213** ELECTRONIC AND INFORMATION RESOURCES

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 213.1** Applicable Terms and Technologies for Electronic and Information Resources {#sec-213.1 omnilex-key=us-tx-regs-official--title-1--213.1}

The following words and terms, when used with this chapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Accessibility Conformance Report (ACR)--a report based on a completed VPAT demonstrating how a product or service conforms to WCAG standards and success criteria.

(2) Accessible--Describes an EIR that does not depend on a single sense or ability and does not limit use by people with disabilities.

(3) Agency head--The top-most senior executive with operational accountability for an agency, department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government that is created by the constitution or a statute of the state; or institutions of higher education as defined in Texas Education Code § 61.003.

(4) Alternate formats--Alternate formats usable by people with disabilities may include, but are not limited to, Braille, ASCII text, large print, recorded audio, and electronic formats that comply with this chapter.

(5) Alternate methods--Different means of providing information, including product documentation and the provision of government services through EIR, to people with disabilities. Alternate methods may include, but are not limited to, voice, fax, relay service, TTY, Internet posting, captioning, text-to-speech synthesis, and audio description.

(6) Assistive technology--Any item, piece of equipment, or system, whether acquired commercially, modified, or customized, that is commonly used to increase, maintain, or improve functional capabilities of individuals with disabilities.

(7) Commercial off-the-shelf product--a software product that is available in the commercial marketplace prior to customization.

(8) Department--The Department of Information Resources.

(9) Digital Accessibility--The practice of designing, developing, and maintaining EIR in a manner that ensures individuals with disabilities can access and utilize the technology.

(10) DOJ Title II Rule--The final rule published by the U.S. Department of Justice titled "Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Communications Technology" (28 CFR Part 35, RIN 1190-AA80). This federal regulation requires state and local government entities to ensure that their web content and mobile applications are readily accessible to and usable by individuals with disabilities by conforming to the Web Content Accessibility Guidelines (WCAG) 2.1 Level AA standards or higher.

(11) Electronic and information resources (EIR)--As defined by Texas Government Code § 2054.451. The term does not include equipment that contains embedded information technology where the principal function is not processing or managing information. If the embedded information technology processes or manages information through an external web or computer interface, that interface is considered EIR. Other terms such as, but not limited to, Information and Communications Technology (ICT) as defined by Section 508 Standards, Information Technology (IT) and Electronic Information Technology (EIT), etc. can be considered interchangeable terms with EIR for purposes of applicability or compliance with this chapter.

(12) Electronic and information resources (EIR) Development Services--Design, development, and / or programming services that developers provide for web development, application development, and/or configuration that impacts a user interface.

(13) Exception--A justified, documented non-compliance with one or more standards or specifications of Chapter 206 and/or Chapter 213 of this title or, as applicable, the DOJ Title II Rule, which has been approved by the agency head or the President or Chancellor of an Institution of Higher Education.

(14) Exemption--A justified, documented non-compliance with one or more standards or specifications of Chapter 206 and/or Chapter 213 of this title, which has been approved by the department and which is applicable statewide.

(15) Hardware--A tangible device, equipment, or physical component of ICT, such as telephones, computers, multifunction copy machines, and keyboards.

(16) Major information resource project (MIRP)--Any information resources technology project that meets the criteria defined in Texas Government Code § 2054.003(10).

(17) Operable controls--A component of a product that requires physical contact for normal operation. Operable controls include, but are not limited to, mechanically operated controls, input and output trays, card slots, keyboards, and keypads.

(18) Product--Electronic and information resources.

(19) Section 508 Standards--The technical standards established by Section 508 of the Rehabilitation Act of 1973 as amended, 29 U.S.C. § 794d, 36 C.F.R. § 1194.1, established by the federal Architectural and Transportation Barriers Compliance Board (the "Access Board") that apply to EIR developed, procured, maintained, or used by the federal government, including computer hardware and software, websites, phone systems, and copiers. The Section 508 standards were issued to implement Section 508 of the federal Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794d, which requires access for both members of the public and federal employees to such technologies when developed, procured, maintained, or used by federal agencies.

(20) Self Contained, Closed Products--Products that generally have embedded software and are commonly designed in such a fashion that a user cannot easily attach or install assistive technology. These products include, but are not limited to, information kiosks and information transaction machines, copiers, printers, calculators, fax machines, and other similar products.

(21) Technical Accessibility Standards and Specifications--Accessibility standards and specifications for Texas agency and institution of higher education websites and EIR set forth in Chapter 206 and/or Chapter 213 of this title.

(22) Telecommunications--As defined by Texas Government Code § 2054.003(14).

(23) Training/Technical Assistance--Training and technical assistance to comply with the accessibility standards.

(24) Voluntary Product Accessibility Template (VPAT)--A vendor-supplied industry template form used to document EIR compliance with technical accessibility standards and success criteria. A link to the standardized VPAT form is available at the department's website.

(25) World Wide Web Content Accessibility Guidelines--Internationally recognized set of technical standards designed to make web content and digital media accessible to people with disabilities.

(26) The terms referenced by Section 508 Appendices A and C and the DOJ Title II Rule shall have the meaning stated therein.

**History**
- *Source Note: The provisions of this §213.1 adopted
to be effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.2** Institution of Higher Education {#sec-213.2 omnilex-key=us-tx-regs-official--title-1--213.2}

A university system or institution of higher education as defined by Texas Education Code §61.003.

**History**
- *Source Note: The provisions of this §213.2 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.3** State Agency {#sec-213.3 omnilex-key=us-tx-regs-official--title-1--213.3}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §213.3 adopted to be effective April 27, 2006, 31 TexReg 3379.*

##### **1 Tex. Admin. Code § 213.4** Department Responsibilities {#sec-213.4 omnilex-key=us-tx-regs-official--title-1--213.4}

(a) The department shall establish and maintain a list of EIR that the department has determined are exempt from the standards and specifications of all or part of Chapter 206 and/or Chapter 213 of this title.

(1) The department will post the list of exempt EIR under the Accessibility section of its website.

(2) The department will provide the below information for each exemption listed:

(A) a date of expiration or duration of the exemption;

(B) a plan for alternate means of access for persons with disabilities;

(C) justification for the exemption including technical barriers, cost of remediation, fiscal impact for bringing the EIR into compliance, and other identified risks; and

(D) written approval of the department's executive director.

(3) The department shall establish and publish a policy under the Accessibility section of its website that defines the procedures and standards used to determine which EIR are exempt from the standards and specifications described in Chapter 206 and/or Chapter 213 of this title.

(b) In establishing information technology commodity procurement contracts pursuant to its authority under Texas Government Code § 2157.068, the department shall obtain and make available to state agencies accessibility information for products or services, where applicable, through one of the following methods:

(1) inclusion of or URLs to manufacturer's completed VPATs or ACRs for applicable Commercial Off the Shelf products or services submitted in vendor solicitation responses; or

(2) other documents/forms requested by the department in its information technology commodity procurement solicitations that provide credible evidence of the vendor's capability or ability to produce accessible EIR products and services. Such evidence may include, but is not limited to, a vendor's experiences and practices related to developing accessible EIR, contractual warranties for accessibility, accessibility testing documents, and examples of prior work results.

(c) The department shall provide training resources, and assistance regarding compliance with Chapter 206 and Chapter 213 of this title, pursuant to Texas Government Code § 2054.452.

(1) The department shall schedule on-going training events or seminars, focused on accessibility development, testing, procurement and/or awareness training.

(2) The department shall publish information regarding publicly available accessibility training opportunities and technical assistance.

(d) The department shall conduct an EIR accessibility survey regarding progress on and compliance with Chapters 206 and 213 of this title, pursuant to Texas Government Code §§ 2054.464 and 2054.651.

(e) The department shall designate and maintain a person responsible for statewide digital accessibility initiatives, including sharing information with other state agencies regarding EIR accessibility requirements under Chapters 206 and 213 of this title and other regulatory standards.

**History**
- *Source Note: The provisions of this §213.4 adopted to be
effective June 16, 2026, 51 TexReg 3877.*

#### **Subchapter B** ACCESSIBILITY STANDARDS FOR STATE AGENCIES

##### **1 Tex. Admin. Code § 213.10** Software Applications and Operating Systems {#sec-213.10 omnilex-key=us-tx-regs-official--title-1--213.10}

Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this chapter, all software applications and operating systems EIR developed, procured, or changed by a state agency shall comply with the standards described in this subchapter. Each state agency shall comply with the following standards referenced in Section 508 Appendix C:

(1) Chapter 7, §702.10 (WCAG 2.0 Level AA excluding Guideline 1.2 Time Based Media);

(2) Chapter 5, §502 Interoperability with Assistive Technology;

(3) Chapter 5, §503 Applications; and

(4) Chapter 5, §504 Authoring Tools.

**History**
- *Source Note: The provisions of this §213.10 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.11** Telecommunications Products {#sec-213.11 omnilex-key=us-tx-regs-official--title-1--213.11}

Unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this chapter, when purchasing telecommunication equipment or services, a state agency shall contractually require the manufacturer of telecommunication equipment or provider of telecommunication services to ensure that the equipment or services are in compliance with 47 U.S.C. § 255 and 36 C.F.R. § 1194.2, Appendix B, when such products are readily available or compliance is achievable.

**History**
- *Source Note: The provisions of this §213.11 adopted to be
effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.12** Video and Multimedia {#sec-213.12 omnilex-key=us-tx-regs-official--title-1--213.12}

(a) Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to 1 Texas Administrative Code §213.17, all video and multimedia EIR developed, procured, or changed by a state agency shall comply with the standards described in this subchapter. Each state agency shall comply with the applicable standards referenced in Section 508 Appendix C.

(b) Based on a request for accommodation of a webcast of a live/real time open meeting (Open Meetings Act, Texas Government Code, Chapter 551) or training and informational video productions which support the agency's mission, each state agency that receives such request shall consider captioning and alternative forms of accommodation for videos posted on state websites.

**History**
- *Source Note: The provisions of this §213.12 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.13** Hardware {#sec-213.13 omnilex-key=us-tx-regs-official--title-1--213.13}

(a) Unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this chapter, all EIR hardware developed, procured, or changed by a state agency shall comply with the standards described in this subchapter. Each state agency shall comply with the following standards/specifications referenced in Section 508 Appendix C:

(1) Chapter 4, § 401 General;

(2) Chapter 4, § 402 Closed Functionality;

(3) Chapter 4, § 403 Biometrics;

(4) Chapter 4, § 404 Preservation of Information Provided for Accessibility;

(5) Chapter 4, § 405 Privacy;

(6) Chapter 4, § 406 Standard Connections;

(7) Chapter 4, § 407 Operable Parts;

(8) Chapter 4, § 408 Display Screens;

(9) Chapter 4, § 409 Status Indicators;

(10) Chapter 4, § 410 Color Coding;

(11) Chapter 4, § 411 Audible Signals;

(12) Chapter 4, § 412 ICT with Two-Way Communication;

(13) Chapter 4, § 413 Closed Caption Processing Technologies;

(14) Chapter 4, § 414 Audio Description Processing Technologies; and

(15) Chapter 4, § 415 User Controls for Captions and Audio Descriptions.

(b) When EIR hardware is located in maintenance or monitoring spaces and where status indicators and operable parts are located in spaces that are frequented only by service personnel for maintenance, repair, or occasional monitoring of equipment, such status indicators and operable parts shall not be required to conform to §213.13 of this chapter.

**History**
- *Source Note: The provisions of this §213.13 adopted to be
effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.15** Functional Performance Criteria {#sec-213.15 omnilex-key=us-tx-regs-official--title-1--213.15}

Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this chapter, all EIR developed, procured, or changed by a state agency shall comply with the standards described in this subchapter. To the extent that an EIR does not comply with the requirements of 1 Texas Administrative Code §§213.10 - 213.13 that are applicable to that EIR, the noncompliant features of that EIR shall conform to the standards referenced in Section 508 Appendix C, Chapter 3, § 302 Functional Performance Criteria.

**History**
- *Source Note: The provisions of this §213.15 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.16** Support Documentation and Services {#sec-213.16 omnilex-key=us-tx-regs-official--title-1--213.16}

Effective April 18, 2020, unless an exception is approved by the agency head or an exemption has been made for specific technologies pursuant to §213.17 of this chapter, all documentation and services that support the use of EIR developed, procured, or changed by a state agency shall comply with the standards described in this subchapter. Each state agency shall comply with the following standards referenced in Section 508 Appendix C, Chapter 6:

(1) Chapter 6, § 602 Support Documentation; and

(2) Chapter 6, § 603 Support.

**History**
- *Source Note: The provisions of this §213.16 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.17** Compliance Exceptions and Exemptions {#sec-213.17 omnilex-key=us-tx-regs-official--title-1--213.17}

All EIR developed, procured, or changed by a state agency shall comply with the standards and specifications of Chapter 206 and/or Chapter 213 of this title, unless the agency head approves an exception subject to this chapter or, as applicable, the DOJ Title II Rule, or the department grants an exemption.

(1) Legacy EIR. Any component or portion of existing EIR that complies with an earlier standard issued pursuant to Chapter 206 or Chapter 213 of this title and the user interface has not been altered shall not be required to be modified to conform to this revised rule unless the EIR is required to comply with the DOJ Title II Rule.

(2) In its accessibility policy, an agency shall include standards and processes for handling exception requests for all EIR, including those subject to exceptions for a significant barrier or expense contained in Texas Government Code § 2054.460.

(3) The agency head must approve in writing exceptions for a material difficulty or expense pertaining to significant barriers to users under Texas Government Code § 2054.460 for EIR that does not comply with the standards and specifications described in Chapter 206 and/or Chapter 213 of this title, pursuant to Texas Government Code § 2054.460:

(A) prior to the procurement, completion, use, or deployment; or

(B) at the point the barrier is identified if the vendor is unable to immediately remedy the failure to comply with Chapter 206 and/or Chapter 213 of this title.

(4) An approved exception for a significant barrier or expense under Texas Government Code § 2054.460 shall include the following:

(A) List of compliance issues posing a risk to the agency with anticipated impact of each issue;

(B) a date of expiration or duration of the exception;

(C) a plan for alternate means of access for persons with disabilities;

(D) justification for the exception including technical barriers, cost of remediation, fiscal impact for bringing the EIR into compliance, and other identified risks; and

(E) documentation of how the agency considered alternative solutions and all agency resources available to the program or program component for which the product is being developed, procured, maintained, or used. Examples may include, but are not limited to, agency budget, grants, and alternative vendor or product selections.

(5) Agencies shall maintain records of approved exceptions in accordance with the agency's records retention schedule.

**History**
- *Source Note: The provisions of this §213.17 adopted
to be effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective November
17, 2009, 34 TexReg 8027; amended to be effective September 18, 2014,
39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg
7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.18** Procurements {#sec-213.18 omnilex-key=us-tx-regs-official--title-1--213.18}

(a) For the procurement of EIR made directly by an agency or through the department's information technology commodity procurement contracts entered pursuant to Texas Government Code § 2157.068, the agency shall require a vendor to provide accessibility information for the purchased products or services, where applicable, through one of the following methods:

(1) inclusion of URLs to manufacturer's VPATS or ACRs for applicable Commercial Off the Shelf products or services;

(2) other documents/forms requested by the agency that provide credible evidence of the vendor's capability or ability to produce accessible EIR products and services. Such evidence may include, but is not limited to, a vendor's internal accessibility policy documents, contractual warranties for accessibility, accessibility testing documents, and examples of prior work results; or

(3) If credible accessibility documentation cannot be provided, then the EIR shall be considered noncompliant.

(b) An agency shall implement a procurement accessibility policy, and supporting business processes and contract terms for making procurement decisions. An agency shall monitor the procurement processes and contracts for accessibility compliance.

(c) This subchapter applies to EIR developed, procured, or materially changed by an agency, or developed, procured, or materially changed by a contractor under a contract with an agency, which requires the use of such product to a significant extent in the performance of a service or the furnishing of a product.

(d) Unless an exception is approved by the agency head pursuant to Texas Government Code § 2054.460 and §213.17 of this subchapter or unless an exemption is approved by the department pursuant to Texas Government Code § 2054.460 and 1 Texas Administrative Code §213.17, all EIR products developed, procured, or materially changed through a procured services contract, and all electronic and information resource services provided through hosted or managed services contracts, shall comply with the provisions of Chapter 206 and Chapter 213 of this title, as applicable.

(e) A state agency must include accessibility testing, planning, and execution criteria for EIR development and implementation projects.

(f) Accessibility testing must be performed by a third-party testing resource or knowledgeable state agency staff member to validate compliance with 1 Texas Administrative Code §206.50 and this chapter for any EIR development project whose costs exceed $500,000 and that:

(1) requires one year or longer to reach operations status;

(2) involves more than one state agency or institution of higher education; or

(3) substantially alters work methods of agency personnel or the delivery of services to clients.

(g) Nothing in this subchapter is intended to prevent the use of designs or technologies as alternatives to those prescribed in this subchapter provided they result in substantially equivalent or greater access to and use of a product for people with disabilities.

**History**
- *Source Note: The provisions of this §213.18 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
November 17, 2009, 34 TexReg 8027; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.19** State Agency Accessibility Administration, Training, Technical Assistance, and Job Descriptions {#sec-213.19 omnilex-key=us-tx-regs-official--title-1--213.19}

(a) The executive director of each agency shall ensure appropriate staff receive training necessary to comply with Chapters 206 and 213 of this title.

(b) Each state agency shall consider including accessibility criteria, such as compliance with Chapters 206 and 213 of this title and other regulatory requirements, in job descriptions where the position is responsible for EIR subject to this chapter.

(c) A state agency shall establish goals for making its EIR accessible, which includes progress measurements towards meeting those goals.

**History**
- *Source Note: The provisions of this §213.19 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
September 18, 2014, 39 TexReg 7565; amended to be effective December
12, 2019, 44 TexReg 7679; amended to be effective June 16, 2026, 51
TexReg 3877.*

##### **1 Tex. Admin. Code § 213.20** Accessibility Survey and Reporting Requirements {#sec-213.20 omnilex-key=us-tx-regs-official--title-1--213.20}

(a) Each state agency shall complete the accessibility survey the department distributes pursuant to Texas Government Code § 2054.464 and §213.4(d) of this chapter within the prescribed deadlines established by the department.

(b) A state agency shall support its survey responses with agency documentation.

**History**
- *Source Note: The provisions of this §213.20 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
September 18, 2014, 39 TexReg 7565; amended to be effective December
12, 2019, 44 TexReg 7679; amended to be effective June 16, 2026, 51
TexReg 3877.*

##### **1 Tex. Admin. Code § 213.21** Digital Accessibility Officer {#sec-213.21 omnilex-key=us-tx-regs-official--title-1--213.21}

(a) Pursuant to 1 Texas Administrative Code §206.54, each state agency shall publish to its website a current accessibility policy, which must reflect at a minimum:

(1) Confirmation of the agency's compliance with the standards and specifications of this chapter; and

(2) An agency-approved plan by which the state agency will bring EIR into and maintain compliance with the Technical Accessibility Standards and Specifications of this chapter, which must include a process for corrective actions to remediate non-compliant items.

(b) The agency head or information resources manager shall designate a Digital Accessibility Officer, who must be organizationally placed to oversee agency-wide progress in EIR Accessibility compliance with Chapters 206 and 213 of this title and digital accessibility best practices in support of their internal accessibility policies and initiatives.

(1) In filling this role, the state agency may employ an individual solely for this purpose or may add this responsibility to a current employee's existing job duties.

(2) A state agency must inform DIR of their designation of a Digital Accessibility Officer, which must include the individual's name, contact information, and other information in the format prescribed by the department.

(3) A state agency shall inform the department within 30 days whenever the agency Digital Accessibility Officer position is vacant or when the agency has designated a new Digital Accessibility Officer.

**History**
- *Source Note: The provisions of this §213.21 adopted
to be effective September 16, 2008, 33 TexReg 7744; amended to be
effective September 18, 2014, 39 TexReg 7565; amended to be effective
December 12, 2019, 44 TexReg 7679; amended to be effective June 16,
2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.22** Applicable Standards {#sec-213.22 omnilex-key=us-tx-regs-official--title-1--213.22}

State agencies shall comply with the minimum expected standards established by this chapter and federal law. To the extent that there is a discrepancy between discrete federal standards, state agencies shall adopt the higher of the two standards.

**History**
- *Source Note: The provisions of this §213.22 adopted to be
effective June 16, 2026, 51 TexReg 3877.*

#### **Subchapter C** ACCESSIBILITY STANDARDS FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 213.30** Software Applications and Operating Systems {#sec-213.30 omnilex-key=us-tx-regs-official--title-1--213.30}

Effective April 18, 2020, unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant to 1 Texas Administrative Code §213.37, all software applications and operating systems EIR developed, procured, or changed by an institution of higher education shall comply with the standards described in this subchapter. Each institution of higher education shall comply with the following standards referenced in Section 508 Appendix C:

(1) Chapter 7, § 702.10 (WCAG 2.0 Level AA excluding Guideline 1.2 Time Based Media);

(2) Chapter 5, § 502 Interoperability with Assistive Technology;

(3) Chapter 5, § 503 Applications; and

(4) Chapter 5, § 504 Authoring Tools.

**History**
- *Source Note: The provisions of this §213.30 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.31** Telecommunications Products {#sec-213.31 omnilex-key=us-tx-regs-official--title-1--213.31}

Unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant §213.37 of this chapter, when purchasing telecommunication equipment or services, an institution of higher education shall contractually require the manufacturer of telecommunication equipment or provider of telecommunication services to ensure that the equipment or services are in compliance with 47 U.S.C. § 255 and 36 C.F.R. § 1194.2, Appendix B, when such products are readily available or compliance is achievable.

**History**
- *Source Note: The provisions of this §213.31 adopted to be
effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.32** Video and Multimedia {#sec-213.32 omnilex-key=us-tx-regs-official--title-1--213.32}

(a) Effective April 18, 2020, unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant to 1 Texas Administrative Code §213.37, all video and multimedia EIR developed, procured or changed by an institution of higher education shall comply with the standards described in this subchapter. Each institution of higher education shall comply with the standards referenced in Section 508 Appendix C.

(b) Based on a request for accommodation of a webcast of a live/real time open meeting (Open Meetings Act, Texas Government Code, Chapter 551) or training and informational video productions which support the institution's mission, each institution of higher education that receives such request shall consider captioning and alternative forms of accommodation for videos posted on state websites.

**History**
- *Source Note: The provisions of this §213.32 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.33** Hardware {#sec-213.33 omnilex-key=us-tx-regs-official--title-1--213.33}

(a) Unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant to §213.37 of this chapter, all EIR hardware developed, procured, or changed by an institution of higher education shall comply with the following standards referenced in US Section 508 Appendix C Chapter 4:

(1) Chapter 4, § 401 General;

(2) Chapter 4, § 402 Closed Functionality;

(3) Chapter 4, § 403 Biometrics;

(4) Chapter 4, § 404 Preservation of Information Provided for Accessibility;

(5) Chapter 4, § 405 Privacy;

(6) Chapter 4, § 406 Standard Connections;

(7) Chapter 4, § 407 Operable Parts;

(8) Chapter 4, § 408 Display Screens;

(9) Chapter 4, § 409 Status Indicators;

(10) Chapter 4, § 410 Color Coding;

(11) Chapter 4, § 411 Audible Signals;

(12) Chapter 4, § 412 ICT with Two-Way Communication;

(13) Chapter 4, § 413 Closed Caption Processing Technologies;

(14) Chapter 4, § 414 Audio Description Processing Technologies; and

(15) Chapter 4, § 415 User Controls for Captions and Audio Descriptions.

(b) When EIR hardware is located in maintenance or monitoring spaces and where status indicators and operable parts are located in spaces that are frequented only by service personnel for maintenance, repair, or occasional monitoring of equipment, such status indicators and operable parts shall not be required to conform to §213.33 of this chapter.

**History**
- *Source Note: The provisions of this §213.33 adopted to be
effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.35** Functional Performance Criteria {#sec-213.35 omnilex-key=us-tx-regs-official--title-1--213.35}

Effective April 18, 2020 unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant to 1 Texas Administrative Code §213.37, all EIR developed, procured, or changed by an institution of higher education shall comply with the standards described in this subchapter. To the extent that an EIR does not comply with the requirements of 1 Texas Administrative Code §213.30 - 213.33 that are applicable to that EIR, the noncompliant features of that EIR shall conform to the standards referenced in Section 508 Appendix C, Chapter 3, §302 Functional Performance Criteria.

**History**
- *Source Note: The provisions of this §213.35 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.36** Support Documentation and Services {#sec-213.36 omnilex-key=us-tx-regs-official--title-1--213.36}

Effective April 18, 2020, unless an exception is approved by the president or chancellor of an institution of higher education or an exemption has been made for specific technologies pursuant to §213.37 of this chapter, all documentation and services that support the use of EIR developed, procured, or changed by an institution of higher education shall comply with the following standards referenced in US Section 508 Appendix C, Chapter 6:

(1) Chapter 6, § 602 Support Documentation; and

(2) Chapter 6, § 603 Support Services.

**History**
- *Source Note: The provisions of this §213.36 adopted to be effective April 27, 2006, 31 TexReg 3379; amended to be effective September 16, 2008, 33 TexReg 7744; amended to be effective September 18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019, 44 TexReg 7679.*

##### **1 Tex. Admin. Code § 213.37** Compliance Exceptions and Exemptions {#sec-213.37 omnilex-key=us-tx-regs-official--title-1--213.37}

All EIR developed, procured, or changed by an institution of higher education shall comply with the standards and specifications of Chapter 206 and/or Chapter 213 of this title, unless the president or chancellor of an institution of higher education approves an exception subject to this chapter or, as applicable, the DOJ Title II Rule or the department grants an exemption.

(1) Legacy EIR. Any component or portion of existing EIR that complies with an earlier standard issued pursuant to Chapter 206 or Chapter 213 of this title and the user interface has not been altered shall not be required to be modified to conform to this revised rule unless the EIR is required to comply with the DOJ Title II Rule.

(2) In its accessibility policy, an agency shall include standards and processes for handling exception requests for all EIR, including those subject to exceptions for a significant barrier or expense contained in Texas Government Code § 2054.460.

(3) The president or chancellor of an institution of higher education must approve in writing exceptions for a material difficulty or expense pertaining to significant barriers to users under Texas Government Code § 2054.460 for EIR that does not comply with the standards and specifications described in Chapter 206 and/or Chapter 213 of this title, pursuant to Texas Government Code § 2054.460:

(A) prior to the procurement, completion, use, or deployment; or

(B) at the point the barrier is identified if the vendor is unable to immediately remedy the failure to comply with Chapter 206 and/or Chapter 213 of this title.

(4) An approved exception for a significant barrier or expense under Texas Government Code § 2054.460 shall include the following:

(A) List of compliance issues posing a risk to the institution of higher education with anticipated impact of each issue;

(B) a date of expiration or duration of the exception;

(C) a plan for alternate means of access for persons with disabilities;

(D) justification for the exception including technical barriers, cost of remediation, fiscal impact for bringing the EIR into compliance, and other identified risks; and

(E) documentation of how the institution of higher education considered alternative solutions and all institution resources available to the program or program component for which the product is being developed, procured, maintained, or used. Examples may include, but are not limited to, institution budget, grants, and alternative vendor or product selections.

(5) Institutions of higher education shall maintain records of approved exceptions in accordance with that institution of higher education's records retention schedule.

**History**
- *Source Note: The provisions of this §213.37 adopted
to be effective April 27, 2006, 31 TexReg 3379; amended to be effective
September 16, 2008, 33 TexReg 7744; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.38** Procurements {#sec-213.38 omnilex-key=us-tx-regs-official--title-1--213.38}

(a) For the procurement of EIR made directly by an institution of higher education or through the department's information technology commodity procurement contracts entered pursuant to Texas Government Code § 2157.068, the institution shall require a vendor to provide accessibility information for the purchased products or services, where applicable, through one of the following methods:

(1) inclusion of URLs to manufacturer's VPATS or ACRs for applicable Commercial Off the Shelf products or services;

(2) other documents / forms requested by the institution that provide credible evidence of the vendor's capability or ability to produce accessible EIR products and services. Such evidence may include, but is not limited to, a vendor's internal accessibility policy documents, contractual warranties for accessibility, accessibility testing documents, and examples of prior work results; or

(3) If credible accessibility documentation cannot be provided, then the EIR shall be considered noncompliant.

(b) An institution of higher education shall implement a procurement accessibility policy, and supporting business processes and contract terms for making procurement decisions. The institution of higher education shall monitor the procurement processes and contracts for accessibility compliance.

(c) This subchapter applies to EIR developed, procured, or materially changed by an institution of higher education, or developed, procured, or materially changed by a contractor under a contract with an institution of higher education, which requires the use of such product to a significant extent in the performance of a service or the furnishing of a product.

(d) Unless an exception is approved by the president or chancellor of an institution of higher education pursuant to Texas Government Code § 2054.460 and §213.37 of this subchapter or unless an exemption is approved by the department pursuant to Texas Government Code § 2054.460 and §213.37 of this subchapter, all EIR products developed, procured or materially changed through a procured services contract, and all electronic and information resource services provided through hosted or managed services contracts, shall comply with the provisions of Chapter 206 and Chapter 213 of this title, as applicable.

(e) An institution of higher education must include accessibility testing, planning, and execution criteria for EIR development and implementation projects.

(f) Accessibility testing:

(1) requires one year or longer to reach operations status;

(2) involves more than one institution of higher education or state agency; or

(3) substantially alters work methods of institution of higher education or agency personnel or the delivery of services to clients.

(g) Nothing in this subchapter is intended to prevent the use of designs or technologies as alternatives to those prescribed in this subchapter provided they result in substantially equivalent or greater access to and use of a product for people with disabilities.

**History**
- *Source Note: The provisions of this §213.38 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
November 17, 2009, 34 TexReg 8027; amended to be effective September
18, 2014, 39 TexReg 7565; amended to be effective December 12, 2019,
44 TexReg 7679; amended to be effective June 16, 2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.39** Institution of Higher Education Accessibility Administration, Training, Technical Assistance, and Job Descriptions {#sec-213.39 omnilex-key=us-tx-regs-official--title-1--213.39}

(a) The president or chancellor of each institution of higher education shall ensure appropriate staff receive training necessary to comply with Chapters 206 and 213 of this title.

(b) Each institution of higher education shall consider including accessibility criteria in job descriptions, such as compliance with Chapters 206 and 213 of this title and other regulatory requirements, where the position is responsible for EIR subject to this chapter.

**History**
- *Source Note: The provisions of this §213.39 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
September 18, 2014, 39 TexReg 7565; amended to be effective December
12, 2019, 44 TexReg 7679; amended to be effective June 16, 2026, 51
TexReg 3877.*

##### **1 Tex. Admin. Code § 213.40** Accessibility Survey and Reporting Requirements {#sec-213.40 omnilex-key=us-tx-regs-official--title-1--213.40}

(a) Each institution of higher education shall be required to complete the accessibility survey the department distributes pursuant to Texas Government Code § 2054.464 and §213.4(d) of this chapter within the prescribed deadlines established by the department.

(b) Each institution of higher education shall support their survey responses with institutional documentation.

**History**
- *Source Note: The provisions of this §213.40 adopted to be
effective September 16, 2008, 33 TexReg 7744; amended to be effective
September 18, 2014, 39 TexReg 7565; amended to be effective December
12, 2019, 44 TexReg 7679; amended to be effective June 16, 2026, 51
TexReg 3877.*

##### **1 Tex. Admin. Code § 213.41** Digital Accessibility Officer {#sec-213.41 omnilex-key=us-tx-regs-official--title-1--213.41}

(a) Pursuant to 1 Texas Administrative Code §206.74, each institution of higher education shall publish to its website a current accessibility policy, which must reflect at a minimum:

(1) Confirmation of the institution's compliance with the standards and specifications of this chapter; and

(2) An institution-approved plan by which the institution will bring EIR into and maintain compliance with the Technical Accessibility Standards and Specifications of this chapter, which must include a process for corrective actions to remediate non-compliant items.

(b) The president or chancellor of an institution of higher education or information resources manager shall designate a Digital Accessibility Officer who must be organizationally placed to oversee institution-wide EIR accessibility compliance and digital accessibility best practices in support of their internal accessibility policies and initiatives.

(1) In filling this role, the institution of higher education may employ an individual solely for this purpose or may add this responsibility to a current employee's existing job duties.

(2) An institution of higher education must inform DIR of their designation of a Digital Accessibility Officer, which must include the individual's name, contact information, and other information in the format prescribed by the department.

(3) An institution of higher education shall inform the department within 30 days whenever the institution of higher education Digital Accessibility Officer position is vacant or when the institution of higher education has designated a new Digital Accessibility Officer

**History**
- *Source Note: The provisions of this §213.41 adopted
to be effective September 16, 2008, 33 TexReg 7744; amended to be
effective September 18, 2014, 39 TexReg 7565; amended to be effective
December 12, 2019, 44 TexReg 7679; amended to be effective June 16,
2026, 51 TexReg 3877.*

##### **1 Tex. Admin. Code § 213.42** Applicable Standards. {#sec-213.42 omnilex-key=us-tx-regs-official--title-1--213.42}

Institutions of higher education shall comply with the minimum expected standards established by this chapter and federal law. To the extent that there is a discrepancy between discrete federal standards, institutions of higher education shall adopt the higher of the two standards.

**History**
- *Source Note: The provisions of this §213.42 adopted to be
effective June 16, 2026, 51 TexReg 3877.*

### **Chapter 215** STATEWIDE TECHNOLOGY CENTERS

#### **Subchapter A** GENERAL PURPOSE AND DEFINITIONS

##### **1 Tex. Admin. Code § 215.1** General Purpose {#sec-215.1 omnilex-key=us-tx-regs-official--title-1--215.1}

As provided by Texas Government Code §2054.378, the department may directly operate, or contract with another entity to operate, statewide technology centers to provide governmental entities, on a cost-sharing basis, services related to:

(1) Information resources and information resources technology; and

(2) The deployment, development, and maintenance of software applications.

**History**
- *Source Note: The provisions of this §215.1 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.2** Applicable Terms and Technologies for Statewide Technology Centers {#sec-215.2 omnilex-key=us-tx-regs-official--title-1--215.2}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative Fees--Those fees as authorized under Texas Government Code §2054.380.

(2) Application--A separately identifiable and interrelated set of information resources technologies that allows for the manipulation of information resources to support specifically defined objectives on a computer.

(3) Application Services Center - A statewide technology center described in 1 Texas Administrative Code Chapter 215, Subchapters D - E, and as established by the department pursuant to Texas Government Code Chapter 2054, Subchapter L.

(4) Application Services Center Customer - Any state or local government entity receiving Application Services Center services.

(5) Bulk Print and Mail--A service capable of offering high-volume printing and mail needs, such as the production of statements, notifications, letters, and other communications in a highly secure and cost-effective manner.

(6) Cloud computing services-- As defined by the National Institute of Standards and Technology or other widely accepted industry standard.

(7) Customer Representative--Primary point of contact for a Data Center Services Customer who has authority to request services and obligate funds for Data Center Services.

(8) Data Center--Physical location where computer and data processing equipment is installed and managed.

(9) Data Center Services (DCS)--A statewide technology center consisting of private and public cloud environments, remote business office compute, mainframe, and bulk print/mail for consolidated data services managed by a contracted vendor(s) established by the department pursuant to Texas Government Code Chapter 2054, Subchapter L and more fully described in subchapters of this rule.

(10) DCS Customer--Any state or local government entity receiving DCS services.

(11) Department--The Department of Information Resources.

(12) Designated State Agency--A state agency selected for required consolidation at a statewide technology center as specified in Texas Government Code §2054.385.

(13) Disaster Recovery--The process of planning for, and recovering, information infrastructure after a disaster.

(14) Discretionary State Agency--A state agency voluntarily receiving services from a statewide technology center.

(15) Government Entity--A state agency or local government as defined herein and in Texas Government Code §2054.003.

(16) Information Resources--As defined in Texas Government Code §2054.003(7).

(17) Information Resources Manager (IRM)--As defined in Texas Government Code §2054.071.

(18) Information Resources Technologies--As defined in Texas Government Code §2054.003(8).

(19) Interagency Agreement--An agreement, as authorized by Texas Government Code Chapter 771, entered into between the department and any state agency or institution of higher education Statewide Technology Center customer pursuant to which Services are provided to such customer.

(20) Interlocal Agreement--An agreement, as authorized by Texas Government Code Chapter 791, entered into between the department and any local government Statewide Technology Center customer pursuant to which services are provided to such customer.

(21) ITCHE--Information Technology Council for Higher Education.

(22) Local Government--A county, municipality, special district, school district, junior college district, or other political subdivision of the state.

(23) Mainframe--A high-end computer processor, with related peripheral devices, capable of supporting large volumes of batch processing, high performance on-line transaction processing systems, and extensive data storage and retrieval.

(24) Network--Means collectively, WAN, LAN, and other communication or transport networks.

(25) Partner Group--To effectively engage DCS customers in enterprise decision making, governance committees use a representational approach. DCS customers are organized into groups and each governance committee includes the participation of at least one representative from each group.

(26) Server--Any computer that provides shared processing or resources (e.g. Application processing, identity management, database, mail, proxy, firewalls, backup capabilities, print, and fax services) over the Network. A Server includes associated peripherals (e.g. local storage devices, attachments to centralized storage, monitor, keyboard, pointing device, tape drives, and external disk arrays) and is identified by a unique manufacturer's serial number.

(27) Server Consolidation--The mandatory consolidation of select servers operated by Designated Agencies from the legacy data centers to the Statewide Technology Center.

(28) Service Catalog--The online catalog of the services, equipment, software, and configurations of services, equipment, and software based on deployment standards.

(29) Service Provider--Multi-sourcing Service Integrator (MSI) and Service Component Provider (SCP) vendors offering managed services through the Statewide Technology Center.

(30) Software-as-a-Service - As defined by the National Institute of Standards and Technology or other widely accepted industry standard.

(31) SMM--Service Management Manual.

(32) Statewide Technology Center--As defined by Texas Government Code §2054.375(2) and further described in subchapters to this rule.

(33) System environment--As defined by the National Institute of Standards and Technology or other widely accepted industry standard.

(34) Technology Solution Services Group--A technology steering committee that approves technology plans and technology standards for hardware and software configurations related to Data Center Services.

(35) Technology Plan--A Data Center Services Plan that reports how the service provider will support DIR and DCS Customers in advancing their technology objectives and strategies.

**History**
- *Source Note: The provisions of this §215.2 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective November 23, 2015, 40 TexReg 8197; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.3** Institution of Higher Education {#sec-215.3 omnilex-key=us-tx-regs-official--title-1--215.3}

A university system or institution of higher education as defined by Texas Education Code §61.003.

**History**
- *Source Note: The provisions of this §215.3 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.4** State Agency {#sec-215.4 omnilex-key=us-tx-regs-official--title-1--215.4}

A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §215.4 adopted to be effective March 17, 2015, 40 TexReg 1368.*

#### **Subchapter B** DATA CENTER SERVICES FOR STATE AGENCIES AND LOCAL GOVERNMENT

##### **1 Tex. Admin. Code § 215.10** Receipt of Services {#sec-215.10 omnilex-key=us-tx-regs-official--title-1--215.10}

(a) Eligible DCS Customers.

(1) Designated State Agencies.

(A) In accordance with Texas Government Code Chapter 771, each participating state agency shall execute an Interagency Contract with the department prior to the start of services.

(B) Exemption Process. A designated state agency requesting exemption from all or part of the Data Center Services shall provide to the designated DIR representative:

(i) Executive summary that describes the reason(s) for designated customer's requested exemption, signed by the agency head or designee;

(ii) Agency certification that includes documentation in which designated customer certifies that the proposed alternative to Data Center Services:

(I) Is financially viable;

(II) Protects state agency data;

(III) Is in the best interest of the State of Texas; and

(IV) Is compatible with the current Data Center Services system environment.

(iii) Upon receipt of all required documentation, the department shall review and provide a formal determination to the requesting designated customer within 30 calendar days. The department's determination will be based on the best interest of the State.

(2) Discretionary State Agencies. In accordance with Texas Government Code Chapter 771, each participating state agency shall execute an Interagency Contract with the department defining the services to be provided prior to the start of services.

(3) Local Government Entity. In accordance with Texas Government Code Chapter 791, each participating local government shall execute an Interlocal Contract with the department defining the services to be provided prior to the start of services.

(b) Request for Services.

(1) For prospective DCS Customers initiating service:

(A) Prior to providing services, a request for new services shall be submitted via a written request addressed to the designated DIR representative. The written request shall, at a minimum, include the DCS Customer's estimated compute volume and service requirements.

(B) Upon receipt of any such request to initiate service, a cost estimate will be provided by the DCS Program to the prospective DCS Customer.

(2) An existing DCS Customer requesting additional services offered under this rule shall follow the policies and procedures established for all DCS Customers documented in the Service Management Manual.

(A) Upon receipt of any such request for additional services, the DCS Program will provide a cost estimate to the DCS Customer.

(B) Along with the cost estimate, a formal notice from the DCS Program to the DCS Customer shall include:

(i) The scope of the services to be provided; and

(ii) The implementation schedule.

(C) A DCS Customer seeking to obtain project work or other service changes shall submit a request via the online Service Catalog.

**History**
- *Source Note: The provisions of this §215.10 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.11** DCS Billing {#sec-215.11 omnilex-key=us-tx-regs-official--title-1--215.11}

(a) The department shall bill each DCS Customer for services on a monthly basis. The invoice may include the following:

(1) Services received by the department and service provider on behalf of the DCS Customer;

(2) The department's administrative fee; and

(3) Additional pass-through expenses incurred by the department or service providers on behalf of the DCS Customer.

(b) Notwithstanding 1 Texas Administrative Code §215.11(d), in order to allow the department to meet the statutory payment requirements specified in Texas Government Code Chapter 2251, DCS Customers shall ensure the department's receipt of payment within (20) calendar days following delivery of the monthly invoice.

(c) The department's administrative fee shall be, at a minimum, reviewed semi-annually. Any proposed incremental change in the department's administrative fee shall first be considered by the Legislative Budget Board and the Office of the Governor.

(d) DCS Customers shall dispute erroneous charges within four (4) invoice cycles after the date the DCS Customer receives the invoice in dispute. The dispute must provide details as to the nature of the dispute and all information the DCS Customer may have to assist in resolution of the dispute.

**History**
- *Source Note: The provisions of this §215.11 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.12** DCS User Responsibilities {#sec-215.12 omnilex-key=us-tx-regs-official--title-1--215.12}

(a) Each DCS Customer shall provide to the department the name, title, contact information, including emergency contact, of the designated employee(s) authorized to initiate, change, modify, or amend services. At a minimum it shall include:

(1) Executive level technology officer such as a Chief Information Officer or Information Resources Manager; and

(2) Customer Representative.

(b) Each DCS Customer is responsible for ensuring that its use of DCS services is in compliance with applicable law, policy, and procedures.

(c) For software products not initially procured by or through the DCS program on behalf of DCS Customer, the DCS Customer shall coordinate with the DCS program to ensure complete documentation of entitlement is on file. The DCS Customer is responsible for providing proof of entitlement; without which, the DCS Customer is solely responsible for software license compliance.

(d) Each state agency customer that receives funding through the state appropriations shall coordinate with the department and the Legislative Budget Board to establish anticipated DCS program needs for each subsequent biennium. In coordination with the department, the state agency shall consider:

(1) Type and volume of future service; and

(2) Planned IT projects.

(e) To ensure savings to the state, each designated state agency shall make all reasonable efforts to affect server consolidation into the state data center. At a minimum, a designated state agency shall do the following:

(1) Coordinate with service provider to establish a consolidation plan in which server move groups and schedules for the consolidation of move groups are established;

(2) Coordinate with the department and the Legislative Budget Board to ensure its biennium budget includes the resources necessary to accomplish server consolidation per the established consolidation plan;

(3) Make all reasonable efforts, including the remediation of impacted applications, to ensure the consolidation plan is accomplished as scheduled.

(f) Audit notification.

(1) DCS Customers shall promptly notify the department whenever the customer becomes aware that an audit or compliance review is planned by external, internal, software vendor, or federal oversight auditors that will require audit assistance from the DCS program Service Providers. In any event, where audit assistance is required, the DCS Customer shall notify the department of planned audit or compliance review no less than five business days prior to anticipated start of audit or compliance review.

(2) In performing audits, DCS Customers shall endeavor to avoid unnecessary disruption of the DCS program operations and duplication of other audits. Therefore, DCS Customers shall leverage SOC or comparable audits provided for under the DCS contract, to the extent possible.

(3) The state auditor, the department's internal auditors, a state agency's internal auditors, and if applicable, the Office of Inspector General of the agency, or federal auditors, may conduct audits or investigations of any entity receiving funds from the state directly under a contract or indirectly under a subcontract for Statewide Technology Center services.

(4) A DCS Customer may request copies of audit reports submitted to the department as required by the DCS contract and governed by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) or successor group. The requesting DCS Customer should submit the request to the DCS Audit Coordinator at the department. Due to the confidential nature of information in the report, the requesting DCS Customer shall only distribute the report to its staff that have a legitimate business need for access to the report and may not distribute the report to external auditors or entities. External auditors that require access to a report in connection with an audit of a DCS Customer must contact the DCS Audit Coordinator and sign a non-disclosure agreement prior to receiving a copy of the report.

(g) Technology planning.

(1) Each DCS Customer will participate in an annual DCS technology planning process based on instructions provided in the technology planning process as documented in the Service Management Manual. This planning will relate to the services the DCS Customer receives or expects to receive through the program.

(2) All DCS Customer shall follow the technology standards for hardware and software configurations as specified in the annual technology plan and Service Management Manual. DCS Customers seeking exception to specified technology standards shall comply with the relevant Service Management Manual.

(h) Governance process.

(1) All DCS Customers will participate in the governance process designed to facilitate individual customer input into enterprise decisions that affect all customers. Each customer is assigned to a group of similar customers, called a "partner group", and that group will be given one membership position on each governance committee. Members of the partner group are expected to represent the interests of all partner group members in governance decisions.

(2) Enterprise-level decisions and resolution of escalated DCS Customer-specific issues shall be addressed through standing governance committees, organized by subject area and comprised of representatives from the department, DCS Customers, and service providers. Participation on committees is selected from each designated partner group.

(i) Confidential data.

(1) DCS Customer shall provide its specific confidentiality requirements as determined by the nature of the data stored in the DCS program. Generally, the specific confidentiality requirements shall be appended to the interagency or interlocal contract. The Service Management Manual shall provide additional documentation on the specific procedures, including the process DCS Customers shall follow to identify confidential information.

(2) In general, a DCS Customer shall include in the interagency or interlocal agreement:

(A) General notification as to the type of confidential data and the laws that guide in the handling of such data; and

(B) Subsequent changes to laws that apply to previously identified confidential data.

(j) Security.

(1) DCS Customers shall comply with the Security Incident Management and Response process available in the Service Management Manual.

(2) DCS Customers shall be in compliance with 1 Texas Administrative Code Chapter 202.

**History**
- *Source Note: The provisions of this §215.12 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective September 17, 2018, 43 TexReg 5947; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.13** Data Center Services {#sec-215.13 omnilex-key=us-tx-regs-official--title-1--215.13}

(a) DCS services include the following services within the State's private and public cloud environment and approved remote locations:

(1) Mainframe services

(2) Server services

(3) Hosting and management of telecommunication hardware for emergency services

(4) Storage services

(5) Bulk Print and mail services

(6) Network services for DCS managed environments

(7) Disaster Recovery services

(8) Security Services for DCS managed environments

(9) Application portfolio management

(10) Cloud computing services, not including software-as-a-service products

(11) Support and management services related to the above described services.

(b) Unless an exemption has been requested and approved by the department pursuant to 1 Texas Administrative Code §215.10(a)(1)(B), designated DCS Customers shall not procure the services specified in this section outside the DCS program.

**History**
- *Source Note: The provisions of this §215.13 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective November 23, 2015, 40 TexReg 8197; amended to be effective August 1, 2021, 46 TexReg 4681.*

#### **Subchapter C** DATA CENTER SERVICES FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 215.30** Receipt of Services {#sec-215.30 omnilex-key=us-tx-regs-official--title-1--215.30}

(a) Eligible DCS Customers.

(1) In accordance with Texas Government Code §2054.377, participation by an institution of higher education in the DCS program requires approval by the Information Technology Council for Higher Education (ITCHE).

(2) In accordance with Texas Government Code Chapter 771, each participating institution of higher education shall execute an Interagency Contract with the department defining the services to be provided prior to the start of services.

(b) Request for Services.

(1) For prospective higher education DCS Customers initiating service:

(A) Prior to providing services, a request for new services shall be submitted via a formal written request addressed to the designated DIR representative. The written request shall, at a minimum, include the written approval from ITCHE, DCS Customer's estimated compute volume, and service requirements.

(B) Upon receipt of any such request to initiate service, a cost estimate will be provided by the DCS Program to the prospective DCS Customer.

(2) After established as a DCS Customer, institutions of higher education requesting additional services offered under this rule shall follow the policies and procedures established for all DCS Customers documented in the Service Management Manual. Institutions of higher education shall also include written approval from ITCHE with any request for additional services.

(A) Upon receipt of any such request for additional services, a cost estimate will be provided by the DCS Program to the DCS Customer.

(B) Along with the cost estimate, a formal notice from the DCS Program to the DCS Customer shall include:

(i) The scope of the services to be provided; and

(ii) The implementation schedule.

(3) A DCS Customer seeking to obtain project work or other service changes shall submit a request via the online Service Catalog.

**History**
- *Source Note: The provisions of this §215.30 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.31** DCS Billing {#sec-215.31 omnilex-key=us-tx-regs-official--title-1--215.31}

(a) The department shall bill each DCS Customer for services on a monthly basis. The invoice may include the following:

(1) Services received by the department and service provider on behalf of the DCS customer;

(2) The department's administrative fee; and

(3) Additional pass-through expenses incurred by the department or service providers on behalf of the DCS Customer.

(b) Notwithstanding 1 Texas Administrative Code §215.33(d), in order to allow the department to meet the statutory payment requirements of Texas Government Code Chapter 2251, a DCS Customer shall ensure the department's receipt of payment within (20) calendar days following delivery of the monthly invoice.

(c) The department's administrative fee shall be, at a minimum, reviewed semi-annually. Any proposed incremental change in the department's administrative fee shall first be considered by the Legislative Budget Board and the Office of the Governor.

(d) DCS Customers shall dispute erroneous charges within four (4) invoice cycles after the date the DCS Customer receives the invoice in dispute. The dispute must provide details as to the nature of the dispute and all information the DCS Customer may have to assist in resolution of the dispute.

**History**
- *Source Note: The provisions of this §215.31 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.32** DCS User Responsibilities {#sec-215.32 omnilex-key=us-tx-regs-official--title-1--215.32}

(a) Each DCS Customer shall provide to the department the name, title, contact information, including emergency contact, of the designated employee(s) authorized to initiate, change, or modify services. At a minimum it shall include:

(1) Executive level technology officer such as a Chief Information Officer or Information Resources Manager; and

(2) Customer Representative.

(b) Each DCS Customer is responsible for ensuring that its use of DCS services is in compliance with applicable law, policy, and procedures.

(c) For software products not initially procured by or through the DCS program on behalf of DCS Customer, the DCS Customer shall coordinate with the DCS program to ensure complete documentation of entitlement is on file. The DCS Customer is responsible for providing proof of entitlement to the software and is accountable for software license compliance.

(d) Audit notification.

(1) DCS Customers shall promptly notify the department whenever the Customer becomes aware that an audit or compliance review is planned by external, internal, software vendor, or federal oversight auditors that will require audit assistance from the DCS program Service Providers. In any event, where audit assistance is required, the DCS Customer shall notify the department of planned audit or compliance review no less than five business days prior to anticipated start of audit or compliance review.

(2) In performing audits, DCS Customers shall endeavor to avoid unnecessary disruption of the DCS program operations and duplication of other audits. Therefore, DCS Customers shall leverage SOC or comparable audits provided for under the DCS contract, to the extent possible.

(3) The state auditor, the department's internal auditors, an institution of higher education's internal auditors, and if applicable, the Office of Inspector General of the institution of higher education, or federal auditors, may conduct audits or investigations of any entity receiving funds from the state directly under a contract or indirectly under a subcontract for Statewide Technology Center Services.

(4) A DCS Customer may request copies of audit reports submitted to the department as required by the DCS contract and governed by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) or successor group. The requesting DCS Customer should submit the request to the DCS Audit Coordinator at the department. Due to the confidential nature of information in the report, the requesting DCS Customer shall only distribute the report to its staff that have a legitimate business need for access to the report and may not distribute the report to external auditors or entities. External auditors that require access to a report in connection with an audit of a DCS Customer must contact the DCS Audit Coordinator and sign a non-disclosure agreement prior to receiving a copy of the report.

(e) Technology planning.

(1) Each DCS Customer will participate in an annual DCS technology planning process based on instructions provided in the technology planning process as documented in the Service Management Manual. This planning will relate to the services the DCS Customer receives or expects to receive through the program.

(2) All DCS Customers shall follow the technology standards for hardware and software configurations as specified in the annual technology plan and Service Management Manual. DCS Customers seeking exception to specified technology standards shall comply with the relevant Service Management Manual.

(f) Governance process.

(1) All DCS Customers will participate in the governance process designed to facilitate individual customer input into enterprise decisions that affect all customers. Each customer is assigned to a group of similar customers, called a "partner group", and that group will be given one membership position on each governance committee. Members of the partner group are expected to represent the interests of all partner group members in governance decisions.

(2) Enterprise-level decisions and resolution of escalated DCS Customer-specific issues shall be addressed through standing governance committees, organized by subject area and comprised of representatives from the department, DCS Customers, and service providers. Participation on committees is selected from each designated partner group.

(g) Confidential data.

(1) DCS Customer shall provide its specific confidentiality requirements as determined by the nature of the data stored in the DCS program. Generally, the specific confidentiality requirements shall be appended to the interagency contract. The Service Management Manual shall provide additional documentation on the specific procedures, including the process DCS Customers shall follow to identify confidential information.

(2) In general, a DCS Customer shall include in the interagency agreement:

(A) General notification as to the type of confidential data and the laws that guide in the handling of such data; and

(B) Subsequent changes to laws that apply to previously identified confidential data.

(h) Security.

(1) DCS Customers shall comply with the Security Incident Management and Response process available in the Service Management Manual.

(2) DCS Customers shall be in compliance with 1 Texas Administrative Code Chapter 202.

**History**
- *Source Note: The provisions of this §215.32 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective September 17, 2018, 43 TexReg 5948; amended to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.33** Data Center Services {#sec-215.33 omnilex-key=us-tx-regs-official--title-1--215.33}

DCS services include the following services within the State's private and public cloud environment and approved remote locations:

(1) Mainframe services

(2) Server services

(3) Hosting and management of telecommunication hardware for emergency services

(4) Storage services

(5) Bulk Print and mail services

(6) Network services for DCS managed environments

(7) Disaster Recovery services

(8) Security Services for DCS managed environments

(9) Application Portfolio Management

(10) Cloud computing services, not including software-as-a-service products

(11) Support and management services related to the above-described services.

**History**
- *Source Note: The provisions of this §215.33 adopted to be effective March 17, 2015, 40 TexReg 1368; amended to be effective November 23, 2015, 40 TexReg 8197; amended to be effective August 1, 2021, 46 TexReg 4681.*

#### **Subchapter D** APPLICATION SERVICES CENTER FOR STATE AGENCIES AND LOCAL GOVERNMENT

##### **1 Tex. Admin. Code § 215.40** Receipt of Services {#sec-215.40 omnilex-key=us-tx-regs-official--title-1--215.40}

(a) Eligible Application Services Center Customers.

(1) State Agencies. In accordance with Texas Government Code Chapter 771, each participating state agency shall execute an Interagency Contract with the department defining the services to be provided prior to the start of services.

(2) Local Government Entity. In accordance with Chapter 791, each participating local government shall execute an Interlocal Contract with the department defining the services to be provided prior to the start of services.

(b) Request for Services.

(1) For prospective Application Services Center Customers initiating service:

(A) Prior to providing services, a request for new services shall be submitted via a formal written request addressed to the designated DIR representative.

(B) Upon receipt of any such request to initiate service, a cost estimate will be provided by the Application Services Center to the prospective DCS Customer.

(2) An existing Application Services Center Customer requesting additional services offered under this rule shall follow the policies and procedures established for all Application Services Center Customers documented in the applicable Service Management Manual.

(A) Upon receipt of any such request for additional services, the Application Services Center Program will provide a cost estimate to the Application Services Center Customer.

(B) Along with the cost estimate, a formal notice from the Application Services Center Program to the Application Services Center Customer shall include:

(i) The scope of the services to be provided; and

(ii) The implementation schedule.

(C) An Application Services Center Customer seeking to obtain project work or other service changes shall submit a request via the online Service Catalog.

**History**
- *Source Note: The provisions of this §215.40 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.41** Application Services Center Billing {#sec-215.41 omnilex-key=us-tx-regs-official--title-1--215.41}

(a) The department shall bill each Application Services Center Customer for services on a monthly basis. The invoice may include the following:

(1) Services received by the department and service provider on behalf of the Application Services Center Customer;

(2) The department's administrative fee; and

(3) Additional pass-through expenses incurred by the department or service providers on behalf of the Application Services Center Customer.

(b) Notwithstanding 1 Texas Administrative Code §215.41(d), in order to allow the department to meet the statutory payment requirements specified in Texas Government Code Chapter 2251, Application Services Center Customers shall ensure the department's receipt of payment within (20) calendar days following delivery of the monthly invoice.

(c) The department's administrative fee shall be, at a minimum, reviewed semi-annually. Any proposed incremental change in the department's administrative fee shall first be considered by the Legislative Budget Board and the Office of the Governor.

(d) Application Services Center Customers shall dispute erroneous charges within four (4) invoice cycles after the date the Application Services Center Customer receives the invoice in dispute. The dispute must provide details as to the nature of the dispute and all information the Application Services Center Customer may have to assist in resolution of the dispute.

**History**
- *Source Note: The provisions of this §215.41 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.42** Application Services Center User Responsibilities {#sec-215.42 omnilex-key=us-tx-regs-official--title-1--215.42}

(a) Each Application Services Center Customer shall provide to the department the name, title, contact information, including emergency contact, of the designated employee(s) authorized to initiate, change, modify, or amend services. At a minimum it shall include:

(1) Executive level technology officer such as a Chief Information Officer or Information Resources Manager; and

(2) Customer Representative.

(b) Each Application Services Center Customer is responsible for ensuring that its use of Application Services Center services is in compliance with applicable law, policy, and procedures.

(c) Each state agency customer that receives funding through the state appropriations shall coordinate with the department and the Legislative Budget Board to establish anticipated needs for each subsequent biennium. In coordination with the department, the state agency shall consider:

(1) Type and volume of future service; and

(2) Planned IT projects.

(d) Audit notification.

(1) Application Services Center Customers shall promptly notify the department whenever the customer becomes aware that an audit or compliance review is planned by external, internal, software vendor, or federal oversight auditors that will require audit assistance from the Application Services Center program Service Providers. In any event, where audit assistance is required, the Application Services Center Customer shall notify the department of planned audit or compliance review no less than five business days prior to anticipated start of audit or compliance review.

(2) In performing audits, Application Services Center Customers shall endeavor to avoid unnecessary disruption of the DCS program operations and duplication of other audits. Therefore, Application Services Center Customers shall leverage SOC or comparable audits provided for under the Application Services Center contract, to the extent possible.

(3) The state auditor, the department's internal auditors, a state agency's internal auditors, and if applicable, the Office of Inspector General of the agency, or federal auditors, may conduct audits or investigations of any entity receiving funds from the state directly under a contract or indirectly under a subcontract for Statewide Technology Center services.

(4) An Application Services Center Customer may request copies of audit reports submitted to the department as required by the Statewide Technology Center services contract and governed by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) or successor group. The requesting Application Services Center Customer should submit the request to the department's designated audit representative. Due to the confidential nature of information in the report, the requesting Application Services Center Customer shall only distribute the report to its staff that have a legitimate business need for access to the report and may not distribute the report to external auditors or entities. External auditors that require access to a report in connection with an audit of a Application Services Center Customer must contact the department's designated audit representative and sign a non-disclosure agreement prior to receiving a copy of the report.

(e) Technology planning.

(1) Each Application Services Center Customer will participate in an annual Application Services Center technology planning process based on instructions provided in the technology planning process as documented in the applicable Service Management Manual. This planning will relate to the services the Application Services Center Customer receives or expects to receive through the program.

(2) All Application Services Center Customers shall follow the technology standards for hardware and software configurations as specified in the annual technology plan and Service Management Manual. Application Services Center Customers seeking exception to specified technology standards shall comply with the relevant Service Management Manual.

(f) Governance process.

(1) All Application Services Customers will participate in the governance process designed to facilitate individual customer input into enterprise decisions that affect all customers. Each customer is assigned to a group of similar customers, called a "partner group", and that group will be given one membership position on each governance committee. Members of the partner group are expected to represent the interests of all partner group members in governance decisions.

(2) Enterprise-level decisions and resolution of escalated Application Services Center Customer-specific issues shall be addressed through standing governance committees, organized by subject area and comprised of representatives from the department, DCS Customers, and service providers. Participation on committees is selected from each designated partner group.

(g) Confidential data.

(1) Application Services Center Customer shall provide its specific confidentiality requirements as determined by the nature of the data stored in the Application Services Center program. Generally, the specific confidentiality requirements shall be appended to the interagency or interlocal contract. The applicable Service Management Manual shall provide additional documentation on the specific procedures, including the process Application Services Center Customers shall follow to identify confidential information.

(2) In general, an Application Services Center Customer shall include in the interagency or interlocal agreement:

(A) General notification as to the type of confidential data and the laws that guide in the handling of such data; and

(B) Subsequent changes to laws that apply to previously identified confidential data.

(h) Security.

(1) Application Services Center Customers shall comply with the Security Incident Management and Response process available in the Service Management Manual.

(2) Application Services Center Customers shall be in compliance with 1 Texas Administrative Code Chapter 202.

**History**
- *Source Note: The provisions of this §215.42 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.43** Application Services Center Services {#sec-215.43 omnilex-key=us-tx-regs-official--title-1--215.43}

(a) Application Services Center Services include the development, deployment, and maintenance of software applications, including:

(1) procurement, configuration, and integration of software-as-a-service; and

(2) cloud computing services that are not Data Center Services identified by 1 Texas Administrative Code §215.13(a).

(b) Any of the services described in 1 Texas Administrative Code §215.43(a)(1) that require an interface or connection with the Data Center Services system environment shall be procured only through this Applications Services Center program, unless an exemption has been requested and approved by the department in accordance with 1 Texas Administrative Code §215.44.

**History**
- *Source Note: The provisions of this §215.43 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.44** Exemption Process {#sec-215.44 omnilex-key=us-tx-regs-official--title-1--215.44}

(a) A customer requesting exemption from the Application Services Center Services for a particular service described in 1 Texas Administrative Code §215.43(a)(1) or (a)(2) shall provide to the designated DIR representative:

(1) Executive summary that describes the reason(s) for the customer's requested exemption, signed by the agency head or designee;

(2) Customer certification that includes documentation in which the customer certifies that the proposed alternative to Application Services Center:

(A) Is financially viable;

(B) Protects state agency data;

(C) Is in the best interest of the State of Texas; and

(D) Is compatible with the current Data Center Services system environment.

(b) Upon receipt of all required documentation, the department shall review and provide a formal determination to the requesting customer within 30 calendar days. The department's determination will be based on the best interest of the State.

**History**
- *Source Note: The provisions of this §215.44 adopted to be effective August 1, 2021, 46 TexReg 4681.*

#### **Subchapter E** APPLICATION SERVICES CENTER FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 215.50** Receipt of Services {#sec-215.50 omnilex-key=us-tx-regs-official--title-1--215.50}

(a) Eligible Application Services Center Customers.

(1) In accordance with Texas Government Code §2054.377, participation by an institution of higher education in the Application Services Center requires approval by ITCHE.

(2) In accordance with Texas Government Code Chapter 771, each participating institution of higher education shall execute an Interagency Contract with the department defining the services to be provided prior to the start of services.

(b) Request for Services.

(1) For prospective higher education Application Services Center Customers initiating service:

(A) Prior to providing services, a request for new services shall be submitted via a formal written request addressed to the designated DIR representative. The written request shall, at a minimum, include the written approval from ITCHE, the estimated compute volume, and service requirements.

(B) Upon receipt of any such request to initiate service, a cost estimate will be provided by the Application Services Center to the prospective DCS Customer.

(2) After being established as an Application Services Center Customer, an institution of higher education requesting additional services offered under this rule shall follow the policies and procedures established for all Application Services Center Customers documented in the applicable Service Management Manual. Institutions of higher educations shall also include approval from ITCHE with any request for additional services.

(A) Upon receipt of any such request for additional services, the Application Services Center Program will provide a cost estimate to the Application Services Center Customer.

(B) Along with the cost estimate, a formal notice from the Application Services Center Program to the Application Services Center Customer shall include:

(i) The scope of the services to be provided; and

(ii) The implementation schedule.

(C) An Application Services Center Customer seeking to obtain project work or other service changes shall submit a request via the online Service Catalog.

**History**
- *Source Note: The provisions of this §215.50 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.51** Application Services Center Billing {#sec-215.51 omnilex-key=us-tx-regs-official--title-1--215.51}

(a) The department shall bill each Application Services Center Customer for services on a monthly basis. The invoice may include the following:

(1) Services received by the department and service provider on behalf of the Application Services Center Customer;

(2) The department's administrative fee; and

(3) Additional pass-through expenses incurred by the department or service providers on behalf of the Application Services Center Customer.

(b) Notwithstanding 1 Texas Administrative Code §215.51(d), in order to allow the department to meet the statutory payment requirements specified in Texas Government Code Chapter 2251, Application Services Center Customers shall ensure the department's receipt of payment within (20) calendar days following delivery of the monthly invoice.

(c) The department's administrative fee shall be, at a minimum, reviewed semi-annually. Any proposed incremental change in the department's administrative fee shall first be considered by the Legislative Budget Board and the Office of the Governor.

(d) Application Services Center Customers shall dispute erroneous charges within four (4) invoice cycles after the date the Application Services Center Customer receives the invoice in dispute. The dispute must provide details as to the nature of the dispute and all information the Application Services Center Customer may have to assist in resolution of the dispute.

**History**
- *Source Note: The provisions of this §215.51 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.52** Application Services Center User Responsibilities {#sec-215.52 omnilex-key=us-tx-regs-official--title-1--215.52}

(a) Each Application Services Center Customer shall provide to the department the name, title, contact information, including emergency contact, of the designated employee(s) authorized to initiate, change, modify, or amend services. At a minimum it shall include:

(1) Executive level technology officer such as a Chief Information Officer or Information Resources Manager; and

(2) Customer Representative.

(b) Each Application Services Center Customer is responsible for ensuring that its use of Application Services Center services is in compliance with applicable law, policy, and procedures.

(c) For software products not initially procured by or through the Application Services Center program on behalf of Application Services Center Customer, the Application Services Center Customer shall coordinate with the Application Services Center program to ensure complete documentation of entitlement is on file. The Application Services Center Customer is responsible for providing proof of entitlement; without which, the Application Services Center Customer is solely responsible for software license compliance.

(d) Audit notification.

(1) Application Services Center Customers shall promptly notify the department whenever the customer becomes aware that an audit or compliance review is planned by external, internal, software vendor, or federal oversight auditors that will require audit assistance from the Application Services Center program Service Providers. In any event, where audit assistance is required, the Application Services Center Customer shall notify the department of planned audit or compliance review no less than five business days prior to anticipated start of audit or compliance review.

(2) In performing audits, Application Services Center Customers shall endeavor to avoid unnecessary disruption of the DCS program operations and duplication of other audits. Therefore, Application Services Center Customers shall leverage SOC or comparable audits provided for under the Application Services Center contract, to the extent possible.

(3) The state auditor, the department's internal auditors, a state agency's internal auditors, and if applicable, the Office of Inspector General of the agency, or federal auditors, may conduct audits or investigations of any entity receiving funds from the state directly under a contract or indirectly under a subcontract for Statewide Technology Center services.

(4) An Application Services Center Customer may request copies of audit reports submitted to the department as required by the Statewide Technology Center services contract and governed by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) or successor group. The requesting Application Services Center Customer should submit the request to the department's designated audit representative. Due to the confidential nature of information in the report, the requesting Application Services Center Customer shall only distribute the report to its staff that have a legitimate business need for access to the report and may not distribute the report to external auditors or entities. External auditors that require access to a report in connection with an audit of a Application Services Center Customer must contact the department's designated audit representative and sign a non-disclosure agreement prior to receiving a copy of the report.

(e) Technology planning.

(1) Each Application Services Center Customer will participate in an annual Application Services Center technology planning process based on instructions provided in the technology planning process as documented in the applicable Service Management Manual. This planning will relate to the services the Application Services Center Customer receives or expects to receive through the program.

(2) All Application Services Center Customers shall follow the technology standards for hardware and software configurations as specified in the annual technology plan and Service Management Manual. Application Services Center Customers seeking exception to specified technology standards shall comply with the relevant Service Management Manual.

(f) Governance process.

(1) All Application Services Customers will participate in the governance process designed to facilitate individual customer input into enterprise decisions that affect all customers. Each customer is assigned to a group of similar customers, called a "partner group", and that group will be given one membership position on each governance committee. Members of the partner group are expected to represent the interests of all partner group members in governance decisions.

(2) Enterprise-level decisions and resolution of escalated Application Services Center Customer-specific issues shall be addressed through standing governance committees, organized by subject area and comprised of representatives from the department, DCS Customers, and service providers. Participation on committees is selected from each designated partner group.

(g) Confidential data.

(1) Application Services Center Customer shall provide its specific confidentiality requirements as determined by the nature of the data stored in the Application Services Center program. Generally, the specific confidentiality requirements shall be appended to the interagency or interlocal contract. The applicable Service Management Manual shall provide additional documentation on the specific procedures, including the process Application Services Center Customers shall follow to identify confidential information.

(2) In general, an Application Services Center Customer shall include in the interagency or interlocal agreement:

(A) General notification as to the type of confidential data and the laws that guide in the handling of such data; and

(B) Subsequent changes to laws that apply to previously identified confidential data.

(h) Security.

(1) Application Services Center Customers shall comply with the Security Incident Management and Response process available in the Service Management Manual.

(2) Application Services Center Customers shall be in compliance with 1 Texas Administrative Code Chapter 202.

**History**
- *Source Note: The provisions of this §215.52 adopted to be effective August 1, 2021, 46 TexReg 4681.*

##### **1 Tex. Admin. Code § 215.53** Application Services Center Services {#sec-215.53 omnilex-key=us-tx-regs-official--title-1--215.53}

Application Services Center Services include the development, deployment, and maintenance of applications, including:

(1) procurement, configuration, and integration of software-as-a-service; and

(2) cloud computing services that are not Data Center Services identified by 1 TAC 215.33.

**History**
- *Source Note: The provisions of this §215.53 adopted to be effective August 1, 2021, 46 TexReg 4681.*

### **Chapter 216** PROJECT MANAGEMENT PRACTICES

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 216.1** Applicable Terms and Technologies for Project Management Practices {#sec-216.1 omnilex-key=us-tx-regs-official--title-1--216.1}

The following words and terms, when used with this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Additional monitoring report--The report entitled "A Report on Contract Monitoring Assessment at Certain State Agencies" promulgated annually by the Texas State Auditor's Office in compliance with Texas Government Code § 2261.258.

(2) Agency head--Top-most senior executive with operational accountability for a state agency or institution of higher education, such as an executive director, commissioner, university president, university chancellor, comptroller, or board president.

(3) Component--Element of project management practices such as project management methodologies, tools, and techniques.

(4) Department--Department of Information Resources.

(5) Information Resources--Shall have the meaning in Texas Government Code § 2054.003(7).

(6) Major information resources project--Any information resources technology project that meets the criteria defined in Texas Government Code § 2054.003(10) and the General Appropriations Act.

(7) Methodology--A system of practices, techniques, procedures, and rules used by those who work in a discipline.

(8) Process--Series of steps used to achieve specific goals and results.

(9) Project--As defined by Texas Government Code § 2054.003(12).

(10) Project management practices--Documented and repeatable activities through which a state agency applies knowledge, skills, tools, and techniques to satisfy project activity requirements.

(11) Standard--A definition, format, or specification that has been approved by a recognized, formal, national, and international standards organization or is accepted as a de facto standard by the industry.

(12) Texas Project Delivery Framework--A statewide method for project selection, control, and evaluation based on alignment with business goals and objectives that assists and guides agencies to successfully plan and manage major information resources projects.

**History**
- *Source Note: The provisions of this §216.1 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 17, 2009, 34 TexReg 8028; amended to be effective November 23, 2015, 40 TexReg 8198; amended to be effective March 8, 2023, 48 TexReg 1280.*

##### **1 Tex. Admin. Code § 216.2** Institution of Higher Education {#sec-216.2 omnilex-key=us-tx-regs-official--title-1--216.2}

A university system or institution of higher education as defined by Texas Education Code § 61.003.

**History**
- *Source Note: The provisions of this §216.2 adopted to be effective November 23, 2015, 40 TexReg 8198; amended to be effective March 8, 2023, 48 TexReg 1280.*

##### **1 Tex. Admin. Code § 216.3** State Agency {#sec-216.3 omnilex-key=us-tx-regs-official--title-1--216.3}

A department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, other than an institution of higher education, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §216.3 adopted to be effective November 23, 2015, 40 TexReg 8198; amended to be effective March 8, 2023, 48 TexReg 1280.*

#### **Subchapter B** PROJECT MANAGEMENT PRACTICES FOR STATE AGENCIES

##### **1 Tex. Admin. Code § 216.10** Policy {#sec-216.10 omnilex-key=us-tx-regs-official--title-1--216.10}

(a) Each state agency that has identified a project in its current fiscal year biennial operating plan or amended biennial operating plan shall institute, approve, and publish a methodology that communicates an agency-wide approach for project management practices. At a minimum, the methodology will:

(1) Identify components and general use of project management practices, citing sources of reusable components adopted from industry standards, best practices, another agency, or institution of higher education that satisfy requirements specified under §216.11 of this subchapter (relating to Requirements); and

(2) Be approved by the agency head or designee.

(b) Each state agency shall include in its agency strategic plan under Texas Government Code § 2056.002 a description of the extent to which the state agency uses its project management practices.

**History**
- *Source Note: The provisions of this §216.10 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198; amended to be effective March 8, 2023, 48 TexReg 1280.*

##### **1 Tex. Admin. Code § 216.11** Requirements {#sec-216.11 omnilex-key=us-tx-regs-official--title-1--216.11}

(a) Each state agency shall manage information resources projects based on project management practices that meet the criteria found in this subsection.

(b) A state agency's project management practices for information resources projects shall:

(1) Include a standardized and repeatable method for delivery of information resources projects that solve business problems;

(2) Include a method for governing application of project management practices;

(3) Be documented by the state agency and include a single reference source (e.g., handbook, guide, repository);

(4) Include a project classification method developed by DIR, the state agency, or another source that:

(A) Differentiates and categorizes projects according to level of complexity and risk (e.g., technology, size, budget, time to deliver); and

(B) Defines how to use the project classification method to establish, scale, and execute the appropriate level of processes;

(5) Include a method to periodically review, assess, monitor, measure, and improve the impact of organizational project management practices on the agency's ability to achieve its strategic objectives and deliver business value;

(6) Align with use of the Texas Project Delivery Framework for major information resources projects;

(7) Accommodate use of other practices and methods that align with application of project management practices; and

(8) Be reviewed and updated at least every two years to facilitate continuous process improvement.

(c) For major information resources projects:

(1) The quality assurance team shall monitor and report on performance indicators for each state agency project, including schedule, cost, scope, and quality for the entire project life cycle.

(2) The department shall develop the performance indicators required to monitor under paragraph (1) of this subsection in consideration of applicable information technology industry standards.

(3) Each state agency engaged in a major information resources project will regularly report, according to quality assurance team directed frequency, the performance indicator metrics defined in paragraph (2) of this subsection for each major information resources project.

(4) If a state agency major information resources project is determined not likely to achieve the performance objectives for the project, the quality assurance team shall place the project on a list for more intense monitoring by the quality assurance team.

(5) The quality assurance team shall closely monitor monthly reports for each major information resources project identified under paragraph (3) of this subsection and, based on the performance indicator metrics developed by the department, determine whether to recommend to the department the need to initiate corrective action for the project.

(6) The department shall create and maintain on the department's website a user-friendly data visualization tool that provides an analysis and visual representation of the performance indicators developed under paragraph (2) of this subsection for each state agency major information resources project.

(7) If, under the additional monitoring report, a state agency is assigned a status of additional monitoring or reduced monitoring, then the state agency shall follow the applicable guidelines described below. The State Auditor's Office determines the contract period during which additional or reduced monitoring will occur.

(A) When additional monitoring is warranted:

(i) The department shall provide additional oversight services as described by Texas Government Code § 2054.1181(a) for major information resources projects and for other major information resources projects selected for oversight by the governor, lieutenant governor, or speaker of the house of representatives. These additional oversight services will be provided in addition to the below minimum requirements for additional monitoring during contract periods. The department shall publish to its website the additional monitoring matrix which will assess which additional oversight services shall be provided based on monitoring levels assigned by the quality assurance team.

(ii) During any contract solicitation development period for the project, the state agency shall complete and submit to the quality assurance team the Framework's Acquisition Plan for Additional Monitoring. The state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a monthly basis. The state agency shall be required to meet with the quality assurance team to report on project status as required by the quality assurance team.

(iii) During the contract formation and award period, the state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a monthly basis. The state agency shall be required to meet with the quality assurance team to report on contract negotiation status as required by the quality assurance team.

(iv) During the contract management and termination period, the state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a monthly basis and shall be required to submit a Contract Closeout Report at contract termination. The state agency shall be required to meet with the quality assurance team to report on project progress as required by the quality assurance team.

(v) The quality assurance team or the department shall notify a state agency subject to additional monitoring as to which additional monitoring services, based upon the additional monitoring matrix promulgated by the department, are applicable to their projects. A state agency subject to additional monitoring components shall comply with the identified additional monitoring components for the duration of the time it is identified on the additional monitoring report promulgated by the State Auditor's Office.

(B) When reduced monitoring is warranted:

(i) During any contract solicitation development period for the project, the state agency may submit to the quality assurance team any acquisition plan that is consistent with the Texas Procurement and Contract Management Guide for contracts valued at $10 million or more rather than the Framework Acquisition Plan established by the department. The state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a quarterly basis unless otherwise noted by the quality assurance team.

(ii) During the contract formation and award period, the state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a quarterly basis unless otherwise noted by the quality assurance team.

(iii) During the contract management and termination period, the state agency shall submit Monitoring Report data into the Statewide Project Automated Reporting system on a quarterly basis unless otherwise noted by the quality assurance team.

**History**
- *Source Note: The provisions of this §216.11 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198; amended to be effective November 19, 2017, 42 TexReg 6507; amended to be effective September 13, 2020, 45 TexReg 6226; amended to be effective March 8, 2023, 48 TexReg 1280.*

##### **1 Tex. Admin. Code § 216.12** Standards {#sec-216.12 omnilex-key=us-tx-regs-official--title-1--216.12}

Each state agency shall identify and adopt one or more standards as a basis for project management practices to meet project requirements in a minimum of the following knowledge areas:

(1) integration management;

(2) scope management;

(3) schedule management;

(4) cost management;

(5) quality management;

(6) resources management;

(7) communications management;

(8) risk management;

(9) procurement management; and

(10) stakeholder management.

**History**
- *Source Note: The provisions of this §216.12 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198; amended to be effective March 8, 2023, 48 TexReg 1280.*

#### **Subchapter C** PROJECT MANAGEMENT PRACTICES FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 216.20** Policy {#sec-216.20 omnilex-key=us-tx-regs-official--title-1--216.20}

Each institution of higher education shall institute, approve, and publish a methodology that communicates an institution-wide approach for project management practices. At a minimum, the methodology will:

(1) Identify components and general use of project management practices, citing sources of reusable components adopted from industry standards, best practices, or a state agency or another institution of higher education that satisfy requirements specified under §216.21 of this subchapter; and

(2) Be approved by the president or chancellor of the institution of higher education or designee.

**History**
- *Source Note: The provisions of this §216.20 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198.*

##### **1 Tex. Admin. Code § 216.21** Requirements {#sec-216.21 omnilex-key=us-tx-regs-official--title-1--216.21}

Each institution of higher education shall manage information resources projects based on project management practices that meet the following criteria:

(1) Include a standardized and repeatable method for delivery of information resources projects that solve business problems;

(2) Include a method for governing application of project management practices;

(3) Be documented and include a single reference source (e.g., handbook, guide, repository);

(4) Include a project classification method developed by DIR, the institution of higher education, or another source that:

(A) Differentiates and categorizes projects according to level of complexity and risk (e.g., technology, size, budget, time to deliver); and

(B) Defines how to use the project classification method to establish, scale, and execute the appropriate level of processes;

(5) Include a method to periodically review, assess, monitor, measure, and improve the impact of organizational project management practices on the institution of higher education's ability to achieve its strategic objectives and deliver business value;

(6) Accommodate use of other practices and methods that intersect with application of project management practices; and

(7) Be reviewed and updated at least every two years to facilitate continuous process improvement.

**History**
- *Source Note: The provisions of this §216.21 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198.*

##### **1 Tex. Admin. Code § 216.22** Standards {#sec-216.22 omnilex-key=us-tx-regs-official--title-1--216.22}

Each institution of higher education shall identify and adopt one or more standards as a basis for project management practices to meet project requirements in a minimum of the following knowledge areas:

(1) integration management;

(2) scope management;

(3) schedule management;

(4) cost management;

(5) quality management;

(6) human resources management;

(7) communications management;

(8) risk management

(9) procurement (acquisition) management; and

(10) stakeholder management.

**History**
- *Source Note: The provisions of this §216.22 adopted to be effective November 11, 2007, 32 TexReg 7894; amended to be effective November 23, 2015, 40 TexReg 8198.*

### **Chapter 217** PROCUREMENT OF INFORMATION RESOURCES

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 217.1** Key Terms for Procurement of Information Resources {#sec-217.1 omnilex-key=us-tx-regs-official--title-1--217.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Computer Equipment--A desktop, notebook, or tablet computer and includes a computer monitor or other display device that does not contain a tuner.

(2) Department--The Department of Information Resources.

(3) Manufacturer--A person:

(A) who manufactures or manufactured computer equipment under a brand that:

(i) the person owns or owned; or

(ii) the person is or was licensed to use, other than under a license to manufacture Computer Equipment for delivery exclusively to or at the order of the licensor;

(B) who sells or sold Computer Equipment manufactured by others under a brand that:

(i) the person owns or owned; or

(ii) the person is or was licensed to use, other than under a license to manufacture Computer Equipment for delivery exclusively to or at the order of the licensor;

(C) who manufactures or manufactured Computer Equipment without affixing a brand;

(D) who manufactures or manufactured Computer Equipment to which the person affixes or affixed a brand that:

(i) the person does not or has not owned; or

(ii) the person is not or was not licensed to use; or

(E) who imports or imported computer equipment manufactured outside the United States into the United States unless at the time of importation the company or licensee that sells or sold the Computer Equipment to the importer has or had assets or a presence in the United States sufficient to be considered the Manufacturer.

**History**
- *Source Note: The provisions of this §217.1 adopted to be effective June 10, 2009, 34 TexReg 3511; amended to be effective June 9, 2010, 35 TexReg 4655; amended to be effective November 17, 2011, 36 TexReg 7662; amended to be effective November 23, 2015, 40 TexReg 8200.*

##### **1 Tex. Admin. Code § 217.2** Institution of Higher Education {#sec-217.2 omnilex-key=us-tx-regs-official--title-1--217.2}

A university system, institution of higher education, or private or independent institution of higher education as defined by §61.003, Texas Education Code.

**History**
- *Source Note: The provisions of this §217.2 adopted to be effective June 10, 2009, 34 TexReg 3511; amended to be effective November 23, 2015, 40 TexReg 8200.*

##### **1 Tex. Admin. Code § 217.3** State Agency {#sec-217.3 omnilex-key=us-tx-regs-official--title-1--217.3}

A department, commission, board, office, or other agency that is in the executive or legislative branch of state government and that was created by the constitution or a statute, excluding a public or private institution of higher education as defined by §61.003, Texas Education Code; or the supreme court, the court of criminal appeals, a court of appeals, or the Texas Judicial Council or another agency in the judicial branch of state government.

**History**
- *Source Note: The provisions of this §217.3 adopted to be effective June 10, 2009, 34 TexReg 3511; amended to be effective November 23, 2015, 40 TexReg 8200.*

##### **1 Tex. Admin. Code § 217.4** Quasi-State Agency {#sec-217.4 omnilex-key=us-tx-regs-official--title-1--217.4}

The Electric Reliability Council of Texas, the Lower Colorado River Authority, a volunteer fire department, as defined by §152.001, Tax Code, or other quasi-state agency that was created by the constitution or a statute.

**History**
- *Source Note: The provisions of this §217.4 adopted to be effective November 23, 2015, 40 TexReg 8200.*

##### **1 Tex. Admin. Code § 217.5** Private School {#sec-217.5 omnilex-key=us-tx-regs-official--title-1--217.5}

A private school as defined by §5.001, Education Code.

**History**
- *Source Note: The provisions of this §217.5 adopted to be effective November 23, 2015, 40 TexReg 8200.*

#### **Subchapter B** STATE AGENCY PROCUREMENTS OF COMPUTER EQUIPMENT

##### **1 Tex. Admin. Code § 217.10** Bidder Certification Required for Bidding on Computer Equipment {#sec-217.10 omnilex-key=us-tx-regs-official--title-1--217.10}

(a) A public solicitation for the purchase or lease of Computer Equipment issued by the Department or another state agency, after compliance with Chapter 212 of this title (relating to Purchases of Commodity Items), is required to contain the following certification to be completed by bidders, including Manufacturers and resellers: Bidder hereby certifies its compliance with Subchapter Y, Chapter 361, Texas Health and Safety Code and the Texas Commission on Environmental Quality rules, 30 TAC Chapter 328.

(b) Failure of a bidder to provide this certification shall render the bidder ineligible to participate in the bidding. The Department or other state agency shall reject the related bid and not evaluate it.

(c) Each state agency that solicits bids or proposals from the public for the purchase and/or lease of Computer Equipment must do so in accordance with applicable rules adopted by the Comptroller of Public Accounts pertaining to competitive bidding or competitive sealed proposals.

**History**
- *Source Note: The provisions of this §217.10 adopted to be effective June 10, 2009, 34 TexReg 3511.*

##### **1 Tex. Admin. Code § 217.11** Computer Recycling Preference {#sec-217.11 omnilex-key=us-tx-regs-official--title-1--217.11}

The Department or a state agency, after compliance with Chapter 212 of this title (relating to Purchases of Commodity Items), shall include in all bids for the purchase or lease of Computer Equipment a special preference for all Manufacturers that have a program to recycle the Computer Equipment of other Manufacturers, which program includes collection events and Manufacturer initiatives to accept Computer Equipment labeled with another Manufacturer's brand. The preference may take the form of extra evaluation points or be the tie-breaking factor among equal bids.

**History**
- *Source Note: The provisions of this §217.11 adopted to be effective June 10, 2009, 34 TexReg 3511.*

#### **Subchapter C** INSTITUTION OF HIGHER EDUCATION PROCUREMENTS OF COMPUTER EQUIPMENT

##### **1 Tex. Admin. Code § 217.30** Bidder Certification Required for Bidding on Computer Equipment {#sec-217.30 omnilex-key=us-tx-regs-official--title-1--217.30}

(a) A public solicitation for the purchase or lease of Computer Equipment issued by an institution of higher education is required to contain the following certification to be completed by bidders, including Manufacturers and resellers: Bidder hereby certifies its compliance with Subchapter Y, Chapter 361, Texas Health and Safety Code and the Texas Commission on Environmental Quality rules, 30 TAC Chapter 328.

(b) Failure of a bidder to provide this certification shall render the bidder ineligible to participate in the bidding. The institution of higher education shall reject the related bid and not evaluate it.

(c) Each institution of higher education that solicits bids or proposals from the public for the Purchase and/or lease of Computer Equipment must do so in accordance with applicable rules adopted by the Comptroller of Public Accounts pertaining to competitive bidding or competitive sealed proposals.

**History**
- *Source Note: The provisions of this §217.30 adopted to be effective June 10, 2009, 34 TexReg 3511.*

##### **1 Tex. Admin. Code § 217.31** Computer Recycling Preference {#sec-217.31 omnilex-key=us-tx-regs-official--title-1--217.31}

All institutions of higher education shall include in all bids for the purchase or lease of Computer Equipment a special preference for all Manufacturers that have a program to recycle the Computer Equipment of other Manufacturers, which program includes collection events and Manufacturer initiatives to accept Computer Equipment labeled with another Manufacturer's brand. The preference may take the form of extra evaluation points or be the tie-breaking factor among equal bids.

**History**
- *Source Note: The provisions of this §217.31 adopted to be effective June 10, 2009, 34 TexReg 3511.*

### **Chapter 218** DATA GOVERNANCE AND MANAGEMENT

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 218.1** Definitions {#sec-218.1 omnilex-key=us-tx-regs-official--title-1--218.1}

(a) Data Governance Program - the program established pursuant to the requirements of Texas Government Code § 2054.137(b)(2).

(b) Data Management Officer - the full-time employee designated by the state agency or institution of higher education to fulfill the statutory duties required by Texas Government Code § 2054.137(b). A state agency or institution of higher education is only required to designate such an employee to the extent that it meets the statutory requirement to do so.

(c) Data Maturity Assessment - the assessment of an agency's data governance program required by Texas Government Code § 2054.137(b)(2) that is conducted by the designated data management officer.

**History**
- *Source Note: The provisions of this §218.1 adopted to be effective November 16, 2023, 48 TexReg 6581.*

##### **1 Tex. Admin. Code § 218.2** State Agency {#sec-218.2 omnilex-key=us-tx-regs-official--title-1--218.2}

A department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, other than an institution of higher education, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §218.2 adopted to be effective November 16, 2023, 48 TexReg 6581.*

##### **1 Tex. Admin. Code § 218.3** Institution of Higher Education {#sec-218.3 omnilex-key=us-tx-regs-official--title-1--218.3}

A university system or institution of higher education as defined by Texas Education Code § 61.003.

**History**
- *Source Note: The provisions of this §218.3 adopted to be effective November 16, 2023, 48 TexReg 6581.*

#### **Subchapter B** DATA GOVERNANCE AND MANAGEMENT FOR STATE AGENCIES

##### **1 Tex. Admin. Code § 218.10** Data Maturity Assessment {#sec-218.10 omnilex-key=us-tx-regs-official--title-1--218.10}

(a) A state agency shall conduct a biennial data maturity assessment and submit the report of the assessment results in compliance with Texas Government Code § 2054.515.

(b) The data maturity assessment tool promulgated by the department shall include at least the below elements:

(1) Data Architecture;

(2) Data Analytics;

(3) Data Governance and Standardization;

(4) Data Management and Methodology;

(5) Data Program Management and Change Control;

(6) Data Quality;

(7) Data Security and Privacy;

(8) Data Strategy and Roadmap;

(9) Master Data Management;

(10) Metadata Management; and

(11) Texas Open Data Portal.

(c) State agencies shall complete their data maturity assessment through the method prescribed by the department.

(d) The data maturity assessment completed pursuant to this subsection addresses the requirement to review an agency's data governance program found in Texas Government Code § 2054.515.

**History**
- *Source Note: The provisions of this §218.10 adopted to be
effective November 16, 2023, 48 TexReg 6581; amended to be effective
March 18, 2026, 51 TexReg 1609.*

#### **Subchapter C** DATA GOVERNANCE AND MANAGEMENT FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 218.20** Data Maturity Assessment {#sec-218.20 omnilex-key=us-tx-regs-official--title-1--218.20}

(a) An institution of higher education shall conduct a biennial data maturity assessment and submit the report of the assessment results in compliance with Texas Government Code § 2054.515.

(b) An institution of higher education's data maturity assessment shall include at least the below elements:

(1) Data Architecture;

(2) Data Analytics;

(3) Data Governance and Standardization;

(4) Data Management and Methodology;

(5) Data Program Management and Change Control;

(6) Data Quality;

(7) Data Security and Privacy;

(8) Data Strategy and Roadmap;

(9) Master Data Management;

(10) Metadata Management; and

(11) Texas Open Data Portal.

(c) Institutions of higher education shall complete their data maturity assessment through the method prescribed by the department.

(d) The data maturity assessment completed pursuant to this subsection addresses the requirement to review an institution of higher education's data governance program found at Texas Government Code § 2054.515.

**History**
- *Source Note: The provisions of this §218.20 adopted to be
effective November 16, 2023, 48 TexReg 6581; amended to be effective
March 18, 2026, 51 TexReg 1609.*

### **Chapter 219** ARTIFICIAL INTELLIGENCE

#### **Subchapter A** CODE OF ETHICS AND GENERAL INFORMATION

##### **1 Tex. Admin. Code § 219.1** Definitions {#sec-219.1 omnilex-key=us-tx-regs-official--title-1--219.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) AI--Artificial Intelligence

(2) Artificial Intelligence System--As defined by Texas Government Code § 2054.003(1-a).

(3) Consequential Decision--As defined by Texas Government Code § 2054.003(2-b).

(4) Controlling Factor--As defined by Texas Government Code § 2054.003(2-c).

(5) Department--The Department of Information Resources.

(6) Executive Head--The top-most senior executive with operational accountability for a state agency or local government.

(7) Governmental Entities--State agencies, including institutions of higher education, and local governments.

(8) Heightened Scrutiny Artificial Intelligence System--As defined by Texas Government Code § 2054.003(6-a).

(9) Information Resources--As defined by Texas Government Code § 2054.003(7).

(10) Information Resources Technologies--As defined by Texas Government Code § 2054.003(8).

(11) Local Government--As defined by Texas Government Code § 2054.003(9).

(12) Personal Identifying Information (PII) --As defined by Texas Business & Commerce Code § 521.002(a)(1).

(13) Principal Basis--As defined by Texas Government Code § 2054.003(11).

(14) State Agency--As defined by Texas Government Code § 2054.003(13).

(15) Unlawful Harm--As defined by Texas Government Code § 2054.701.

**History**
- *Source Note: The provisions of this §219.1 adopted
to be effective March 18, 2026, 51 TexReg 1610.*

##### **1 Tex. Admin. Code § 219.11** Code of Ethics and the Ethical Principles of Artificial Intelligence {#sec-219.11 omnilex-key=us-tx-regs-official--title-1--219.11}

(a) As required by Texas Government Code § 2054.702, state agencies and local governments shall adopt the AI Code of Ethics established by this section and follow the ethical principles included herein as they procure, develop, deploy, or use artificial intelligence systems.

(b) Preamble

(1) AI systems have the potential to transform the way our state and local governments serve Texans. AI systems can create efficiencies, support economic and scientific advancement, and improve the safety and well-being of our communities. The State of Texas supports the use of AI systems by governmental entities to improve the services they deliver to Texans and to lead in innovative AI adoption in the public sector.

(2) While they have significant potential value, AI systems also pose substantial risks if not implemented ethically and responsibly. AI risks vary based on the system involved, how it is used, and who uses it. AI systems are often trained on large amounts of data from a variety of sources, which can lead to inaccurate outputs. To the extent that AI systems are trained on or used to process PII, they may raise significant privacy concerns, particularly when the systems are deployed outside of a secure government environment. Malicious actors can utilize AI to develop more advanced cyberattacks, bypass security measures, and exploit vulnerabilities in systems. These and other AI risks make it a uniquely challenging technology for governmental entities to use safely, but with appropriate guardrails, governmental entities can limit the risks of AI and secure its many benefits for Texans.

(3) Governmental entities must limit the potential harm of AI systems by managing risk and prioritizing trustworthy and responsible development and deployment of AI consistent with the National Institute of Standards and Technology AI Risk Management Framework. Creating trustworthy AI requires balancing each of these principles based on the identified risks of an AI system and the context in which it is used.

(4) This section articulates the principles of ethical AI implementation that governmental entities must strive for when procuring, developing, designing, or using AI systems.

(c) Human Oversight and Control

(1) Human oversight plays a crucial role in ensuring that AI systems operate ethically. While AI can analyze vast amounts of data much faster--and sometimes more accurately--than humans, it lacks the human judgment necessary to ensure that its decisions align with societal values and the rights granted to individuals under the law. Ensuring human control over AI systems mitigates risks of inaccurate or undesirable outputs and allows for revision of the rules established during development of the system and to the data that supports the system's decision-making.

(2) Governmental entities:

(A) Must deploy AI systems in ways that enable humans to review and analyze inputs and outputs at appropriate intervals throughout the AI lifecycle;

(B) May incorporate a level of human oversight reasonably commensurate to the risks associated with a particular AI system, with heightened scrutiny AI systems requiring increased human oversight relative to lower risk systems; and

(C) Must ensure AI systems can be paused, restricted, or disabled until harmful or inaccurate decision making can be remedied.

(d) Fairness

(1) The data used to develop AI systems must adequately represent the subjects or people about which AI systems make judgments, decisions, or predictions. Incomplete or inaccurate data can result in unlawful harm.

(2) Governmental entities:

(A) Must ensure their use of AI systems does not infringe upon the legally protected rights and liberties of the individuals they serve or result in unlawful harm; and

(B) Must implement data governance practices for AI systems throughout the AI system's lifecycle to ensure fairness.

(e) Accuracy

(1) While AI systems are overall improving in their ability to deliver more accurate results, inaccurate outputs remain a significant risk when using AI systems.

(2) Governmental entities:

(A) Must train their employees to understand the importance of verifying AI outcomes for accuracy;

(B) Must formalize processes for monitoring system accuracy before the deployment of an AI system and throughout its life cycle, as a system's accuracy may change over time; and

(C) Shall, when feasible, implement processes to improve the accuracy of AI systems by training the systems using human feedback or improving retrieval-augmented generation by ensuring the accuracy and relevance of the underlying data used by the tool to develop answers.

(f) Redress

(1) Providing a method for redress will promote public trust in both the AI system and in the entity that deploys it.

(2) Governmental entities:

(A) Must provide a mechanism to seek redress for those impacted when an AI system makes a consequential decision that results in unlawful harm about their rights or access to governmental services;

(B) Must have a designated point of contact for individuals to address when seeking information about an unfair consequential decision; and

(C) Must develop internal procedures to allow employees to identify and remedy negative impacts caused by the use of AI systems.

(g) Transparency

(1) Establishing transparency for AI systems means providing information about the data, models, and outputs of an AI system to both the individuals interacting with the system and those deploying it. Strong transparency practices will build public trust in the AI systems governmental entities use.

(2) Governmental entities:

(A) Must collaborate with developers of AI systems and demand transparency to understand how a system operates, the source of the data the system was trained on, and its intended use cases;

(B) Must strive to understand the capabilities of the system and how it makes decisions;

(C) Must disclose when individuals interact with a public-facing AI system and when an AI system is used to make consequential decisions about their rights or access to governmental services; and

(D) Must never represent AI systems as human when interacting with the public.

(h) Data Privacy

(1) Governmental entities have a responsibility to protect the PII they collect and process about individuals, and both legal and ethical restrictions exist on what PII entities share with third parties. Data privacy principles likewise apply to the PII governmental entities process in and share with AI systems.

(2) The most effective method for protecting PII is through data minimization.

(3) Many AI systems rely on vast amounts of PII to make predictions and decisions. Sharing PII with an AI tool may violate privacy laws and obligations the entity has to the individual, particularly when using a tool outside the governmental entity's secure environment.

(4) Governmental entities:

(A) May collect and maintain only that PII needed for operations and must establish a process to delete PII consistent with records retention schedules and other legal requirements.

(B) Must strive to understand what PII the AI system uses, how that PII has been and will be collected, and how the tool uses, stores, and shares PII with third parties prior to using any government-held PII in an AI system;

(C) Must train employees about the risk of inputting sensitive or PII into publicly available AI systems that use inputs to train the model and share those inputs with other users of the AI system outside of the governmental entity; and

(D) Must strive to practice data minimization and ensure they abide by any purpose limitations granted when the PII was first collected, or as expressly allowed by law.

(i) Security

(1) AI systems are subject to security vulnerabilities. Common security concerns in the AI context may include data poisoning or malicious code injection, exfiltration of models or data within the AI system, and improper access controls that result in unauthorized access to the AI system itself. Secure AI systems will maintain the confidentiality and integrity of the AI system as well as the data it contains even when unexpected events or changes in their environment or use occur.

(2) Governmental entities:

(A) Must monitor, secure, and test AI systems to prevent or limit security attacks; and

(B) Must demand that AI system providers disclose known vulnerabilities and resolutions in a timely manner to the governmental entities deploying those systems.

(j) Accountability and Liability

(1) While governmental entities may delegate tasks and decision making to AI systems, the entities remain accountable for the decisions the AI systems make and the outcomes they produce. Use of AI systems for employment-related tasks or to make consequential decisions poses heightened risks.

(2) Governmental entities:

(A) Must provide training to employees on how to use AI systems in an effective, safe, and ethical way;

(B) Must ensure their vendors are contractually bound to these AI ethical principles and any relevant laws or regulations governing the use of AI systems; and

(C) Must ensure AI systems they deploy comply with the legal obligations they have at both the state and federal level.

(3) When deploying AI systems, governmental entities must establish appropriate retention schedules for the AI system's records and consider the Public Information Act implications related to the storage of data inputs and outputs.

(k) Evaluation

(1) AI systems can change over time, as can the purposes for which they are used.

(2) Governmental entities:

(A) Must establish methods for regular evaluation of AI systems to ensure the systems provide ongoing benefit to the populations they serve; and

(B) Must document such evaluations.

(l) Documentation

(1) Documentation provides a critical element for managing AI risk. Consistent documentation of preliminary assessments, ongoing monitoring and testing, and complaints provides governmental entities insight into the operations and improvements of their AI systems over their lifecycle. Documentation allows entities to evaluate the value of AI systems and determine where best to spend resources in further developing AI solutions.

(2) Governmental entities should maintain records of:

(A) The sources of data used in the AI system; and

(B) How the AI system is modified throughout the system's life cycle.

**History**
- *Source Note: The provisions of this §219.11 adopted
to be effective March 18, 2026, 51 TexReg 1610.*

#### **Subchapter B** REQUIRED MINIMUM STANDARDS

##### **1 Tex. Admin. Code § 219.20** Statutory Requirement {#sec-219.20 omnilex-key=us-tx-regs-official--title-1--219.20}

This subchapter establishes the minimum standards required by Texas Government Code § 2054.703 as enacted pursuant to Senate Bill 1964 of the Eighty-ninth Regular Session.

**History**
- *Source Note: The provisions of this §219.20 adopted to be
effective March 18, 2026, 51 TexReg 1610.*

##### **1 Tex. Admin. Code § 219.21** AI Risk Management {#sec-219.21 omnilex-key=us-tx-regs-official--title-1--219.21}

(a) A state agency or local government shall designate an employee as the AI Risk Officer.

(1) The AI Risk Officer is responsible for promoting ethical AI system procurement, development, deployment, and use within the state agency or local government, consistent with the AI Code of Ethics established by this chapter and the AI Risk Management Framework published by the National Institute of Standards and Technology.

(2) If a state agency or local government deploys a heightened scrutiny AI system, the AI Risk Officer is responsible for ensuring that the risk assessment is completed for that system. The AI Risk Officer shall evaluate the completed risk assessment and ensure that the heightened scrutiny AI system is deployed consistent with the minimum standards established by this chapter.

(3) In filling this role, the state agency or local government may employ an individual solely for this purpose or may add this responsibility to a current employee's existing job duties.

(b) A state agency or local government shall establish a process to identify and inventory all implementations of AI systems that qualify as heightened scrutiny AI systems.

**History**
- *Source Note: The provisions of this §219.21 adopted to be
effective March 18, 2026, 51 TexReg 1610.*

##### **1 Tex. Admin. Code § 219.22** AI Risk Assessment for Heightened Scrutiny AI Systems {#sec-219.22 omnilex-key=us-tx-regs-official--title-1--219.22}

(a) Before a state agency or local government develops, procures, deploys, or uses a heightened scrutiny AI system and at the time that a material change is made to the system, the state agency or local government shall conduct a written AI risk assessment to consider the probability and severity of harm that could occur as the result of implementation of the AI system.

(b) The risk assessment shall consider and document:

(1) The AI system's known security risks and mitigation steps available to limit those risks;

(2) The heightened scrutiny AI system's performance metrics relating to accuracy and operational efficiency; and

(3) The heightened scrutiny AI system's transparency, including information about:

(A) The system's algorithms and how the system makes decisions;

(B) The data used to train the system's model; and

(C) The availability of inputs and outputs to monitor the system's decision-making over time.

(c) When a state agency or local government is deploying any heightened scrutiny AI system, the AI Risk Officer shall:

(1) Review the completed written risk assessment prepared for that system prior to system deployment; and

(2) Approve or deny deployment of the system based on the risk and mitigation measures identified by the completed written risk assessment. At a minimum, the AI Risk Officer shall notify the state agency or local government's executive head or their designee of a decision to deploy a heightened scrutiny AI system. A state agency or local government may also establish a process for consultation or final approval by the executive head or their designee, as the state agency or local government determines appropriate.

(d) The state agency or local government shall maintain a record of the completed written risk assessment and all relevant documents for as long as required by the applicable state records retention schedule.

**History**
- *Source Note: The provisions of this §219.22 adopted to be
effective March 18, 2026, 51 TexReg 1610.*

##### **1 Tex. Admin. Code § 219.23** AI Impact Assessments {#sec-219.23 omnilex-key=us-tx-regs-official--title-1--219.23}

(a) A state agency that deploys or uses a heightened scrutiny artificial intelligence system or, at the request of a contracting state agency, a vendor that contracts with the state agency for the deployment or use of a heightened scrutiny AI system shall conduct an impact assessment:

(1) prior to deploying the heightened scrutiny AI system; and

(2) at the time any material change is made to:

(A) The system;

(B) The state or local data used by the system; or

(C) The intended use of the system.

(b) A heightened scrutiny AI system impact assessment required by this section must include:

(1) A description of the system, including its training data, model, and intended use;

(2) How the agency will use the system and who within the state agency is responsible for its deployment and ongoing monitoring and evaluation;

(3) Whether the system will process or store any PII provided by the agency or the users of the agency's system and, if so, whether the system will use that information to train the model;

(4) Potential risks of unlawful harm that the agency identifies and steps the agency can take to limit those risks;

(5) System limitations identified by the agency;

(6) How the agency will monitor the system outputs to evaluate accuracy and harm and identify the intervals at which the monitoring will occur; and

(7) The retention duration for the system's inputs and outputs and the method for deleting outputs once the identified retention period has passed.

(c) A state agency or a vendor contracted by the state agency shall either develop its own AI impact assessment for heightened scrutiny artificial intelligence systems or use the standard impact assessment form created by the department.

(d) A state agency that deploys or uses a heightened scrutiny artificial intelligence system shall maintain a record of the AI impact assessment for as long as required by the applicable state records retention schedule.

(1) If a vendor that contracts with the state agency for the deployment or use of a heightened scrutiny AI system conducts an impact assessment, the state agency must receive a copy of the completed impact assessment, which is treated as the document of record.

(2) The state agency shall make a copy of the assessment available to the department on request.

(e) Local governments shall:

(1) Comply with all requirements established by the department regarding the procurement of information resources and information resources technology that include a heightened scrutiny AI system;

(2) Consider conducting an impact assessment in alignment with the state agency requirements established by subsections (a)- (c) when deploying a heightened scrutiny AI system; and

(3) Review relevant resources posted by the department on its website.

**History**
- *Source Note: The provisions of this §219.23 adopted
to be effective March 18, 2026, 51 TexReg 1610.*

##### **1 Tex. Admin. Code § 219.24** Guidelines for Frameworks, Policies, and Trainings {#sec-219.24 omnilex-key=us-tx-regs-official--title-1--219.24}

(a) This section establishes the guidelines required by Texas Government Code § 2054.703(b)(4) as enacted pursuant to Senate Bill 1964 in the Eighty-ninth Regular Session.

(b) When a state agency or local government deploys or uses a heightened scrutiny AI system, they must identify the acceptable use cases for such system, identify its limitations, and adopt an acceptable use policy to prevent uses other than those approved by the agency for the heightened scrutiny artificial intelligence system. All employees must be adequately trained on the acceptable use policy.

(c) A state agency or local government that deploys or uses a heightened scrutiny AI system shall provide employees or contractors who access, use, or manage the heightened scrutiny AI system with training regarding identified risks and appropriate methods for mitigating those risks.

(d) A state agency or local government that contracts with vendors to deploy a heightened scrutiny AI system shall mitigate third party risk by contractually requiring those vendors to implement an AI risk management framework such as that published by the National Institute of Standards and Technology or a comparable standard for heightened scrutiny AI systems.

**History**
- *Source Note: The provisions of this §219.24 adopted to be
effective March 18, 2026, 51 TexReg 1610.*

## **Part 12** COMMISSION ON STATE EMERGENCY COMMUNICATIONS

### **Chapter 251** 9-1-1 SERVICE--STANDARDS

##### **1 Tex. Admin. Code § 251.1** Regional Strategic Plans for 9-1-1 Service {#sec-251.1 omnilex-key=us-tx-regs-official--title-1--251.1}

(a) Purpose. The purpose of this rule is to establish a framework for a Regional Planning Commission (RPC) to use in the development and submission for Commission approval or disapproval of a regional strategic plan for 9-1-1 service, or amendments thereto, pursuant to Health and Safety Code §§771.055 - 771.057. A regional strategic plan will, at a minimum, include the elements required by statute, this rule, and Commission Program Policy Statements.

(b) Regional Strategic Plan Scope. A regional strategic plan must describe how 9-1-1 service is to be provided and available 24 hours a day, 7 days a week, 365 days a year, and address the entire geographic area within the boundaries of the RPC's 9-1-1 service area.

(c) Regional Strategic Plan Criteria. A regional strategic plan must include the following and be updated at least once a biennium:

(1) A description of how grant and any other funds allocated to the RPC by the Commission under this chapter are to be allocated in the region;

(2) Projected financial operating information for the two state fiscal years following the submission of the plan;

(3) Strategic planning information for the five state fiscal years following submission of the plan;

(4) Identify all participating public safety agencies, and all Emergency Communication Districts and other RPCs with whom the RPC shares 9-1-1 service area boundaries;

(5) Call routing plan;

(6) Local monitoring plan;

(7) Capital asset plan;

(8) Database maintenance plan;

(9) Equipment maintenance plan;

(10) RPC Public Safety Answering Point (PSAP) Network plan;

(11) Information security program;

(12) Text-to-911 service (absent a Commission-approved waiver); and

(13) Financial and performance reporting at least quarterly on a schedule to be established by Commission staff.

(d) Contracts. Each RPC must execute interlocal agreements between itself and each public agency or public safety agency in the RPC's region reflecting the RPC's Commission-approved regional strategic plan and addressing, at a minimum, the planning, development, operation and provision of 9-1-1 service, the use of 9-1-1 funds, and the requirements in the contracts promulgated pursuant to Commission Rule 251.12, Commission and Regional Planning Commission Contracts for 9-1-1 Service.

**History**
- *Source Note: The provisions of this §251.1 adopted to be effective August 4, 2002, 27 TexReg 6682; amended to be effective August 24, 2003, 28 TexReg 6535; amended to be effective May 2, 2004, 29 TexReg 3955; amended to be effective October 10, 2004, 29 TexReg 9352; amended to be effective December 11, 2005, 30 TexReg 8056; amended to be effective December 7, 2008, 33 TexReg 9971; amended to be effective March 5, 2014, 39 TexReg 1357; amended to be effective August 16, 2017, 42 TexReg 3962; amended to be effective October 16, 2018, 43 TexReg 6815; amended to be effective August 16, 2020, 45 TexReg 5507.*

##### **1 Tex. Admin. Code § 251.2** Changes to 9-1-1 Service Arrangements {#sec-251.2 omnilex-key=us-tx-regs-official--title-1--251.2}

(a) Purpose. The purpose of this rule is to establish minimum requirements for implementing changes to 9-1-1 service arrangements in order to protect against degradation of service.

(b) Standards. All goods, services, systems, or technology purchased with 9-1-1 funds must be consistent with the current commonly accepted standards for enhanced and next-generation 9-1-1. The reference for commonly accepted standards for 9-1-1 networks, equipment, services, and databases is the National 911 Implementation and Coordination Office, commonly referred to as the National 9-1-1 Office. The Emergency Communications Advisory Committee will advise the Commission on matters including standards for statewide interoperability and interconnection of Texas 9-1-1 Administrative Entities' Emergency Services Internet Protocol Networks as provided in Commission Rule §252.8, Emergency Communications Advisory Committee.

(c) Requirements to prevent degradation of 9-1-1 service.

(1) 9-1-1 Database Management Services Provider and 9-1-1 Network Services Provider Requirements.

(A) The service provider, including 9-1-1 Next Generation Core Services Provider, making the proposal to the Texas 9-1-1 Administrative Entity verifies in writing, as part of the proposed agreement, that:

(i) Service provider will participate in joint planning meetings with affected service providers and Texas 9-1-1 Administrative Entities as necessary to prevent degradation of 9-1-1 service;

(ii) Reasonable notice of the proposal (i.e., at least 10 days before a joint planning meeting) has been provided to the current service provider (if a change in service providers is involved) and to other potentially affected service providers;

(iii) The service provider also verifies that at least one joint planning meeting occurred with at least 10 days' notice to all affected service providers that they may participate in the joint planning meeting; and

(iv) As a result of the joint planning meeting either each technical issue or objection by other service providers has fully been resolved or an impartial statement of each unresolved issue or objection has been provided (a joint planning meeting is open to evaluate all alternatives and is not limited to a discussion of one service provider's proposal).

(B) All certifications, prerequisites, and agreements requiring approval under applicable laws and regulations, specifically including Public Utility Commission's §§26.272, 26.433, and 26.435 (16 TAC Part 2, Chapter 26) as they pertain to 9-1-1 service, have been obtained, completed, and approved.

(C) Upon request from a Texas 9-1-1 Administrative Entity, a service provider may implement temporary geospatial routing for a defined period of time for a planned event or in response to an emergency incident. At the conclusion of the planned event or emergency incident, the geospatial routing must revert back to the routing policy previously approved by the Texas 9-1-1 Administrative Entity.

(2) Texas 9-1-1 Administrative Entity Requirements. Prior to the implementation of a change in a 9-1-1 service arrangement, a Texas 9-1-1 Administrative Entity must give reasonable notice to all neighboring or adjacent 9-1-1 entities that could potentially be affected by the change.

**History**
- *Source Note: The provisions of this §251.2 adopted
to be effective April 1, 1997, 22 TexReg 3033; amended to be effective
September 5, 1999, 24 TexReg 6709; amended to be effective July 6,
2003, 28 TexReg 4885; amended to be effective July 18, 2004, 29 TexReg
6621; amended to be effective June 3, 2014, 39 TexReg 4235; amended
to be effective February 16, 2022, 47 TexReg 645; amended to be effective
February 18, 2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 251.3** Use of Revenue in Certain Counties {#sec-251.3 omnilex-key=us-tx-regs-official--title-1--251.3}

(a) Purpose. The purpose of this rule is to implement §771.0751 Health and Safety Code, which authorizes a Regional Planning Commission (RPC) to use 9-1-1 fees and surcharges in certain counties, in addition to other authorized or required uses, for any costs deemed necessary by the Commission and attributable to designing a 9-1-1 system or the establishing and operating of a public safety answering point (PSAP) or other answering point and related operations. Use of revenue is limited to unexpended and unencumbered allocated grant funds from 9-1-1 service fees (wireline/VoIP, wireless, and prepaid wireless) and equalization surcharge remitted to the Comptroller of Public Accounts from the RPC's service region for the fiscal year use of revenue is requested. Allocated grant funds exceeding an RPC's 9-1-1 service fee and equalization surcharge revenues are not eligible for use of revenue. Allocated grant funds of RPC 9-1-1 service fee and equalization surcharge revenues are expended and encumbered first before any other source of funding of an RPC's grant, including from appropriations from General Revenue Dedicated fund balances.

(b) Eligibility. The eligibility for approval of funding under this rule is as follows:

(1) A county participating in its RPC's regional strategic plan with a population of at least 1,000,000 as reported by the Texas Demographic Center.

(2) A county participating in its RPC's regional strategic plan that has the highest population within the region as reported by the Texas Demographic Center.

(c) Requests. Requests for funding under this rule shall be submitted by the RPC as an amendment to its regional strategic plan at fiscal year close out when all encumbrances and payables have been expended in accordance with Commission rules and Commission Program Policy Statements. The request must demonstrate that all basic regional 9-1-1 needs have been met prior to funding under this rule. The request must include a letter signed by the RPC's Executive Director authorizing the request and include (1) a description of the design of the 9-1- 1 system; and/or (2) each PSAP or other answering point to receive funding and the respective amount to be received. For each PSAP or other answering point listed, a written request must be included from the PSAP or other answering point specifying how the funds will be used and that funds received will be expended as specified.

**History**
- *Source Note: The provisions of this §251.3 adopted to be effective February 29, 2004, 29 TexReg 1641; amended to be effective October 16, 2006, 31 TexReg 8507; amended to be effective December 7, 2008, 33 TexReg 9971; amended to be effective March 5, 2014, 39 TexReg 1357; amended to be effective October 16, 2018, 43 TexReg 6815; amended to be effective August 16, 2020, 45 TexReg 5507.*

##### **1 Tex. Admin. Code § 251.4** Guidelines for Accessibility Equipment {#sec-251.4 omnilex-key=us-tx-regs-official--title-1--251.4}

(a) Purpose. The purpose of this rule is to establish minimum standards for RPCs to use in complying with applicable sections of the Americans with Disabilities Act (ADA).

(b) Equipment. All 9-1-1 Public Safety Answering Points (PSAPs) must have telecommunication device for the deaf (TDD) accessibility equipment at each 9-1-1 call taking position. This equipment may be integrated into the CPE or may be a separate stand-alone unit. In addition, each PSAP must also have at least one functioning stand-alone TDD unit available to be used as back-up in the event of equipment failure; in order to comply with Title II of the ADA.

(c) Testing. In accordance with Commission Rule 251.1, Regional Strategic Plans for 9-1-1 Service, all PSAPs must test the 9-1-1 equipment to ensure that the integrated and stand alone TDD is functioning properly.

(d) Training. All 9-1-1 call takers must be trained to recognize and accept TDD calls through both the integrated and stand alone TDD. Training must be offered at a minimum of once every six months.

**History**
- *Source Note: The provisions of this §251.4 adopted to be effective February 29, 2004, 29 TexReg 1642; amended to be effective December 7, 2008, 33 TexReg 9971.*

##### **1 Tex. Admin. Code § 251.5** Guidelines for Management and Disposition of 9-1-1 Equipment and Controlled Assets {#sec-251.5 omnilex-key=us-tx-regs-official--title-1--251.5}

(a) Purpose. The purpose of this rule is to implement the Texas Uniform Grant Management Standards (UGMS) for the management and disposition of 9-1-1 equipment and controlled assets purchased with 9-1-1 funds. Instructions provided in this rule are in addition to the direction provided in UGMS.

(b) Management and Disposition. Each RPC shall designate at least one individual who is responsible and accountable for all 9-1-1 equipment, and controlled assets in its region purchased with 9-1-1 funds.

(c) Interlocal Agreement. For all 9-1-1 equipment and controlled assets not under the RPC's direct control, the RPC will ensure, at a minimum, that:

(1) Ownership, transfer of ownership, control, and/or disposition of 9-1-1 equipment and controlled assets are covered in its interlocal agreements.

(2) Contract provisions for 9-1-1 equipment and controlled assets set forth in its interlocal agreements are consistent with UGMS.

(d) Maintenance. Maintenance procedures shall be in place to keep 9-1-1 equipment and controlled assets in good working order.

(1) RPCs funding the purchase and/or lease of 9-1-1 equipment and controlled assets shall develop and adopt, within 30 days of purchase, maintenance plans covering the equipment involved as part of the regional plan. Maintenance plans shall be provided to the Commission upon request.

(2) The Commission shall review maintenance costs for consistency with funding priorities and the approved regional strategic plan.

(e) Property Records. Each RPC shall maintain property records in an inventory list and provide the list to the Commission upon request.

(1) All 9-1-1 equipment and controlled assets shall be listed on the inventory.

(2) A physical inventory of all 9-1-1 equipment and controlled assets shall be taken at least once a year and the results reconciled to the property records. An annual certification shall be provided to the Commission in accordance with Commission rules, policies and procedures.

(f) Control System. A control system must be in place to ensure adequate safeguards to prevent loss, damage, or theft of 9-1-1 equipment and controlled assets. Documentation of the control system shall be provided to the Commission upon request.

(g) Disposition. Funds generated by the disposition of 9-1-1 equipment and controlled assets shall be reported to the Commission on the Financial Status Report. A report listing all disposals of 9-1-1 equipment and controlled assets shall be provided to the Commission annually.

**History**
- *Source Note: The provisions of this §251.5 adopted to be effective June 13, 1994, 19 TexReg 4194; amended to be effective September 5, 1999, 24 TexReg 6710; amended to be effective November 11, 2001, 26 TexReg 8791; amended to be effective July 18, 2004, 29 TexReg 6621; amended to be effective December 7, 2008, 33 TexReg 9971.*

##### **1 Tex. Admin. Code § 251.7** Guidelines for Implementing Integrated Services {#sec-251.7 omnilex-key=us-tx-regs-official--title-1--251.7}

(a) Purpose. It is the purpose of this rule to allow for the integration of appropriate technologies into the 9-1-1 call-taking equipment that enhance or facilitate the delivery of a 9-1-1 call (voice or text), while providing safeguards to protect the 9-1-1 equipment from failure due to the integration of faulty or inappropriate applications.

(b) Definitions. Unless the context clearly indicates otherwise, terms contained in this rule are defined as shown in Commission Rule 252.7, Definitions.

(c) Integrated Services. A regional planning commission (RPC) shall meet the following requirements for integration:

(1) Integrated Services.

(A) Eligible Services. Personal Computer (PC) based Integrated Workstation (IWS) 9-1-1 call-taking equipment has the capability of expanding the traditional 9-1-1 Automatic Number Identification (ANI) and Automatic Location Identification (ALI) feature functionality to allow for additional public safety software applications. The Commission is supportive of such advancement in emergency services call-taking capabilities; however, 9-1-1 funds may only be used for applications that are eligible strategic plan budget components for the purposes of the delivery of a 9-1-1 call. To ensure the integrity of 9-1-1 is maintained, only the following 9-1-1 funded and non-9-1-1 funded features are eligible integrated services:

(i) Expanded or Supplemental Location Information;

(ii) Call Recording and Playback;

(iii) Paging;

(iv) Texas Law Enforcement Teletype Services (TLETS);

(v) Computer Aided Dispatch Gateway;

(vi) Graphical/Mapping Displaying of Location;

(vii) Call Handling Protocols;

(viii) Information Management (MIS);

(ix) Short Message Service (SMS); and

(x) Real Time Text (RTT).

(B) Other Services. Integrated services other than the above-mentioned applications must have a demonstrated applicability to the direct provisions of delivering 9-1-1 and emergency call-taking services and will require Commission approval.

(C) System Security. Operating procedures must be established by the RPC, and security measures taken and demonstrated, to ensure that non-Commission-approved software applications cannot be integrated into the IWS platform. At no time should the 9-1-1 call-taking equipment permit access to the Internet.

(D) Memory Usage. Baseline memory and CPU usage of the operating system should maintain the "80/20" performance rule, thereby demonstrating that 80% of the total memory and CPU is available to the operating system applications, while 20% of the total memory and CPU remains unused. The installation and use of software should not lead to the degradation of equipment or services subsequent to the installation of the ancillary software.

(E) Testing. Prior to integrating and deploying the expanded applications onto a IWS 9-1-1 call-taking environment, the following testing must be completed according to Commission policy, to ensure the stability and reliability of the 9-1-1 system:

(i) Documented "Lab" testing shall be completed by the IWS Vendor and RPCs or Districts demonstrating the successful integration of the authorized applications. Test scenarios should include documentation of the operating system requirements, detailed functionality results as each application is integrated and evaluated independently, and load testing results of all systems operating together on the IWS workstation.

(ii) Documented "Live" testing in a PSAP shall also be completed by the IWS Vendor with cooperation and coordination by the RPC or District, demonstrating the successful integration of the authorized applications. Test scenarios should include documentation of the operating system requirements, detailed functionality results as each application is integrated and evaluated independently, and load testing results of all systems operating on the IWS workstation, as well as a standardized set of basic call-taking functions.

(F) Testing Documentation. Documentation of the testing shall be maintained by the RPC, and submitted to the Commission upon request.

(2) Graphical Display (Mapped ALI). Requirements of RPC. Prior to the implementation of graphical display of location information at a PSAP, a RPC shall meet the following requirements:

(A) Develop a digital map in accordance with standards to be determined by the Commission.

(B) Establish and adopt a database maintenance plan, including GIS data.

(C) Perform testing to ensure that the telephone number (TN) data is mapping correctly on the PSAP screen prior to implementing mapped ALI "live" at a PSAP.

(D) Submit a strategic plan amendment according to Commission policy.

(d) Applicability to Emergency Communications Districts (Districts). This rule shall apply to Districts receiving 9-1-1 Equalization Surcharge funds.

**History**
- *Source Note: The provisions of this §251.7 adopted to be effective December 13, 1995, 20 TexReg 10187; amended to be effective May 31, 1998, 23 TexReg 5425; amended to be effective September 5, 1999, 24 TexReg 6711; amended to be effective July 6, 2003, 28 TexReg 4885; amended to be effective July 18, 2004, 29 TexReg 6621; amended to be effective June 3, 2014, 39 TexReg 4235; amended to be effective October 16, 2018, 43 TexReg 6815.*

##### **1 Tex. Admin. Code § 251.8** Regional Planning Commission Procurement of 9-1-1 Equipment and Services with 9-1-1 Funds {#sec-251.8 omnilex-key=us-tx-regs-official--title-1--251.8}

(a) Purpose. The purpose of this rule is to implement the Texas Uniform Grant Management Standards (UGMS) for purchases of 9-1-1 equipment and services made with 9-1-1 funds. Instructions provided in this rule are in addition to the direction provided in UGMS. This rule is not intended to prohibit a regional planning commission (RPC) from implementing more stringent competitive procurement practices.

(b) Funding. Funds allocated for the procurement of 9-1-1 equipment and services will be subject to Commission funding priorities and policies.

(c) Statewide Procurement. The Commission reserves the right to procure 9-1-1 equipment and services for the State program based on best value and upon determination of which goods or services are in the best interest of the State program. In instances of statewide procurement, the Commission will work with the RPCs and local governments to ensure that purchases are consistent with local 9-1-1 system infrastructure and best meet the needs of the local governments.

(d) Industry Standard. All purchases of 9-1-1 equipment and services shall be consistent with the current industry standard. The authority for the industry standard for 9-1-1 networks, equipment, and databases is the National Emergency Number Association (NENA).

(e) Competitive Procurement Required. Competitive procurement is required for all Capital Purchases.

(1) Exceptions for sole source may be used when consistent with UGMS. Prior written concurrence from the Commission is required for any sole source purchase expected to exceed $25,000.

(2) Purchases made by RPCs through a state agency or other qualified cooperative purchasing program shall satisfy this section of the rule.

(3) Purchases of tariffed goods or services meeting the definition of capital purchases are subject to competitive procurement. An RPC may not contract to pay a vendor an amount higher than its tariffed price.

(4) Modifications to leases with a nonrecurring cost of greater than $5,000 are considered capital purchases subject to competitive procurement.

(f) Historically Underutilized Businesses (HUBs). RPCs shall take affirmative steps to contract with HUBs according to the RPC's HUB plan included in the regional strategic plan.

(g) Record Retention. All procurement records must be maintained by RPCs in accordance with UGMS and each RPC's record retention policy. Documentation will be made available to the Commission upon request.

(h) Code of Ethics. An RPC employee, whose salary is funded in whole or in part with 9-1-1 Funds, shall adhere to the following ethical standards. Each RPC shall establish a policy to ensure that this code of ethics is addressed in the procurement of all 9-1-1 equipment and services and provide a copy of this policy to the Commission upon request. RPC employee may not:

(1) Participate in work on a contract by taking action as an employee through decision, approval, disapproval, recommendation, giving advice, investigation or similar action knowing that the employee, or member of their immediate family, has an actual or potential financial interest in the contract, including prospective employment;

(2) Solicit or accept anything of value from a vendor or potential vendor;

(3) Be employed by, or agree to work for, a vendor or potential vendor; or

(4) Knowingly disclose confidential information for personal gain.

(i) Compliance. If an RPC fails to comply with the provisions of this rule, the Commission may take action to recover any excessive costs clearly shown to have been paid as a result of infractions of this rule.

(j) Applicability of State Procurement Statutes. To the extent of any conflict between this rule and applicable state statutes prescribing procurement methods, such statutes shall be followed.

(k) Applicability to an Emergency Communications District (ECD). The requirements set forth in this rule also apply to an ECD awarded equalization surcharge by the commission.

**History**
- *Source Note: The provisions of this §251.8 adopted to be effective September 5, 1999, 24 TexReg 6709; amended to be effective February 10, 2003, 28 TexReg 1171; amended to be effective July 18, 2004, 29 TexReg 6622; amended to be effective December 7, 2008, 33 TexReg 9971; amended to be effective March 5, 2014, 39 TexReg 1357.*

##### **1 Tex. Admin. Code § 251.10** Guidelines for Implementing Wireless E9-1-1 Service {#sec-251.10 omnilex-key=us-tx-regs-official--title-1--251.10}

(a) Responsibilities. Each Regional Planning Commission (RPC) and wireless service provider (WSP) is responsible for implementing and providing Wireless E9-1-1 Service in accordance with this rule, federal law and regulations, and Commission policy.

(b) Implementation and Requests for Wireless E9-1-1 Service. Prior to implementing Wireless E9-1-1 Service in an RPC's region, a WSP shall submit to the Commission on a form prescribed by a Commission PPS the details of its technical approach to providing Wireless E9-1-1 Service including, but not limited to, its preferred deployment method and methods for delivering the required voice and data elements. Commission staff will review and evaluate the information submitted and notify the RPC that it may request Wireless E9-1-1 Service from the WSP. A WSP shall keep current the information submitted.

(c) Deployment Method. Unless otherwise approved by the Commission or Commission Staff as an exception, RPC and WSP will agree upon one of the following methods of wireless 911 call delivery:

(1) Callpath Associated Signaling (CAS);

(2) Non-Callpath Associated Signaling (NCAS); and

(3) Exceptions to CAS and NCAS, e.g., stand-alone ALI environments or Hybrid CAS/NCAS, which shall be illustrated and demonstrated to the satisfaction of each affected RPC prior to implementing Wireless E9-1-1 Service.

(d) Testing. Prior to implementing Wireless E9-1-1 Service, the RPC, WSP, local service provider, and any third party shall conduct database and equipment testing to ensure WSP's capacity to correctly route and deliver accurate ANI and/or ALI for wireless 9-1-1 calls. Further testing shall be performed as may be required by the RPC. Required testing shall not exceed any testing requirements established by the Federal Communications Commission (FCC) except by agreement between the RPC and WSP.

(e) Class of Service. Unless an exception is approved by the Commission, the FCC, or a national industry standards body, the following standard Classes of Service (COS) shall be used to identify each wireless 9-1-1 call delivered to a PSAP:

(1) "WRLS" for Wireless E9-1-1 Phase I Service; and

(2) "WPH2" for Wireless E9-1-1 Phase II Service.

(f) Reimbursement. A WSP may request reimbursement for reasonable expenses for network facilities and associated implementation costs by submitting detailed cost information to the Commission in a form prescribed by Commission policy. Reasonable costs to be reimbursed by an RPC may include trunking, database and other associated implementation costs. In determining the reasonableness of costs, the Commission may compare the costs being submitted for recovery by one WSP to the costs of other, similarly situated WSPs.

(g) RPC Requests for Information. An RPC may request additional information from a WSP, including but not limited to a description of WSP's network, database, equipment display requirements, training and accessibility elements, technical solutions, network diagrams, documented wireless 9-1-1 call set-up times, deployment plans and timelines, specific work plans, WSP network contingency and disaster recovery plans, escalation lists, trouble call response times, and wholesale/resale customer list.

**History**
- *Source Note: The provisions of this §251.10 adopted to be effective February 3, 2009, 34 TexReg 581; amended to be effective June 3, 2014, 39 TexReg 4235.*

##### **1 Tex. Admin. Code § 251.12** Commission and Regional Planning Commission Contracts for 9-1-1 Service {#sec-251.12 omnilex-key=us-tx-regs-official--title-1--251.12}

(a) Purpose. The purpose of this rule is to implement the requirement in Health and Safety Code §771.078 that the Commission adopt by rule the standard provisions for a contract between the Commission and a Regional Planning Commission (RPC) to provide 9-1-1 service.

(b) Per Health and Safety Code §771.078(c), a contract under this section must provide for:

(1) the reporting of financial information regarding administrative expenses in accordance with generally accepted accounting principles;

(2) the reporting of information regarding the current performance, efficiency, and degree of implementation of emergency communications services in an RPC's 9-1-1 service area;

(3) the collection of efficiency data on the operation of 9-1-1 answering points;

(4) standards for the use of and the creation of new public safety answering points;

(5) quarterly disbursements of money due under the contract, except as provided by paragraph (6) of this subsection;

(6) the Commission to withhold disbursement to an RPC that does not follow a standard imposed by the contract, a Commission rule, or a statute; and

(7) a means for the Commission to give an advance on a quarterly distribution under the contract to an RPC that has a financial emergency.

(c) Per Commission Program Policy Statement (PPS) Contracts for 9-1-1 Service, the Commission provides a standard form for contracts under this section.

(d) Per Commission PPS Regional Planning Commission Advance Quarterly Funding, the Commission provides advance funding to an RPC at the beginning of each fiscal quarter to fund operating costs attributable to providing 9-1-1 service.

**History**
- *Source Note: The provisions of this §251.12 adopted to be effective November 21, 1999, 24 TexReg 10044; amended to be effective February 10, 2003, 28 TexReg 1171; amended to be effective August 24, 2003, 28 TexReg 6535; amended to be effective May 2, 2004, 29 TexReg 3956; amended to be effective August 21, 2005, 30 TexReg 4633; amended to be effective December 7, 2008, 33 TexReg 9971; amended to be effective March 5, 2014, 39 TexReg 1357; amended to be effective June 9, 2021, 46 TexReg 3515.*

##### **1 Tex. Admin. Code § 251.13** Use of 9-1-1 Database Information {#sec-251.13 omnilex-key=us-tx-regs-official--title-1--251.13}

(a) 9-1-1 Database information is confidential and is not available for public inspection (Health and Safety Code §771.061(a), Texas Attorney General Open Records Decision 661, 1999). The information in the 9-1-1 Database is collected and maintained for the provision of 9-1-1 service, and emergency services as that term is defined in 47 U.S.C. §222(h)(5). A 9-1-1 Database Management Services Provider shall not release or make otherwise available information in the 9-1-1 Database without the express written approval of the Commission and the Regional Planning Commission (RPC) requesting use of such information. An RPC shall withdraw its consent if a local governmental entity or a provider of emergency notification services does not maintain the confidentiality of the information or misuses emergency notification services.

(b) The Commission intends to authorize the release of the 9-1-1 database information within the Commission program areas for the use of emergency notification services under the condition that this information is be used for the purpose of warning or alerting citizens regarding information in an emergency situation where property or human life is in jeopardy. Further, it is the intention of Commission that the current designated 9-1-1 database provider, RPCs, and Commission staff cooperate with local government to the fullest extent possible in accordance with Commission rules and policy, and state and federal law for the implementation of emergency notification services.

(c) The local government entities are responsible for the expenses related to the implementation of emergency notification services and the transfer of 9-1-1 Database information.

(d) Procedures. The procedures for authorization of utilizing the 9-1-1 database for emergency notification services will be:

(1) The RPC shall submit a written request to the Commission for the authorization to release the information. This written request shall contain:

(A) Technical format requirements of the emergency notification services;

(B) The name(s) of the local government entity(ies) requesting the 9-1-1 database and its (their) written request;

(C) A description of geographic area utilizing the services;

(D) A general description of when and by whom the service may be deployed; and

(E) An interlocal agreement from all parties that the 9-1-1 database will only be used in emergency situations and will be kept confidential and not available for public inspection.

(2) The Commission staff has the authority to review and approve the written request and shall provide written authorization once all information is provided.

(3) The designated 9-1-1 database provider shall cooperate and provide access to the information to the RPC, local government entity, or directly to the vendor of emergency notification services upon receipt from the RPC of a written request including a copy of the Commission's notification of approval.

(4) The RPC shall notify the vendor of emergency notification services regarding the confidentiality of the 9-1-1 database.

(5) The Commission staff will maintain an inventory of all requests, including withdrawals of assistance when the confidentiality of the information is misused.

(6) The RPC will notify the Commission, through its quarterly performance report, on the implementation and status of any emergency notification services that utilize the 9-1-1 database information within its region and/or when the emergency notification services is withdrawn, especially when the withdrawal is based on misuse of the confidential information.

**History**
- *Source Note: The provisions of this §251.13 adopted to be effective August 4, 2002, 27 TexReg 6683; amended to be effective May 2, 2004, 29 TexReg 3956; amended to be effective December 7, 2008, 33 TexReg 9971; amended to be effective June 3, 2014, 39 TexReg 4235.*

##### **1 Tex. Admin. Code § 251.14** VoIP Positioning Center Operator Minimum Requirements {#sec-251.14 omnilex-key=us-tx-regs-official--title-1--251.14}

(a) Purpose. The purpose of this rule is to establish minimum requirements for VoIP Positioning Center (VPC) Operators providing or facilitating the providing of 9-1-1 service using a dynamic Automatic Location Identification (ALI) solution. This rule is intended to provide the end-users of IP-enabled voice service providers (VSPs) with a consistent level of 9-1-1 service that is more comparable to wireline E9-1-1 service.

(b) Applicability. This rule is applicable to VPC Operators providing or facilitating the providing of 9-1-1 service to VSP end-users whose voice service is either fixed or nomadic, but non-mobile. Nomadic service is service that an end-user can access from any broadband connection. This rule provides the minimum standards for a VPC Operator to implement 9-1-1 service requirements.

(c) Registration. A VPC Operator shall register with the Commission and provide written notice to each 9-1-1 Entity in whose region or territory they provide VPC service. Registration is a prerequisite to accessing a 9-1-1 Entity's Network and 9-1-1 Database, for obtaining 9-1-1 Entity approval to obtain pseudo automatic number identifications (pANIs), and for accessing dedicated 9-1-1 trunking, as applicable. Registration shall be made on a form provided by Commission staff and includes:

(1) VPC Operator name;

(2) Services provided;

(3) Name of 9-1-1 Entity in whose region or territory the VPC Operator provides service;

(4) Name and contact information of its VSP customers;

(5) Whether the VPC Operator collects or remits 9-1-1 service fees on behalf of any of its VSP customers' end-users.

(d) Service Plan. A VPC Operator shall submit to the Commission a service plan consisting of the pANIs obtained from the North America Numbering Plan Administrator and the Emergency Service Number (ESN) assignment associated with each pANI.

(e) Certification. A VPC Operator shall annually, and upon request by the Commission or a 9-1-1 Entity, update and certify the accuracy of its registration information.

(f) Coordination with 9-1-1 Entity. Upon request from the Commission or a 9-1-1 Entity in whose region or territory a VPC Operator provides service, the VPC Operator shall coordinate with the Commission or requesting 9-1-1 Entity to ensure compliance with this rule and the proper provisioning of 9-1-1 service.

(g) VPC Operator Minimum Requirements in Providing 9-1-1 Service. A VPC Operator shall:

(1) use the current Master Street and Address Guide (MSAG) of each 9-1-1 Entity in whose region or territory the Operator provides 9-1-1 service to:

(A) validate end-user ALI;

(B) assign wireline ESNs from Emergency Services Query Key (ESQK) pools created for such purpose; and

(C) use the correct ESQK pool in order to enable displaying valid English Language Translations (ELTs) matching the assigned wireline ESN;

(2) accept delta MSAG files in a manner consistent with the standard current format of initial MSAG files to maintain the MSAG for near real-time validation purposes;

(3) provide a pANI shell record containing the Automatic Number Information (ANI) and ALI associated with the 9-1-1 call;

(4) provide the equivalent of MSAG-validated routing with associated wireline ESN, including the appropriate National Emergency Number Association (NENA) Class of Service (COS) code provided by its VSP and used by the 9-1-1 Entity in its region or territory. The foregoing requires VPC Operator to request from its VSP customers that they convey the correct COS codes for the VSPs' end-users;

(5) provide its VSP customer's NENA Company ID in the Company ID field in the ALI record associated with each 9-1-1 call. VPC Operator's NENA Company ID should be identified by the pANI. In areas where the 9-1-1 Database supports using two NENA Company IDs, the two Company IDs shall be populated as provided in NENA standard 02-010; and

(6) not use fictitious data in the pANI shell record associated with each 9-1-1 call.

(h) MSAG validation and ALI Discrepancies. A VPC Operator shall address MSAG validation errors and ALI discrepancies within three (3) business days of notification by a 9-1-1 Entity. A VPC Operator shall verify that referred MSAG validation and ALI discrepancies have been resolved and provide written notice to the notifying 9-1-1 Entity.

(1) A VPC shall obtain prior approval from the notifying 9-1-1 Entity before resolving a validation or discrepancy using an address translation or alias. A notifying 9-1-1 Entity shall use its best efforts to approve/deny requests for translations or aliases within three (3) business days of receipt of a request from a VPC Operator.

(2) A VPC shall refer questions about a 9-1-1 Entity's MSAG to the appropriate 9-1-1 Entity. If the VPC Operator does not receive a response within three (3) business days, it shall escalate the issue to the 9-1-1 Entity or a representative of the appropriate MSAG authority.

(i) ESQKs. Upon request from a 9-1-1 Entity, a VPC Operator will provide a listing of ESQKs used in the requesting 9-1-1 Entity's region or territory and a description of the standard period of aging and re-use cycle of ESQKs (e.g., how long ESQK information for the 9-1-1 call remains visible for call transfers).

(j) Conversion and Deletion of Static 9-1-1 ALI Records. A VPC Operator whose VSP customer has static 9-1-1 ALI records in the 9-1-1 Database shall notify in writing its customer and the 9-1-1 Entity when conversion from the static protocol is complete to enable the VSP to initiate removal of all affected static records from the 9-1-1 Database.

(k) Records and Information. To the extent permitted by 47 U.S.C. §222(g), a VPC Operator will, upon request from the Commission or a 9-1-1 Entity, provide records and information described by that section or timely forward the request to all affected VSPs and provide notice to the Commission or the requesting 9-1-1 Entity. Records and information submitted in response to a request shall be kept confidential in accordance with 47 U.S.C. §222(g) and Health and Safety Code §771.061, and used for purposes of enhancing the provisioning of 9-1-1 service or emergency notification service.

**History**
- *Source Note: The provisions of this §251.14 adopted to be effective May 1, 2013, 37 TexReg 8449.*

##### **1 Tex. Admin. Code § 251.15** Emergency Services Gateway Operator Minimum Requirements {#sec-251.15 omnilex-key=us-tx-regs-official--title-1--251.15}

(a) Purpose. The purpose of this rule is to establish minimum requirements for Emergency Services Gateway (ESGW) Operators providing or facilitating the providing of 9-1-1 service using a dynamic Automatic Location Identification (ALI) solution. This rule is intended to ensure end-users whose 9-1-1 calls are delivered and routed through an ESGW are provided with a consistent level of 9-1-1 service. This rule is structured to encourage ESGW Operators and their customers to cooperate with each other in good faith to ensure ESGW Operators are able to comply with their obligations stated herein.

(b) Applicability. This rule is applicable to ESGW Operators, which for purposes of this rule, includes entities that provide or facilitate the provisioning of 9-1-1 call delivery and routing services to interconnected Voice over Internet Protocol (VoIP) or wireless end-users directly through the end-user's VoIP service provider (VSP) or commercial mobile radio service (CMRS) provider, respectively, or indirectly through another ESGW, a VoIP Positioning Center (VPC), or a Mobile Positioning Center (MPC). An ESGW Operator does not include an entity operating under a certificate required by Texas Utilities Code §54.001, acting solely to provide local exchange telephone service, basic local telecommunications service, or switched access service; or a VSP that self-provisions 9-1-1 service for its own end-users. This rule provides the minimum standards for an ESGW Operator to implement 9-1-1 service requirements.

(c) Registration. An ESGW Operator shall register with the Commission and provide written notice to each 9-1-1 Entity ( *i.e.,* an Emergency Communication District or Regional Planning Commission as defined in Texas Health and Safety Code §771.001) in whose region or territory they provide ESGW service. A current registration is a prerequisite to interfacing with a 9-1-1 Entity's Network, and for obtaining 9-1-1 Entity authorization to order dedicated 9-1-1 trunks (16 Tex. Admin. Code §26.5(64)). Registration shall be made on a form provided by Commission staff and include:

(1) ESGW Operator name (including d/b/a), address, website, and contact information including email;

(2) Contact information of the ESGW E9-1-1 Coordination Manager and ESGW 24X7 Operations.

(3) Name and contact information of VPC Operators utilizing ESGW Operator's services

(4) Services provided;

(5) Name of each 9-1-1 Entity in whose region or territory the ESGW Operator provides services;

(6) Name and contact information of its ESGW customers; and

(7) Whether the ESGW Operator collects or remits 9-1-1 service fees on behalf of any of its ESGW customers' end-users.

(d) Authorization to Interface with 9-1-1 Entity's Network. A 9-1-1 Entity will upon request provide an ESGW Operator registered under subsection (c) with a Certificate of Authorization (COA) authorizing the ESGW Operator to interface with the 9-1-1 Entity's Network. A COA serves as authorization to the 9-1-1 Entity's 9-1-1 Network Services Provider that the ESGW Operator is authorized to provide ESGW services within the 9-1-1 Entity's service area.

(e) Service Plan. An ESGW Operator shall submit to the Commission a service plan that for each selective router includes 911 Trunk Circuit ID 2+6 Code(s), number of Trunks in Trunk Group, CLLI code, 9-1-1 Entity Authorizing Trunk Group and the date the COA was received. The service plan shall be submitted on a form provided by Commission staff.

(f) Annual Certification. An ESGW Operator shall annually, and upon written request by the Commission or a 9-1-1 Entity, update and certify the accuracy of its Registration and Service Plan. An ESGW Operator shall submit an amended Registration and/or Service Plan at the time of its Annual Certification if changes have been made to the Registration and/or Service Plan.

(g) Implementation, Testing and Maintenance Procedures. An ESGW Operator shall use reasonable diligence to implement, test, and maintain its ability to provide ESGW services consistent with recognized industry standards, best practices, and applicable law. An ESGW Operator shall notify the Commission and each potentially affected 9-1-1 Entity in writing of any changes to ESGW Operator services or arrangements that may materially impact the provisioning of 9-1-1 service by the ESGW Operator.

(h) Compliance and the Provisioning of 9-1-1 Service. Upon written request from the Commission or a 9-1-1 Entity in whose region or territory an ESGW Operator provides service, an ESGW Operator shall coordinate with the Commission or requesting 9-1-1 Entity to ensure compliance with this rule and the proper provisioning of 9-1-1 service. Upon receipt of a written request, an ESGW Operator will provide reasonable access to and/or copies of the ESGW Operator's basic network information and/or provisioning related records or a detailed explanation why the requested information cannot reasonably be made available. This subsection does not require an ESGW Operator to disclose confidential VSP customer information without customer consent. Records and information submitted in response to a written request under this subsection are required and shall be kept confidential in accordance with Health and Safety Code §771.061.

(i) Reimbursement for Direct Dedicated 9-1-1 Trunking. The reimbursable costs for direct dedicated 9-1-1 trunks are set by the Public Utility Commission (16 Tex. Admin. Code §26.435(c)). Cost reimbursement is provided to the extent permitted by law and only within the 9-1-1 Entity's then available appropriations and budget. An ESGW Operator seeking direct dedicated 9-1-1 trunking reimbursement shall request reimbursement directly from the appropriate 9-1-1 Entity.

(j) Liability Protection. ESGW Operator in compliance with this rule is deemed a "third party or other entity involved in the providing of 9-1-1 service" as that term is used to limit liability in Texas Health and Safety Code §771.053.

**History**
- *Source Note: The provisions of this §251.15 adopted to be effective May 1, 2017, 41 TexReg 9261.*

##### **1 Tex. Admin. Code § 251.16** Direct Access to 9-1-1 Service {#sec-251.16 omnilex-key=us-tx-regs-official--title-1--251.16}

(a) Purpose. The purpose of this rule is to facilitate the implementation of Texas Health and Safety Code Chapter 771A ("Kari's Law") requiring telephone systems that provide outbound dialing capacity to be configured to provide direct access to 9-1-1 service and, in instances where no hardware changes are necessary, to provide notification of a 9-1-1 call to a central location on the site of the residential or business facility from which a 9-1-1 call is made using a telephone system.

(b) Definitions. For the purposes of this rule:

(1) "9-1-1 service" means a communications service that connects users to a public safety answering point through a 9-1-1 system.

(2) "Additional location" means an optional location, other than a central location, that receives notification of a 9-1-1 call that should be staffed 24x7 with personnel that can assist emergency first responders in accessing the residential or business facility from which a 9-1-1 call is made and determining the location of the 9-1-1 call, e.g., Campus Police, Security Office.

(3) "Business service" means a telecommunications or communications service provided a customer where the use is primarily of a business, professional, institutional, or otherwise occupational nature.

(4) "Business service user" means a user of business service that provides telecommunications or communications service, including 9-1-1 service, to end users through a publicly or privately owned or controlled telephone switch. Business service user includes a "governmental body" as defined in §552.003, Government Code, including an institution of higher education.

(5) "Central location" means a designated location on the site of a residential or business facility from which a 9-1-1 call is made that receives notification of the 9-1-1 call. A central location is not required to have a person available at the location to receive or respond to the notification.

(6) "Commission" means the Commission on State Emergency Communications.

(7) "Internet Protocol enabled service" or "IP" has the meaning assigned by §51.002, Texas Utilities Code.

(8) "Local exchange access line" or "Equivalent local exchange access line" has the meaning assigned in Commission Rule 255.4 (Title 1, Part 12 Texas Admin. Code, §255.4).

(9) "Notification" refers to a telephone system feature that can send notice to a central location and optional additional location that a 9-1-1 call has been made. Common notifications include "screen pops" with audible alarms for security desk computers using a client application, text messages for smartphones, and email for administrators. Where feasible, notification should provide the telephone number or extension and location information of the telephone system handset from which the 9-1-1 call is made.

(10) "Telephone switch" refers to the function of switching inbound and outbound calls in order to allow multiple end-users to share a defined number of local exchange access lines or equivalent local exchange access line.

(11) "Telephone system" refers to a legacy system, or equivalent system using Internet Protocol enabled service, comprised of common control units, interconnected telephone or handsets, control hardware and software, and adjunct systems that allow for advanced features such as call handling and transferring, conference calling, call metering and accounting, private and shared voice message boxes, direct inward/outward dialing. A telephone system, commonly referred to as a "multi-line telephone system" or MLTS, includes network and premises based systems such as Centrex and VoIP, as well as private branch exchange (PBX), Hybrid, and Key Telephone Systems (as classified by the Federal Communications Commission under Part 68 of Title 47, Code of Federal Regulations) and includes systems used, owned, or leased by governmental agencies and political subdivisions, for-profit businesses, and non-profit entities.

(12) Any term not expressly defined in this rule, has the meaning assigned in Commission Rule 252.7, Definitions.

(c) A business service user that owns or controls a telephone system that provides outbound dialing capacity or access shall configure the telephone system to allow a person initiating a 9-1-1 call on the system to directly access 9-1-1 service by dialing in order the digits 9, 1, and 1 without an additional code, digit, prefix, postfix, or trunk-access code. All non-compliant telephone handsets that provide outbound dialing capacity or access must have immediately adjacent to, and optionally on, the telephone the instructional sticker required in subsection (d)(7).

(d) A business service user shall be granted a one-year waiver (September 1 - August 31) of the requirements of Kari's Law and this rule upon submission of an affidavit not later than September 1 of each year that provides:

(1) name (legal and any D/B/A), address, and contact information of the business service user;

(2) address of all locations within Texas served by a non-complaint telephone system;

(3) a narrative of efforts demonstrating a good faith attempt to reprogram or replace non-compliant telephone systems;

(4) a statement that compliance with this rule is unduly and unreasonably cost prohibitive;

(5) the manufacturer and model number of each non-compliant telephone system and the estimated costs to reprogram or replace each system;

(6) a projected date for compliance with Kari's Law and this rule; and

(7) confirmation that the business service user agrees to or has placed an instructional sticker immediately adjacent to, and optionally on, each non-compliant telephone handset instructing the user how to access 9-1-1 service. The instructional sticker must be printed in at least 16-point boldface type, in a contrasting color using a font that is easily readable, and is written in English and Spanish.

(e) A business service user's waiver request affidavit may be submitted electronically to http://texas911.org/karislaw/ or mailed to the appropriate address provided in the website link.

(f) A business service user that provides residential or business facilities and owns or controls a telephone system that provides outbound dialing capacity or access shall configure the telephone system to provide notification when a person within a residential or business facility dials 9-1-1 if the telephone system is able to be configured to provide the notification without an improvement to the system's hardware. The notification requirement is separate from and in addition to the requirement in Texas law that "9-1-1 service" connects a 9-1-1 caller to the public safety answering point designated for the area from which the call is made.

(g) A business service user in compliance with this rule is deemed a "third party or other entity involved in the providing of 9-1-1 service" as that term is used to limit liability in §771.053, Texas Health and Safety Code.

**History**
- *Source Note: The provisions of this §251.16 adopted to be effective March 1, 2016, 41 TexReg 1439.*

### **Chapter 252** ADMINISTRATION

##### **1 Tex. Admin. Code § 252.1** Definition of State Agency for Billing Purpose of the 9-1-1 Service Fees and Surcharges {#sec-252.1 omnilex-key=us-tx-regs-official--title-1--252.1}

The reference to state government in Health and Safety Code §771.074 refers to a state agency. State agency means:

(1) any department, commission, board, office, or other agency that:

(A) is in the executive, legislative, or judicial branch of state government;

(B) has authority that is not limited to a geographical portion of the state; and

(C) was created by the constitution or a statute of this state; or

(2) an institution of higher education as defined by the Education Code, §61.003, other than a public junior college or community college.

**History**
- *Source Note: The provisions of this section 252.1 adopted to be effective July 11, 1988, 13 TexReg 3291; amended to be effective June 8, 2008, 33 TexReg 4299.*

##### **1 Tex. Admin. Code § 252.2** Purchase of Goods and Services: Historically Underutilized Businesses. {#sec-252.2 omnilex-key=us-tx-regs-official--title-1--252.2}

In accordance with Government Code §2161.003, the Commission adopts by reference the Historically Underutilized Business rules of the Comptroller of Public Accounts in 34 Texas Administrative Code Chapter 20, relating to the Historically Underutilized Business Program.

**History**
- *Source Note: The provisions of this §252.2 adopted to be
effective February 10, 2003, 28 TexReg 1172; amended to be effective
June 8, 2008, 33 TexReg 4299; amended to be effective October 16,
2018, 43 TexReg 6815; amended to be effective February 18, 2026, 51
TexReg 893.*

##### **1 Tex. Admin. Code § 252.3** State Employee Sick and Family Leave Pools {#sec-252.3 omnilex-key=us-tx-regs-official--title-1--252.3}

(a) A sick leave pool program is established to help alleviate the hardship caused to a state employee and the employee's immediate family if a catastrophic illness or injury or a previous donation to the sick leave pool forces the employee to exhaust their sick leave.

(b) A family leave pool program is established to provide a state employee more flexibility in:

(1) bonding with and caring for children during a child's first year following birth, adoption, or foster placement; and

(2) caring for a seriously ill family member or the employee.

(c) The Commission's Executive Director shall designate a Leave Pools Administrator to administer the sick and family leave pool programs.

(d) The Leave Pools Administrator, with approval by the Executive Director, shall prescribe procedures for the sick and family leave pool programs and include such procedures in the Commission's Human Resources Manual.

(e) Employee donations of one or more days of accrued sick leave to the sick leave pool or accrued sick or vacation leave to the family leave pool are strictly voluntary and must be made in writing.

(f) Procedures for the operation of the sick and family leave pools will be consistent with Texas Government Code, Chapter 661.

**History**
- *Source Note: The provisions of this §252.3 adopted to be
effective August 3, 2009, 34 TexReg 5059; amended to be effective
February 16, 2022, 47 TexReg 646; amended to be effective February
18, 2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 252.5** Employee Training {#sec-252.5 omnilex-key=us-tx-regs-official--title-1--252.5}

(a) "Training" as used in this rule means instruction, teaching, or other education received by a Commission employee that is not normally received by all Commission employees and that is designed to enhance the ability of the employee to perform the employee's job. The term includes a course of study at an institution of higher education or a private or independent institution of higher education as defined by §61.003, Education Code, if the employing state agency spends money to assist the state employee to meet the expense of the course of study or pays salary to the employee to undertake the course of study as an assigned duty. The term does not include training required either by state or federal law or that is determined necessary by the Commission and offered to all Commission employees performing similar jobs.

(b) The Commission may make public funds available to its employees for training in accordance with the State Employees Training Act (Texas Government Code, §§656.041 - 656.055) and Texas Government Code Chapter 656, Subchapter D (§§656.101 - 656.104). The Commission may spend public funds to pay the salary, tuition and other fees, travel and living expenses, training stipend, expense of training materials, and other necessary expenses of an instructor, student, or other participant in a training program.

(c) The training must be related to the duties or prospective duties of the employee.

(d) Employees may be required to complete a training program related to the employee's duties or prospective duties.

(e) Requirements for eligibility and participation in a training program shall be in accordance with this rule and the Commission's current Human Resources Manual.

(f) Approval to participate in a training program, including Commission-sponsored programs, shall not in any way affect an employee's at-will status or constitute a guarantee or indication of continued employment, nor shall it constitute a guarantee or indication of future employment in a current or prospective position.

(g) Permission to participate in any training program may be withdrawn if the Commission's Executive Director determines that participation would negatively impact the employee's job duties or performance.

(h) For an authorized training program offered by an institution of higher education or private or independent institution of higher education:

(1) the Commission may only reimburse the tuition expenses for a program course(s) successfully completed by the employee at an accredited institution of higher education (including online courses or courses not credited towards a degree); and

(2) the Commission's Executive Director must authorize the tuition reimbursement payment.

(i) All materials received by an employee through Commission-funded training are the property of the Commission.

**History**
- *Source Note: The provisions of this §252.5 adopted to be
effective November 2, 2010, 35 TexReg 9677; amended to be effective
July 21, 2016, 41 TexReg 5169; amended to be effective February 18,
2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 252.6** Wireless Service Fee Proportional Distribution {#sec-252.6 omnilex-key=us-tx-regs-official--title-1--252.6}

(a) The Commission shall use the most recent annual population estimates from the Texas Demographic Center to determine the proportionate amount of wireless and prepaid wireless emergency service fees remitted per Health and Safety Code §771.0711(c) and §771.0712(a) attributable to each regional planning commission (RPC) and emergency communication district (ECD).

(b) Within 90 days of the publication of the state demographer's population estimates, Commission staff shall provide the RPCs and ECDs with the proposed proportionate distribution percentages. RPCs and ECDs may provide comments to the proposed percentages within the timeframe set by Commission staff. Commission staff's proposed percentages are provided to allow comment from RPCs and ECDs whose 9-1-1 service boundaries and therefore population totals are not fully accounted for in the state demographer's population estimates. It is the joint responsibility of affected RPCs and ECDs to provide the Commission with agreed adjustments to the proposed population distributions and proposed percentages to accurately reflect their 9-1-1 service populations.

(c) The Commission shall adopt proportionate distribution percentages in an open meeting. Notice of the adopted percentages shall be provided by Commission staff to the RPCs and ECDs within thirty (30) days of adoption.

(d) Upon request by an RPC, ECD, or Commission staff, the Commission shall review and may modify the adopted distribution percentages to account for changes in 9-1-1 service boundaries not reflected in the state demographer's population estimates.

(e) In accordance with Health and Safety Code §771.0711(c), Commission staff shall use the adopted percentages to distribute to each ECD not participating in the state system its pro-rata share of remitted wireless and prepaid wireless emergency service fees, and notify each ECD when a distribution is made.

(f) Commission staff shall use the adopted percentages to distribute to each ECD not participating in the state system the interest earned on remitted wireless and prepaid wireless emergency service fees and credited by the Comptroller of Public Accounts. Distributions of interest shall be made no less than once each fiscal year.

**History**
- *Source Note: The provisions of this §252.6 adopted to be
effective November 6, 1997, 22 TexReg 10637; amended to be effective
October 12, 2003, 28 TexReg 8583; amended to be effective December
7, 2008, 33 TexReg 9972; amended to be effective August 23, 2012,
37 TexReg 6295; amended to be effective April 17, 2019, 44 TexReg
1835; amended to be effective February 18, 2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 252.7** Definitions {#sec-252.7 omnilex-key=us-tx-regs-official--title-1--252.7}

(a) Purpose. This rule defines terms commonly used by the Commission. Terms not defined in this rule or another Commission rule or policy statement shall be defined by Applicable Law. The National Emergency Number Association (NENA) Knowledge Base Glossary is adopted by reference. Commission rules and/or policy statements shall govern in the event of a conflict with the definitions in the NENA Knowledge Base Glossary.

(b) Definitions. Unless the context clearly indicates otherwise, the following terms mean:

(1) 9-1-1 Call Taking Position--Equipment required to deliver an emergency 9-1-1 call. The position is defined as the equipment necessary to answer the call, not the associated personnel. A position consists of a device for answering the 9-1-1 calls, a device to display 9-1-1 call information, and the related telephone circuitry and computer and/or router equipment necessary to ensure reliable handling of the 9-1-1 call.

(2) 9-1-1 Database--An organized collection of information, which is typically stored in computer systems that are comprised of fields, records (data), and indexes. In 9-1-1, such databases include master street address guides (MSAG), telephone numbers, emergency service numbers (ESNs), and telephone customer records. This information is used for the delivery of location information to a designated public safety answering point (PSAP). Use of the 9-1-1 database must be authorized by the Commission and RPC. The database is developed and maintained by the local government agency and/or the RPC as described within the regional strategic plan in accordance with Commission Rule 251.9, Guidelines for Database Maintenance Funds.

(3) 9-1-1 Equipment--Items and components whose cost is over $10,000 and have a useful life of at least one year.

(4) 9-1-1 Funds--Funds assessed and disbursed in accordance with the Texas Health and Safety Code, Chapter 771.

(5) 9-1-1 Network--The dedicated network of equipment, circuits, and controls assembled to establish communication paths to deliver 9-1-1 emergency communications.

(6) Call-Handling Equipment (CHE)--The terminal equipment at a PSAP or other approved facility connected to a communications network to provide 9-1-1 service.

(7) Capital Asset--Items and components whose cost is over $10,000 and which have a useful life of at least one year.

(8) Commission--Commission on State Emergency Communications. Also referred to as CSEC.

(9) Contingency Routing Plan--Routing scheme to provide for the provision of uninterrupted 9-1-1 service in the event of an incident that requires the temporary rerouting of 9-1-1 calls due to man-made or natural disasters.

(10) Controlled Assets--Controlled assets are property classes that state agencies are required to report to the Comptroller. A listing of items can be found in the CPA FMX Website: https://fmx.cpa.texas.gov/fmx/pubs/spaproc/appendices/appa/appa_6.php, or as amended.

(11) Database Maintenance--A program for the maintenance of the regional MSAG.

(12) Digital Map--A computer generated and stored data set based on a coordinate system, which includes geographical and attribute information pertaining to a defined location. A digital map includes street name and location information, data sets related to emergency service provider boundaries, as well as other associated data.

(13) Emergency Communication District (District)--A public agency or group of public agencies acting jointly that provided 9-1-1 service before September 1, 1987, or that had voted or contracted before that date to provide that service; or a District created under Texas Health and Safety Code, Chapter 772, Subchapters B, C, D, or F.

(14) Equipment Maintenance--The preservation and upkeep of 9-1-1 equipment in order to ensure that it continues to operate and perform at a level comparable to that exhibited at its initial acquisition.

(15) FCC--The Federal Communications Commission.

(16) Integrated Services--Primary or third party computer software applications that have been installed or implemented on an existing 911 call taking position's workstation that were not designed or intended for the workstation at the time of purchase or not loaded onto the workstation by the equipment vendor when originally installed at the PSAP.

(17) Interlocal Agreement--A contract cooperatively executed under Chapter 791 Government Code between local governments or other political subdivisions of the state to perform administrative functions or provide services, relating to 9-1-1 telecommunications.

(18) Local Government--A county, municipality, public agency, or any other political subdivision that provides, participates in the provision of, or has authority to provide fire-fighting, law enforcement, ambulance, medical, 9-1-1, or other emergency services and/or addressing functions.

(19) Local Monitoring Plan--The RPC schedule for monitoring all Interlocal Agreements, 9-1-1 funded activities, equipment, PSAPs, and subcontractors.

(20) Next Generation 9-1-1 Core Services (NGCS)--The set of services needed to process a 9-1-1 call on an ESInet. The term does not include the network on which the services operate.

(21) Primary PSAP--PSAP to which 9-1-1 calls are routed directly from a selective routing tandem or NGCS provider.

(22) Regional Planning Commission (RPC)--A commission established under Local Government Code, Chapter 391, also referred to as a regional council of governments.

(23) Regional Strategic Plan--A plan developed by each RPC for the establishment and operation of 9-1-1 service throughout the region that the RPC serves. The service and contents must meet the standards established by the Commission. A Regional Strategic Plan may also be referred to as Regional Plan or Strategic Plan.

(24) TDD--Telecommunication Device for the Deaf. Other interchangeable acronyms accepted are TTY (Teletypewriter) or TT (Text Telephone).

(25) Texas Grant Management Standards (TxGMS)--As developed by the Comptroller of Public Accounts under the authority of Texas Government Code, Chapter 783.

(26) Useful Life--The period of time that a piece of capital equipment can consistently and acceptably fulfill its service or functional assignment.

(27) Wireless 9-1-1 Call--A call made by a wireless end user utilizing a WSP wireless network, initiated by dialing "9-1-1" (and, as necessary, pressing the "Send" or analogous transmitting button) on a Wireless Handset.

(28) Wireless E9-1-1 Phase I Service--The service by which the wireless service provider (WSP) delivers to the designated PSAP the wireless end user's call back number and cell site/sector information when a wireless end user has made a 9-1-1 call, as contracted by the RPC.

(29) Wireless E9-1-1 Phase II Service--The service by which the WSP delivers to the designated PSAP the wireless end user's call back number, cell site/sector information, as well as X, Y (longitude, latitude) coordinates to the accuracy standards set forth in the FCC Order.

**History**
- *Source Note: The provisions of this §252.7 adopted
to be effective February 3, 2009, 34 TexReg 581; amended to be effective
February 18, 2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 252.8** Emergency Communications Advisory Committee {#sec-252.8 omnilex-key=us-tx-regs-official--title-1--252.8}

(a) Purpose. The Emergency Communications Advisory Committee (Committee) is established under Health and Safety Code §771.0511 to assist the Commission in coordinating the development, implementation, interoperability, and internetworking of interconnected emergency services Internet Protocol networks (ESInets). Interconnected, interoperable ESInets providing Next Generation Core Services covering all of Texas constitute the State-level ESInet. As defined in Health and Safety Code §771.0511(a)(2), the State-level ESInet is used for communications between and among public safety answering points (PSAPs) and other entities that support or are supported by PSAPs in providing emergency call handling and response, and will be a part of the Texas Next Generation Emergency Communications System.

(b) Policy. It is Commission policy that the development, implementation, interoperability, interconnection, and internetworking of ESInets be done on a cooperative basis between the Commission, Regional Planning Commissions (RPCs), and Emergency Communication Districts (ECDs), as that term is defined in Health and Safety Code §§771.001(3)(A) and 771.001(3)(B) (collectively, 9-1-1 Entities). It is Commission policy that the Committee:

(1) advise the Commission on matters regarding the interoperability and interconnection of ESInets, specifically including but not limited to Statewide Interoperability & Standards development for planning for interconnectivity, interoperability, and internetworking of ESInets as reflected in the Commission's Agency Strategic Plan; and

(2) provide for 9-1-1 Entity collaboration on issues regarding ESInets, particularly regarding interoperability and interconnection of ESInets, to ensure that the requirements of the state's 9-1-1 Entities are met.

(c) Composition of Committee. Each Committee member must have appropriate training, experience, and knowledge of Next Generation 9-1-1 technology and services and/or emergency services other than 9-1-1 services to effectively advise the Commission.

(1) the Committee is appointed by the Commission and includes, at a minimum, the following members:

(A) The Executive Director of the Commission or such individual's designee;

(B) two representatives from the RPCs

(C) two representatives from the ECDs, as that term is defined in Health and Safety Code §771.001(3)(A); and

(D) two representatives from the ECDs, as that term is defined in Health and Safety Code §771.001(3)(B).

(2) No two Committee members may be from the same 9-1-1 Entity.

(3) The Commission may add to the composition of the Committee including members representing emergency services other than 9-1-1 service.

(4) In appointing members to the Committee except under paragraph (3) of this subsection, the Commission shall consult with the RPCs and ECDs. RPCs may designate responsibility for consulting with the Commission to the Texas Association of Regional Councils. ECDs defined in Health and Safety Code §771.001(3)(A) and (B) may designate responsibility for consulting with the Commission to the Municipal Emergency Communication Districts Association and the Texas 9-1-1 Alliance, respectively.

(d) Bylaws. Draft bylaws for approval by the Commission. The bylaws shall, at a minimum, provide for the following:

(1) selection from among the members a presiding officer and an assistant presiding officer whose terms may not exceed two years; and

(2) establish standing committees.

(e) Terms of Office. Except for the Executive Director of the Commission or such individual's designee, whose term as a member does not expire, each member shall be appointed for a term of 3 years, except for the initial member terms under paragraph (4) of this subsection.

(1) Member terms begin on January 1st.

(2) Members shall continue to serve after the expiration of their term until a replacement member is appointed by the Commission.

(3) If a vacancy occurs, a person shall be appointed by the Commission to serve the unexpired portion of the vacating member's term.

(4) Members serve staggered terms. Initial member terms are as follows:

(A) one member from each 9-1-1 Entity represented on the Committee expires on December 31, 2013; and

(B) one member from each 9-1-1 Entity represented on the Committee expires on December 31, 2014.

(f) Committee Meeting Attendance. Members shall attend scheduled Committee meetings.

(1) A member shall notify the presiding officer or Commission staff if the member is unable to attend a scheduled meeting.

(2) The Commission may remove a member if it determines that a member cannot discharge the member's duties for a substantial part of the member's appointed term because of illness or disability, is absent from more than half of the Committee meetings during a fiscal year, or is absent from at least three consecutive Committee meetings. The validity of an action of the Committee is not affected by the fact that it is taken when a ground for removal of a member exists.

(g) Committee Roles and Responsibilities. The Committee is to assist the Commission in coordinating the development, implementation, and management of interoperable and interconnected ESInets. The Committee shall seek state 9-1-1 Entity input and collaboration, specifically including but not limited to Statewide Interoperability & Standards development for planning for interconnectivity, interoperability, and internetworking of ESInets as reflected in the Commission's Next Generation 9-1-1 Master Plan (Appendix 1 to the Commission Strategic Plan for Statewide 9-1-1 Service for Fiscal Years 20xx-20xx).

(h) Reporting to the Commission. The Committee, through its presiding officer, shall submit by September 1 of each year an annual report to the Commission on its activities. The reports shall include the following:

(1) an update on the Committee's work, including:

(A) Committee and sub- or standing-committee meeting dates;

(B) member attendance records;

(C) description of actions taken by the Committee;

(D) description of how the Committee has accomplished or addressed the tasks and objectives of this section and any other issues assigned to the Committee by the Commission; and

(E) anticipated future activities of the Committee;

(2) description of the usefulness of the Committee's work; and

(3) statement of costs related to the Committee, including the cost of Commission staff time spent in support of the Committee.

(i) Statement by a Member.

(1) The Commission and the Committee shall not be bound in any way by any statement or action by a member except when the statement or action is in pursuit of specific instructions from the Commission.

(2) The Committee and its members may not participate in legislative activity in the name of the Commission or the Committee without Commission approval.

(j) Advisory Committee. The Committee is an advisory committee in that it does not supervise or control public business or policy. As an advisory committee, the Committee is not subject to the Open Meetings Act (Government Code, Chapter 551).

(k) Commission Staff. Support for the Committee will be provided by Commission staff.

(l) Applicable law. The Committee is subject to Government Code, Chapter 2110, concerning state agency advisory committees.

(m) Commission Evaluation. The Commission shall annually evaluate the Committee's work, usefulness, and the costs related to the Committee, including the cost of Commission staff time spent supporting the Committee's activities.

(n) Report to the Legislative Budget Board. The Commission shall report to the Legislative Budget Board the information developed in subsection (n) of this section on a biennial basis as part of the Commission's request for appropriations.

(o) Review and Duration. On or before September 1, 2029, the Commission will initiate and complete a review of the Committee to determine whether the Committee should be continued or abolished. If the Committee is not continued, it shall be automatically abolished on September 1, 2029.

**History**
- *Source Note: The provisions of this §252.8 adopted to be
effective May 4, 2010, 35 TexReg 3463; amended to be effective November
2, 2010, 35 TexReg 9677; amended to be effective December 6, 2011,
36 TexReg 8225; amended to be effective November 4, 2015, 40 TexReg
7619; amended to be effective June 11, 2019, 44 TexReg 2837; amended
to be effective August 16, 2023, 48 TexReg 4389; amended to be effective
February 18, 2026, 51 TexReg 893.*

##### **1 Tex. Admin. Code § 252.9** Liability Protection of NG9-1-1 Service Providers {#sec-252.9 omnilex-key=us-tx-regs-official--title-1--252.9}

(a) Purpose. The purpose of this rule is to make clear that the protection from liability provided by Health and Safety Code §771.053(a) extends to and includes service providers involved in developing, deploying, and operating Next Generation 9-1-1 (NG9-1-1).

(b) NG9-1-1 Service Providers. NG9-1-1 service provider refers to a person or entity involved in providing 9-1-1 service that utilizes in whole or in part Internet Protocol or other NG9-1-1 technologies.

(c) Liability Protection. NG9-1-1 service providers are protected from liability for any claim, damage, or loss arising from the provisioning of 9-1-1 service to the same extent as a service provider of telecommunications service involved in or a manufacturer of equipment used in providing 9-1-1 service under Health and Safety Code §771.053(a).

**History**
- *Source Note: The provisions of this §252.9 adopted to be
effective February 22, 2011, 36 TexReg 916; amended to be effective
February 18, 2026, 51 TexReg 893.*

### **Chapter 253** PRACTICE AND PROCEDURE

##### **1 Tex. Admin. Code § 253.1** Petitions for Rulemaking before the Commission {#sec-253.1 omnilex-key=us-tx-regs-official--title-1--253.1}

(a) Petition for Rulemaking. Any interested person may petition the commission requesting the adoption of a new rule or the amendment of an existing rule.

(1) The petition shall be in writing and shall include a brief explanation of the rule, the reason(s) the new or amended rule should be adopted, the statutory authority for such a rule or amendment, and complete proposed text for the rule. The proposed text for the rule shall indicate by striking through the words, if any, to be deleted from the current rule and by underlining the words, if any, to be added to the current rule.

(2) Within 60 days after submission of a petition, the commission either shall deny the petition in writing, stating its reasons for the denial, or shall initiate rulemaking proceedings.

(b) Commission Initiated Rulemaking. The commission may initiate rulemaking proceedings on its own motion or on the motion of the executive director of the commission. Nothing in this section shall preclude the executive director of the commission or his or her designee from consideration or development of new rules or amendments to existing rules without express direction from the commission.

**History**
- *Source Note: The provisions of this §253.1 adopted to be
effective July 6, 2003, 28 TexReg 4886; amended to be effective February
18, 2026, 51 TexReg 896.*

##### **1 Tex. Admin. Code § 253.2** Competitive Sealed Bids or Proposals {#sec-253.2 omnilex-key=us-tx-regs-official--title-1--253.2}

The Commission adopts by reference the rules of the Texas Comptroller of Public Accounts relating to competitive sealed bids or proposals (34 Tex. Admin. Code §20.207 and §20.208).

**History**
- *Source Note: The provisions of this §253.2 adopted to be effective November 2, 2010, 35 TexReg 9677; amended to be effective August 16, 2017, 42 TexReg 3963.*

##### **1 Tex. Admin. Code § 253.3** Protest Procedures {#sec-253.3 omnilex-key=us-tx-regs-official--title-1--253.3}

(a) The purpose of this rule is to provide for the efficient and effective resolution of protests related to contract purchases made by the Commission.

(b) These procedures are consistent with those of the Texas Comptroller of Public Accounts (Comptroller) (34 Tex. Admin. Code §§20.533 - 20.538). In the event of a direct conflict between the rules, the procedures in §§20.533 - 20.538 shall control.

(c) In the event of a direct conflict with the Comptroller's rules, the following terms used in the Comptroller rules shall be defined as follows:

(1) Comptroller--The Commission.

(2) Chief Clerk--Commission Executive Director.

(3) Director--Commission Director of Contracting and Purchasing

(4) General Counsel--Commission General Counsel.

(5) Using Agency--The Commission.

(d) Any actual or prospective bidder, offeror, or contractor claiming to have been aggrieved in connection with the solicitation, evaluation or method of evaluation, award of a contract, or tentative award by the Commission may submit a protest to the Director of Contracting and Purchasing. Protests must be received by the Director of Contracting and Purchasing within 10 days after the protesting party knows, or should have known, of the occurrence of the action that is the subject of the protest. A Protest must conform to subsection (d) and subsection (f) of this section, and shall be resolved through the procedures described in subsections (g) - (n) of this section. The protesting party must mail or deliver copies of the protest to all interested parties.

(e) In the event a protest is timely received, the Commission shall not proceed further with the solicitation, evaluation, or award a contract unless the Director of Contracting and Purchasing, after consultation with the Commission's Executive Director, makes a written determination that a contract must be awarded without delay to protect the best interests of the state.

(f) A protest must be sworn and meet the requirements of Comptroller §20.535(a)(1) (34 Tex. Admin. Code §20.535).

(g) The Director of Contracting and Purchasing may settle and resolve the dispute over the solicitation, evaluation, award of a contract, or tentative award at any time before the matter is submitted on appeal to the Executive Director. The Director of Contracting and Purchasing may solicit written responses to the protest from interested parties.

(h) If the protest is not resolved by mutual agreement, the Director of Contracting and Purchasing shall send a determination letter resolving the protest to the protesting party and interested parties. The determination letter shall set for the reasons for the determination; and

(1) If the Director of Contracting and Purchasing determines that a violation of any statutory or regulatory provisions has occurred in a situation in which a contract has not been awarded, include in the determination letter the appropriate remedy for the violation; or

(2) If the Director of Contracting and Purchasing determines that a violation of any statutory or regulatory provisions has occurred in a situation in which a contract has been awarded, may declare the awarded contract to be void.

(i) The protesting party may appeal a determination of a protest by the Director of Contracting and Purchasing to the Executive Director. An appeal of the Director of Contracting and Purchasing's determination must be in writing and received in the office of the Executive Director no later than 10 working days from the date notice of the determination was sent. The protesting party's appeal must contain a certified statement that a copy of the appeal was sent to all interested parties. The scope of the appeal shall be limited to a review of the General Counsel's determination.

(j) The Executive Director may refer the matter to the Commission for consideration or may issue a written decision regarding the appeal.

(k) The following requirements shall apply to a protest that the Executive Director refers to the Commission:

(1) The Executive Director shall deliver copies of the appeal and any responses by interested parties to each Commissioner.

(2) The Commission may consider any documents that Commission staff or interested parties have submitted.

(3) The Commission shall issue a written letter of determination of the appeal to the protesting party and all interested parties which shall be final.

(l) A protest or an appeal of a determination that is not timely received shall not be considered unless good cause for delay is shown or the Director of Contracting and Purchasing determines that an appeal raises issues that are significant to Commission procurement practices or procedures in general.

(m) A determination issued by either the Executive Director or the Commission shall be the final administrative action of the Commission.

**History**
- *Source Note: The provisions of this §253.3 adopted to be
effective November 2, 2010, 35 TexReg 9677; amended to be effective
August 16, 2017, 42 TexReg 3963; amended to be effective February
18, 2026, 51 TexReg 896.*

##### **1 Tex. Admin. Code § 253.4** Negotiated Rulemaking and Alternative Dispute Resolution {#sec-253.4 omnilex-key=us-tx-regs-official--title-1--253.4}

(a) Policy. It is the Commission's policy to encourage the use of negotiated rulemaking and alternative dispute resolution procedures in appropriate situations.

(b) Negotiated Rulemaking. When the Commission finds that a rule to be proposed is likely to be complex, controversial, or affect disparate groups, the Commission may propose to engage in negotiated rulemaking in accordance with the Government Code, Chapter 2008.

(1) The Commission's executive director or his designee shall serve as the Commission's convener.

(2) The convener shall assist in identifying persons who are likely to be affected by a proposed rule, including those who oppose issuance of a rule. The convener shall discuss with those persons or their representatives as provided in Government Code §2008.052(c).

(3) The convener shall then recommend to the Commission whether negotiated rulemaking is a feasible method to develop the proposed rule and shall report to the agency on the relevant considerations, including those listed in Government Code §2008.052(d).

(4) After considering the convener's recommendation and report, if the Commission intends to engage in negotiated rulemaking it shall publish notice of its intent in appropriate media and in the Texas Register consistent with the requirements in Government Code §2008.053(a).

(5) After considering comments, if the Commission intends to proceed with negotiated rulemaking it shall appoint a negotiated rulemaking committee and a facilitator in accordance with Government Code §2008.055 that is approved by the negotiated rulemaking committee.

(6) The facilitator shall preside over meetings of the negotiated rulemaking committee and assist the committee in establishing procedures for conducting negotiations and in attempting to arrive at a consensus on the proposed rule.

(7) At the conclusion of negotiations, the negotiated rulemaking committee shall send a written report to the Commission as provided in Government Code §2008.056(d).

(8) After considering the negotiated rulemaking committee's report, if the Commission intends to proceed with the rulemaking process it shall proceed in accordance with Government Code, Chapter 2001, Subchapter B.

(c) Alternative Dispute Resolution. The Commission encourages the fair and expeditious resolution of disputes through alternative dispute resolution (ADR) procedures.

(1) ADR procedures include any procedure or combination of procedures described by Civil Practice and Remedies Code, Chapter 154. ADR procedures are intended to supplement and not limit other dispute resolution procedures available for use by the Commission.

(2) Any ADR procedure used to resolve disputes before the Commission shall conform with Government Code, Chapter 2009, and, to the extent possible, the model guidelines for the use of ADR issued by the State Office of Administrative Hearings (SOAH).

(3) Upon receipt of notice of a dispute, the Commission's Executive Director, in consultation with the Commission's General Counsel, shall determine whether use of an ADR procedure is an appropriate method for resolving the dispute.

(4) If an ADR procedure is determined to be appropriate, the Commission's Executive Director shall recommend to the claimant the use of ADR to resolve the dispute. The Commission's General Counsel will collaborate with the claimant to select an appropriate procedure for dispute resolution and implement the agreed upon procedure consistent with SOAH's model guidelines.

(5) ADR for Breach of Contract Claims. Resolution of breach of certain contract claims brought by a contractor against the Commission shall conform to the requirements of Government Code, Chapter 2260. The Commission adopts by reference the Office of the Attorney General's rules regarding the negotiation and mediation of certain contract disputes (1 Texas Administrative Code Part 3, Chapter 68).

(6) The requirements of Government Code, Chapter 2260, and the Office of the Attorney General's model rules are required prerequisites to a contractor filing suit in accordance with Civil Practices and Remedies Code, Chapter 107.

(d) The Commission's General Counsel is designated as the coordinator to implement the Commission's policy under this rule, provide necessary training, and collect data concerning the effectiveness of the implemented procedures.

**History**
- *Source Note: The provisions of this §253.4 adopted to be
effective December 6, 2011, 36 TexReg 8227; amended to be effective
February 18, 2026, 51 TexReg 896.*

##### **1 Tex. Admin. Code § 253.5** Enhanced Contract and Performance Monitoring {#sec-253.5 omnilex-key=us-tx-regs-official--title-1--253.5}

(a) The Commission will conduct enhanced contract and/or performance monitoring for each Commission contract that:

(1) has an expected total value in excess of $5 million; or

(2) the Commission or its Executive Director requests enhanced monitoring based on risk assessment factors, including:

(A) The impact of the contracted goods or services on essential Commission functions or programs;

(B) Vendor experience with delivering the contracted goods or services;

(C) Vendor performance on previous Commission contracts; and

(D) Vendor performance during the contract term.

(b) Contracts identified for enhanced contract and/or performance monitoring will be reported to the Commission at the next regular Commission meeting. Thereafter, the Commission will be immediately notified of any unresolved or potential serious issue or risk arising with respect to an identified contract.

(c) Identified contracts will be monitored in accordance with policies and procedures in the Commission's Contract Management Handbook.

(d) This rule does not apply to a memorandum of understanding, interagency contract, interlocal agreement, grant agreement, or a contract that has no cost to the Commission.

**History**
- *Source Note: The provisions of this §253.5 adopted to be
effective July 21, 2016, 41 TexReg 5169; amended to be effective February
18, 2026, 51 TexReg 896.*

### **Chapter 254** REGIONAL POISON CONTROL CENTERS

##### **1 Tex. Admin. Code § 254.1** Designation and Funding of Regional Poison Control Centers {#sec-254.1 omnilex-key=us-tx-regs-official--title-1--254.1}

(a) Purpose. Health and Safety Code, Chapter 777, provides the Commission on State Emergency Communications (Commission) with the authority to establish a program to award grants to fund a network of regional poison control centers (RPCCs). Funding of the grants comes from revenues generated by the equalization surcharge imposed under Health and Safety Code, §771.072 and appropriated to the Commission.

(b) The Commission shall designate the service area region for each RPCC. The regions are as follows:

(1) The University of Texas Medical Branch at Galveston--Texas Health and Human Services (HHS) Regions 5 and 6;

(2) The Dallas County Hospital District/North Texas Poison Center--HHS Regions 3 and 4;

(3) The University of Texas Health Science Center at San Antonio--HHS Regions 8 and 11;

(4) The University Medical Center of El Paso, El Paso County Hospital District--HHS Regions 9 and 10;

(5) The Texas Tech University Health Sciences Center at Amarillo--HHS Regions 1 and 2; and

(6) Scott & White Memorial Hospital--HHS Region 7.

(c) Eligibility for Grants. The entities eligible to request grants are the regional poison control centers for the state, designated in Health and Safety Code, Chapter 777, as follows:

(1) The University of Texas Medical Branch at Galveston;

(2) The Dallas County Hospital District/North Texas Poison Center;

(3) The University of Texas Health Science Center at San Antonio;

(4) The University Medical Center of El Paso, El Paso County Hospital District;

(5) The Texas Tech University Health Sciences Center at Amarillo; and

(6) Scott & White Memorial Hospital, Temple.

(d) Requests for Grants. A RPCC shall request a grant by submitting to the Commission a strategic plan or amendment to an approved strategic plan developed in accordance with Commission Rule §254.3, Regional Strategic Plans and Reporting for Poison Control Service.

(e) Grant Criteria. As required by Health and Safety Code §777.009(b), the criteria for awarding grants to a RPCC includes the following:

(1) the need of the region based on criteria including, but not limited to, population and geographical area served for poison control services, and the extent to which the grant would meet the identified need;

(2) the assurance of providing quality services;

(3) the availability of other funding sources;

(4) achieving and/or maintaining accreditation as a poison control center with the American Association of Poison Control Centers (AAPCC); and

(5) maintenance of effort.

(f) Grant Awards. Upon review and approval of grant requests, the Commission shall award a grant to an RPCC from appropriated equalization surcharge to fund approved strategic plans, or amendments thereto, to carry out the duties specified in Health and Safety Code Chapter 777. In reviewing requests for grants, the Commission shall consider:

(1) whether the strategic plan or amendment:

(A) complies with Commission rules and policies;

(B) may be effectively implemented;

(C) is cost effective;

(D) is appropriate to providing poison control service; and

(2) the ability of the RPCC to meet the requirements and functions in its strategic plan or amendment.

(g) Use of Grant Funds. As determined by the Commission in approving RPCC Strategic Plans under Commission Rule §254.3, Regional Strategic Plans and Reporting for Poison Control Service, awarded grant funds may only be used to provide poison control service as follows:

(1) Telephone Services;

(2) Community Programs and Assistance. To inform the public on poison prevention methods and inform and educate health professionals on the management of poison and overdose victims;

(3) Research Programs;

(4) Information at Birth; and

(5) Achieving or Maintaining AAPCC Accreditation.

(h) Notice. The Commission shall notify each RPCC of the approval or disapproval of its strategic plan or amendment not later than the 90th day after the date the Commission receives an administratively complete plan or amendment. If the Commission disapproves the plan, it shall specify the reasons for disapproval and set a deadline for submission of a modified plan or amendment.

(i) Contracts. Upon approval of a grant request, an RPCC shall execute a contract with the Commission to implement the approved strategic plan, or amend its existing contract as necessary to implement an approved strategic plan amendment. Per Commission rules, policies, and procedures, and the Uniform Grant Management Standards, the Commission shall provide in a Commission Program Policy Statement a standard form contract to be executed by the parties.

**History**
- *Source Note: The provisions of this §254.1 adopted to be effective December 11, 2005, 30 TexReg 8057; amended to be effective October 2, 2008, 33 TexReg 8167; amended to be effective February 2, 2010, 35 TexReg 629; amended to be effective March 6, 2012, 37 TexReg 1491; amended to be effective April 1, 2015, 40 TexReg 1849.*

##### **1 Tex. Admin. Code § 254.2** Poison Control Coordinating Committee {#sec-254.2 omnilex-key=us-tx-regs-official--title-1--254.2}

(a) Purpose. Establish the Poison Control Coordinating Committee (Committee) created by Health and Safety Code §777.008. The Committee shall coordinate the activities of the regional poison control centers (RPCCs) and advise the Commission on State Emergency Communications (Commission) on:

(1) promoting public safety and injury prevention through well-coordinated poison control activities within the state of Texas;

(2) providing information and educational programs for communities and health care professionals;

(3) providing poison prevention education to the public, and informing and educating health professionals on the management of poison and overdose victims;

(4) providing technical assistance to state agencies requesting toxicology assistance; and

(5) providing consultation services concerning medical toxicology.

(b) Tasks. The Committee is tasked with:

(1) advising the Commission on rules relating to the poison control program;

(2) advising the Commission regarding the requirements of Health and Safety Code, Chapter 777, Regional Poison Control Centers;

(3) advising the Commission on the guidelines for an RPCC to achieve and maintain accreditation through the American Association of Poison Control Centers (AAPCC);

(4) coordinating with Commission staff the poison control program's input into the Commission's Strategic Plan and Legislative Appropriations Request; and

(5) coordinating, partnering, and evaluating in accordance with the Commission's adopted Committee bylaws.

(c) Composition. The Committee is composed of:

(1) one public member appointed by the Commission;

(2) six members who represent the six RPCCs, one member each appointed by the chief executive officer of each RPCC or the functional equivalent;

(3) one member appointed by the commissioner of the Department of State Health Services (DSHS); and

(4) one member who is a health care professional designated as the poison control program coordinator appointed by the Commission.

(d) Bylaws. The Committee shall draft bylaws for approval by the Commission.

(e) Terms of Office. Each member shall be appointed for a term of six years.

(1) Member terms begin on September 1 of the year of appointment.

(2) Members shall continue to serve after the expiration of their term until a replacement member is appointed.

(3) If a vacancy occurs, a person shall be appointed to serve the unexpired portion of that member's term.

(4) Members serve staggered terms, with the terms of one-third of the members expiring August 31 of each odd-numbered year. To implement staggered terms, the initial terms of each member are as follows:

(A) public member and two RPCC members--2011;

(B) DSHS member and two RPCC members--2013; and

(C) Commission member and two RPCC members--2015.

(f) Committee Meeting Attendance. Members shall attend scheduled Committee meetings.

(1) A member shall notify the presiding officer or Commission staff if the member is unable to attend a scheduled meeting.

(2) It is grounds for removal, including by the Commission, if a member cannot discharge the member's duties for a substantial part of the member's appointed term because of illness or disability, is absent from more than half of the Committee meetings during a fiscal year, or is absent from at least three consecutive Committee meetings. The validity of an action of the Committee is not affected by the fact that it is taken when a ground for removal of a member exists.

(g) Statement by Members.

(1) The Commission and the Committee shall not be bound in any way by any statement or action on the part of any Committee member except when a statement or action is in pursuit of specific instructions from the Commission or Committee.

(2) The Committee and its members may not participate in legislative activity in the name of the Commission or the Committee except with approval through the Commission's legislative process. Committee members are not prohibited from representing themselves, their RPCC, or other entities in the legislative process.

(h) Reimbursement for Expenses. In accordance with the requirements set forth in Government Code, Chapter 2110, a Committee member may only receive reimbursement for the member's expenses, including travel expenses, incurred for each day the member engages in official Committee business from appropriated funds if authorized by the General Appropriations Act or budget execution process.

(1) No compensatory per diem shall be paid to Committee members unless required by law.

(2) A Committee member who is an employee of a state agency, other than the Commission or DSHS, may not receive reimbursement for expenses from the Commission.

(3) A nonmember of the Committee who is appointed to serve on a subcommittee may not receive reimbursement for expenses from appropriated funds unless authorized in accordance with subsection (h) of this section and approved by the Commission's Executive Director.

(4) Each member who is to be reimbursed for expenses shall submit to Commission staff the member's receipts for expenses and any required official forms no later than 14 days after each Committee meeting.

(5) Requests for reimbursement of expenses shall be made on official state travel vouchers prepared by Commission staff.

(i) Reporting to the Commission. The Committee shall submit written reports to the Commission in accordance with Committee bylaws; and additionally as follows:

(1) by September 1 of each year submit an annual report to the Commission that includes, but is not limited to, the following:

(A) an update on the Committee's work, including:

(i) Committee meeting dates;

(ii) member attendance records;

(iii) description of actions taken by the Committee;

(iv) description of how the Committee has accomplished or addressed the tasks and issues assigned to the Committee by the Commission;

(v) information on available grants and any grant funding received by the RPCCs; and

(vi) anticipated future activities of the Committee;

(B) description of the usefulness of the Committee's work; and

(C) statement of costs related to the Committee, including the cost of Commission staff time spent in support of the Committee;

(2) by June 1 in even-numbered years, a report advising and making recommendations regarding development of the Commission's biennial Strategic Plan and Legislative Appropriations Request; and

(3) by June 1 in odd-numbered years, a report on the distribution of appropriated funding, the implementation of legislative requirements, and other information as may be determined by the Commission.

(j) Commission Staff. Support for the Committee shall be provided by Commission staff.

(k) Advisory Committee. The Committee is an advisory committee in that it does not supervise or control public business or policy. As an advisory committee, the Committee is not subject to the Open Meetings Act (Texas Government Code, Chapter 551).

(l) Applicable law. The Committee is subject to Government Code, Chapter 2110, concerning state agency advisory committees.

(m) Commission Evaluation. The Commission shall annually evaluate the Committee's work, usefulness, and the costs related to the Committee, including the cost of Commission staff time spent supporting the Committee's activities.

(n) Report to the Legislative Budget Board. The Commission shall report to the Legislative Budget Board the information developed in subsection (m) of this section on a biennial basis as part of the Commission's Legislative Appropriations Request.

(o) Review and Duration. Before September 1, 2029, the Commission will initiate and complete a review of the Committee to determine whether the Committee should be continued or abolished. If the Committee is not continued, it shall be automatically abolished on September 1, 2029.

**History**
- *Source Note: The provisions of this §254.2 adopted to be effective May 4, 2010, 35 TexReg 3466; amended to be effective April 1, 2015, 40 TexReg 1849; amended to be effective August 16, 2020, 45 TexReg 5508; amended to be effective October 18, 2023, 48 TexReg 5977.*

##### **1 Tex. Admin. Code § 254.3** Regional Strategic Plans and Reporting for Poison Control Service {#sec-254.3 omnilex-key=us-tx-regs-official--title-1--254.3}

(a) Purpose. This rule establishes a framework for a regional poison control centers (RPCC) to use in the development and submission of a strategic plan for poison control service delivery, amendments to an approved strategic plan, and quarterly reports.

(b) Requests for Grants. To request a grant award from the Commission, an RPCC must submit a regional strategic plan, or an amendment to its approved plan, consistent with this rule. The Commission's awarding of grants shall be determined in accordance with Commission Rule §254.1, Designation and Funding of Regional Poison Control Centers.

(c) Strategic Plans. In preparing a strategic plan or amendment, an RPCC shall use the Commission's standard RPCC strategic plan form as designated in a Commission Program Policy Statement following Uniform Grant Management Standards (UGMS). A strategic plan must be updated at least once every state fiscal biennium, in addition to any amendments. The RPCC strategic plan form shall include, at a minimum, the following:

(1) Poison Control Service. A description of how poison control service is to be provided and administered that includes:

(A) Staffing. An RPCC shall be staffed by physicians, pharmacists, nurses, and other professionals, trained in various aspects of toxicology and poison control and prevention;

(B) Telephone Services. An RPCC shall provide toll-free, telephone referral and information service for the public and health care professionals according to the criteria established by the American Association of Poison Control Centers (AAPCC);

(C) Community Programs and Assistance. An RPCC shall provide:

(i) community education programs to inform the public on poison prevention methods;

(ii) information and education to health professionals involved in the management of poison and overdose victims, including information regarding appropriate therapeutic use of medications, their compatibility and stability, and adverse drug reactions and interactions;

(iii) professional and technical assistance to state agencies requesting toxicological assistance; and

(iv) consultation services concerning medical toxicology to health care facilities, health care professionals, law enforcement, and others. An RPCC may set and charge a fee to cover the costs of providing consultation services;

(D) Research Programs. Description of planned and ongoing toxicology poison treatment research;

(E) Information at Birth. Description includes, but is not limited to, a description of how birth information packets are to be distributed within the RPCC's designated region;

(F) Healthcare Treatment Facilities Database. Description of the process for maintaining a comprehensive statewide database of treatment facilities, capabilities, and specializations; and

(G) American Association of Poison Control Centers (AAPCC) Compliance and Accreditation Status. Description of how the RPCC provides services in compliance with AAPCC's criteria, and the current status of the RPCC's AAPCC accreditation.

(2) Awarded Grant Funds. Description of how awarded grant funds will be used consistent with Commission Rule §254.1(g);

(3) Financial Information. Description regarding the financing of RPCC operations, including:

(A) Detailed projected financial information for each of the two state fiscal years following the submission of the strategic plan, including the availability of other funding sources; and

(B) General projected financial information for the third, fourth and fifth state fiscal years following the submission of the strategic plan, including the availability of other funding sources.

(d) Reporting. Each RPCC shall submit financial and performance reports to the Commission at least quarterly and in accordance with Commission Program Policy Statements (PPS). The financial status report shall identify actual costs by budget allocation component. The performance report shall reflect the progress of implementing the strategic plan requirements and functions, including performance measures. RPCCs shall use the Commission's standard financial status and performance reports as designated in a Commission PPS.

**History**
- *Source Note: The provisions of this §254.3 adopted to be effective March 6, 2012, 37 TexReg 1493; amended to be effective April 1, 2015, 40 TexReg 1849.*

##### **1 Tex. Admin. Code § 254.4** Texas Poison Control Network Operations {#sec-254.4 omnilex-key=us-tx-regs-official--title-1--254.4}

(a) Purpose. This rule is intended to optimize the operations of the regional poison control centers (RPCCs) comprising the Texas Poison Control Network (TPCN). This rule authorizes RPCCs to provide services for regions served by other RPCCs in the state in order to maximize efficient use of resources and provide appropriate services in each region.

(b) TPCN Scheduling. To improve the efficiency of the TPCN, network-wide scheduling shall be implemented by the Commission. To establish network-wide scheduling, the Commission in collaboration with the TPCN will:

(1) analyze telecommunications data to identify call volume trends to determine the necessary call-taking capacity for the TPCN during specific times of any 24-hour period;

(2) determine appropriate staffing levels of Specialists in Poison Information (SPI) for the TPCN, and ensure that SPI staffing levels are aligned with demand for the TPCN during any 24-hour period; and

(3) adopt a Commission Program Policy Statement to:

(A) establish and coordinate SPI staffing schedules for the TPCN; and

(B) establish standard operating procedures for RPCCs related to network-wide scheduling and handling of calls for poison control service.

**History**
- *Source Note: The provisions of this §254.4 adopted to be effective March 6, 2012, 37 TexReg 1495; amended to be effective April 1, 2015, 40 TexReg 1849.*

### **Chapter 255** FINANCE

##### **1 Tex. Admin. Code § 255.1** Regional Planning Commission 9-1-1 Emergency Service Fee and State Equalization Surcharge {#sec-255.1 omnilex-key=us-tx-regs-official--title-1--255.1}

(a) 9-1-1 Emergency Service Fee. The Commission shall set by order the 9-1-1 emergency service fee imposed on local exchange access lines and equivalent local exchange access line as defined in Commission Rule §255.4. The 9-1-1 emergency service fee is imposed only on local exchange access lines or equivalent local exchange access lines in areas in which 9-1-1 service is provided by a regional planning commission (RPC) pursuant to an approved regional plan or by an emergency communication district participating in its RPC's approved regional plan.

(b) The amount of the 9-1-1 emergency service fee may not exceed $0.50 a month for each local exchange access line or equivalent local exchange access line. The Commission may set the fee in a different amount in each RPC region based on the cost of providing 9-1-1 service to each region.

(c) State Equalization Surcharge. The Commission shall set by order the equalization surcharge imposed on local exchange access lines or equivalent local exchange access lines as defined in Commission Rule §255.4 and wireless telecommunications connections as defined in Health and Safety Code §771.001. The equalization surcharge is imposed on all local exchange access lines or equivalent local exchange access lines, including those in an area served by an emergency communication district, even if it is not participating in its RPC's approved regional plan. The equalization surcharge is not imposed on wireless telecommunications connections that constitute prepaid wireless telecommunications service subject to Health and Safety Code §771.0712.

(d) The equalization surcharge may not exceed $0.10 a month for each local exchange access line or equivalent local exchange access line and each wireless telecommunications connection that does not constitute prepaid wireless telecommunications service. The equalization surcharge shall be set at a rate that ensures the aggregate of the anticipated surcharges collected for the following 12 months does not exceed the aggregate of the surcharges collected in the preceding 12 months.

(e) Annual Review. The Commission shall review the 9-1-1 emergency service fee set in subsection (a) of this section and the equalization surcharge set in subsection (c) of this section at least once per year.

(f) Effective Date. A change by the Commission in the 9-1-1 emergency service fee or equalization surcharge shall not become effective before the 90th day after the date notice of a change is provided by the Commission to service providers.

**History**
- *Source Note: The provisions of this §255.1 adopted to be effective June 3, 1988, 13 TexReg 2365; amended to be effective December 27, 1991, 16 TexReg 7173; amended to be effective December 24, 1993, 18 TexReg 9180; amended to be effective December 30, 2001, 26 TexReg 10495; amended to be effective August 28, 2005, 30 TexReg 4809; amended to be effective December 6, 2011, 36 TexReg 8227.*

##### **1 Tex. Admin. Code § 255.2** 9-1-1 Service Fee and Surcharge Collection and Remittance {#sec-255.2 omnilex-key=us-tx-regs-official--title-1--255.2}

(a) Service providers shall collect and remit the 9-1-1 service fees authorized by Health and Safety Code §§771.071, 771.0711, and 771.0712 (collectively, 9-1-1 fees) and the equalization surcharge authorized by Health and Safety Code §771.072 (the surcharge) from their customers in accordance with Health and Safety Code Chapter 771. Customers includes subscribers, end-users, and any other person or entity not expressly exempted from the 9-1-1 fees or surcharge by Health and Safety Code §771.074.

(b) A service provider shall collect the 9-1-1 fees and surcharge in the same manner it collects those charges for service, except that the service provider is not required to take legal action to enforce the collection of the fees or surcharges. Service providers have no authority to cease collecting and remitting 9-1-1 fees and surcharges for any non-exempt customer unless and until formally authorized to do so by the Commission.

(c) A service provider that fails to separately state the 9-1-1 fees or surcharge on a customer's bill or combined in an appropriately labeled single line item on the customer's bill is not exempt from the requirements of this section.

**History**
- *Source Note: The provisions of this §255.2 adopted to be effective November 20, 2014, 39 TexReg 8959.*

##### **1 Tex. Admin. Code § 255.3** Emergency Communication District Equalization Surcharge Funding Policy {#sec-255.3 omnilex-key=us-tx-regs-official--title-1--255.3}

(a) The Commission will consider requests for equalization surcharge (the surcharge) funding assistance from an Emergency Communication District (ECD) as authorized by Health and Safety Code §771.072. Administratively complete ECD funding requests will be considered for approval at an open meeting.

(b) An administratively complete funding request must address:

(1) the reasons for the request, including but not limited to demonstrated need for surcharge funding (i.e., financial viability); annual 9-1-1 service fee revenues; current wireline/VoIP fee including the last change to that fee; why existing ECD financial resources (including any federal funds awarded for Next Generation 9-1-1) are insufficient; estimated date of exhaustion of 9-1-1 service fee revenues; to what extent the ECD uses 9-1-1 service fee revenues to pay telecommunicators/dispatchers;

(2) the amount of the surcharge request;

(3) specific description of how the ECD will use surcharge funding (including whether such use is for one-time or recurring costs);

(4) for an emergency request, details about the nature and cause(s) of the emergency including ECD efforts to avoid or mitigate the effects of the emergency and how the requested surcharge addresses the emergency; and

(5) for a municipal ECD (including the Dallas County Sheriff's Office), compliance with Local Government Code Ch. 365, Enforcement of Public Camping Bans, and Comptroller of Public Accounts Rule 20.600 (34 Texas Administrative Code Ch. 20, Subch. I, §20.600).

(c) A condition precedent for Commission consideration of an ECD's administratively complete surcharge funding request is that it be submitted sufficiently in advance to allow the Commission to consider during an open meeting in advance of Commission consideration of its biennial Legislative Appropriations Request (LAR). For an emergency surcharge funding request the condition precedent is waived.

(d) Commission staff will provide a surcharge funding request form that includes the requirements identified in subsection (b) of this section. The form is based on the budget components included in the instructions for completing the Commission's LAR.

(e) Upon receipt of an ECD's request for surcharge, Commission staff will clarify the request with the ECD as necessary; notify the requesting ECD in writing when its request is administratively complete, and recommend to the Commission approval or disapproval of the request based on the requirements in subsection (b) of this section, plus the impact of the request on funding of RPC regional plans and the surcharge account balance, and the Commission's 9-1-1 service funding priorities.

(f) The Commission will consider an ECD's non-emergency surcharge funding request for approval or disapproval during an open meeting held prior to the meeting at which the Commission considers its biennial LAR. An ECD's emergency surcharge funding request will be considered by the Commission at the first open meeting following submission by the ECD of an administratively complete request.

**History**
- *Source Note: The provisions of this §255.3 adopted to be effective November 20, 2014, 39 TexReg 8959; amended to be effective April 17, 2019, 44 TexReg 1835; amended to be effective December 4, 2022, 47 TexReg 7863.*

##### **1 Tex. Admin. Code § 255.4** Definition of a Local Exchange Access Line or an Equivalent Local Exchange Access Line {#sec-255.4 omnilex-key=us-tx-regs-official--title-1--255.4}

(a) The terms "local exchange access line" or "equivalent local exchange access line" mean the physical voice grade telecommunications connection or the cable or broadband transport facilities, or any combination of these facilities, owned, controlled, or relied upon by a service provider, between an end user customer's premises and a service provider's network that, when the digits 9-1-1 are dialed, provides the end user customer access to a public safety answering point through a permissible interconnection to the dedicated 9-1-1 network. In the case of multi-channel services or offerings, channelized by a service provider, each individual channel provided to an end user customer shall constitute a separate "local exchange access line" or "equivalent local exchange access line" (e.g., ISDN-PRI service consists of 24 individual channels.) The terms "local exchange access line" or "equivalent local exchange access line" include lines as defined above that a service provider offers at a fully or partially discounted rate from the provider's base rate to a class of end users (e.g., the service provider's employees/retirees). Such discounting is not a basis for eliminating or reducing the 9-1-1 emergency service fee on such lines, except in the instance of an Emergency Communication District imposing its 9-1-1 emergency service fee based on a percentage in lieu of a flat rate.

(b) The terms "local exchange access line" or "equivalent local exchange access line" do not include coin-operated public telephone equipment, public telephone equipment operated by card reader, commercial mobile radio service that provides access to a paging or other one-way signaling service, a communication channel suitable only for data transmission, a line from a telecommunications service provider to an Internet service provider for the Internet service provider's data modem lines used only to provide its Internet access service and that are not capable of transmitting voice messages, a wireless roaming service or other nonvocal commercial mobile radio service, a private telecommunications system, or a wireless telecommunications connection subject to Texas Health and Safety Code §771.0711.

(c) A service provider using one or more facilities with multiple calling capabilities to serve a single end user customer location that cannot determine the actual number of local exchange access lines or equivalent local exchange access lines being served by such facilities (e.g., Enterprise Voice over Internet Protocol applications), shall assess the 9-1-1 emergency service fee as follows:

Attached Graphic

**History**
- *Source Note: The provisions of this §255.4 adopted to be effective July 11, 1988, 13 TexReg 3291; amended to be effective December 13, 1995, 20 TexReg 10187; amended to be effective June 8, 1999, 24 TexReg 4226; amended to be effective November 21, 1999, 24 TexReg 10045; amended to be effective February 13, 2005, 30 TexReg 543; amended to be effective October 16, 2006, 31 TexReg 8508; amended to be effective October 11, 2007, 32 TexReg 7037.*

## **Part 15** TEXAS HEALTH AND HUMAN SERVICES COMMISSION

### **Chapter 351** COORDINATED PLANNING AND DELIVERY OF HEALTH AND HUMAN SERVICES

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 351.1** Health and Human Services Commission Review of Component Agency Rules {#sec-351.1 omnilex-key=us-tx-regs-official--title-1--351.1}

(a) Purpose. This rule implements the Health and Human Services Commission (HHSC) review of its component agencies' rulemaking. State law empowers HHSC to review all proposed rules of its component agencies for compliance with its coordinated strategic plan, existing statutory authority, rules of other health and human services agencies, and budgetary implications. HHSC may notify its component agencies that it requires withdrawal or amendment of their proposed rules. Texas Civil Statutes, Article 4413(502), §15, describes the procedures for all rules except Medicaid rules. The State Medicaid Office, a function of HHSC, approves and issues Medicaid rules.

(b) Notice by publication. Publication of a proposed rule in the Texas Register is notice to the commission that a component agency proposes to adopt a rule.

(c) Notice of emergency rules. The power of the component agencies to enact emergency rules is not impaired by the commission's review of component agency rules. The commission's review of emergency rules will take place after those emergency rules are published as proposed rules.

(d) Notice of requirement for withdrawal or amendment. Before a component agency adopts a rule, if the commission requires the withdrawal or amendment of the rule, the commission will notify the component agency in writing of its reasons for the request. The commission signifies its approval of a proposed rule by not notifying the component agency in writing that the commission requires the withdrawal or amendment of the rule before the component agency adopts a rule.

(e) Procedures. HHSC will inform the component agencies from time to time of its procedures by which component agencies shall keep HHSC informed as they develop rules.

**History**
- *Source Note: The provisions of this §351.1 adopted to be effective October 1, 1993, 18 TexReg 7921.*

##### **1 Tex. Admin. Code § 351.2** Petition for the Adoption of a Rule {#sec-351.2 omnilex-key=us-tx-regs-official--title-1--351.2}

(a) Purpose. The purpose of this section is to provide procedures for any interested person to request that the Texas Health and Human Services Commission (HHSC) adopt a rule.

(b) Form of the petition.

(1) The petition must be in writing.

(2) The petition must contain the following:

(A) the petitioner's name, address, and organization or affiliation, if any;

(B) a plain and brief description about why a rule or change to an existing rule is needed, required or desirable, including the public good to be served and any effect on those who would be required to comply with the rule;

(C) to the extent feasible to the petitioner, an estimated fiscal impact of the rule on state and local government, separately stated, for each of the first five years of its implementation; and, to the extent feasible to the petitioner, an estimated economic impact on persons required to comply with the rule for each of the first five years the rules are in effect;

(D) a statement of HHSC's authority to adopt the proposed rule;

(E) if the petition proposes to amend an existing rule, the text of the existing rule, with proposed changes clearly indicated within the existing text; and

(F) if the petition is for a new rule, the proposed text of the new rule.

(c) The petition must be addressed to the HHSC Executive Commissioner, and be mailed or hand delivered to HHSC, 4900 North Lamar, Austin, Texas 78751.

(d) The HHSC Executive Commissioner reviews the petition for compliance with the requirements in subsection (b) of this section. The petition may be refused if these requirements are not met.

(1) If the requirements of subsection (b) are met, the HHSC Executive Commissioner consults with the appropriate subject matter experts within HHSC regarding the requested rules proposal.

(2) The HHSC Executive Commissioner denies or accepts the petition in whole or in part.

(A) If the HHSC Executive Commissioner denies the petition, he or she notifies the petitioner in writing and state the reason(s) for the denial.

(B) If the HHSC Executive Commissioner accepts the petition, he or she refers the petition to the appropriate program to initiate the rulemaking process under Government Code, Chapter §2001, Subchapter B, within 60 days from the date of submission of the petition by the petitioner.

**History**
- *Source Note: The provisions of this §351.2 adopted to be effective December 17, 2002, 27 TexReg 11743; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective July 1, 2016, 41 TexReg 4432.*

##### **1 Tex. Admin. Code § 351.3** Recognition of Out-of-State License of a Military Service Member or Military Spouse {#sec-351.3 omnilex-key=us-tx-regs-official--title-1--351.3}

(a) This section uses the same definitions as found in Texas Occupations Code Chapter 55. The requirements and steps in this section follow what Texas Occupations Code Chapter 55 allows or requires. This section does not change or affect any rights given by federal law.

(b) This section applies to all licenses to engage in a business or occupation which the Texas Health and Human Services Commission (HHSC) issues to an individual under authority granted by the laws of the State of Texas. A more specific rule concerning recognition of out-of-state licenses of military service members and military spouses may also apply but only to the extent the more specific rule does not conflict with this rule. Any conflicts between this rule and the more specific rule are resolved in favor of this rule.

(c) A military service member or military spouse may engage in a business or occupation as if licensed in the State of Texas without obtaining the applicable license in Texas if the military service member or military spouse:

(1) currently holds a license similar in scope of practice issued by the licensing authority of another state and is in good standing with that state's licensing authority; and

(2) submits an application to HHSC in the manner required by the HHSC rules governing that business or occupation. HHSC does not charge any application fees, but the applicant may still be responsible for paying costs to third-party vendors, such as costs for criminal background checks. The application must include:

(A) a copy of the member's military orders showing relocation to Texas;

(B) a copy of the military spouse's marriage license, if the applicant is a military spouse; and

(C) a notarized affidavit affirming under penalty of perjury that:

(i) the applicant is the person described and identified in the application;

(ii) all statements in the application are true, correct, and complete;

(iii) the applicant understands the scope of practice for the applicable license in Texas and will not perform outside of that scope of practice; and

(iv) the applicant is in good standing, as defined by subsection (d) of this section, in each state in which the applicant holds or has held an applicable license.

(d) For purposes of this section, a person is in good standing with another state's licensing authority if the person:

(1) holds a license that is current, has not been suspended or revoked, and has not been voluntarily surrendered during an investigation for unprofessional conduct;

(2) has not been disciplined by the licensing authority with respect to the license or person's practice of the occupation for which the license is issued; and

(3) is not currently under investigation by the licensing authority for unprofessional conduct related to the person's license or profession.

(e) Not later than the 10th business day after HHSC receives an application under subsection (c)(2) of this section, HHSC notifies the applicant that:

(1) HHSC recognizes the applicant's out-of-state license;

(2) the application is incomplete; or

(3) HHSC is unable to recognize the applicant's out-of-state license because HHSC does not issue a license similar in scope of practice to the applicant's license.

(f) On receipt of the information required by subsection (c)(2) of this section, HHSC issues a provisional license to the applicant.

(g) A provisional license issued under subsection (f) of this section may not be renewed. The provisional license expires on the earlier of:

(1) the date the agency issues or denies the recognition under subsection (e) of this section; or

(2) the 180th day after the date HHSC issues the provisional license.

(h) HHSC reviews and evaluates the following criteria, if relevant to a Texas license, when determining whether another state issues a license that is similar in scope of practice to a license HHSC issues:

(1) the activities the person is authorized to perform under the out-of-state license;

(2) whether the out-of-state license authorizes the person to work with a similar population and in a similar setting as a Texas license;

(3) whether a similar level of supervision or oversight is required under the out-of-state license; and

(4) any other relevant factor.

(i) A military service member or military spouse may engage in the business or occupation under the authority of this section only for the period during which the military service member or, with respect to a military spouse, the military service member to whom the spouse is married is stationed at a military installation in Texas.

(j) In the event of a divorce or similar event that affects a person's status as a military spouse, the former spouse may continue to engage in the business or occupation under the authority of this section until the third anniversary of the date the spouse submitted the application required by subsection (c)(2) of this section. A similar event includes the death of the military service member or the military service member's discharge from the military. If the former spouse decides to keep practicing in Texas, the former spouse must obtain a Texas license.

(k) The military service member or military spouse shall comply with all applicable laws, rules, and standards of Texas, including applicable Texas Health and Safety Code chapters and all relevant Texas Administrative Code provisions.

**History**
- *Source Note: The provisions of this §351.3 adopted to be
effective December 5, 2019, 44 TexReg 7375; amended to be effective
December 1, 2023, 48 TexReg 6883; amended to be effective December
1, 2025, 50 TexReg 7697.*

##### **1 Tex. Admin. Code § 351.4** Health and Human Services Commission Executive Council {#sec-351.4 omnilex-key=us-tx-regs-official--title-1--351.4}

(a) Statutory authority. Texas Government Code §523.0101 establishes the Health and Human Services Commission Executive Council and requires the Executive Commissioner to adopt rules for its operation.

(b) Applicability of Texas Government Code Chapter 2110. The Health and Human Services Commission Executive Council is not subject to Texas Government Code Chapter 2110.

(c) Applicability of Texas Government Code Chapter 551. The Health and Human Services Commission Executive Council is not subject to Texas Government Code Chapter 551.

(d) Definitions. For the purpose of this section, the following terms are defined as follows:

(1) Executive Commissioner--The executive commissioner of the Health and Human Services Commission.

(2) Executive Council--The Health and Human Services Commission Executive Council.

(3) Health and Human Services system--All state agencies and departments under and including the Health and Human Services Commission.

(4) HHSC--The Health and Human Services Commission.

(e) Purpose. The Executive Council is established to receive public input and advise the Executive Commissioner regarding the operation of the Health and Human Services system.

(f) Tasks. The Executive Council reviews policies related to the operation of the HHS system.

(1) The Executive Council seeks and receives public comment on:

(A) proposed rules;

(B) recommendations of advisory committees established under Subchapter B of this Chapter (relating to Advisory Committees);

(C) legislative appropriations request or other documents related to the appropriations process;

(D) the operation of health and human services programs; and

(E) other items the Executive Commissioner determines appropriate.

(2) The Executive Council does not have the authority to make administrative or policy decisions.

(g) Membership. The members of the Executive Council serve at the pleasure of the Executive Commissioner.

(1) The Executive Council is composed of:

(A) the Executive Commissioner;

(B) the director of each HHSC division established under Texas Government Code §523.0151(a);

(C) the commissioner of each Health and Human Services system agency;

(D) other individuals appointed by the Executive Commissioner.

(2) When appointing members under paragraph (1)(D) of this subsection, the Executive Commissioner will make every effort to ensure that those appointments result in Executive Council membership that includes:

(A) a balanced representation of a broad range of health and human services industry and consumer interests; and

(B) representation from broad geographic regions of the State of Texas.

(3) Members appointed under paragraph (1)(D) of this subsection are subject to the restrictions applicable to service on the Executive Council provided by Texas Government Code §523.0104(b).

(4) Terms. Members appointed under paragraph (1)(D) of this subsection will serve three-year terms.

(A) No more than half of the terms of members appointed under paragraph (1)(D) of this subsection shall expire in a single state fiscal year.

(B) If more than half of the members appointed under paragraph (1)(D) of this subsection have terms beginning in the same state fiscal year, members will draw for two- or three-year terms. Subsequent terms will be for a period of two years.

(C) Members may serve a maximum of two consecutive terms.

(h) Presiding officer. The Executive Commissioner serves as the chair of the Executive Council.

(i) Meetings. The Executive Council meets at the call of the Executive Commissioner, at least quarterly.

(1) A meeting of the individual members of the Executive Council that occurs in the ordinary course of Health and Human Services system operations is not a meeting of the Executive Council, and the provisions of subsection (j) of this section do not apply.

(2) Live video transmissions of each meeting will be publicly available through the HHSC website.

(j) Public notice. The Executive Council will give public notice of the date, time, and place of each meeting.

(k) Quorum. A majority of the members of the Executive Council constitutes a quorum for the transaction of business.

(l) Reimbursement and compensation. Members appointed under subsection (g)(1)(D) of this section may not receive compensation but are entitled to reimbursement for travel expenses incurred while conducting the business of the Executive Council, as provided by the Texas General Appropriations Act.

**History**
- *Source Note: The provisions of this §351.4 adopted to be
effective October 23, 2016, 41 TexReg 8193; amended to be effective
April 1, 2025, 50 TexReg 971.*

##### **1 Tex. Admin. Code § 351.5** Charges for Public Records {#sec-351.5 omnilex-key=us-tx-regs-official--title-1--351.5}

The HHSC adopts by reference General Services Commission rules for charges for public records, 1 TAC §§111.61-111.69, adopted to be effective April 22, 1994. The rules were published in the April 8, 1994, issue of the Texas Register (19 TexReg 2482).

**History**
- *Source Note: The provisions of this §351.5 adopted to be effective September 28, 1994, 19 TexReg 7269.*

##### **1 Tex. Admin. Code § 351.6** Alternative Licensing for Military Service Members, Military Spouses, and Military Veterans {#sec-351.6 omnilex-key=us-tx-regs-official--title-1--351.6}

(a) This section uses the definitions in Texas Occupations Code (TOC) Chapter 55. This section makes rules based on TOC Chapter 55 and does not change or affect rights under federal law.

(b) This section applies to all licenses to engage in a business or occupation which the Texas Health and Human Services Commission (HHSC) issues to an individual under authority granted by the laws of the State of Texas. A more specific rule concerning alternative licensing for military service members, military spouses, and military veterans may also apply but only to the extent the more specific rule does not conflict with this rule. Any conflicts between this rule and the more specific rule are resolved in favor of this rule.

(c) Notwithstanding any other rule, HHSC may issue a license or provisional license to an applicant who is a military service member, military spouse, or military veteran if the military service member, military spouse, or military veteran:

(1) holds a current license issued by another state that is similar in scope of practice to the license in Texas and is in good standing, as defined by subsection (d) of this section, with that state's licensing authority; or

(2) has had the same Texas license within the preceding five years.

(d) For purposes of this section, a person is in good standing with another state's licensing authority if the person:

(1) holds a license that is current, has not been suspended or revoked, and has not been voluntarily surrendered during an investigation for unprofessional conduct;

(2) has not been disciplined by the licensing authority with respect to the license or person's practice of the occupation for which the license is issued; and

(3) is not currently under investigation by the licensing authority for unprofessional conduct related to the person's license or profession.

(e) HHSC may waive any requirement to obtaining a license for an applicant described by subsection (c) of this section after reviewing the applicant's credentials.

(f) If an applicant described by subsection (c) of this section must demonstrate competency to meet the requirements for obtaining the license, HHSC may accept alternate forms of competency including:

(1) proof of a passing score for any national exams required to obtain the occupational license;

(2) proof of duration or hours that meet the professional experience requirement, if specific professional experience is required; and

(3) proof of verified hours related to training experience, if specific training hours are required to obtain the license.

(g) On receipt of a completed application for alternative licensing, HHSC issues a provisional license pending the issuance of a license. A provisional license may not be renewed.

(h) A provisional license issued under subsection (g) of this section expires on the earlier of:

(1) the date HHSC approves or denies the provisional license holder's license application; or

(2) the 180th day after the date HHSC issues the provisional license.

(i) HHSC has 10 business days from the date a military service member, military spouse, or military veteran submits an application for alternative licensing to process the application and issue a license to an applicant who qualifies for the license.

(j) HHSC does not charge for the license. However, the applicant is responsible for any required costs paid to third-party vendors, such as costs for criminal background checks.

**History**
- *Source Note: The provisions of this §351.6 adopted to be
effective December 1, 2023, 48 TexReg 6883; amended to be effective
December 1, 2025, 50 TexReg 7697.*

##### **1 Tex. Admin. Code § 351.7** Agency Submission of Strategic Plans and Legislative Appropriations Requests to Health and Human Services Commission {#sec-351.7 omnilex-key=us-tx-regs-official--title-1--351.7}

(a) Purpose. This rule implements the Health and Human Services Commission (HHSC) authority to require the health and human services agencies listed in Texas Civil Statutes, Article 4413(502), §19, to submit agency strategic plans and budgets to the HHSC for use in the Health and Human Services Coordinated Strategic Plan and Consolidated Budget.

(b) Requirement to Submit. HHSC requires the component agencies to submit agency strategic plans and Legislative Appropriations Requests (LARs) to the commission on the same date the agency strategic plans and LARs are due to the governor and the Legislative Budget Board. From time to time, as the governor's and Legislative Budget Board's due dates are announced, HHSC will announce the dates on which it requires the component agencies to submit draft strategic plans and LARs and explanatory material to it.

**History**
- *Source Note: The provisions of this §351.7 adopted to be effective October 4, 1994, 19 TexReg 7433.*

##### **1 Tex. Admin. Code § 351.11** Reports on Efforts to Streamline and Simplify Delivery of Services {#sec-351.11 omnilex-key=us-tx-regs-official--title-1--351.11}

(a) Applicability. This section applies to state health and human services agencies as defined in Texas Government Code §521.0001.

(b) Quarterly Reports.

(1) The executive head of each health and human services agency shall report quarterly to the governing body of the agency on the agency's efforts to streamline and simplify the delivery of services.

(2) The reports shall be presented at the governing body's regular meetings in March, June, September, and December for efforts during the previous three months. If the governing body of the agency does not hold a meeting in the designated month, then the report shall be presented at the next meeting after the designated month.

(3) Each agency shall submit a copy of the report to the Health and Human Services Commission within 15 days from the date the report was submitted to the agency's governing body.

(c) Report Content and Format.

(1) Information to be included in the report and the report format will be defined by the Health and Human Services Commission, and will include descriptions of activities that relate to streamlining and simplifying of the delivery of services.

(2) Activities that streamline and simplify the delivery of services may include, but are not limited to the following:

(A) consolidation, coordination, streamlining or simplification of administrative or support functions, including use of automation or the Internet;

(B) state/local collaborations or partnerships;

(C) coordination or collaboration initiatives with other state agencies;

(D) cost-efficiency or cost-effectiveness initiatives;

(E) efforts to streamline or simplify service delivery at one or more of the following stages:

(i) planning;

(ii) eligibility determination;

(iii) intake or enrollment;

(iv) outreach, marketing, or education;

(v) implementation;

(vi) case management or referral;

(vii) quality assurance; or

(viii) evaluation;

(F) other efforts that increase consumer satisfaction.

**History**
- *Source Note: The provisions of this §351.11 adopted
to be effective January 3, 1999, 24 TexReg 127; amended to be effective
April 1, 2025, 50 TexReg 971.*

##### **1 Tex. Admin. Code § 351.13** Substitute Care Provider Outcome Standards {#sec-351.13 omnilex-key=us-tx-regs-official--title-1--351.13}

(a) Definitions of Domains. The following words or terms, when used in this section, shall have the following meanings unless the context clearly indicates otherwise.

(1) Medical domain: The medical domain is related to a child's physical health. It includes, but is not limited to, medication management, medication monitoring, and management of acute and chronic medical conditions.

(2) Safety and security domain: The safety and security domain is characterized by the absence of harm to self and others and safety to self, others, and community. This domain includes, but is not limited to, self-harm, aggression, and destructive acts.

(3) Recreational domain: The recreational domain involves the child's ability to choose and participate in age-appropriate play and activities. This domain includes, but is not limited to, hobbies and sports.

(4) Educational domain: The educational domain is related to a child's performance, progress, and conduct in the most appropriate and least restrictive academic or vocational setting.

(5) Mental/behavioral health domain: The mental/behavioral health domain refers to the behavioral and emotional functioning of the child, as well as any psychiatric symptomatology that may be present.

(6) Relationship domain: The relationship domain is characterized by, but is not limited to, a child's ability to trust, to form positive relationships, to function well as part of family unit, as well as by the development and maintenance of age-appropriate social relationships.

(7) Socialization domain: The socialization domain is characterized by, but is not limited to, age-appropriate social behavior, problem-solving, and social skills in various social settings.

(8) Permanence domain: The permanence domain is characterized by a child moving out of a substitute care system and remaining in the least restrictive environment in the community.

(9) Parent and child participation domain: The parent and child participation domain involves, but is not limited to, both the parent's and child's general satisfaction with services, their relationship with service providers, their participation in the treatment or service plan, and improvement in the relationship between the child and the parents.

(b) Other Definitions.

(1) Contracting entity--a health and human services agency (the Texas Juvenile Probation Commission and juvenile boards that contract with the Texas Juvenile Probation Commission, Texas Department of Mental Health and Mental Retardation and local mental health and/or mental retardation authorities, and/or Texas Department of Protective and Regulatory Services) that is responsible for implementing, coordinating, and monitoring outcome standards for substitute care services for children placed in a licensed foster families, foster group homes, or 24-hour residential care facilities. This rule is not applicable to contracts for persons residing in state-operated facilities as listed in §532.001, Health and Safety Code, or persons residing in HCS or ICF/MR facilities under contract with the Texas Department of Mental Health and Mental Retardation under the state's Medicaid program.

(2) Substitute care provider--a person who provides residential care for children for 24 hours a day, including:

(A) a child-care institution, as defined by §42.002, Human Resources Code;

(B) a child-placing agency, as defined by §42.002, Human Resources Code;

(C) a foster group home or foster family home, as defined by §42.002, Human Resources Code; and

(D) an agency group home or agency home, as defined by §42.002, Human Resources Code, other than an agency group home, agency home, or a foster home verified or certified by the Texas Department of Protective and Regulatory Services.

(3) Individualized Treatment Plan--this term has the same meaning as that set out in 25 TAC §402.53 (Definitions in Continuity of Services--Mental Health).

(4) Service Plan--this term has the same meaning as that set out in 40 TAC §700.1331 (Child's Service Plan).

(c) Individualized Treatment Plan or Service Plan. A substitute care provider who receives funds from the state to provide substitute care services to children under the care of the State shall maintain an individualized treatment plan or service plan on each individual child. The plan shall contain specific behavioral goals that are appropriate to the child and the types of services to be provided under the appropriate levels of care. The provider should use the nine domains in subsection (a) of this section in setting the behavioral goals. A child is not required to have a goal in each domain; however, a child may have one or more different goals within the same domain.

(d) Development of Goals. The responsibility of developing goals in a child's individual treatment plan or service plan resides with contracting entity in conjunction with the substitute care provider. The child and family should be involved in the development of treatment goals whenever possible. Once a child has met goal(s) identified in the treatment or service plan, new goals should be developed for the child.

(e) Measurement of Progress toward Goals.

(1) The staff, representative, or third party independent agent of the contracting entity shall monitor the progress of the child in achieving the goals. The frequency of monitoring shall be based upon the current review period appropriate for that specific child's level of care. A six-point scale measures the child's progress towards the achievement of each goal. The staff, representative, or third party independent agent also rates the child. Progress is rated at given intervals on the following six-point scale:

(A) +3 Goal achieved and maintained;

(B) +2 Substantial improvement in behavior identified in the goal;

(C) +1 Some improvement in behavior identified in the goal;

(D) 0 No decline or improvement in behavior identified in the goal;

(E) -1 Some worsening in behavior identified in the goal; and

(F) -2 Substantial worsening in behavior identified in the goal.

(2) The child's progress will be assessed on each identified goal within the nine domains listed in subsection (a) of this section. If the child has shown improvement in 50% or more of the identified goal(s) as measured by a positive rating (+1, +2, or +3) during the monitoring period, the child will be considered to be progressing towards the goal(s).

(3) The outcome of a substitute care provider's service delivery shall be measured by the percentage of children under its care that are considered to have made progress towards their goals, as defined in paragraph (2) of this subsection.

(4) When a contracting entity has an option in placing a child in substitute care, the entity shall consider whether the children in a particular substitute care provider's care are progressing as defined in paragraph (2) of this subsection.

**History**
- *Source Note: The provisions of this §351.13 adopted to be effective August 23, 1998, 23 TexReg 8419.*

##### **1 Tex. Admin. Code § 351.15** Information Regarding Community-based Services {#sec-351.15 omnilex-key=us-tx-regs-official--title-1--351.15}

(a) Applicability. This section applies to the following state health and human services agencies: Texas Department on Aging (TDoA); Texas Department of Human Services (TDHS); Texas Department of Health (TDH); Texas Department of Mental Health and Mental Retardation (TDMHMR); Texas Department of Protective and Regulatory Services (TDPRS).

(b) Information to be provided to long-term care clients. A state health and human services agency that delivers long-term care services must provide to each long-term care client; to the client's legally authorized representative (LAR) (as defined in §241.151, Health and Safety Code); and, if the LAR is not a member of the client's family and it is possible, to at least one family member, information about all long-term care and long-term support options appropriate to the client's needs that are currently available. The information must be provided before the agency allows the client to be placed in a care setting, including a nursing home, intermediate care facility for the mentally retarded, or institution for the mentally retarded licensed or operated by the Department of Protective and Regulatory Services, to receive care or services provided by the agency or by a person under an agreement with the agency. The information must be provided in a manner designed to maximize the client's understanding of all available options. The information must include community-based options and other options available through other agencies and providers and must be easily understood by the client, the client's family member, or the client's LAR. The agency must obtain a signed statement from the client or the client's LAR that confirms that the client was informed about community-based care and support options. The agency must retain a copy of each statement in the client's records. If the client, or the client's LAR, selects an option that is not immediately available for any reason, the agency must provide assistance in placing the client's name on a waiting list for that option. A competent adult client (a client who has not been adjudicated as incapacitated to manage his or her personal affairs) may withhold consent to provide notification to the client's family member or other LAR. If the client is in the conservatorship of a health and human services agency, the information must be provided to the client's agency caseworker and foster parents, if applicable.

(c) Programs affected. The requirements of subsection (b) of this section apply to the following agencies and programs:

(1) TDHS--Nursing Facility Care; Hospice Program; Swing Bed Program; Program of All-inclusive Care for the Elderly (PACE Waiver Program); Adult Foster Care; Consumer Managed Personal Assistance Services; Home Delivered Meals; Day Activity and Health Services; Emergency Response; In-Home Family Support Program; Medically Dependent Children Program (MDCP); Primary Home Care; Residential Care; Respite Care; Special Services to Persons with Disabilities; Special Services to Persons with Disabilities 24-Hour Attendant Care, Community Based Alternatives Waiver Program; Community Living Assistance and Support Services Waiver Program Deaf-Blind Multiple Disabilities; Waiver Program; and the Consolidated Waiver Program.

(2) TDH--Texas Health Steps; Texas Health Steps-Comprehensive Care Program (CCP); Children with Special Health Care Needs Services Program (CSHCN); Respite Grant Programs.

(3) TDMHMR--all long-term care services.

(4) TDPRS--all long-term care services.

(d) Reporting. By November 1 of each year, agencies that operate the programs listed in subsection (c) of this section must report to the Texas Legislature and to the Health and Human Services Commission the number of clients served in community-based settings and the number of clients served in residential-care settings in the programs during the previous fiscal year. By November 1 of each year, DPRS must report to the Texas Legislature and to the Health and Human Services Commission the number of Adult Protective Services clients placed in community-based and nursing home services and the number of Child Protective Services children by type of placement. By November 1 of each year, TDoA must report to the Texas Legislature and to the Health and Human Services Commission the number of clients served in the Options for Independent Living program.

**History**
- *Source Note: The provisions of this §351.15 adopted to be effective February 13, 2000, 25 TexReg 717; amended to be effective August 4, 2002, 27 TexReg 6685.*

##### **1 Tex. Admin. Code § 351.17** Right to Correct Incorrect Personal Information {#sec-351.17 omnilex-key=us-tx-regs-official--title-1--351.17}

(a) An individual may ask the Health and Human Services Commission (HHSC) to correct information HHSC collects about that individual (personal information).

(b) HHSC will review the request and decide, in accordance with this chapter, if the information should be corrected.

(c) This chapter does not apply when there are other requirements that an individual give HHSC updated and corrected information or when HHSC has another applicable change process. Also, individuals are encouraged to use other informal processes such as telephone calls, in-person discussion, and email to correct information.

**History**
- *Source Note: The provisions of this §351.17 adopted to be effective October 6, 2002, 27 TexReg 9307.*

##### **1 Tex. Admin. Code § 351.19** Requesting a Correction of Personal Information {#sec-351.19 omnilex-key=us-tx-regs-official--title-1--351.19}

(a) A request to correct information collected about an individual must be in writing and must:

(1) identify the individual requesting the correction,

(2) identify the information to be corrected,

(3) state why the information is incorrect,

(4) include any evidence that shows the information is incorrect,

(5) state what correction is requested; and

(6) include a return address, telephone number or email address at which the individual can be contacted.

(b) If the Health and Human Services Commission (HHSC) cannot identify the individual, locate the information in question, or determine what correction is requested, HHSC may contact the individual to clarify the request. If HHSC cannot clarify the request, the request will be denied.

**History**
- *Source Note: The provisions of this §351.19 adopted to be effective October 6, 2002, 27 TexReg 9307.*

##### **1 Tex. Admin. Code § 351.20** Use of Certified Promotoras in Medicaid {#sec-351.20 omnilex-key=us-tx-regs-official--title-1--351.20}

The Health and Human Services Commission shall require health and human services agencies to use certified promotoras to the extent possible in health outreach and education programs for recipients of medical assistance under Chapter 32, Human Resources Code.

**History**
- *Source Note: The provisions of this §351.20 adopted to be effective January 9, 2003, 28 TexReg 59.*

##### **1 Tex. Admin. Code § 351.21** Where to Send a Request for Correction of Personal Information {#sec-351.21 omnilex-key=us-tx-regs-official--title-1--351.21}

(a) Individuals must send requests for corrections of personal information to the Health and Human Services Commission (HHSC) division that originally collected the information in question.

(b) Individuals who do not know where to send a request should send it to HHSC's Records Manager/Coordinator at 4900 North Lamar Boulevard, 4th Floor, Austin, Texas 78751-2316.

**History**
- *Source Note: The provisions of this §351.21 adopted to be effective October 6, 2002, 27 TexReg 9307.*

##### **1 Tex. Admin. Code § 351.23** Review of Requests for Correction of Personal Information {#sec-351.23 omnilex-key=us-tx-regs-official--title-1--351.23}

(a) The Health and Human Services Commission (HHSC) will decide whether information collected about an individual should be corrected. HHSC will notify the individual of the decision in writing within 60 days of the receipt of the request for correction. HHSC may extend this period for an additional 30 days. The HHSC will notify the individual of the extension in writing.

(b) Records may not be destroyed or altered to make a correction. HHSC will add the correct information to the record with the incorrect information and make a notation that the correct information supercedes the incorrect information.

(c) HHSC will not review information as provided in this chapter if HHSC previously reviewed the information to determine its accuracy under a different review process. Examples of other review processes include personnel grievance hearings, client fair hearings, formal appeals, informal dispute resolution, and informal reconsideration.

(d) If HHSC receives a request for correction from a person other than the individual who is the subject of the information, HHSC will not correct the information unless the subject of the information agrees the earlier information is incorrect or HHSC can independently determine the information is incorrect.

**History**
- *Source Note: The provisions of this §351.23 adopted to be effective October 6, 2002, 27 TexReg 9307.*

##### **1 Tex. Admin. Code § 351.101** Leasing Department Real Property {#sec-351.101 omnilex-key=us-tx-regs-official--title-1--351.101}

(a) Commercial lease. A commercial lease may be executed for surplus real property in accordance with Texas Health and Safety Code, §533.084. A commercial lease may be executed for nonsurplus real property in accordance with Texas Health and Safety Code, §533.087.

(1) A commercial lease proposal must be submitted by the department or by the General Land Office for approval by the Texas Mental Health and Mental Retardation Board (board).

(2) A commercial lease proposal must be advertised in accordance with applicable state law. The advertisement must summarize the lease proposal, state where a copy of the lease proposal and the criteria for awarding the lease can be obtained, and provide the name and address of a person to whom interested parties may submit bids for the lease.

(3) The commissioner or designee reviews any commercial lease bid received based upon whether the rent meets or exceeds the prevailing rate established by the General Land Office, the published criteria, and any other factors deemed appropriate for any or all bids.

(4) The commissioner or designee submits for board approval all bids meeting the published criteria along with his or her recommended bid.

(5) Prior to the awarding any competitively bid lease that has a term exceeding five years, the board must be apprised of all bids received.

(6) The board may reject any and all bids submitted by the commissioner or designee.

(b) Public benefit lease. A public benefit lease, as defined, may be executed for nonsurplus real property in accordance with Texas Health and Safety Code, §533.087.

(1) Board's approval. The board may execute a public benefit lease and may reduce the rent and/or waive advertising and competitive bidding requirements.

(2) Commissioner's approval. The commissioner is authorized to execute a public benefit lease and to reduce the rent and/or waive advertising and competitive bidding requirements when:

(A) the duration of the proposed lease term does not exceed five years; and

(B) the prevailing market rate of the real property is less than $50,000.

(c) Proceeds. Proceeds from all leases are deposited to the credit of the department in the Texas capital trust fund and used in accordance with the Texas Health and Safety Code, §533.084(b), unless otherwise provided for by state or federal law.

**History**
- *Source Note: The provisions of this §351.101 adopted to be effective April 27, 2003, 28 TexReg 3347; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 351.501** Definitions relating to child abuse, neglect, and exploitation {#sec-351.501 omnilex-key=us-tx-regs-official--title-1--351.501}

The following words and terms, when used in this section, §351.503, and §351.505, have the following meanings, unless the context clearly indicates otherwise:

(1) Abuse--any intentional, knowing, or reckless act or omission by an employee, volunteer, or other individual working under the auspices of a facility that causes or may cause emotional harm or physical injury, whether substantial or not, to or the death of a child the facility serves. Abuse includes both physical and sexual abuse.

(2) Allegation--a report by a person who believes or has knowledge that a child has been or may be abused, neglected, or exploited in a facility.

(3) Child--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.

(4) Emotional harm--an injury to a child as evidenced by an observable physical, mental, or emotional impairment in the child's psychological growth, development, or functioning.

(5) Exploitation--the illegal or improper use of a child or of the resources of a child served by a facility for monetary or personal benefit, profit, or gain by an employee, volunteer, or other individual working under the auspices of a facility.

(6) Facility--an entity licensed, operated, certified, or registered by a state agency that provides care and services to a child, the Texas School for the Deaf, and the Texas School for the Blind and Visually Impaired.

(7) "Persons who work under the auspices of a facility" include:

(A) an employee or volunteer of the facility;

(B) a person under contract with the facility;

(C) a director, owner, operator, or administrator of a facility;

(D) anyone who has responsibility for a child in a facility's care;

(E) anyone who has unsupervised access to a child in a facility's care;

(F) anyone who regularly or routinely lives at the facility;

(G) any other person permitted by act or omission to have access to a child in the facility's care; and

(H) a university or college student working at the facility, including student teachers and interns.

(8) Intentional, knowing, or reckless--an act or omission is intentional, knowing, or reckless if the person committing it:

(A) deliberately causes or may cause physical injury or emotional harm, whether substantial or not, to the child;

(B) knows or should know that physical injury or emotional harm, whether substantial or not, to the child is a likely result of the act or omission; or

(C) consciously disregards an unjustifiable risk of physical injury or emotional harm, whether substantial or not, to the child.

(9) Neglect--a negligent act or omission by an employee, volunteer, or other person working under the auspices of a facility, 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 substantial physical injury to, or the death of, a child served by the facility.

(10) Omission--a failure to act.

(11) Physical injury--any bodily harm, including, but not limited to, scrapes, cuts, welts, and bruises.

(12) Professional--an individual who is licensed or certified by the state or who is an employee of a facility licensed, certified, or operated by the state and who, in the normal course of official duties or duties for which a license or certification is required, has direct contact with children.

(13) Preponderance of evidence--the greater weight of the evidence, evidence that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

(14) Report--a report that alleged or suspected abuse, neglect, or exploitation of a child has occurred or may occur.

(15) Reporter--a person filing a report of alleged abuse, neglect, or exploitation. The "Reporter" may be the victim of the alleged abuse, neglect, or exploitation, a third party filing a report on behalf of the alleged victim, or both.

(16) Sexual abuse--

(A) conduct harmful to a child's mental, emotional, or physical welfare;

(B) conduct that constitutes the offense of indecency with a child under §21.11 of the Penal Code, sexual assault under §22.011 of the Penal Code, or aggravated sexual assault under §22.021 of the Penal Code;

(C) failure to make a reasonable effort to prevent sexual conduct harmful to a child;

(D) compelling or encouraging the child to engage in sexual conduct, as defined in §43.01 of the Penal Code;

(E) causing, permitting, encouraging, engaging in, or allowing the photographing, filming, or depicting of the child, if the person knew or should have known that the resulting photograph, film, or depiction of the child is obscene, as defined in §43.21 of the Penal Code, or pornographic;

(F) causing, permitting, encouraging, engaging in, or allowing a sexual performance by a child, as defined in §43.25 of the Penal Code.

(17) State agency--an agency under the umbrella of HHSC that operates, licenses, certifies, or registers a facility in which a child is located; the Texas School for the Blind and Visually Impaired; and the Texas School for the Deaf.

(18) Substantial emotional harm--an observable physical, mental, or emotional impairment in a child's psychological growth, development, or functioning that is significant enough to require treatment by a medical or mental health professional.

(19) Substantial physical injury--bodily harm or damage to a child for which a prudent person would conclude that the injury required professional medical attention. These injuries include, but are not limited to, dislocated, fractured, or broken bones; brain damage; subdural hematoma; internal injuries; lacerations requiring stitches; second and third degree burns; poisoning; and concussions.

(20) Substantial risk--a real and significant possibility or likelihood.

**History**
- *Source Note: The provisions of this §351.501 adopted to be effective January 12, 2003, 28 TexReg 439.*

##### **1 Tex. Admin. Code § 351.503** Minimum Standards for Investigations {#sec-351.503 omnilex-key=us-tx-regs-official--title-1--351.503}

(a) Applicability. This section applies to investigations, conducted under §261.401 of the Family Code, of alleged child abuse, neglect, or exploitation in facilities operated, licensed, certified, or registered by a state agency.

(b) Formal investigation. On receiving an oral or written allegation or report of abuse, neglect or exploitation, a state agency must immediately initiate a formal investigation to determine the accuracy of the report and to evaluate the need for protective services for the child. A state agency should consider the following steps (which may vary according to circumstances) in conducting its investigation:

(1) a face-to-face interview with the alleged victim to evaluate immediate and long-term risk. The investigator should make every effort to establish face-to-face contact with the alleged victim, including a diligent search to locate the alleged victim, if the victim's whereabouts are unknown;

(2) make a reasonable effort to locate and inform each parent of a child who is the alleged victim of abuse, neglect, or exploitation, of the nature of the allegation and of the fact that the interview was conducted.

(3) a face-to-face interview with the person(s) thought to have knowledge of the circumstances related to the alleged abuse, neglect or exploitation, including anyone responsible for the ongoing care of a child;

(4) collecting relevant information such as:

(A) the nature, extent, and cause of the abuse, neglect, or exploitation;

(B) the identity of the person responsible for the abuse, neglect, or exploitation;

(C) the names and conditions of the other individual(s) in the home;

(D) the adequacy of the environment; and

(E) the relationship of the alleged victim to the person(s) responsible; and

(5) assigning a priority rating to the investigation based on the information received and the degree of severity and immediacy of the alleged harm to the child.

(c) Priorities for investigation. A state agency, as defined in §351.501 of this title (relating to Definitions Relating to Child Abuse Neglect and Exploitation):

(1) must ensure that the facility establishes a system for informing persons who work under the auspices of the facility of their obligations to report suspected abuse, neglect, and exploitation in accordance with the state agency's rules and/or policies;

(2) must establish a system for assigning reasonable timelines for initiating and for completing an investigation of a report of abuse, neglect or exploitation that is based on the degree to which the alleged victim is believed to be in immediate danger of physical harm and the degree to which relevant evidence may be lost in relation to the initiation date of the investigation:

(A) at any time the alleged victim may incur physical injury or evidence may be lost pending the initiation of an investigation, the investigation must be initiated within 24 hours of receipt of the report;

(B) notwithstanding the potential risk of physical injury to the child or loss of evidence, all investigations must be completed within 30 calendar days of receipt of the report; provided, however, that the completion date for an investigation may be extended beyond 30 days for good cause as documented in the investigation report;

(3) may conclude an investigation and retain any applicable immunity granted pursuant to the Family Code, §261.106, at any time that the agency determines that the report of abuse, neglect or exploitation is frivolous or patently without a factual basis or, the conduct reported, even if true, does not constitute abuse, neglect or exploitation; and

(4) must refer any report of abuse, neglect or exploitation received by the agency but not investigated by the agency to the appropriate law enforcement or state agency that should conduct the investigation.

(d) Collection of evidence. The collection of evidence should include, but is not limited to:

(1) a full statement of the allegation(s);

(2) interview(s) with the alleged victim, alleged perpetrator, and all witnesses or persons who may provide collateral information that may be relevant to the investigation;

(A) interviews must be conducted in a timely manner so as to maximize the information obtained through the interview;

(B) any person authorized to conduct an investigation of abuse, neglect, or exploitation should coordinate investigative activities and share information with other appropriate agencies, if any, in order to minimize the number of interviews of the victim;

(3) written statements signed and dated, respectively, by the alleged victim, alleged perpetrator, and other collateral witnesses interviewed by the investigator; if the alleged victim, alleged perpetrator or other witness is unable or unwilling to write and/or sign a statement, the investigation report must include a statement to this effect;

(4) documentation of a physical examination of the alleged victim and medical treatment rendered, as needed;

(5) photographs should be taken whenever there are allegations of physical injuries;

(6) diagrams, as needed;

(7) the original or computer generated notes made during the investigation, videotapes and audiotapes of interviews, in order to preserve and document the chain of evidence; and

(8) any other physical evidence that is relevant to the investigation.

(e) Burden of proof. After the evidence has been collected and evaluated, the investigative staff must determine whether or not to confirm the allegation. To confirm an allegation, the investigative staff must find the abuse, neglect, and exploitation is supported by a preponderance of the evidence. The following classifications are recommended for investigative findings that are not confirmed:

(1) Unconfirmed means it is reasonable to conclude that abuse, neglect, or exploitation did not occur or is unlikely to occur.

(2) Inconclusive means there is insufficient evidence to support or refute an allegation. This occurs when an allegation of abuse, neglect, or exploitation could not be confirmed, unconfirmed, or unfounded because there is a lack of witnesses or other relevant evidence.

(3) Unfounded means that an allegation of abuse, neglect, or exploitation is spurious or patently without factual basis.

(f) Content of the investigative report. An investigative report should, to the greatest extent possible, be written concisely, clearly, factually, and objectively. The following elements should be included in the report:

(1) a brief description of the allegation that identifies the alleged victim, alleged perpetrator(s), and any witnesses;

(2) date and time the incident occurred and when it was reported;

(3) a summary of investigative procedures;

(4) a summary and an analysis of the evidence, the investigative finding(s), and recommendations; and

(5) supporting documents such as witness statements, injury reports, and diagrams, as appropriate.

(6) The investigating state agency must submit the report, and any recommendations to the district attorney or other appropriate law enforcement agency, if requested to do so by law enforcement, the agency determined further legal action is warranted, or the agency confirmed that the alleged victim was abused, neglected, or exploited and it appears that there is a criminal violation.

(g) Referrals to appropriate agencies. A state agency that receives a report of abuse, neglect, or exploitation that is not within the agency's jurisdiction must refer the matter to the agencies listed below, as appropriate:

(1) to the Texas Department of Protective and Regulatory Services, if

(A) the alleged or suspected abuse, neglect, or exploitation involves a person responsible for the care, custody, or welfare of the alleged victim;

(B) the alleged or suspected abuse, neglect or exploitation of a person receiving services in a facility operated by MHMR, in or from a community center or a local mental health or mental retardation authority, or through a program that contracts with MHMR, a community center, or local mental health or mental retardation authority;

(2) to the appropriate law enforcement agency, if the allegation does not involve a caretaker or the allegation appears to involve an incident that violates the Penal Code; the state agency must send its final report to law enforcement, if the investigation indicates a crime has been committed; and

(3) to the state agency that operates, licenses, certifies, or registers the facility in which the alleged abuse, neglect, or exploitation occurred, may have occurred, or is likely to occur.

(h) Administrative review of investigation findings. A state agency should develop and implement policies and procedures to resolve complaints as described in §261.309 of the Family Code.

(i) Confidentiality of Reports. A state agency may disclose the allegation, report, records, communications, and working papers used or developed in the investigative process, including the resulting final report regarding abuse, neglect, or exploitation, only as provided by §261.201 of the Family Code, concerning the confidentiality of information.

(j) Qualifications and training of investigator(s). A state agency must establish minimum qualifications for all abuse, neglect, and exploitation investigators.

(1) In determining the appropriate qualifications, a state agency must include a minimum number of hours of annual professional training for investigators of suspected child abuse, neglect, or exploitation. The annual professional training curriculum should include information concerning:

(A) physical abuse and neglect, including distinguishing physical abuse from ordinary injuries;

(B) psychological and emotional abuse and neglect;

(C) exploitation;

(D) sexual abuse;

(E) available treatment resources;

(F) the incidence and types of reports of victim abuse, neglect, or exploitation that are received by the investigating agencies, including information concerning false reports;

(G) interview techniques, including setting appropriate limits on the number of interviews and examinations of a suspected victim and the taping (audio or video) of a suspected victim without interruption; and

(H) procedures to preserve evidence, including the original or computer generated notes made during the investigation and videotapes and audiotapes of interviews.

(2) The investigator must have knowledge of Penal Code sections that relate to abuse, neglect, and exploitation.

(3) The investigator must know how to develop written statements and other documentary records related to the interview process and how to handle evidence, for example, collection and preservation of physical evidence.

**History**
- *Source Note: The provisions of this §351.503 adopted to be effective January 12, 2003, 28 TexReg 439.*

##### **1 Tex. Admin. Code § 351.504** Caseload Reduction Plan for Adult Protective Services {#sec-351.504 omnilex-key=us-tx-regs-official--title-1--351.504}

(a) Applicability. This section applies to the development by the executive commissioner of HHSC of a Caseload Reduction Plan (the Plan) for the Adult Protective Services (APS) Division of the Department of Family and Protective Services as required by Texas Government Code §526.0401.

(b) Purpose of the Plan. The purpose of the Plan is to reduce caseloads for adult protective services caseworkers to a level that does not exceed professional caseload standards recommended by the National Adult Protective Services Association by more than five cases per worker by January 1, 2011. The Plan must include annual targets for caseload reduction.

(c) Components of the Plan. The Plan will include:

(1) APS program description.

(2) Assessment of program and demographic data using historic and forecasted information.

(3) Internal and external influences and impact of those influences.

(4) APS policy and operational factors influencing caseloads.

(5) Identification of options to reduce caseloads.

(6) Program impact of caseload reduction options.

(7) Resource needs and cost impact for caseload reduction options.

(8) Consultation with stakeholders.

(d) Report. Beginning in 2006, not later than December 31 of each even numbered year, a report will be prepared on the APS Caseload Reduction Plan including the amount of funding necessary in the next biennium to fully implement the Plan. The report will be provided to the governor, lieutenant governor, speaker of the house of representatives, and the presiding officer of each house and senate standing committee having jurisdiction over adult protective services.

**History**
- *Source Note: The provisions of this §351.504 adopted to
be effective November 15, 2005, 30 TexReg 7431; amended to be effective
April 1, 2025, 50 TexReg 971.*

##### **1 Tex. Admin. Code § 351.505** Information Collection; Uniform Data Collection Procedures {#sec-351.505 omnilex-key=us-tx-regs-official--title-1--351.505}

Each state agency must prepare and keep on file a complete written report of each investigation the agency conducts under Chapter 261 of the Family Code. Each state agency must compile, maintain, and make available statistics on the incidence of child abuse, neglect, and exploitation in each facility it investigates. The statistics also must be forwarded to the Texas Department of Protective and Regulatory Services to be compiled. The rules and policies adopted and implemented by a state agency must, to the greatest extent practicable, provide a uniform method of collecting and analyzing data on suspected child abuse, neglect, or exploitation in a facility. A state agency must use the following procedures when analyzing data on abuse, neglect, and exploitation investigations:

(1) Sort by program classification the number of investigations completed. Examples of program classification include state hospitals, private psychiatric facilities, and maternity homes.

(2) Sort by program classification the number of confirmed investigations that are completed.

(3) Sort all completed investigations according to disposition for example confirmed, unconfirmed, inconclusive, or unfounded.

(4) Sort all completed confirmed investigations by whether the identity of the perpetrator is known or unknown.

(5) Develop a confirmation rate by dividing the sum of all confirmed investigations by the sum of all completed investigations with dispositions of confirmed, unconfirmed, and inconclusive or other dispositions classification used by the state agencies. Unfounded cases are not included in this calculation.

(6) Calculate the average number of days to complete investigations and sort by program.

(7) Calculate the number of investigations referred to law enforcement.

(8) Calculate the number of investigations pending at the end of the report period.

(9) Calculate the number of disciplinary actions resulting from confirmed findings.

(10) Calculate the number of deaths that occur as a result of child abuse or neglect in the affected facilities.

(11) Calculate the number of appeals and the number of cases appealed that are overturned.

(12) Investigations with multiple allegations are to be counted once, based on the highest level of injury. For example, if a single incident involves one allegation of physical abuse that resulted in serious physical injury and a second allegation of verbal abuse, the investigation should be counted only once, as an instance of physical abuse resulting in serious physical injury. In other words, the sum of completed investigations involving serious injuries, non-serious injuries, verbal/emotional abuse and neglect, and exploitation should not exceed the total number of cases completed.

**History**
- *Source Note: The provisions of this §351.505 adopted to be effective January 12, 2003, 28 TexReg 439.*

##### **1 Tex. Admin. Code § 351.507** Adverse Licensing, Listing, or Registration Decisions by Health and Human Services Agencies {#sec-351.507 omnilex-key=us-tx-regs-official--title-1--351.507}

(a) This section applies only to the final licensing, listing, or registration decisions of a health and human services agency as defined by Texas Government Code §521.0001, with respect to a person under the law authorizing the agency to regulate the following types of persons:

(1) a youth camp licensed under Chapter 141, Health and Safety Code;

(2) a home and community support services agency licensed under Chapter 142, Health and Safety Code;

(3) a hospital licensed under Chapter 241, Health and Safety Code;

(4) an institution licensed under Chapter 242, Health and Safety Code;

(5) an assisted living facility licensed under Chapter 247, Health and Safety Code;

(6) a special care facility licensed under Chapter 248, Health and Safety Code;

(7) an intermediate care facility licensed under Chapter 252, Health and Safety Code;

(8) a chemical dependency treatment facility licensed under Chapter 464, Health and Safety Code;

(9) a mental hospital or mental health facility licensed under Chapter 577, Health and Safety Code;

(10) a child-care facility or child-placing agency licensed under or a family home listed or registered under Chapter 42, Human Resources Code; or

(11) an adult day-care facility licensed under Chapter 103, Human Resources Code.

(b) This section applies only to an agency decision that has become final after all opportunities for appeal have been exhausted or waived.

(c) Each health and human services agency that regulates a person described by subsection (a) of this section must maintain a record of:

(1) each application for a license, including a renewal license or a license that does not expire, a listing, or a registration that is denied by the agency under the law authorizing the agency to regulate the person; and

(2) each license, listing, or registration that is revoked, suspended, or terminated by the agency under the applicable law.

(d) The record of an application required by subsection (c)(1) of this section must be maintained until the tenth anniversary of the date the application is denied. The record of the license, listing, or registration required by subsection (c)(2)of this section must be maintained until the tenth anniversary of the date of the revocation, suspension, or termination.

(e) The record required under subsection (c) of this section must include:

(1) the name and address of the applicant for a license, listing, or registration that is denied as described by subsection (c)(1) of this section;

(2) the name and address of each person listed in the application for a license, listing, or registration that is denied as described by subsection (c)(1) of this section;

(3) the name of each person determined by the applicable regulatory agency to be a controlling person of an entity for which an application, license, listing, or registration is denied, revoked, suspended, or terminated as described by subsection (c) of this section;

(4) the specific type of license, listing, or registration that was denied, revoked, suspended, or terminated by the agency;

(5) the reasons for the denial, revocation, suspension, or termination; and

(6) the period the denial, revocation, suspension, or termination was effective.

(f) Each health and human services agency that regulates a person described in subsection (a) of this section each month must provide a copy of the records maintained under this section to each other health and human services agency that regulates a person described by subsection (a) of this section. The Health and Human Services Commission (HHSC) may access the records provided or maintained under this section.

**History**
- *Source Note: The provisions of this §351.507 adopted to
be effective March 1, 2012, 37 TexReg 1283; amended to be effective
April 1, 2025, 50 TexReg 971.*

##### **1 Tex. Admin. Code § 351.701** Unrelated Donor Umbilical Cord Blood Bank Program {#sec-351.701 omnilex-key=us-tx-regs-official--title-1--351.701}

(a) Purpose. This section establishes a program to award funding for an unrelated donor umbilical cord blood bank in Texas.

(b) Funding objectives. The funding awarded pursuant to this section is intended to improve public health in Texas through obtaining efficiently delivered services for gathering and retaining unrelated umbilical cord blood from live births for the primary purpose of making the cord blood available for transplantation purposes.

(c) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

(1) Blood bank--A facility that:

(A) obtains a human umbilical cord blood donation from an unrelated donor;

(B) is licensed, certified, or accredited as a blood bank, blood and tissue center, laboratory, or other health care facility and is authorized by:

(i) state and/or federal law, rule, or regulation;

(ii) the American Association of Blood Banks; and

(iii) International Organization of Standardization to collect, process, and preserve human umbilical cord blood donations; and

(C) is operated in compliance with professionally recognized standards regarding quality and safety of collection of human umbilical cord blood donations, including the American Association of Blood Banks and International Organization of Standardization.

(2) Commission--The Texas Health and Human Services Commission or its designee.

(3) Contractor--The recipient of the funding awarded under this section.

(4) Donation--Human umbilical cord blood obtained from an unrelated donor and resulting from a live birth.

(5) Services--Umbilical cord blood collection, storage, preservation, and/or processing services provided by a blood bank.

(6) Unrelated donor--A person who:

(A) is legally authorized or competent;

(B) voluntarily provides a donation; and

(C) is not related by affinity or consanguinity (as determined under Chapter 573, Texas Government Code) to the recipient of the donation.

(7) Unrelated Donor Umbilical Cord Blood Bank Program or Program--The Contractor-operated public blood bank program that provides for gathering and retaining umbilical cord blood for transplantation to recipients who are unrelated to the blood donors.

(d) General conditions of the funding. The funding awarded pursuant to this section, and any extension, continuation, or addition to such funding, is subject to:

(1) the availability of appropriated state funds;

(2) an award process as established by the commission;

(3) the requirements of Texas Government Code Chapter 521, and any administrative rules adopted thereunder, including Chapter 391 of this title (relating to Purchase of Goods and Services by the Texas Health and Human Services Commission);

(4) the requirements of the contract executed by the commission with the Contractor as required under subsection (f) of this section; and

(5) an audit by the commission, the State Auditor's Office, or an entity approved by the commission of the Contractor's performance of the services or compliance with applicable auditing standards and State and federal law;

(e) Applicant eligibility criteria. To be eligible for the funding awarded under this section, a blood bank must, at a minimum, demonstrate:

(1) the ability to establish, operate, and maintain an unrelated donor umbilical cord blood bank in Texas and to provide related services, including experience operating similar facilities in this state.

(2) possession of an appropriate, current license, certification, or certificate of good standing to operate as a blood bank from the American Association of Blood Banks and International Organization of Standardization;

(3) a plan to continue the operation of the unrelated donor umbilical cord blood bank beyond the term of the contract required by subsection (f) of this section, including an appropriate financial plan;

(4) the financial stability and resources sufficient to ensure the achievement of the funding objectives and operation of the unrelated donor umbilical cord blood bank;

(5) appropriate skills, qualifications, financial resources, and experience necessary to perform the services and provide the deliverables (both of which are specified in the contract entered under subsection (f) of this section) in an efficient and cost-effective manner, with the highest degree of quality and responsiveness within the context of the requirements of the contract; and

(6) policies relating to non-discrimination regarding the selection and treatment of donors and recipients of donations on the basis of race, sex, national origin, or ability to pay.

(f) Contract. The Contractor must enter into a contract with the commission that requires, among other things, the Contractor to:

(1) operate and maintain an unrelated donor umbilical cord blood bank in this state in accordance with standards described in subsection (c)(1) of this section;

(2) gather, collect, and preserve umbilical cord blood from live births only;

(3) comply with any financial or reporting requirements imposed on the Contractor specified in the contract; and

(4) comply with all applicable federal and state laws and their implementing regulations.

**History**
- *Source Note: The provisions of this §351.701 adopted
to be effective August 5, 2003, 28 TexReg 5987; amended to be effective
June 22, 2016, 41 TexReg 4435; amended to be effective April 1, 2025,
50 TexReg 971.*

##### **1 Tex. Admin. Code § 351.703** Grant Program for Regional and Local Health Care Programs {#sec-351.703 omnilex-key=us-tx-regs-official--title-1--351.703}

(a) Purpose. This section implements Subtitle C, Title 2, Health and Safety Code, Chapter 75, Subchapter E , which authorizes the Health and Human Services Commission to implement a competitive grant program to support the initial establishment and operation of one or more regional or local health care programs for employees of small employers.

(b) Grant objectives. The grant or grants awarded under this section are intended to assist with the establishment or operation of regional and local health care programs created to:

(1) Improve the health of employees of small employers and their families by improving the employees' access to health care and by reducing the number of those employees who are uninsured;

(2) Reduce the likelihood that those employees and their families will require services from publicly-funded programs such as Medicaid and CHIP;

(3) Contribute to economic development by helping small businesses remain competitive with a healthy workforce and health care benefits that will attract employees; and

(4) Encourage innovative solutions for providing and funding health care services and benefits.

(c) Definitions. The following definitions are used throughout this section.

(1) Commission--The Health and Human Services Commission.

(2) Employee--An individual employed by an employer. The term includes a partner of a partnership and the proprietor of a sole proprietorship.

(3) Grantee--A recipient of a grant awarded under this section.

(4) Local health care program--A program operating in one county and established to provide health care services or benefits to employees of participating small employers under Health and Safety Code, Chapter 75, Subchapter B, Regional or Local Health Care Program.

(5) Regional health care program--A program operating in two or more counties and established to provide health care services or benefits to employees of participating small employers under Health and Safety Code, Chapter 75, Subchapter B, Regional or Local Health Care Program.

(6) Small Employer--A person who employed an average of at least two employees, but not more than 50 employees, on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.

(d) General conditions of the grant. The grants awarded under this section, and any extension, continuation, or addition to such grants, are subject to:

(1) The availability of appropriated state funds. A grant may be cancelled either before or after the Commission awards a grant if funding for the grant is terminated, withdrawn, or if sufficient funds are not appropriated to the Commission;

(2) A competitive award process established by the Commission;

(3) The requirements of the contract executed by the Commission with the grantee as required under subsection (j) of this section; and

(4) The grant award period specified in the requests for proposals or other notice of potential grant awards issued by the Commission.

(e) Eligible applicants. The following entities are eligible to apply for grant funds:

(1) The Commissioners court or courts of the county or counties participating in a local or regional health care program;

(2) The healthcare system or hospital district of the county, or counties, participating in a regional or local health care program;

(3) A nonprofit organization or such other entity as is described in the requests for proposals or other notice of potential grant award issued by the Commission that:

(A) Plans or operates the program under a contract with the commissioners court or courts, as applicable; or

(B) Is an entity in which the county or counties, or a program affiliated with the county or counties, participate or that is established or designated by the commissioners court or courts, as applicable, to plan or operate the program.

(f) Eligible expenditures. Grant applications must meet the requirements and specifications set forth in requests for proposals issued by the Commission. Projects eligible for grant funding may include:

(1) Identifying the target population of small employers for participating in the program;

(2) Designing the service or benefit structure and delivery mechanisms;

(3) Designing and implementing wellness and educational programs to improve the general health of the targeted population;

(4) Conducting actuarial analysis;

(5) Conducting related surveys or focus groups;

(6) Developing and maintaining a provider network;

(7) Provider contracting;

(8) Marketing to small employers and employees;

(9) Administrative costs for the initial operation of regional or local health care programs; and

(10) Other functions determined by the Commission to support the initial establishment or operation of a regional or local health care program that accomplishes the objectives in subsection (b) of this section.

(g) Application and selection process. An applicant must submit its application for a grant directly to the Commission in the time and manner specified by the Commission. An application received after the deadline will not be considered. A panel selected by the Commission will review and evaluate eligible, complete, and timely applications in accordance with the evaluation methodology published in the request for proposal or other notice of potential grant award issued by the Commission.

(h) Selection criteria. In selecting grant recipients, the Commission shall consider:

(1) The extent to which the regional or local health care program proposed by the applicant accomplishes the purposes established by Chapter 75 of the Health and Safety Code;

(2) The extent to which the regional or local health care program meets the objectives established by §75.101 Health and Safety Code; and

(3) Other criteria established by the Commission as described in the specific request for proposal or other notice of potential grant awards issued by the Commission.

(i) Performance objectives. Grantees will be required to meet performance objectives established by the Commission.

(j) Contract execution. Grantees will be required to execute a contract with the Commission on mutually agreeable terms and conditions in the manner and format prescribed by the Commission. Grant funds may not be distributed to a grantee before the execution of a contract with the Commission. The contract will require that the grantee comply with:

(1) The performance objectives established by the Commission and monitored through progress reports;

(2) Any financial and reporting requirements established by the Commission;

(3) All applicable policies and procedures; and

(4) All applicable federal and state laws and their implementing regulations.

(k) Project review and evaluation report. The Commission will review all grant projects before September 1, 2008. Grantees must participate in this review in the manner prescribed by the Commission, which may include on-site visits and the submission of data, documents, and reports. The Commission will submit a report by December 1, 2008, to the Governor, Lieutenant Governor, and speaker of the House of Representatives that includes:

(1) An evaluation of the success of regional and local health care programs in accomplishing the purposes of Health and Safety Code, Chapter 75, Subchapter E; and

(2) The Commission's recommendations for any legislation needed to facilitate or improve regional and local health care programs.

(l) Expiration. This rule expires September 1, 2009.

**History**
- *Source Note: The provisions of this §351.703 adopted to be effective December 25, 2007, 32 TexReg 9594.*

##### **1 Tex. Admin. Code § 351.751** Integrated eligibility services call centers {#sec-351.751 omnilex-key=us-tx-regs-official--title-1--351.751}

(a) Applicability. This section applies to integrated eligibility services call centers established by the Health and Human Services Commission ("HHSC") after June 1, 2004.

(b) Definitions. The following words and phrases, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

(1) "Applicant" means a person who asks HHSC to determine, certify, or recertify his or her eligibility for a service.

(2) "Call center" means a place where HHSC or an HHSC contractor receives and responds to applicants' telephone inquiries and processes information in order to assist HHSC to determine, certify, or recertify an applicant's eligibility for a service.

(3) "Contractor" means a public or private entity that is awarded a contract to provide call center services under this section.

(4) "Service" means a benefit or assistance provided under any of the following programs:

(A) the Children's Health Insurance Program ("CHIP") established under Chapter 62, Health and Safety Code;

(B) the Temporary Assistance to Needy Families ("TANF") program established under Chapter 31, Human Resources Code;

(C) the Medicaid program established under Chapter 32, Human Resources Code;

(D) the nutritional assistance programs established under Chapter 33, Human Resources Code, including the Food Stamp Program;

(E) long-term care services, as defined by Section 22.0011, Human Resources Code;

(F) community-based support services identified or provided in accordance with Texas Government Code §546.0152; and

(G) any other health and human services program that HHSC determines is appropriate to include as part of a call center service.

(c) Establishment and number of call centers.

(1) HHSC must establish at least one but not more than four call centers if HHSC determines that it is cost-effective to establish such call centers subject to subsections (c)(2) through (c)(4) of this section.

(2) Subject to subsection (d), HHSC must contract with at least one but not more than four private entities for the operation of call centers identified in subsection (c)(1) of this section, unless HHSC determines that contracting is not cost effective.

(3) HHSC must operate any call center identified under subsection (c)(1) of this section that it determines is not cost effective to contract with a private entity to operate.

(4) All eligibility calls, including overflow calls, will be processed through call centers located in Texas.

(5) Each call center established under this section must provide translation and interpretation services as required by federal law.

(6) HHSC will conduct one or more public hearings around the state before it establishes any call center under this section.

(d) Contracting requirements.

(1) Any contract for call center services will be competitively procured in compliance with Section 2155.144, Government Code; HHSC administrative rules codified at 1 TAC chapter 391; and applicable federal laws and regulations.

(2) Any contract for call center services that HHSC awards under this section must include, at a minimum:

(A) Performance requirements that describe the specific services to be performed by a contractor;

(B) Terms and conditions that are expressly required by state or federal laws, rules or regulations; and

(C) Any other provision that HHSC determines is necessary or beneficial to the State of Texas including, but not limited to, HHSC's Uniform Contract Terms and Conditions published on the HHSC Internet web site.

(e) Performance standards and measurement.

(1) HHSC must develop performance standards to govern the operation of each call center that address, at a minimum:

(A) The call center's ability to serve consumers in a timely manner;

(B) Quality and accuracy of eligibility determinations conducted through the call center;

(C) Courtesy, friendliness, training, and knowledge of call center staff;

(D) The call center's management of consumer and public complaints;

(E) Consumer satisfaction with the call center's services;

(F) The accessibility and usability of eligibility call center web sites, including compliance with 1 TAC §206.2, Accessibility and Usability of State Web Sites, and Texas Government Code §525.0252; and

(G) Any other standard that HHSC determines is necessary to ensure the desired or expected levels and quality of call center services.

(2) HHSC must develop mechanisms for measuring the operation of each call center and to evaluate call centers' compliance with all performance standards.

(3) HHSC may establish performance standards and measurements for a contracted call center under a competitive procurement

(4) HHSC will publish all call center performance standards and measures.

(f) Establishment of eligibility by personal appearance.

(1) This subsection does not apply to an applicant whose eligibility must be established or who must be certified or recertified through a face-to-face interview under federal law or to an applicant for CHIP services.

(2) An applicant may request the opportunity to appear in person to establish initial eligibility for a service or for certification or recertification purposes.

(3) If an applicant wishes to appear personally to assist HHSC to determine, certify, or recertify his or her eligibility for a service, the applicant must notify HHSC or the health and human services agency that administers the program. An applicant may provide notice in any of the following ways:

(A) In person at an office of the health and human services agency that administers the program;

(B) In writing by using materials that HHSC provides for this purpose or by any other written method;

(C) By telephone using a toll-free number that HHSC acquires for this purpose; or

(D) By an electronic method that HHSC creates for this purpose, including facsimile and electronic mail.

(4) HHSC or its contractor will schedule a personal appearance upon request unless HHSC can establish the applicant's eligibility without a personal appearance. The personal appearance will be scheduled at a time and location that reasonably accommodates the applicant's schedule, location, and circumstances.

**History**
- *Source Note: The provisions of this §351.751 adopted
to be effective August 8, 2004, 29 TexReg 7297; amended to be effective
April 1, 2025, 50 TexReg 971.*

### **Chapter 352** MEDICAID AND CHILDREN'S HEALTH INSURANCE PROGRAM PROVIDER ENROLLMENT

##### **1 Tex. Admin. Code § 352.1** Purpose {#sec-352.1 omnilex-key=us-tx-regs-official--title-1--352.1}

(a) The enrollment of providers in Medicaid and the Children's Health Insurance Program (CHIP) is conducted under the authority of the Texas Health and Human Services Commission (HHSC), and is administered by HHSC or its designee.

(b) The enrollment requirements in this chapter are consistent with:

(1) Title 42, Part 455, of the Code of Federal Regulations (CFR); and

(2) Texas Government Code Chapter 532.

(c) Additional enrollment requirements may be found in the following authorities:

(1) Title 1, Texas Administrative Code (TAC), Part 15 (relating to Texas Health and Human Services Commission).

(2) Policy publications issued by HHSC or a health and human services agency, such as:

(A) the Texas Medicaid Provider Procedures Manual;

(B) each Medicaid managed care program provider or operating manual;

(C) each CHIP provider or operating manual;

(D) each health and human services agency program handbook; and

(E) each policy update and policy explanation (such as provider banners, bulletins, and quarterly updates).

(3) 40 TAC Part 1 (relating to Department of Aging and Disability Services).

(4) 40 TAC Part 2 (relating to Department of Assistive and Rehabilitative Services).

(5) 25 TAC Part 1 (relating to Department of State Health Services).

**History**
- *Source Note: The provisions of this §352.1 adopted
to be effective December 31, 2012, 37 TexReg 9899; amended to be effective
April 1, 2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 352.3** Definitions {#sec-352.3 omnilex-key=us-tx-regs-official--title-1--352.3}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--An individual or an entity that submits an enrollment application to enroll or re-enroll as a provider or to enroll a new practice location in Medicaid or CHIP as described in paragraph (7) of this section.

(2) CHIP--The Texas State Children's Health Insurance Program established under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa, et seq.) and Chapter 62 of the Health and Safety Code.

(3) Change of ownership--A change of ownership related to a partnership, sole proprietorship, corporation, or leasing arrangement as defined in 42 CFR §489.18.

(4) Designee--An entity to which HHSC has delegated certain functions for provider enrollment purposes. A designee may include:

(A) an HHSC contractor;

(B) a health and human services agency; or

(C) a managed care organization (MCO) that contracts with HHSC under Medicaid or CHIP.

(5) Disenroll--To end a provider's participation in Medicaid or CHIP before the end of the provider's current enrollment period.

(6) Enrollment--The process for applying to become a provider, including contracting and procedures for determining whether to grant approval to enter into a provider agreement.

(7) Enrollment application--Documentation required by HHSC that an applicant submits to HHSC to enroll or re-enroll as a provider or to add a new practice location. An enrollment application includes supplemental forms used to add practice locations for Medicare-enrolled or limited-risk providers, as determined by HHSC.

(8) Enrollment type--A type of enrollment category that identifies how the applicant seeks to enroll, such as individual, group, performing provider, or facility.

(9) Entity--A provider group, a facility, an organization, or a business registered with the Texas Secretary of State.

(10) Health care practitioner--A physician or non-physician licensed or certified health care provider who is recognized by federal law or by HHSC as a provider who can bill for medical services or benefits, submits orders or referrals for services to treat, certifies medical need for services, or supervises other individuals providing services and benefits to Medicaid or CHIP recipients.

(11) Health and human services agency--A state agency identified in Texas Government Code §521.0001(5).

(12) HHSC--The Texas Health and Human Services Commission or its designee.

(13) Medicaid--The medical assistance program, a state and federal cooperative program authorized under Title XIX of the Social Security Act that pays for certain medical and health care costs for people who qualify.

(14) National Provider Identifier--A unique ten-digit identification number assigned by the Centers for Medicare & Medicaid Services.

(15) Overpayment--A payment made to a provider in excess of the amount that is allowable for the service provided, plus any accrued interest.

(16) Person with an ownership or control interest--Has the meaning assigned by §371.1003 of this title (relating to Definitions).

(17) Provider--An applicant that successfully completes the enrollment process outlined in this chapter and in Chapter 371 of this title (relating to Medicaid and Other Health and Human Services Fraud and Abuse Program Integrity).

(18) Provider agreement--An agreement between HHSC and a provider wherein the provider agrees to certain contract provisions as a condition of participation.

(19) Re-enrolling provider--A provider that submits an enrollment application before the end of the provider's current enrollment period.

(20) Recipient--A person receiving benefits under Medicaid or CHIP.

(21) Surety bond--One or more bonds issued by one or more surety companies under 31 U.S.C. §§9304 - 9308 and 31 CFR parts 223, 224, and 225.

(22) Terminate--To take an adverse action against a provider whose participation in Medicaid or CHIP has ended at federal or state agency direction due to violation of state rules or federal regulations.

(23) Third-party billing vendor--A vendor registered with HHSC or its designee that submits claims for reimbursement on behalf of a provider.

**History**
- *Source Note: The provisions of this §352.3 adopted
to be effective December 31, 2012, 37 TexReg 9899; amended to be effective
May 2, 2016, 41 TexReg 3095; amended to be effective April 1, 2025,
50 TexReg 823.*

##### **1 Tex. Admin. Code § 352.5** Provider Enrollment Requirements {#sec-352.5 omnilex-key=us-tx-regs-official--title-1--352.5}

(a) Enrollment in Medicaid or CHIP is required for:

(1) a person or an entity seeking to provide health care services or benefits in Medicaid or CHIP; and

(2) a health care practitioner who:

(A) refers, orders, prescribes, certifies, or renders health care services or benefits for eligible recipients; or

(B) supervises or is supervised by another health care practitioner who performs the functions described in subparagraph (A) of this paragraph.

(b) Prerequisites for enrollment.

(1) Prior to submitting an enrollment application, the applicant or re-enrolling provider must conduct an internal review to confirm that neither the applicant or the re-enrolling provider, nor any of its employees, owners, managing partners, or contractors (as applicable), have been excluded from participation in a program under Title XVIII, XIX, or XXI of the Social Security Act.

(2) The applicant must apply and receive a National Provider Identifier (NPI) in accordance with §1128J(e) of the Social Security Act (42 U.S.C. §1320a-7k(e)). If the applicant provides a service that is not recognized for an NPI, the state may, in its sole discretion, issue an atypical provider identifier to the applicant.

(3) An applicant or re-enrolling provider must meet the criteria in §352.13 of this chapter (relating to Medicare Certification or Enrollment in Medicare).

(4) An applicant or re-enrolling provider must not be terminated from participation in Medicare, another state's medical assistance program, or CHIP.

(5) An applicant or re-enrolling provider must be licensed, certified, or accredited to the extent required by federal and state laws, regulations, statutes, rules, and policy. The applicant or re-enrolling provider must be in good standing related to licensure, certification, and accreditation to be considered for enrollment.

(6) An applicant or re-enrolling provider that is considered out-of-state must meet the requirements for out-of-state provider eligibility in accordance with §352.17 of this chapter (relating to Out-of-State Medicaid Provider Eligibility).

(7) An applicant or re-enrolling provider must consent to criminal background checks, including fingerprinting when required to do so by state or federal law.

(8) As applicable, an applicant or re-enrolling provider must obtain a surety bond pursuant to §352.15 of this chapter (relating to Surety Bond Requirements) for each enrollment location.

(9) An applicant or re-enrolling provider must ensure that, if a third-party billing vendor is used for claim submission, the third-party billing vendor is registered with HHSC pursuant to §354.1187 of this title (relating to Responsibilities of Third-Party Billing Vendors).

(10) An applicant or re-enrolling provider must consent to unscheduled and unannounced pre- and post-enrollment site visits conducted by HHSC or its designee.

(11) An applicant or re-enrolling provider must certify that it has a compliance program containing the core elements as established by the Secretary of Health and Human Services referenced in §1866(j)(8) of the Social Security Act (42 U.S.C. §1395cc(j)(8)), as applicable.

(c) A provider must submit a new enrollment application and comply with §352.7(a) of this chapter (relating to Applying for Enrollment) at least every five years. The time frame for re-enrollment is based on the provider's screening level unless HHSC determines a shorter enrollment period.

**History**
- *Source Note: The provisions of this §352.5 adopted to be effective December 31, 2012, 37 TexReg 9899.*

##### **1 Tex. Admin. Code § 352.7** Applying for Enrollment {#sec-352.7 omnilex-key=us-tx-regs-official--title-1--352.7}

(a) To apply for enrollment or re-enrollment, an applicant or re-enrolling provider must:

(1) meet the requirements outlined in §352.5 of this chapter (relating to Provider Enrollment Requirements) and Chapter 371 of this title (relating to Medicaid and Other Health and Human Services Fraud and Abuse Program Integrity);

(2) complete an enrollment application in accordance with the criteria specified by HHSC or its designee and the instructions contained in the application;

(3) submit a supplemental application form or forms for any new practice location in accordance with the criteria specified by HHSC and the instructions contained in the form;

(4) submit an application fee for each practice location, as described in subsection (b) of this section;

(5) submit documentation to show proof of registration and good standing with the Texas Comptroller of Public Accounts, the Texas Secretary of State, or any other documentation requested by HHSC or its designee, as applicable;

(6) provide a copy of a surety bond obtained pursuant to §352.5 of this chapter;

(7) certify that the information contained in the application is true and accurate to the best of the applicant's or re-enrolling provider's knowledge; and

(8) submit a signed provider agreement with each enrollment application. By signing the provider agreement, the applicant or re-enrolling provider acknowledges that the applicant or re-enrolling provider will comply with all terms and conditions of the provider agreement.

(b) If an applicant or re-enrolling provider must pay an application fee pursuant to 42 CFR §455.460 in an amount determined by 42 CFR §424.514, the applicant or re-enrolling provider must submit:

(1) the application fee; or

(2) documentation showing proof of payment of the application fee within the current enrollment period (as defined by 42 CFR §424.515) under Title XVIII or any other state's program under Title XIX or Title XXI of the Social Security Act.

(c) An applicant or re-enrolling provider must provide all additional information requested by HHSC or its designee in connection with the processing of the enrollment application, by the deadline and in the manner indicated in the request. If the applicant or re-enrolling provider fails to comply with this requirement, the enrollment application will be closed.

(d) If an applicant or re-enrolling provider fails to meet any of the requirements in this section, HHSC or its designee will consider the enrollment application incomplete and the application will not be processed.

**History**
- *Source Note: The provisions of this §352.7 adopted to be effective December 31, 2012, 37 TexReg 9899; amended to be effective May 2, 2016, 41 TexReg 3095.*

##### **1 Tex. Admin. Code § 352.9** Screening Levels {#sec-352.9 omnilex-key=us-tx-regs-official--title-1--352.9}

(a) HHSC assigns an applicant or re-enrolling provider a screening level of "Limited," "Moderate," or "High" based on:

(1) the federal screening level for the type of provider as provided by 42 CFR §424.518, if applicable;

(2) the federal screening level for the type of provider as provided by 42 CFR §455.450; or

(3) HHSC's assessment of:

(A) the risk level for potential fraud, waste, or abuse associated with the type of provider or the geographical area; or

(B) other factors as determined by HHSC, including:

(i) a change in business structure or organization;

(ii) past practices and circumstances; and

(iii) access to care in a geographical area.

(b) For a screening level of "Limited" or "Moderate" assigned under subsection (a) of this section, HHSC may assign a higher screening level based on provider, type of provider, or geographical area. For the requirements outlined in subsection (c) of this section, HHSC may rely on other validated screenings performed by Medicare, as provided for by 42 C.F.R. §455.410.

(c) Requirements for screening levels.

(1) Limited.

(A) For a provider assigned a screening level of "Limited," HHSC:

(i) verifies that a provider meets any federal or state requirements for that type of provider;

(ii) verifies licensure certifications, including licensure certifications in Texas and any other state; and

(iii) conducts database checks pursuant to 42 CFR §455.436.

(B) A provider assigned a screening level of "Limited" must submit a new enrollment application at least every five years, unless HHSC determines a shorter enrollment period.

(2) Moderate.

(A) For a provider assigned a screening level of "Moderate," HHSC:

(i) performs the screening described in paragraph (1)(A) of this subsection; and

(ii) performs at least one unscheduled and unannounced pre- and post-enrollment site visit in accordance with 42 CFR §455.432.

(B) A provider assigned a screening level of "Moderate" must submit a new enrollment application at least every five years, unless HHSC determines a shorter enrollment period.

(3) High.

(A) For a provider assigned a screening level of "High," HHSC:

(i) performs the screening described in paragraph (2)(A) of this subsection;

(ii) conducts a criminal background check; and

(iii) requires the submission of a set of fingerprints if applicable under 42 CFR §455.434.

(B) A provider assigned a screening level of "High" must submit a new enrollment application at least every three to five years, unless:

(i) HHSC determines a shorter enrollment period; or

(ii) the provider meets the requirements of §371.1007 of this title (relating to Screening Levels).

(d) In addition to the screening requirements provided under this section, additional screening may be performed under §371.1009 of this title (relating to Verifications Required for Each Screening Level).

(e) A screening level assigned under subsection (a)(3) of this section is within the sole discretion of HHSC and is not subject to administrative review.

**History**
- *Source Note: The provisions of this §352.9 adopted to be effective December 31, 2012, 37 TexReg 9899; amended to be effective May 2, 2016, 41 TexReg 3095.*

##### **1 Tex. Admin. Code § 352.11** Provider Enrollment Determinations {#sec-352.11 omnilex-key=us-tx-regs-official--title-1--352.11}

(a) HHSC or its designee, in its sole discretion, approves, conditionally approves, or denies each enrollment application submitted in accordance with the requirements of this chapter. HHSC or its designee provides notice of the enrollment determination to the applicant or re-enrolling provider.

(1) Approval. If an enrollment application is approved, the approval is for a time-limited period of participation as specified in the provider agreement or notice of the enrollment determination.

(2) Conditional approval. An enrollment application may be approved with conditions as specified in the notice of the enrollment determination.

(3) Denial. If an enrollment application is denied, HHSC will provide notice of the enrollment determination by certified mail to the address of record on the enrollment application. The reason or reasons for denial are specified in the notice.

(b) In rendering the enrollment determination, HHSC or its designee will consider the following:

(1) the applicant's or re-enrolling provider's compliance with the requirements of this chapter;

(2) the applicant's or re-enrolling provider's current or previous participation in Medicaid and CHIP;

(3) whether access to care is sufficient; and

(4) the recommendation of HHSC's Office of Inspector General made pursuant to Chapter 371 of this title (relating to Medicaid and Other Health and Human Services Fraud and Abuse Program Integrity).

(c) HHSC or its designee may deny an enrollment application for:

(1) failure to meet the requirements of participation for the category of service provided;

(2) failure to repay an overpayment;

(3) termination from participation in the Medicare program;

(4) exclusion from participation in Medicaid or CHIP;

(5) failure to comply with Chapter 371 of this title;

(6) failure to provide true and accurate information during the enrollment process;

(7) failure to cooperate with required unscheduled and unannounced pre- and post-enrollment site visits; or

(8) other reasons as determined by HHSC in its sole discretion.

(d) If an enrollment application is denied, the applicant or re-enrolling provider may request that the determination be reviewed by:

(1) HHSC OIG, if the reason for denial is based on subsection (b)(4) of this section pursuant to §371.1015(c) of this title (relating to Types of Provider Enrollment Recommendations) and follow the process outlined in §371.1011 of this title (relating to Recommendation Criteria); or

(2) HHSC or its designee, if the denial is based on any other reason, as follows:

(A) The applicant or re-enrolling provider must submit a request for an informal desk review within 30 calendar days from the date of the notice.

(B) The request for an informal desk review must be made in writing, state the basis for disagreement, and describe any mitigating circumstances that would support a reconsideration of the enrollment determination.

(C) Upon conclusion of the resulting informal desk review, HHSC or its designee will send a written notice of the final enrollment determination to the address of record on the enrollment application.

(D) The final enrollment determination is not subject to further administrative review or reconsideration.

**History**
- *Source Note: The provisions of this §352.11 adopted to be effective December 31, 2012, 37 TexReg 9899.*

##### **1 Tex. Admin. Code § 352.13** Medicare Certification or Enrollment in Medicare {#sec-352.13 omnilex-key=us-tx-regs-official--title-1--352.13}

(a) To participate in Medicaid or CHIP, an applicant or re-enrolling provider must be actively enrolled in Medicare or certified by Medicare (if applicable), or both, unless otherwise specified by HHSC or its designee or specifically exempted in subsection (b) of this section.

(b) HHSC or its designee, in its sole discretion, may exempt an applicant or re-enrolling provider from subsection (a) of this section if:

(1) the type of practice or service is not covered by Medicare;

(2) an HHSC rule or other state agency's rule expressly exempts an applicant or re-enrolling provider from Medicare enrollment or Medicare certification; or

(3) the applicant's or re-enrolling provider's exclusion from participating in Medicaid or CHIP will prevent recipients from having access to needed medical services.

(c) This section is applicable only to applicants or re-enrolling providers that:

(1) have not been terminated or excluded from Medicare, any other state's medical assistance program, or CHIP; and

(2) meet the requirements in §352.5 of this chapter (relating to Provider Enrollment Requirements).

**History**
- *Source Note: The provisions of this §352.13 adopted to be effective December 31, 2012, 37 TexReg 9899.*

##### **1 Tex. Admin. Code § 352.15** Surety Bond Requirements {#sec-352.15 omnilex-key=us-tx-regs-official--title-1--352.15}

(a) A surety bond may be required for each enrolled location pursuant to the requirements of this section if:

(1) a provider or type of provider has been identified by federal or state agencies to have a significant history of, or potential for, fraud, waste, or abuse; or

(2) HHSC, in its sole discretion, has determined that a provider, based on the provider's conduct, including falsifying information or any material misrepresentation, will be subject to this requirement.

(b) If a surety bond is required, a provider must maintain a current surety bond to continue participation in Medicaid or CHIP.

(c) HHSC or its designee will not reimburse a provider for items or services furnished during a period in which the provider does not have a current surety bond, if a surety bond is required.

(d) An entity operated or administered by a federal, state, local, or tribal government agency is exempt from the requirements of subsection (a) of this section if, during the preceding five years, the entity has not had any uncollected overpayments associated with Medicaid or CHIP.

(e) A surety bond required pursuant to this section must:

(1) include a statement that the surety company issuing the bond:

(A) is licensed by the Texas Department of Insurance; and

(B) maintains a valid Certificate of Authority with the United States Department of Treasury in accordance with 31 U.S.C. §§9304 - 9308 and Title 31 of the Code of Federal Regulations parts 223, 224, and 225 as a surety;

(2) state on the face of the bond the Parties, to include:

(A) the provider as Principal;

(B) HHSC as Obligee; and

(C) the surety company (and its heirs, executors, administrators, successors, and assignees, jointly and severally) as Surety; and

(3) include an effective date and expiration date for the bond.

(f) The amount of the surety bond must be no less than $50,000.

(g) The surety bond must provide that:

(1) the Surety is liable for uncollected overpayments determined to have occurred during the term of the bond, regardless of when the overpayments are discovered;

(2) the Surety remains liable:

(A) for an additional two years after the date of expiration of the bond for overpayments that occurred during the term of the bond, if the provider fails to furnish a new, updated, or renewed bond that meets the requirements of this section; and

(B) for an additional two years after the date the provider's participation is terminated for services provided during the bond period, if HHSC or its designee terminates the provider agreement;

(3) the Surety's liability to HHSC is not affected, diminished, or concluded by:

(A) any action by the provider or the Surety to terminate, reduce, or limit the scope or term of the bond;

(B) any action by the provider to:

(i) cease operation;

(ii) sell or transfer any assets or ownership interest;

(iii) file for bankruptcy; or

(iv) fail to pay the Surety; or

(C) the provider's failure to exercise available appeal rights under Medicaid or CHIP;

(4) the Surety's liability may be terminated only if:

(A) the Surety furnishes HHSC with written notice of its intent to terminate the bond no later than 30 days before the effective date of termination; or

(B) the provider furnishes HHSC with a new bond that meets the requirements of this section; and

(5) the Surety guarantees that upon receipt of written request for payment by HHSC or its designee, the Surety will reimburse Medicaid or CHIP the amount in the request up to the stated amount of the bond.

**History**
- *Source Note: The provisions of this §352.15 adopted to be effective December 31, 2012, 37 TexReg 9899.*

##### **1 Tex. Admin. Code § 352.17** Out-of-State Medicaid Provider Eligibility {#sec-352.17 omnilex-key=us-tx-regs-official--title-1--352.17}

(a) This section applies only to an out-of-state Medicaid applicant or re-enrolling provider. An applicant or re-enrolling provider is considered out-of-state if:

(1) the physical address where services are or will be rendered is located outside the Texas state border and within the United States;

(2) the physical address where the services or products originate or will originate is located outside the Texas state border and within the United States when providing services, products, equipment, or supplies to a Medicaid recipient in the state of Texas; or

(3) the physical address where services are or will be rendered is located within the Texas state border, but:

(A) the applicant or re-enrolling provider maintains all patient records, billing records, or both, outside the Texas state border; and

(B) the applicant or re-enrolling provider is unable to produce the originals or exact copies of the patient records or billing records, or both, from the location within the Texas state border where services are rendered.

(b) An applicant or re-enrolling provider that is considered out-of-state under subsection (a) of this section is ineligible to participate in Medicaid unless HHSC or its designee approves the applicant or re-enrolling provider for enrollment on the basis of a determination that the applicant or re-enrolling provider has provided, is providing, or will provide services under one or more of the following criteria:

(1) The services are medically necessary emergency services provided to a recipient who is located outside the Texas state border, in which case the enrollment will be time-limited for an appropriate period as determined by HHSC or its designee, not to exceed one year.

(2) The services are medically necessary services provided to a recipient who is located outside the Texas state border, and in the expert opinion of the recipient's attending physician or other provider, the recipient's health would be or would have been endangered if the recipient were required to travel to Texas, in which case the enrollment will be time-limited for an appropriate period as determined by HHSC or its designee, not to exceed one year.

(3) The services are medically necessary services that are more readily available to a recipient in the state where the recipient is located, in which case the enrollment will be time-limited for an appropriate period as determined by HHSC or its designee.

(4) The services are medically necessary to a recipient who is eligible on the basis of participation in an adoption assistance or foster care program administered by the Texas Department of Family and Protective Services under Title IV-E of the Social Security Act, in which case the enrollment may be time-limited for an appropriate period as determined by HHSC or its designee.

(5) The services are medically necessary and have been prior authorized by HHSC or its designee, and documented medical justification indicating the reasons the recipient must obtain medical care outside Texas is furnished to HHSC or its designee before providing the services and before payment, in which case the enrollment may be time-limited for an appropriate period as determined by HHSC or its designee.

(6) The services are medically necessary and it is the customary or general practice of recipients in a particular locality within Texas to obtain services from the out-of-state provider, if the provider is located in the United States and within 50 miles driving distance from the Texas state border, or as otherwise demonstrated on a case-by-case basis.

(A) Enrollment under this paragraph may be time-limited for an appropriate period as determined by HHSC or its designee.

(B) An out-of-state provider does not meet the criterion in this paragraph merely on the basis of having established business relationships with one or more providers that participate in Medicaid.

(7) The services are medically necessary and the nature of the service is such that providers for this service are limited or not readily available within the state of Texas.

(8) The services are medically necessary services to one or more dually eligible recipients (i.e., recipients who are enrolled in both Medicare and Medicaid) and the out-of-state provider may be considered for reimbursement of co-payments, deductibles, and co-insurance, in which case the enrollment may be time-limited for an appropriate period as determined by HHSC or its designee, and the enrollment will be restricted to receiving reimbursement only for the Medicaid-covered portion of Medicare crossover claims.

(9) The services are provided by a pharmacy that is a distributor of a drug that is classified by the U.S. Food and Drug Administration (FDA) as a limited distribution drug.

(10) The services are medically necessary and one or more of the following exceptions for good cause exist and can be documented:

(A) Texas Medicaid enrolled providers rely on the services provided by the applicant.

(B) Applicant maintains existing agreements as a participating provider through one or more Medicaid managed care organizations (MCO) and enrollment of the applicant leads to more cost-effective delivery of Medicaid services.

(c) An out-of-state provider that applies for enrollment in Medicaid must submit documentation along with the enrollment application to demonstrate that the provider meets one or more of the criteria in subsection (b) of this section. The provider must submit any additional requested information to HHSC or its designee before enrollment may be approved.

(d) If HHSC or its designee determines that an out-of-state provider meets one or more of the criteria in subsection (b) of this section, the provider must meet all other applicable enrollment eligibility requirements, including those specified in Chapter 371 of this title (relating to Medicaid and Other Health and Human Services Fraud and Abuse Program Integrity) before enrollment may be approved.

(e) Other applicable requirements.

(1) An out-of-state provider that is enrolled pursuant to subsections (b) (d) of this section must follow all other applicable Medicaid participation requirements identified by HHSC or its designee for each service provided. Other applicable requirements that must be followed may include:

(A) service benefits and limitations;

(B) documentation procedures;

(C) obtaining prior authorization for the service whenever required; and

(D) claims filing deadlines as specified in §354.1003 of this title (relating to Time Limits for Submitted Claims).

(2) Certain out-of-state providers are not entitled to utilize the extended 365-day claim filing deadline provided in §354.1003(a)(5)(H) of this title that is otherwise available to out-of-state providers, and must comply with the same claims filing deadlines that apply to in-state providers under that section. Those out-of-state providers are:

(A) providers that are approved for enrollment under the criterion specified in subsection (b)(6) of this section, where the specific basis for approval is that the provider is located within 50 miles driving distance from the Texas state border; and

(B) providers that are approved for enrollment under the criterion specified in subsection (b)(8) of this section regarding dually eligible recipients.

(f) An out-of-state provider that is enrolled pursuant to subsections (b) - (d) of this section must:

(1) comply with the terms of the Medicaid provider agreement;

(2) provide services in compliance with all applicable federal, state, and local laws and regulations related to licensure and certification in the state where the out-of-state provider is located; and

(3) comply with all state and federal laws and regulations relating to Medicaid in the state of Texas.

(g) HHSC or its designee determines the basis and amount of reimbursement for medical services provided outside Texas and within the United States in accordance with Chapter 355 of this title (relating to Reimbursement Rates).

(h) A laboratory may participate as an in-state provider under any program administered by a health and human services agency, including HHSC, that involves laboratory services, regardless of the location where any specific service is performed or where the laboratory's facilities are located if:

(1) the laboratory or an entity that is a parent, subsidiary, or other affiliate of the laboratory maintains laboratory operations in Texas;

(2) the laboratory and each entity that is a parent, subsidiary, or other affiliate of the laboratory, individually or collectively, employ at least 1,000 persons at places of employment located in this state; and

(3) the laboratory is otherwise qualified to provide the services under the program and is not prohibited from participating as a provider under any benefits programs administered by a health and human services agency, including HHSC, based on conduct that constitutes fraud, waste, or abuse.

**History**
- *Source Note: The provisions of this §352.17 adopted to be effective December 31, 2012, 37 TexReg 9899; amended to be effective September 1, 2013, 38 TexReg 5427; amended to be effective September 17, 2014, 39 TexReg 7291.*

##### **1 Tex. Admin. Code § 352.19** Temporary Moratoria {#sec-352.19 omnilex-key=us-tx-regs-official--title-1--352.19}

(a) HHSC or its designee may enforce temporary moratoria imposed pursuant to the requirements of §1867 and §1902 of the Social Security Act (42 CFR, §455.470 and §457.990) on enrollment of new providers or suppliers or impose numerical caps or other limits.

(b) HHSC may determine to impose a temporary moratorium in the Texas Medicaid and CHIP programs based on provider or supplier type, geographical area, new practice locations, or a category of provider or supplier identified as having an increased risk or a potential risk of fraud, waste, or abuse, with the concurrence of the Secretary of Health and Human Services.

(c) A temporary moratorium that is imposed in accordance with this section will be for an initial period of six months, and may be extended in six-month increments at the direction of or in concurrence with the Secretary of Health and Human Services.

(d) HHSC will not process an application if a moratorium or other limit on enrollment is in effect. If an enrollment application is denied solely as the result of a temporary moratorium, HHSC will refund any application fee submitted with the enrollment application.

**History**
- *Source Note: The provisions of this §352.19 adopted to be effective December 31, 2012, 37 TexReg 9899.*

##### **1 Tex. Admin. Code § 352.21** Duty to Report Changes {#sec-352.21 omnilex-key=us-tx-regs-official--title-1--352.21}

(a) As a condition of continued enrollment, a provider must notify HHSC or its designee in writing of any change in its status or condition with respect to the information disclosed in an enrollment application or other supplemental form to an enrollment application, as determined by HHSC, including:

(1) National Provider Identifier or associated taxonomy code;

(2) Medicare number;

(3) Medicare certification status;

(4) federal tax identification number;

(5) responsible billing party for the provider;

(6) physical address for the provider or responsible billing party;

(7) the name, address, date of birth, and Social Security number of any managing employee of the provider;

(8) enrollment type;

(9) provider licensure, certification, accreditation;

(10) any change of ownership as required by 42 CFR §489.18;

(11) a change in the person with an ownership or control interest in the provider;

(12) information required to be disclosed under Chapter 371 of this title (relating to Other Health and Human Services Fraud and Abuse Program Integrity);

(13) third-party billing vendor services; or

(14) any other information required by HHSC or its designee.

(b) Time frame for reporting changes.

(1) If a change described in subsection (a) of this section occurs due to a change of ownership or control interest, the provider must report the change to HHSC or its designee within 30 days of the change of ownership.

(2) For all other changes, the provider must report the change to HHSC or its designee within 90 days of the occurrence.

(c) Upon notification of a change that is reported in accordance with this section, HHSC or its designee may require the submission of a new enrollment application and fee, if applicable, provider agreement, provider licensure or certification, or other documentation necessary to verify the reported change.

(d) If a provider does not report a change as required by this section or 42 CFR §489.18, or does not submit an item HHSC or its designee requires under subsection (c) of this section, HHSC or its designee may, retroactive to the date that the change should have been reported:

(1) disenroll the provider or terminate the provider's participation in Medicaid or CHIP;

(2) deny further reimbursement; and

(3) recoup payments made to the provider.

**History**
- *Source Note: The provisions of this §352.21 adopted to be effective December 31, 2012, 37 TexReg 9899; amended to be effective May 2, 2016, 41 TexReg 3095.*

### **Chapter 353** MEDICAID MANAGED CARE

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 353.1** Purpose {#sec-353.1 omnilex-key=us-tx-regs-official--title-1--353.1}

(a) The purpose of this chapter is to define the requirements for the Medicaid Managed Care program.

(b) The rules in this chapter must be read in conjunction with:

(1) federal and state statutes;

(2) rules relating to Medicaid in Chapter 354 of this title (relating to Medicaid Health Services); and

(3) except where otherwise indicated, Texas Department of Insurance rules regarding:

(A) regulation of health maintenance organizations at 28 TAC Chapter 11; and

(B) exclusive provider benefit plans at 28 TAC Chapter 3, Subchapter KK.

(c) A managed care organization (MCO) must comply with all terms of its contract with the Health and Human Services Commission (HHSC).

(d) Unless otherwise provided in this chapter or incorporated by reference into an agreement with an MCO, HHSC's rules regarding Medicaid Health Services in Chapter 354 of this title do not apply to the Medicaid managed care program.

**History**
- *Source Note: The provisions of this §353.1 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.2** Definitions {#sec-353.2 omnilex-key=us-tx-regs-official--title-1--353.2}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Action--

(A) An action is defined as:

(i) the denial or limited authorization of a requested Medicaid service, including the type or level of service;

(ii) the reduction, suspension, or termination of a previously authorized service;

(iii) the failure to provide services in a timely manner;

(iv) the denial in whole or in part of payment for a service; or

(v) the failure of a managed care organization (MCO) to act within the timeframes set forth by the Texas Health and Human Services Commission (HHSC) and state and federal law.

(B) "Action" does not include expiration of a time-limited service.

(2) Acute care--Preventive care, primary care, and other medical or behavioral health care provided by the provider or under the direction of a provider for a condition having a relatively short duration.

(3) Acute care hospital--A hospital that provides acute care services.

(4) Adoption Assistance Program--The program administered by DFPS in accordance with 40 TAC Chapter 700, Subchapter H (relating to Adoption Assistance Program).

(5) Agreement or Contract--The formal, written, and legally enforceable contract and amendments thereto between HHSC and an MCO.

(6) Allowable revenue--All managed care revenue received by the MCO pursuant to the contract during the contract period, including retroactive adjustments made by HHSC. This would include any revenue earned on Medicaid managed care funds such as investment income, earned interest, or third party administrator earnings from services to delegated networks.

(7) Appeal--The formal process by which a member or his or her representative requests a review of the MCO's action.

(8) Applicant Provider--A physician or other health care provider applying for expedited credentialing as defined in Texas Government Code §533.0064.

(9) Behavioral health service--A covered service for the treatment of mental, emotional, or substance use disorders.

(10) Capitated service--A benefit available to members under the Texas Medicaid program for which an MCO is responsible for payment.

(11) Capitation rate--A fixed predetermined fee paid by HHSC to the MCO each month, in accordance with the contract, for each enrolled member in exchange for which the MCO arranges for or provides a defined set of covered services to the member, regardless of the amount of covered services used by the enrolled member.

(12) CFR--Code of Federal Regulations.

(13) Children's Medicaid Dental Services--The dental services provided through a dental MCO to a client birth through age 20.

(14) Clean claim--A claim submitted by a physician or provider for health care services rendered to a member, with the data necessary for the MCO or subcontracted claims processor to adjudicate and accurately report the claim. A clean claim must meet all requirements for accurate and complete data as further defined under the terms of the contract executed between the MCO and HHSC.

(15) Client--Any Medicaid-eligible recipient.

(16) CMS--The Centers for Medicare & Medicaid Services, which is the federal agency responsible for administering Medicare and overseeing state administration of Medicaid.

(17) Complainant--A member, or a treating provider or other individual designated to act on behalf of the member, who files a complaint.

(18) Complaint--Any dissatisfaction expressed by a complainant, orally or in writing, to the MCO about any matter related to the MCO other than an action. Subjects for complaints may include:

(A) the quality of care of services provided;

(B) aspects of interpersonal relationships such as rudeness of a provider or employee; and

(C) failure to respect the member's rights.

(19) Consumer Directed Services (CDS) option--A service delivery option (also known as self-directed model with service budget) in which an individual or legally authorized representative employs and retains service providers and directs the delivery of certain program services.

(20) Covered services--Unless a service or item is specifically excluded under the terms of the state plan, a federal waiver, a managed care services contract, or an amendment to any of these, the phrase "covered services" means all health care, long term services and supports, or dental services or items that the MCO must arrange to provide and pay for on a member's behalf under the terms of the contract executed between the MCO and HHSC, including:

(A) all services or items comprising "medical assistance" as defined in §32.003 of the Human Resources Code; and

(B) all value-added services under such contract.

(21) Credentialing--The process through which an MCO collects, assesses, and validates qualifications and other relevant information pertaining to a Medicaid enrolled health care provider to determine whether the provider may be contracted to deliver covered services as part of the network of the managed care organization.

(22) Cultural competency--The ability of individuals and systems to provide services effectively to people of various disabilities, cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity.

(23) Day--A calendar day, unless specified otherwise.

(24) Default enrollment--The process established by HHSC to assign a Medicaid managed care enrollee to an MCO when the enrollee has not selected an MCO.

(25) Dental contractor--A dental MCO that is under contract with HHSC for the delivery of dental services.

(26) Dental home--A provider who has contracted with a dental MCO to serve as a dental home to a member and who is responsible for providing routine preventive, diagnostic, urgent, therapeutic, initial, and primary care to patients, maintaining the continuity of patient care, and initiating referral for care. Provider types that can serve as dental homes are federally qualified health centers and individuals who are general dentists or pediatric dentists.

(27) Dental managed care organization (dental MCO)--A dental indemnity insurance provider or dental health maintenance organization licensed or approved by the Texas Department of Insurance.

(28) Dental service--The routine preventive, diagnostic, urgent, therapeutic, initial, and primary care provided to a member and included within the scope of HHSC's agreement with a dental contractor. For purposes of this chapter, "dental service" does not include dental devices for craniofacial anomalies; treatment rendered in a hospital, urgent care center, or ambulatory surgical center setting for craniofacial anomalies; or emergency services provided in a hospital, urgent care center, or ambulatory surgical center setting involving dental trauma. These types of services are treated as health care services in this chapter.

(29) DFPS--The Texas Department of Family and Protective Services.

(30) Disability--A physical or mental impairment that substantially limits one or more of an individual's major life activities, such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, socializing, or working.

(31) Disproportionate Share Hospital (DSH)--A hospital that serves a higher than average number of Medicaid and other low-income patients and receives additional reimbursement from the State.

(32) Dual eligible--A Medicaid recipient who is also eligible for Medicare.

(33) Elective enrollment--Selection of a primary care provider (PCP) and MCO by a client during the enrollment period established by HHSC.

(34) Emergency behavioral health condition--Any condition, without regard to the nature or cause of the condition, that in the opinion of a prudent layperson possessing an average knowledge of health and medicine:

(A) requires immediate intervention and/or medical attention without which the client would present an immediate danger to themselves or others; or

(B) renders the client incapable of controlling, knowing, or understanding the consequences of his or her actions.

(35) Emergency medical condition--A medical condition manifesting itself by acute symptoms of recent onset and sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical care to result in:

(A) placing the patient's health in serious jeopardy;

(B) serious impairment to bodily functions;

(C) serious dysfunction of any bodily organ or part;

(D) serious disfigurement; or

(E) serious jeopardy to the health of a pregnant woman or her unborn child.

(36) Emergency service--A covered inpatient and outpatient service, furnished by a network provider or out-of-network provider that is qualified to furnish such service, that is needed to evaluate or stabilize an emergency medical condition and/or an emergency behavioral health condition. For health care MCOs, the term "emergency service" includes post-stabilization care services.

(37) Encounter--A covered service or group of covered services delivered by a provider to a member during a visit between the member and provider. This also includes value-added services.

(38) Enrollment--The process by which an individual determined to be eligible for Medicaid is enrolled in a Medicaid MCO serving the service area in which the individual resides.

(39) EPSDT--The federally mandated Early and Periodic Screening, Diagnosis, and Treatment program defined in 25 TAC Chapter 33 (relating to Early and Periodic Screening, Diagnosis, and Treatment). The State of Texas has adopted the name Texas Health Steps (THSteps) for its EPSDT program.

(40) EPSDT-CCP--The Early and Periodic Screening, Diagnosis, and Treatment-Comprehensive Care Program described in Chapter 363 of this title (relating to Texas Health Steps Comprehensive Care Program).

(41) Exclusive provider benefit plan (EPBP)--An MCO that complies with 28 TAC §§3.9201 - 3.9212, relating to the Texas Department of Insurance's requirements for EPBPs, and contracts with HHSC to provide Medicaid coverage.

(42) Expedited Credentialing--The process under Texas Government Code §533.0064 in which an MCO allows an applicant provider to provide Medicaid services to members on a provisional basis pending completion of the credentialing process.

(43) Experience rebate--The portion of the MCO's net income before taxes that is returned to the State in accordance with the MCO's contract with HHSC.

(44) Fair hearing--The process adopted and implemented by HHSC in Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules) in compliance with federal regulations and state rules relating to Medicaid fair hearings.

(45) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the *Federal Register* by the United States Department of Health and Human Services under the authority of 42 U.S.C. §9902(2) and as in effect for the applicable budget period determined in accordance with 42 C.F.R. §435.603(h). HHSC uses the FPL to determine an individual's eligibility for Medicaid.

(46) Federal waiver--Any waiver permitted under federal law and approved by CMS that allows states to implement Medicaid managed care.

(47) Federally Qualified Health Center (FQHC)--An entity that is certified by CMS to meet the requirements of 42 U.S.C. §1395x(aa)(3) as a Federally Qualified Health Center and is enrolled as a provider in the Texas Medicaid program.

(48) Former Foster Care Children (FFCC) program--The Medicaid program for young adults who aged out of the conservatorship of DFPS, administered in accordance with Chapter 366, Subchapter J of this title (relating to Former Foster Care Children's Program).

(49) Functional necessity--A member's need for services and supports with activities of daily living or instrumental activities of daily living to be healthy and safe in the most integrated setting possible. This determination is based on the results of a functional assessment.

(50) Habilitation--Acquisition, maintenance, and enhancement of skills necessary for the individual to accomplish ADLs, IADLs, and health-related tasks based on the individual's person-centered service plan.

(51) Health and Human Services Commission (HHSC)--The single state agency charged with administration and oversight of the Texas Medicaid program or its designee.

(52) Health care managed care organization (health care MCO)--An entity that is licensed or approved by the Texas Department of Insurance to operate as a health maintenance organization or to issue an EPBP.

(53) Health care provider group--A legal entity, such as a partnership, corporation, limited liability company, or professional association, enrolled in Medicaid, under which certified or licensed individual health care providers provide health care items or services.

(54) Health care services--The acute care, behavioral health care, and health-related services that an enrolled population might reasonably require in order to be maintained in good health, including, at a minimum, emergency services and inpatient and outpatient services.

(55) Health maintenance organization (HMO)--An organization that holds a certificate of authority from the Texas Department of Insurance to operate as an HMO under Chapter 843 of the Texas Insurance Code, or a certified Approved Non-Profit Health Corporation formed in compliance with Chapter 844 of the Texas Insurance Code.

(56) Hospital--A licensed public or private institution as defined in the Texas Health and Safety Code at Chapter 241, relating to hospitals, or Chapter 261, relating to municipal hospitals.

(57) Intermediate care facility for individuals with an intellectual disability or related condition (ICF-IID)--A facility providing care and services to individuals with intellectual disabilities or related conditions as defined in §1905(d) of the Social Security Act (42 U.S.C. 1396(d)).

(58) Legally authorized representative (LAR)--A person authorized by law to act on behalf of an individual with regard to a matter described in this chapter, and may, depending on the circumstances, include a parent, guardian, or managing conservator of a minor, or the guardian of an adult, or a representative designated pursuant to 42 C.F.R. 435.923.

(59) Long term service and support (LTSS)--A service provided to a qualified member in his or her home or other community-based setting necessary to allow the member to remain in the most integrated setting possible. LTSS includes services provided under the Texas State Plan as well as services available to persons who qualify for STAR+PLUS Home and Community-Based Program services or Medicaid 1915(c) waiver services. LTSS available through an MCO in STAR+PLUS, STAR Health, and STAR Kids varies by program model.

(60) Main dentist--See definition of "dental home" in this section.

(61) Managed care--A health care delivery system or dental services delivery system in which the overall care of a patient is coordinated by or through a single provider or organization.

(62) Managed care organization (MCO)--A dental MCO or a health care MCO.

(63) Marketing--Any communication from an MCO to a client who is not enrolled with the MCO that can reasonably be interpreted as intended to influence the client's decision to enroll, not to enroll, or to disenroll from a particular MCO.

(64) Marketing materials--Materials that are produced in any medium by or on behalf of the MCO that can reasonably be interpreted as intending to market to potential members. Materials relating to the prevention, diagnosis, or treatment of a medical or dental condition are not marketing materials.

(65) MDCP--Medically Dependent Children Program. A §1915(c) waiver program that provides community-based services to assist Medicaid beneficiaries under age 21 to live in the community and avoid institutionalization.

(66) Medicaid--The medical assistance program authorized and funded pursuant to Title XIX of the Social Security Act (42 U.S.C. §1396 et seq) and administered by HHSC.

(67) Medicaid for transitioning foster care youth (MTFCY) program--The Medicaid program for young adults who aged out of the conservatorship of DFPS, administered in accordance with Chapter 366, Subchapter F of this title (relating to Medicaid for Transitioning Foster Care Youth).

(68) Medical Assistance Only (MAO)--A person who qualifies financially and functionally for Medicaid assistance but does not receive Supplemental Security Income (SSI) benefits, as defined in Chapters 358, 360, and 361, of this title (relating to Medicaid Eligibility for the Elderly and People with Disabilities, Medicaid Buy-In Program, and Medicaid Buy-In for Children Program).

(69) Medical home--A PCP or specialty care provider who has accepted the responsibility for providing accessible, continuous, comprehensive, and coordinated care to members participating in an MCO contracted with HHSC.

(70) Medically necessary--

(A) For Medicaid members birth through age 20, the following Texas Health Steps services:

(i) screening, vision, dental, and hearing services; and

(ii) other health care services or dental services that are necessary to correct or ameliorate a defect or physical or mental illness or condition. A determination of whether a service is necessary to correct or ameliorate a defect or physical or mental illness or condition:

(I) must comply with the requirements of a final court order that applies to the Texas Medicaid program or the Texas Medicaid managed care program as a whole; and

(II) may include consideration of other relevant factors, such as the criteria described in subparagraphs (B)(ii) - (vii) and (C)(ii) - (vii) of this paragraph.

(B) For Medicaid members over age 20, non-behavioral health services that are:

(i) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a disability, cause illness or infirmity of a member, or endanger life;

(ii) provided at appropriate facilities and at the appropriate levels of care for the treatment of a member's health conditions;

(iii) consistent with health care practice guidelines and standards that are endorsed by professionally recognized health care organizations or governmental agencies;

(iv) consistent with the member's medical need;

(v) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency;

(vi) not experimental or investigative; and

(vii) not primarily for the convenience of the member or provider.

(C) For Medicaid members over age 20, behavioral health services that:

(i) are reasonable and necessary for the diagnosis or treatment of a mental health or substance use disorder, or to improve, maintain, or prevent deterioration of functioning resulting from such a disorder;

(ii) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care;

(iii) are furnished in the most appropriate and least restrictive setting in which services can be safely provided;

(iv) are the most appropriate level or supply of service that can safely be provided;

(v) could not be omitted without adversely affecting the member's mental and/or physical health or the quality of care rendered;

(vi) are not experimental or investigative; and

(vii) are not primarily for the convenience of the member or provider.

(71) Member--A person who is eligible for benefits under Title XIX of the Social Security Act and Medicaid, is in a Medicaid eligibility category included in the Medicaid managed care program, and is enrolled in a Medicaid MCO.

(72) Member education program--A planned program of education:

(A) concerning access to health care services or dental services through the MCO and about specific health or dental topics;

(B) that is approved by HHSC; and

(C) that is provided to members through a variety of mechanisms that must include, at a minimum, written materials and face-to-face or audiovisual communications.

(73) Member materials--All written materials produced or authorized by the MCO and distributed to members or potential members containing information concerning the managed care program. Member materials include member ID cards, member handbooks, provider directories, and marketing materials.

(74) Non-capitated service--A benefit available to members under the Texas Medicaid program for which an MCO is not responsible for payment.

(75) Nursing facility--As defined in §358.103 of this title (relating to Definitions) and 26 TAC §554.101 (relating to Definitions), an entity or institution, also called nursing home or skilled nursing facility, that provides organized and structured nursing care and services and is subject to licensure under Texas Health and Safety Code Chapter 242.

(76) Nursing facility add-on services--The types of services that are provided in a nursing facility setting by a nursing facility provider or another provider, but are not included in the nursing facility unit rate, including emergency dental services, physician-ordered rehabilitative services, customized power wheel chairs, augmentative communication devices, tracheostomy care for youth under age 22, and ventilator care.

(77) Nursing facility services--The services included in the nursing facility unit rate, nursing facility Medicare coinsurance, and nursing facility add-on services.

(78) Nursing facility unit rate--The rate for the type of services included in the Medicaid fee-for-service (FFS) daily rate for nursing facility providers as defined in 26 TAC §554.2601 (relating to Vendor Payment (Items and Services Included)), including room and board, medical supplies and equipment, personal needs items, social services, and over-the-counter drugs. The nursing facility unit rate also includes applicable nursing facility staff rate enhancements as described in §355.308 of this title (relating to Direct Care Staff Rate Component), and professional and general liability insurance add-on payments as described in §355.312 of this title (relating to Reimbursement Setting Methodology--Liability Insurance Costs). The nursing facility unit rate excludes nursing facility add-on services.

(79) Outside regular business hours--As applied to FQHCs and rural health clinics (RHCs), means before 8 a.m. and after 5 p.m. Monday through Friday, weekends, and federal holidays.

(80) Participating MCO--An MCO that has a contract with HHSC to provide services to members.

(81) Permanency Care Assistance Program--The program administered by DFPS in accordance with 40 TAC Chapter 700, Subchapter J, Division 2 (relating to Permanency Care Assistance Program).

(82) Person-centered care--An approach to care that focuses on members as individuals and supports caregivers working most closely with them. It involves a continual process of listening, testing new approaches, and changing routines and organizational approaches in an effort to individualize and de-institutionalize the care environment.

(83) Person-centered planning--A documented service planning process that includes people chosen by the individual, is directed by the individual to the maximum extent possible, enables the individual to make choices and decisions, is timely and occurs at times and locations convenient to the individual, reflects cultural considerations of the individual, includes strategies for solving conflict or disagreement within the process, offers choices to the individual regarding the services and supports they receive and from whom, includes a method for the individual to require updates to the plan, and records alternative settings that were considered by the individual.

(84) Post-stabilization care service--A covered service, related to an emergency medical condition, that is provided after a Medicaid member is stabilized in order to maintain the stabilized condition, or, under the circumstances described in 42 C.F.R. §438.114(b) and (e) and 42 C.F.R. §422.113(c)(iii) to improve or resolve the Medicaid member's condition.

(85) Primary care provider (PCP)--A physician or other provider who has agreed with the health care MCO to provide a medical home to members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care.

(86) Provider--A credentialed and licensed individual, facility, agency, institution, organization, or other entity, and its employees and subcontractors, that has a contract with the MCO for the delivery of covered services to the MCO's members.

(87) Provider education program--Program of education about the Medicaid managed care program and about specific health or dental care issues presented by the MCO to its providers through written materials and training events.

(88) Provider network or Network--All providers that have contracted with the MCO for the applicable managed care program.

(89) Quality improvement--A system to continuously examine, monitor, and revise processes and systems that support and improve administrative and clinical functions.

(90) Rural Health Clinic (RHC)--An entity that meets all of the requirements for designation as a rural health clinic under §1861(aa)(1) of the Social Security Act (42 U.S.C. §1395x(aa)(1)) and is approved for participation in the Texas Medicaid program.

(91) Service area--The counties included in any HHSC-defined service area as applicable to each MCO.

(92) Significant traditional provider (STP)--A provider identified by HHSC as having provided a significant level of care to the target population, including a DSH.

(93) STAR--The State of Texas Access Reform (STAR) managed care program that operates under a federal waiver and primarily provides, arranges for, and coordinates preventive, primary, acute care, and pharmacy services for low-income families, children, and pregnant women.

(94) STAR Health--The managed care program that operates under the Medicaid state plan and primarily serves:

(A) children and youth in DFPS conservatorship;

(B) young adults who voluntarily agree to continue in a foster care placement (if the state as conservator elects to place the child in managed care); and

(C) young adults who are eligible for Medicaid as a result of their former foster care status through the month of their 21st birthday.

(95) STAR Kids--The program that operates under a federal waiver and primarily provides, arranges, and coordinates preventative, primary, acute care, and long-term services and supports to persons with disabilities under the age of 21 who qualify for Medicaid.

(96) STAR+PLUS--The managed care program that operates under a federal waiver and primarily provides, arranges, and coordinates preventive, primary, acute care, and long-term services and supports to persons with disabilities and elderly persons age 65 and over who qualify for Medicaid by virtue of their SSI or MAO status.

(97) STAR+PLUS Home and Community-Based Services Program--The program that provides person-centered care services that are delivered in the home or in a community setting, as authorized through a federal waiver under §1115 of the Social Security Act, to qualified Medicaid-eligible clients who are age 21 or older, as cost-effective alternatives to institutional care in nursing facilities.

(98) State plan--The agreement between the CMS and HHSC regarding the operation of the Texas Medicaid program, in accordance with the requirements of Title XIX of the Social Security Act.

(99) Supplemental Security Income (SSI)--The federal cash assistance program of direct financial payments to people who are 65 years of age or older, are blind, or have a disability administered by the Social Security Administration (SSA) under Title XVI of the Social Security Act. All persons who are certified as eligible for SSI in Texas are eligible for Medicaid. Local SSA claims representatives make SSI eligibility determinations. The transactions are forwarded to the SSA in Baltimore, which then notifies the states through the State Data Exchange (SDX).

(100) Texas Health Steps (THSteps)--The name adopted by the State of Texas for the federally mandated Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services, described at 42 U.S.C. §1396d(r) and 42 CFR §440.40 and §§441.40 - 441.62.

(101) Value-added service--A service provided by an MCO that is not "medical assistance," as defined by §32.003 of the Texas Human Resources Code.

**History**
- *Source Note: The provisions of this §353.2 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective July 1, 2007, 32 TexReg 2135; amended to be effective September 1, 2007, 32 TexReg 5333; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective July 8, 2012, 37 TexReg 4851; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 1, 2016, 41 TexReg 8265; amended to be effective September 1, 2017, 42 TexReg 4273; amended to be effective April 24, 2019, 44 TexReg 1980; amendedtobe effective August 12, 2021, 46 TexReg 4843; amended to be effective April 2, 2024, 49 TexReg 2061.*

##### **1 Tex. Admin. Code § 353.3** Experience Rebate in the Managed Care Program {#sec-353.3 omnilex-key=us-tx-regs-official--title-1--353.3}

Each managed care organization (MCO) participating in Medicaid managed care must pay to the state an experience rebate calculated according to the graduated rebate method described in the MCO's contract with the Health and Human Services Commission.

**History**
- *Source Note: The provisions of this §353.3 adopted to be effective August 20, 2000, 25 TexReg 7629; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.4** Managed Care Organization Requirements Concerning Out-of-Network Providers {#sec-353.4 omnilex-key=us-tx-regs-official--title-1--353.4}

(a) Network adequacy. HHSC is the state agency responsible for overseeing and monitoring the Medicaid managed care program. Each managed care organization (MCO) participating in the Medicaid managed care program must offer a network of providers that is sufficient to meet the needs of the Medicaid population who are MCO members. HHSC monitors MCO members' access to an adequate provider network through reports from the MCOs and complaints received from providers and members. Certain reporting requirements are discussed in subsection (g) of this section.

(b) MCO requirements concerning coverage for treatment of members by out-of-network providers for non-emergency services.

(1) Nursing facility services. A health care MCO must reimburse an out-of-network nursing facility for medically necessary services authorized by HHSC, using the reasonable reimbursement methodology in subsection (f) of this section. Nursing facility add-on services are considered "other authorized services" under paragraph (2) of this subsection, and are authorized by STAR+PLUS MCOs.

(2) Other authorized services. The MCO must allow referral of its member(s) to an out-of-network provider, must timely issue the proper authorization for such referral, and must timely reimburse the out-of-network provider for authorized services provided if the criteria in this paragraph are met. If all of the following criteria are not met, an out-of-network provider is not entitled to Medicaid reimbursement for non-emergency services:

(A) Medicaid covered services are medically necessary and these services are not available through an in-network provider;

(B) a participating provider currently providing authorized services to the member requests authorization for such services to be provided to the member by an out-of-network provider; and

(C) the authorized services are provided within the time period specified in the MCO's authorization. If the services are not provided within the required time period, a new request for referral from the requesting provider must be submitted to the MCO prior to the provision of services.

(3) School-based telemedicine medical services. If a telemedicine medical service provided by an out-of-network physician to a member in a primary or secondary school-based setting meets the conditions for reimbursement in §354.1432 of this title (relating to Telemedicine and Telehealth Benefits and Limitations), a health care MCO must reimburse the out-of-network physician without prior authorization, even if the physician is not the member's primary care provider. The MCO must use the reasonable reimbursement methodology described in subsection (f)(2) of this section to reimburse an out-of-network physician.

(c) MCO requirements concerning coverage for treatment of members by out-of-network providers for emergency services.

(1) An MCO may not refuse to reimburse an out-of-network provider for medically necessary emergency services.

(2) Health care MCO requirements concerning emergency services.

(A) A health care MCO may not refuse to reimburse an out-of-network provider for post-stabilization care services provided as a result of the MCO's failure to authorize a timely transfer of a member.

(B) A health care MCO must allow its members to be treated by any emergency services provider for emergency services, and services to determine if an emergency condition exists. The health care MCO must pay for such services.

(C) A health care MCO must reimburse for transport provided by an ambulance provider for a Medicaid recipient whose condition meets the definition of an emergency medical condition. Facility-to-facility transports are considered emergencies if the required treatment for the emergency medical condition, as defined in §353.2 of this subchapter (relating to Definitions), is not available at the first facility and the MCO has not included payment for such transports in the hospital reimbursement.

(D) A health care MCO is prohibited from requiring an authorization for emergency services or for services to determine if an emergency condition exists.

(3) Dental MCO requirements concerning emergency services.

(A) A dental MCO must allow its members to be treated for covered emergency services that are provided outside of a hospital or ambulatory surgical center setting, and for covered services provided outside of such settings to determine if an emergency condition exists. The dental MCO must pay for such services.

(B) A dental MCO is prohibited from requiring an authorization for the services described in subparagraph (A) of this paragraph.

(C) A dental MCO is not responsible for payment of non-capitated emergency services and post-stabilization care provided in a hospital or ambulatory surgical center setting, or devices for craniofacial anomalies. A dental MCO is not responsible for hospital and physician services, anesthesia, drugs related to treatment, and post-stabilization care for:

(i) a dislocated jaw, traumatic damage to a tooth, and removal of a cyst;

(ii) an oral abscess of tooth or gum origin; and

(iii) craniofacial anomalies.

(D) The services and benefits described in subparagraph (C) of this paragraph are reimbursed:

(i) by a health care MCO, if the member is enrolled in a managed care program; or

(ii) by HHSC's claims administrator, if the member is not enrolled in a managed care program.

(d) Health care MCO requirements concerning coverage for services provided to certain members by an out-of-network "specialty provider" as that term is defined in §353.7(c) of this subchapter (relating to Continuity of Care with Out-Of-Network Specialty Providers).

(1) A health care MCO may not refuse to reimburse an out-of-network "specialty provider" enrolled as a provider in the Texas Medicaid program for services provided to a member under the circumstances set forth in §353.7 of this subchapter.

(2) In reimbursing a provider for the services described in paragraph (1) of this subsection, a health care MCO must use the reasonable reimbursement methodology in subsection (f)(2) of this section.

(e) An MCO may be required by contract with HHSC to allow members to obtain services from out-of-network providers in circumstances other than those described in subsections (b) - (d) of this section.

(f) Reasonable reimbursement methodology.

(1) Out-of-network nursing facilities.

(A) Out-of-network nursing facilities must be reimbursed at or above 95 percent of the nursing facility unit rate established by HHSC for the dates of service for services provided inside of the MCO's service area.

(B) Out-of-network nursing facilities must be reimbursed at or above 100 percent of the nursing facility unit rate for the dates of services for services provided outside of the MCO's service area.

(2) Emergency and authorized services performed by out-of-network providers.

(A) Except as provided in §353.913 of this chapter (relating to Managed Care Organization Requirements Concerning Out-of-Network Outpatient Pharmacy Services) or subsection (j)(2) of this section, the MCO must reimburse an out-of-network, in-area service provider the Medicaid FFS rate in effect on the date of service less five percent, unless the parties agree to a different reimbursement amount.

(B) Except as provided in §353.913 of this chapter, an MCO must reimburse an out-of-network, out-of-area service provider at 100 percent of the Medicaid FFS rate in effect on the date of service, unless the parties agree to a different reimbursement amount, until the MCO arranges for the timely transfer of the member, as determined by the member's attending physician, to a provider in the MCO's network.

(3) For purposes of this subsection, the Medicaid FFS rates are defined as those rates for providers of services in the Texas Medicaid program for which reimbursement methodologies are specified in Chapter 355 of this title (relating to Reimbursement Rates), exclusive of the rates and payment structures in Medicaid managed care.

(g) Reporting requirements.

(1) Each MCO that contracts with HHSC to provide health care services or dental services to members in a service area must submit quarterly information in its Out-of-Network quarterly report to HHSC.

(2) Each report submitted by an MCO must contain information about members enrolled in each HHSC Medicaid managed care program provided by the MCO. The report must include the following information:

(A) the types of services provided by out-of-network providers for the MCO's members;

(B) the scope of services provided by out-of-network providers to the MCO's members;

(C) for a health care MCO, the total number of hospital admissions, as well as the number of admissions that occur at each out-of-network hospital. Each out-of-network hospital must be identified;

(D) for a health care MCO, the total number of emergency room visits, as well as the total number of emergency room visits that occur at each out-of-network hospital. Each out-of-network hospital must be identified;

(E) total dollars for paid claims by MCOs, other than those described in subparagraphs (C) and (D) of this paragraph, as well as total dollars billed by out-of-network providers for other services; and

(F) any additional information required by HHSC.

(3) HHSC determines the specific form of the report described in this subsection and includes the report form as part of the Medicaid managed care contract between HHSC and the MCOs.

(h) Utilization.

(1) Upon review of the reports described in subsection (g) of this section that are submitted to HHSC by the MCOs, HHSC may determine that an MCO exceeded maximum out-of-network usage standards set by HHSC for out-of-network access to health care services and dental services during the reporting period.

(2) Out-of-network usage standards.

(A) Inpatient admissions: No more than 15 percent of a health care MCO's total hospital admissions, by service area, may occur in out-of-network facilities.

(B) Emergency room visits: No more than 20 percent of a health care MCO's total emergency room visits, by service area, may occur in out-of-network facilities.

(C) Other services: For services that are not included in subparagraph (A) or (B) of this paragraph, no more than 20 percent of total dollars for paid claims by the MCO for services provided may be provided by out-of-network providers.

(3) Special considerations in calculating a health care MCO's out-of-network usage of inpatient admissions and emergency room visits.

(A) In the event that a health care MCO exceeds the maximum out-of-network usage standard set by HHSC for inpatient admissions or emergency room visits, HHSC may modify the calculation of that health care MCO's out-of-network usage for that standard if:

(i) the admissions or visits to a single out-of-network facility account for 25 percent or more of the health care MCO's admissions or visits in a reporting period; and

(ii) HHSC determines that the health care MCO has made all reasonable efforts to contract with that out-of-network facility as a network provider without success.

(B) In determining whether the health care MCO has made all reasonable efforts to contract with the single out-of-network facility described in subparagraph (A) of this paragraph, HHSC considers at least the following information:

(i) how long the health care MCO has been trying to negotiate a contract with the out-of-network facility;

(ii) the in-network payment rates the health care MCO has offered to the out-of-network facility;

(iii) the other, non-financial contractual terms the health care MCO has offered to the out-of-network facility, particularly those relating to prior authorization and other utilization management policies and procedures;

(iv) the health care MCO's history with respect to claims payment timeliness, overturned claims denials, and provider complaints;

(v) the health care MCO's solvency status; and

(vi) the out-of-network facility's reasons for not contracting with the health care MCO.

(C) If the conditions described in subparagraph (A) of this paragraph are met, HHSC may modify the calculation of the health care MCO's out-of-network usage for the relevant reporting period and standard by excluding from the calculation the inpatient admissions or emergency room visits to that single out-of-network facility.

(i) Provider complaints.

(1) HHSC accepts provider complaints regarding reimbursement for or overuse of out-of-network providers and conducts investigations into any such complaints.

(2) When a provider files a complaint regarding out-of-network payment, HHSC requires the relevant MCO to submit data to support its position on the adequacy of the payment to the provider. The data includes a copy of the claim for services rendered and an explanation of the amount paid and of any amounts denied.

(3) Not later than the 60th day after HHSC receives a provider complaint, HHSC notifies the provider who initiated the complaint of the conclusions of HHSC's investigation regarding the complaint. The notification to the complaining provider includes:

(A) a description of the corrective actions, if any, required of the MCO in order to resolve the complaint; and

(B) if applicable, a conclusion regarding the amount of reimbursement owed to an out-of-network provider.

(4) If HHSC determines through investigation that an MCO did not reimburse an out-of-network provider based on a reasonable reimbursement methodology as described in subsection (f) of this section, HHSC initiates a corrective action plan. Refer to subsection (j) of this section for information about the contents of the corrective action plan.

(5) If, after an investigation, HHSC determines that additional reimbursement is owed to an out-of-network provider, the MCO must:

(A) pay the additional reimbursement owed to the out-of-network provider within 90 days from the date the complaint was received by HHSC or 30 days from the date the clean claim, or information required that makes the claim clean, is received by the MCO, whichever comes first; or

(B) submit a reimbursement payment plan to the out-of-network provider within 90 days from the date the complaint was received by HHSC. The reimbursement payment plan provided by the MCO must provide for the entire amount of the additional reimbursement to be paid within 120 days from the date the complaint was received by HHSC.

(6) If the MCO does not pay the entire amount of the additional reimbursement within 90 days from the date the complaint was received by HHSC, HHSC may require the MCO to pay interest on the unpaid amount. If required by HHSC, interest accrues at a rate of 18 percent simple interest per year on the unpaid amount from the 90th day after the date the complaint was received by HHSC, until the date the entire amount of the additional reimbursement is paid.

(7) HHSC pursues any appropriate remedy authorized in the contract between the MCO and HHSC if the MCO fails to comply with a corrective action plan under subsection (j) of this section.

(j) Corrective action plan.

(1) HHSC requires a corrective action plan in the following situations:

(A) the MCO exceeds a maximum standard established by HHSC for out-of-network access to health care services and dental services described in subsection (h) of this section; or

(B) the MCO does not reimburse an out-of-network provider based on a reasonable reimbursement methodology as described in subsection (f) of this section.

(2) A corrective action plan imposed by HHSC requires one of the following:

(A) reimbursements by the MCO to out-of-network providers at rates that equal the allowable rates for the health care services as determined under §32.028 and §32.0281, Texas Human Resources Code, for all health care services provided during the period:

(i) the MCO is not in compliance with a utilization standard established by HHSC; or

(ii) the MCO is not reimbursing out-of-network providers based on a reasonable reimbursement methodology, as described in subsection (f) of this section;

(B) initiation of an immediate freeze by HHSC on the enrollment of additional recipients in the MCO's managed care plan until HHSC determines that the provider network under the managed care plan can adequately meet the needs of the additional recipients;

(C) education by the MCO of members enrolled in the MCO regarding the proper use of the MCO's provider network; or

(D) any other actions HHSC determines are necessary to ensure that Medicaid recipients enrolled in managed care plans provided by the MCO have access to appropriate health care services or dental services, and that providers are properly reimbursed by the MCO for providing medically necessary health care services or dental services to those recipients.

(k) Application to Pharmacy Providers. The requirements of this section do not apply to providers of outpatient pharmacy benefits, except as noted in §353.913 of this chapter (relating to Managed Care Organization Requirements Concerning Out-of-Network Outpatient Pharmacy Services).

**History**
- *Source Note: The provisions of this §353.4 adopted to be effective January 22, 2006, 31 TexReg 281; amended to be effective February 17, 2010, 35 TexReg 1123; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective May 2, 2016, 41 TexReg 3095; amended to be effective September 1, 2021, 46 TexReg 5386; amended to be effective November 15, 2022, 47 TexReg 7533; amended to be effective April 2, 2024, 49 TexReg 2061.*

##### **1 Tex. Admin. Code § 353.5** Internet Posting of Sanctions Imposed For Contractual Violations {#sec-353.5 omnilex-key=us-tx-regs-official--title-1--353.5}

(a) This section pertains to a managed care organization (MCO) which the Health and Human Services Commission (HHSC) determines has failed to comply with the terms of a contract to provide health care services or dental services to members enrolled in the MCO.

(b) HHSC is responsible for identifying and investigating contract deficiencies and violations, and taking corrective action to remedy contract deficiencies and violations of an MCO. Corrective actions may include assessment of liquidated damages, contract termination, and/or any other sanction or remedy available under the terms and conditions of the contract or state and federal law and regulations.

(c) If HHSC finds that performance issues, problems, or deficiencies exist with an MCO, as those issues pertain or relate to certain deliverable services, HHSC may investigate a claim of contract violation and determine whether a contract violation has occurred or currently exists.

(d) If HHSC determines that a contract violation has occurred or currently exists, HHSC will decide on the appropriate contract sanction or remedy to be imposed.

(e) If required by contract, HHSC will give written notice to the MCO, describing the contract violation, the contract sanction or remedy to be imposed, the method by which reimbursement (if applicable) to HHSC will be made, and the time frame for resolution of the issue.

(f) When a contract violation has been determined and a sanction or remedy imposed, HHSC will post the following information on HHSC's Internet website:

(1) the name and address of the MCO;

(2) a description of the contractual obligation the MCO failed to meet;

(3) the date of determination of noncompliance;

(4) the date the sanction or remedy was imposed;

(5) the maximum sanction or remedy that may be imposed under the contract for the violation; and

(6) the actual sanction or remedy imposed against the MCO.

(g) HHSC will post and maintain the records required by this section on HHSC's Internet website in English and Spanish. HHSC will update the list of records on the website at least quarterly.

(h) The information posted on the website will be displayed for twelve months (12) from the date of posting, or for twelve months after completion of the contract sanction or remedy, whichever is later.

(i) HHSC will not post information on HHSC's Internet website that relates to a sanction or remedy while the sanction or remedy is the subject of an administrative appeal or judicial review. Nothing in this subsection creates or enlarges a right to an administrative appeal or judicial review of a contract sanction or remedy.

(j) For purposes of this section, a contract sanction or remedy includes assessment or imposition of one or more of the following:

(1) assessment of a penalty;

(2) assessment of liquidated damages or other monetary remedies;

(3) imposition of a corrective action plan;

(4) debarment;

(5) involuntary suspension of a contract or portion of a contract; and/or

(6) involuntary termination of a contract or portion of a contract.

(k) For purposes of this section, a sanction is not considered to include:

(1) a vendor hold or similar temporary delay in payment; or

(2) an agreed temporary remedial measure intended to facilitate contract compliance.

**History**
- *Source Note: The provisions of this §353.5 adopted to be effective May 1, 2007, 32 TexReg 2275; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.6** Audit of Managed Care Organizations {#sec-353.6 omnilex-key=us-tx-regs-official--title-1--353.6}

(a) The Health and Human Services Commission (HHSC), through the Medicaid and CHIP Services Division, the Office of Inspector General (OIG), and Health and Human Services (HHS) Internal Audit Division, is responsible for audits of MCOs and any entity with which an MCO contracts.

(b) For purposes of this rule, "MCO" includes any entity with which an MCO contracts.

(c) HHSC conducts audits of MCOs, including financial audits, performance audits, compliance audits, and agreed upon procedures:

(1) with the scope and frequency necessary to provide information to allow for the effective oversight and control of the MCOs; and

(2) as necessary to comply with all federal and state laws.

(d) Medicaid and CHIP Services Division's roles and responsibilities for audits of MCOs include:

(1) determining, based on coordination with OIG about MCO audits, which audits to assign to contracted audit firms in order to eliminate duplication of audit effort and reduce the impact of potentially duplicative audits on the MCOs;

(2) coordinating with HHS Internal Audit Division to obtain delegated authority, from the State Auditor's Office (SAO), to procure audit services as required by Texas Government Code §321.020;

(3) facilitating and determining the extent of work to be performed in agreed upon procedures and audits of MCOs, through the use of contracted audit firms as part of the integrated business processes used to oversee and monitor MCOs;

(4) providing final reports of agreed upon procedures and audits to OIG, along with other information relevant to quantifying MCO performance under the contract with HHSC, including results of on-site monitoring visits, and other relevant MCO-related performance information;

(5) providing all deliverables, such as contracts, contract amendments, and audit reports, for contracted audit related engagements to HHS Internal Audit Division for delivery to the SAO; and

(6) ensuring actions planned to address audit recommendations are implemented, including actions planned by the Medicaid and CHIP Services Division or by an MCO.

(e) The OIG's roles and responsibilities, related to performing audits of MCOs, are as outlined in §371.37 of this title (relating to Audit of Managed Care Organizations).

(f) HHS Internal Audit Division's roles and responsibilities, related to audits of MCOs, are:

(1) auditing the Medicaid and CHIP Services Division and OIG, as part of its established audit authority and risk-based audit coverage, including auditing the effectiveness of coordination between the Medicaid and CHIP Services Division and OIG on the performance of MCO audits;

(2) notifying and conferring with the Medicaid and CHIP Services Division and OIG before initiating an audit of an MCO contained in the audit plan approved by the HHS Executive Commissioner;

(3) coordinating with Medicaid and CHIP Services Division when audit services need to be procured to ensure HHSC obtains the appropriate authority to procure audit services from the SAO; and

(4) coordinating with Medicaid and CHIP Services Division to ensure that all appropriate documents related to contracted audit services are obtained and provided to the SAO. These documents include executed contracts, contract amendments, and audit reports.

**History**
- *Source Note: The provisions of this §353.6 adopted to be effective July 14, 2016, 41 TexReg 5038; amended to be effective August 17, 2020, 45 TexReg 5623.*

##### **1 Tex. Admin. Code § 353.7** Continuity of Care with Out-of-Network Specialty Providers {#sec-353.7 omnilex-key=us-tx-regs-official--title-1--353.7}

(a) A health care MCO must allow a member age 20 or younger, who has complex medical needs, to remain under the care of a Medicaid enrolled specialty provider from whom the member is receiving care at the time of the member's enrollment into the health care MCO, even if the specialty provider is an out-of-network provider.

(b) For the purpose of this section "complex medical needs" means a member receiving:

(1) Level 1 Service Coordination as authorized in the STAR Kids managed care contract; or

(2) Service Management as authorized in the STAR Health managed care contract.

(c) For the purpose of this section "specialty provider" means one of the following provider types:

(1) a physician licensed under the Texas Occupations Code, Chapter 155, who has and maintains a specialty in:

(A) Adolescent Medicine (Teenagers);

(B) Allergist (Allergies);

(C) Ambulatory Medicine (General Non-Emergency Care);

(D) Cardiology, Cardiovascular (Heart, Blood Vessels);

(E) Colon/Rectal (Bowels);

(F) Dermatology (Skin);

(G) Endocrinology (Glands);

(H) Family Medicine (General Family Medical Care);

(I) Gastroenterology (Stomach, Digestion);

(J) Genetics (Inherited Diseases, Birth Defects);

(K) Hematology (Blood);

(L) Hepatology (Liver);

(M) Immunology (Immune System);

(N) Infectious Diseases (Viral/Bacterial Infections);

(O) Internal Medicine (General Medical Care);

(P) Neonatology/Perinatology (Fetus and Newborns);

(Q) Nephrology (Kidney);

(R) Neurology (Brain, Nervous System);

(S) Neurosurgery (Operations of the Brain, Spinal Cord);

(T) Nuclear Medicine (Testing, e.g., MRI, CAT scan);

(U) Obstetrics/Gynecology (Pregnancy, Women's Health);

(V) Occupational Medicine (Work-Related Injuries);

(W) Oncology (Cancer);

(X) Ophthalmology (Eyes);

(Y) Oral-Maxillofacial Surgery (Jaw and Mouth);

(Z) Orthopedics (Bones and Joints);

(AA) Otolaryngology (Ear, Nose, and Throat);

(BB) Otology (Ears);

(CC) Pediatrician (Babies, Children);

(DD) Perinatology (Fetus);

(EE) Physical Medicine (Rehabilitation);

(FF) Plastic Surgery (Corrective Surgery);

(GG) Psychiatry (Mental Illness);

(HH) Pulmonology (Lungs, Breathing);

(II) Radiology (X-Rays);

(JJ) Reproductive Endocrinology (Reproductive System Diseases);

(KK) Rheumatologist (Joints, Muscles, Tendons);

(LL) Sports Medicine (Sports Injuries);

(MM) Surgery (Operations);

(NN) Thoracic Surgery (Chest Surgery);

(OO) Urology (Urinary Tract); or

(PP) Vascular Surgery (Operations of the Blood Vessels);

(2) an audiologist, as that term is defined in Texas Occupations Code, §401.001(1-a), licensed under the Texas Occupations Code, Chapter 401;

(3) a chiropractor that holds a license issued by the board created under the Texas Occupations Code, Chapter 201;

(4) a dietitian licensed under the Texas Occupations Code, Chapter 701;

(5) an optometrist licensed under the Texas Occupations Code, Chapter 351; or

(6) a podiatrist licensed under the Texas Occupations Code, Chapter 202.

(d) A health care MCO must comply with the reasonable reimbursement methodology for authorized services performed by out-of-network providers as described in §353.4(f)(2) of this chapter (relating to Managed Care Organization Requirements Concerning Out-of-Network Providers) until:

(1) an alternate reimbursement agreement, including a single-case agreement, is reached with the member's specialty provider;

(2) the member or the member's LAR agree to select an in-network specialty provider; or

(3) the member is no longer enrolled in the health care MCO.

(e) If a member wants to remain under the care of a Medicaid enrolled specialty provider that is not in the health care MCO's provider network, the MCO must make a good-faith effort to negotiate a single-case agreement with the out-of-network specialty provider using a simple, timely, and efficient process developed by the MCO.

(f) A single-case agreement entered into under subsection (d)(1) of this section is not considered accessing an out-of-network provider for the purposes of Medicaid managed care organization network adequacy requirements.

**History**
- *Source Note: The provisions of this §353.7 adopted to be effective September 1, 2021, 46 TexReg 5386; amended to be effective November 15, 2022, 47 TexReg 7533.*

##### **1 Tex. Admin. Code § 353.8** Certification of Managed Care Organizations Prior to Contract Awards {#sec-353.8 omnilex-key=us-tx-regs-official--title-1--353.8}

(a) As provided by Texas Government Code §540.0203, the Texas Health and Human Services Commission (HHSC) awards a contract under Texas Government Code Chapter 540 to a managed care organization (MCO) only if the MCO has been certified by HHSC as reasonably able to fulfill the terms of the contract, including all requirements of applicable federal and state law.

(b) HHSC determines whether to certify an MCO following the evaluation of the proposals submitted in response to a solicitation. Certification and the certification determination process described in this section do not impact an MCO's final score in the evaluation, but failure to obtain certification results in no further consideration of the MCO for the contract award.

(c) In its certification determination, HHSC may review:

(1) materials submitted by the MCO in response to the solicitation;

(2) materials related to the MCO's past performance in any state, including materials required to be monitored by a state's managed care program under 42 C.F.R. §438.66(c); and

(3) any additional information and assurances requested by HHSC from the MCO for purposes of the certification determination.

(d) HHSC provides notice of approval or denial of certification by electronic mail to an MCO. A notice of denial sets forth the reasons for the denial of certification. If an MCO is denied certification, the MCO may appeal the denial by submitting an appeal to the solicitation's sole point of contact no later than 10 business days after the date HHSC transmits the notice of denial of certification.

(e) An appeal must specifically address the reasons for the denial of the certification as stated in the notice of denial and precisely state the argument, authorities, and evidence the MCO offers in support of its appeal.

(f) To resolve an appeal, HHSC:

(1) dismisses the appeal as untimely;

(2) upholds the denial of certification; or

(3) reverses the denial of certification and certifies the MCO as reasonably able to fulfill the terms of the contract, including all requirements of applicable federal and state law.

(g) After the expiration of the appeal period and the resolution of any pending appeals, MCOs that obtained the required certification will proceed to the next phase of the contract award process.

(h) HHSC's determination whether to certify that an MCO is reasonably able to fulfill the terms of a contract is not a contested case proceeding under the Texas Administrative Procedure Act, Texas Government Code, Chapter 2001.

**History**
- *Source Note: The provisions of this §353.8 adopted to be
effective August 28, 2022, 47 TexReg 4967; amended to be effective
April 1, 2025, 50 TexReg 823.*

#### **Subchapter B** PROVIDER AND MEMBER EDUCATION PROGRAMS

##### **1 Tex. Admin. Code § 353.101** Purpose {#sec-353.101 omnilex-key=us-tx-regs-official--title-1--353.101}

This subchapter implements the Health and Human Services Commission's authority to establish provider and member education requirements for managed care organizations participating in the Texas Medicaid program. This authority is granted in Texas Government Code §540.0054.

**History**
- *Source Note: The provisions of this §353.101 adopted to
be effective February 28, 1997, 22 TexReg 1799; amended to be effective
August 10, 2005, 30 TexReg 4466; amended to be effective March 1,
2012, 37 TexReg 1283; amended to be effective April 1, 2025, 50 TexReg
823.*

##### **1 Tex. Admin. Code § 353.102** Provider and Member Education Programs Generally {#sec-353.102 omnilex-key=us-tx-regs-official--title-1--353.102}

A managed care organization (MCO) that contracts with the Health and Human Services Commission (HHSC) to provide health care services or dental services through the Medicaid program must provide education programs for providers and members using a variety of techniques and media as described in this chapter and in the contract between HHSC and the MCO.

**History**
- *Source Note: The provisions of this §353.102 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.104** Member Education Program {#sec-353.104 omnilex-key=us-tx-regs-official--title-1--353.104}

A member education program must present information in a manner that is easy to understand. In addition to any requirements specified in the contract between the managed care organization (MCO) and the Health and Human Services Commission, a program must include, at minimum, information on:

(1) a member's rights and responsibilities under the Bill of Rights and the Bill of Responsibilities prescribed in Subchapter C of this chapter (relating to Member Bill of Rights and Responsibilities);

(2) how to access dental services or health care services;

(3) how to access complaint and appeal procedures, the member's right to request a fair hearing, and the process for requesting a fair hearing;

(4) Medicaid policies, procedures, eligibility standards, and benefits;

(5) the policies and procedures of the MCO; and

(6) the importance of prevention, early intervention, and appropriate use of services.

**History**
- *Source Note: The provisions of this §353.104 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.105** Provider Education Program {#sec-353.105 omnilex-key=us-tx-regs-official--title-1--353.105}

In addition to any requirements specified in the contract between the managed care organization and the Health and Human Services Commission, a provider education program must include, at minimum, information on:

(1) Medicaid policies, procedures, eligibility standards, and benefits;

(2) the specific problems and needs of Medicaid clients;

(3) screening, identification, and referral processes for coordinating dental services or health care services; and

(4) members' rights and responsibilities set out in Subchapter C of this chapter (relating to Member Bill of Rights and Responsibilities).

**History**
- *Source Note: The provisions of this §353.105 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

#### **Subchapter C** MEMBER BILL OF RIGHTS AND RESPONSIBILITIES

##### **1 Tex. Admin. Code § 353.201** Purpose {#sec-353.201 omnilex-key=us-tx-regs-official--title-1--353.201}

This subchapter implements the Health and Human Services Commission's authority to adopt a member bill of rights and responsibilities. This authority is granted in Texas Government Code §532.0301.

**History**
- *Source Note: The provisions of this §353.201 adopted to
be effective February 28, 1997, 22 TexReg 1799; amended to be effective
August 10, 2005, 30 TexReg 4466; amended to be effective March 1,
2012, 37 TexReg 1283; amended to be effective April 1, 2025, 50 TexReg
823.*

##### **1 Tex. Admin. Code § 353.202** Member Bill of Rights {#sec-353.202 omnilex-key=us-tx-regs-official--title-1--353.202}

Each managed care organization (MCO) participating in the Texas Medicaid program must provide to each member an easy-to-read, written document describing the member's rights, which must include the following:

(1) Member rights for members of health care MCOs:

(A) You have the right to respect, dignity, privacy, confidentiality and nondiscrimination. That includes the right to:

(i) Be treated fairly and with respect.

(ii) Know that your medical records and discussions with your providers will be kept private and confidential.

(B) You have the right to a reasonable opportunity to choose a managed care organization (MCO) and primary care provider. This is the doctor or health care provider you will see most of the time and who will coordinate your care. You have the right to change to another MCO or provider in a reasonably easy manner. That includes the right to:

(i) Be told how to choose and change your MCO and your primary care provider.

(ii) Choose any MCO you want that is available in your area and choose your primary care provider from that plan.

(iii) Change your primary care provider.

(iv) Change your MCO without penalty.

(v) Be told how to change your MCO or your primary care provider.

(C) You have the right to ask questions and get answers about anything you do not understand. That includes the right to:

(i) Have your provider explain your health care needs to you and talk to you about the different ways your health care problems can be treated.

(ii) Be told why care or services were denied and not given.

(D) You have the right to agree to or refuse treatment and actively participate in treatment decisions. That includes the right to:

(i) Work as part of a team with your provider in deciding what health care is best for you.

(ii) Say yes or no to the care recommended by your provider.

(E) You have the right to use each complaint and appeal process available through the MCO and through Medicaid, and get a timely response to complaints, appeals and fair hearings. That includes the right to:

(i) Make a complaint to your MCO or to the Texas Medicaid program about your health care, your provider or your MCO.

(ii) Get a timely answer to your complaint.

(iii) Use the MCO's appeal process and be told how to use it.

(iv) Ask for a fair hearing from the Texas Medicaid program and get information about how that process works.

(F) You have the right to timely access to care that does not have any communication or physical access barriers. That includes the right to:

(i) Have telephone access to a medical professional 24 hours a day, 7 days a week to get any emergency or urgent care you need.

(ii) Get medical care in a timely manner.

(iii) Be able to get in and out of a health care provider's office. This includes barrier free access for people with disabilities or other conditions that limit mobility, in accordance with the Americans with Disabilities Act.

(iv) Have interpreters, if needed, during appointments with your providers and when talking to your MCO. Interpreters include people who can speak in your native language, help someone with a disability, or help you understand the information.

(v) Be given information you can understand about your MCO's rules, including the health care services you can get and how to get them.

(G) You have the right to not be restrained or secluded when it is for someone else's convenience, or is meant to force you to do something you do not want to do, or is to punish you.

(H) You have a right to know that doctors, hospitals, and others who care for you can advise you about your health status, medical care, and treatment. Your MCO cannot prevent them from giving you this information, even if the care or treatment is not a covered service.

(I) You have a right to know that you are not responsible for paying for covered services. Doctors, hospitals, and others cannot require you to pay copayments or any other amounts for covered services.

(2) Member rights for members of dental MCOs:

(A) You have the right to get accurate, easy-to-understand information to help you make good choices about you or your child's dentists and other providers.

(B) You have the right to know how your child's dentists are paid. You have a right to know about what those payments are and how they work.

(C) You have the right to know how your managed care organization (MCO) decides about whether a service is covered and/or medically necessary. You have the right to know about the people in the MCO's office who decide those things.

(D) You have the right to know the names of the dentists and other providers enrolled with your MCO and their addresses.

(E) You have the right to pick from a list of dentists that is large enough so that your child can get the right kind of care when your child needs it.

(F) You have the right to take part in all the choices about your child's dental care.

(G) You have the right to speak for your child in all treatment choices.

(H) You have the right to get a second opinion from another dentist enrolled in your MCO about what kind of treatment your child needs.

(I) You have the right to be treated fairly by your MCO, dentists and other providers.

(J) You have the right to talk to your child's dentists and other providers in private, and to have your child's dental records kept private. You have the right to look over and copy your child's dental records and to ask for changes to those records.

(K) You have a right to know that dentists, hospitals, and others who care for your child can advise you about your child's health status, medical care, and treatment. Your child's MCO cannot prevent them from giving you this information, even if the care or treatment is not a covered service.

(L) You have a right to know that you are not responsible for paying for covered services for your child. Dentists, hospitals, and others cannot require you to pay any other amounts for covered services.

**History**
- *Source Note: The provisions of this §353.202 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 13, 2003, 28 TexReg 6265; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.203** Member Bill of Responsibilities {#sec-353.203 omnilex-key=us-tx-regs-official--title-1--353.203}

Each managed care organization (MCO) participating in the Texas Medicaid program must provide to each member an easy-to-read, written document, which must include the following:

(1) Member responsibilities for members of health care MCOs:

(A) You must learn and understand each right you have under the Medicaid program. That includes the responsibility to:

(i) Learn and understand your rights under the Medicaid program.

(ii) Ask questions if you do not understand your rights.

(iii) Learn what choices of managed care organizations (MCOs) are available in your area.

(B) You must abide by the MCO's and Medicaid's policies and procedures. That includes the responsibility to:

(i) Learn and follow your MCO's rules and Medicaid rules.

(ii) Choose your MCO and a primary care provider (PCP) quickly.

(iii) Make any changes in your MCO and PCP in the ways established by Medicaid and by the MCO.

(iv) Keep your scheduled appointments.

(v) Cancel appointments in advance when you cannot keep them.

(vi) Always contact your PCP first for your non-emergency medical needs.

(vii) Be sure you have approval from your PCP before going to a specialist.

(viii) Understand when you should and should not go to the emergency room.

(C) You must share information about your health with your PCP and learn about service and treatment options. That includes the responsibility to:

(i) Tell your PCP about your health.

(ii) Talk to your providers about your health care needs and ask questions about the different ways your health care problems can be treated.

(iii) Help your providers get your medical records.

(D) You must be involved in decisions relating to service and treatment options, make personal choices, and take action to keep yourself healthy. That includes the responsibility to:

(i) Work as a team with your provider in deciding what health care is best for you.

(ii) Understand how the things you do can affect your health.

(iii) Do the best you can to stay healthy.

(iv) Treat providers and staff with respect.

(v) Talk to your provider about all of your medications.

(E) If you think you have been treated unfairly or discriminated against, call the U.S. Department of Health and Human Services (HHS) toll-free at 1-800-368-1019. You also can view information concerning the HHS Office of Civil Rights online at www.hhs.gov/ocr.

(2) Member responsibilities for members of dental MCOs:

(A) You and the MCO both have an interest in seeing your child's dental health improve. You can help by assuming these responsibilities.

(i) You and your child must try to follow healthy habits, such as encouraging your child to exercise, to stay away from tobacco, and to eat a healthy diet.

(ii) You must become involved in the dentist's decisions about you and your child's treatments.

(iii) You must work together with the MCO's dentists and other providers to pick treatments for your child that you have all agreed upon.

(iv) If you have a disagreement with the MCO, you must try first to resolve it using the MCO's complaint process.

(v) You must learn about what the MCO does and does not cover. You must read your Member Handbook to understand how the rules work.

(vi) If you make an appointment for your child, you must try to get to the dentist's office on time. If you cannot keep the appointment, be sure to call and cancel it.

(vii) You must report misuse by dental and health care providers, other members, the MCO, or other dental or medical plans.

(B) If you think you have been treated unfairly or discriminated against, call the U.S. Department of Health and Human Services (HHS) toll-free at 1-800-368-1019. You also can view information concerning the HHS Office of Civil Rights online at www.hhs.gov/ocr.

**History**
- *Source Note: The provisions of this §353.203 adopted to be effective February 28, 1997, 22 TexReg 1799; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective March 1, 2012, 37 TexReg 1283.*

#### **Subchapter E** STANDARDS FOR MEDICAID MANAGED CARE

##### **1 Tex. Admin. Code § 353.403** Enrollment and Disenrollment {#sec-353.403 omnilex-key=us-tx-regs-official--title-1--353.403}

(a) Enrollment by HHSC. HHSC will conduct enrollment and disenrollment activities. Except as provided in subsection (d)(2) and (5) of this section, regarding dental home assignments, HHSC may not contract with a participating MCO to serve as the administrator for enrollment or disenrollment activities in any area of the state.

(b) Procedures for enrollment. HHSC will establish procedures for enrollment into participating MCOs, primary care providers (PCPs), and dental homes, including enrollment periods and time limits within which enrollment must occur. Beneficiaries will have at least 15 calendar days from the date notification is mailed to choose an MCO, PCP, and dental home.

(c) Default assignment. Beneficiaries who fail to select an MCO, PCP, or dental home within the timeframe specified in subsection (b) of this section will have an MCO, PCP, or dental home selected for them by HHSC using the default assignment methodology described in subsection (d) of this section.

(d) Default assignment methodology. HHSC's default assignment methodology will include the following criteria, to the maximum extent possible:

(1) Automated PCP assignment. If a beneficiary has not selected a PCP, HHSC or its administrative services contractor will assign one using an automated algorithm that considers:

(A) the beneficiary's established history with a PCP, as demonstrated by Medicaid claims or encounter history with the provider in the preceding year, if available;

(B) the geographic proximity of the beneficiary's home address to the PCP;

(C) whether the provider serves as a PCP to other members of the beneficiary's household;

(D) limitations on default assignment, such as PCP restrictions on age, gender, and capacity; and

(E) other criteria determined by HHSC.

(2) Automated dental home assignment. If a beneficiary has not selected a dental home, the dental MCO will assign one using an automated algorithm that considers:

(A) the beneficiary's established history with a dental home, as demonstrated by Medicaid claims or encounter history with the provider in the preceding year, if available;

(B) the geographic proximity of the beneficiary's home address to the dental home;

(C) whether the provider serves as the dental home to other members of the beneficiary's household;

(D) limitations on default assignment, such as dental home restrictions on age and capacity; and

(E) other criteria approved by HHSC.

(3) Automated MCO assignment. If a beneficiary has not selected a health care MCO or dental MCO, HHSC or its administrative services contractor will assign one using an automated algorithm that considers the beneficiary's history with a PCP or dental home when possible. If this is not possible, HHSC or its administrative services contractor will equitably distribute beneficiaries among qualified MCOs, using an automated algorithm that considers one or more of the following factors:

(A) whether other members of the beneficiary's household are enrolled in the MCO;

(B) MCO performance;

(C) the greatest variance between the percentage of elective and default enrollments (with the percentage of default enrollments subtracted from the percentage of elective enrollments);

(D) capitation rates;

(E) market share; and

(F) other criteria determined by HHSC.

(4) Automatic re-enrollment. Notwithstanding subsection (d) of this section, HHSC will automatically re-enroll a beneficiary in the same MCO if there is a loss of Medicaid eligibility of six months or less.

(5) Use of manual default processes. A beneficiary who cannot be assigned to a PCP, dental home, health care MCO, or dental MCO on the basis of an automated default process may be assigned through a manual default process determined by HHSC. Beneficiaries with special medical needs may be defaulted on the basis of a manual default methodology if such beneficiaries can be identified and if the automated default process cannot be administered for such beneficiaries.

(e) Modified default enrollment process. HHSC has the option to implement a modified default enrollment process for MCOs when contracting with a new MCO or implementing managed care in a new service area, or when it has placed an MCO on full or partial enrollment suspension.

(f) Request to change dental home or PCP. There is no limit on the number of times a member can request to change his or her dental home or PCP. A member can request a change in writing or by calling the MCO's toll-free member hotline.

(g) Disenrollment from Medicaid managed care.

(1) Disenrollment at a member's request.

(A) Members will be informed of disenrollment opportunities no less than annually.

(B) Members who are enrolled in a managed care program on a voluntary basis may request disenrollment from the managed care model and transfer to fee-for-service Medicaid at any time for any reason.

(C) Members who are enrolled in a managed care program on a mandatory basis may request, in writing to HHSC, disenrollment from the managed care model and transfer to fee-for-service Medicaid. HHSC considers disenrollment from the managed care model only if medical documentation establishes that the MCO cannot provide the needed services. An authorized HHSC representative reviews all disenrollment requests and processes approved requests for disenrollment from an MCO.

(D) Disenrollment will take place no later than the first day of the second month after the month in which the member has requested a change.

(2) Disenrollment at an MCO's request.

(A) An MCO may submit a request to HHSC that a member be disenrolled without the member's consent in the following limited circumstances:

(i) the member misuses or loans his or her MCO membership card to another person to obtain services;

(ii) the member's behavior is disruptive or uncooperative to the extent that the member's continued enrollment in the MCO seriously impairs the MCO's or a provider's ability to provide services to either the member or other members, and the member's behavior is not related to a developmental, intellectual, or physical disability, or behavioral health condition; or

(iii) the member steadfastly refuses to comply with managed care restrictions (such as repeatedly using the emergency room in combination with a refusal to allow treatment for the underlying medical condition).

(B) An MCO must take reasonable measures to correct a member's behavior prior to requesting disenrollment. Reasonable measures may include providing education and counseling regarding the offensive acts or behaviors.

(C) An MCO cannot request a disenrollment based on adverse change in the member's health status or utilization of medically necessary services.

(D) HHSC will review all requests for disenrollment. HHSC will grant a request if it determines that all reasonable measures taken by the MCO have failed to correct the member's behavior.

(E) If HHSC grants a request, it will notify the member of the disenrollment decision and the availability of HHSC's fair hearings process for an appeal of the disenrollment.

(h) MCO Transfer. A beneficiary may request transfer to another MCO in the service area through the enrollment broker at any time for any reason.

**History**
- *Source Note: The provisions of this §353.403 adopted to be effective December 18, 1996, 21 TexReg 11822; amended to be effective October 6, 1997, 22 TexReg 9673; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective July 8, 2012, 37 TexReg 4851; amended to be effective September 1, 2014, 39 TexReg 5873.*

##### **1 Tex. Admin. Code § 353.405** Marketing {#sec-353.405 omnilex-key=us-tx-regs-official--title-1--353.405}

(a) Managed care organizations (MCOs) must submit a marketing plan and all marketing materials to the Health and Human Services Commission (HHSC) for prior written approval.

(b) MCOs may present their marketing materials to eligible Medicaid clients through any method or media determined to be acceptable by HHSC. The media may include: written materials, such as brochures, posters, or fliers, which can be mailed directly to the client or left at HHSC eligibility offices; enrollment events; and public service announcements on radio.

(c) MCO enrollment or marketing representatives are required to complete HHSC's marketing orientation and training program prior to engaging in marketing activities on behalf of the MCO.

(d) Prohibited marketing practices.

(1) MCOs and providers must not conduct any direct contact marketing except through enrollment events or when assisting the MCO's current members with reapplication.

(2) MCOs and providers must not make any written or oral statement containing material misrepresentations of fact or law relating to their plan or the Medicaid managed care program.

(3) MCOs and providers must not make false, misleading or inaccurate statements relating to services or benefits, providers, or potential providers through their plan.

(4) MCOs and providers must not offer Medicaid recipients material or financial gain as an inducement for enrollment, unless an exception is made by HHSC.

(5) Marketing or enrollment practices of MCOs and providers must not discriminate against a client because of a client's race, creed, age, color, religion, national origin, ancestry, marital status, sexual orientation, physical or mental disability, health status, or existing need for medical care.

(e) MCO network providers must comply with the standards described in §354.1452 of this title (relating to Provider Marketing).

(f) Nothing in this section prohibits a provider participating in the STAR+PLUS program from, as permitted under the provider's contract, engaging in a marketing activity, including any dissemination of material or other attempt to communicate, that is intended to educate a Medicaid client about available long-term care services and supports.

**History**
- *Source Note: The provisions of this §353.405 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective July 6, 2014, 39 TexReg 4951.*

##### **1 Tex. Admin. Code § 353.407** Requirements of Managed Care Plans {#sec-353.407 omnilex-key=us-tx-regs-official--title-1--353.407}

(a) Entities or individuals who subcontract with an MCO to provide benefits, perform services, or carry out any essential function of the MCO contract must meet the same qualifications and contract requirements as the MCO for the service, benefit, or function delegated under the subcontract.

(b) An MCO must reimburse a Federally Qualified Health Center (FQHC), a Rural Health Clinic (RHC), or a municipal health department's public clinic for health care services provided to a member outside of regular business hours, as defined at §353.2 of this title (relating to Definitions), at a rate that is equal to the allowable rate for those services as determined under §32.028(e) and (f), Human Resources Code, if the member does not have a referral from the member's primary care provider.

(c) An MCO must comply with HHSC's policy on contracting and subcontracting with historically underutilized businesses (HUBs). HHSC's policy is to meet the goals and good faith effort requirements as stated in the Comptroller of Public Accounts rules at 34 TAC Chapter 20, Subchapter B (relating to Historically Underutilized Business Program).

(d) An MCO must contract with advance practice registered nurses and physician assistants as primary care providers in compliance with Texas Government Code §540.0269.

(e) Beginning March 1, 2015, an MCO must provide Medicaid benefits to nursing facility residents and reimburse nursing facility providers in compliance with Texas Government Code §540.0752(b).

**History**
- *Source Note: The provisions of this §353.407 adopted to
be effective December 18, 1996, 21 TexReg 11822; transferred effective
September 1, 2001, as published in the Texas Register May 24, 2002,
27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg
4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended
to be effective December 25, 2007, 32 TexReg 9594; amended to be effective
March 1, 2012, 37 TexReg 1283; amended to be effective September 1,
2014, 39 TexReg 5873; amended to be effective April 1, 2025, 50 TexReg
823.*

##### **1 Tex. Admin. Code § 353.409** Scope of Services {#sec-353.409 omnilex-key=us-tx-regs-official--title-1--353.409}

(a) An MCO must provide covered services to members. The MCO is not responsible for providing or paying for non-capitated services or members' cost sharing obligations, if any.

(b) HHSC will establish the scope and level of benefits, which all MCOs must agree to provide as a condition for participation. In accordance with 42 C.F.R. §438.210, the scope of benefits must be provided at least in an amount, duration, and scope available to Medicaid fee-for-service clients, unless otherwise explicitly authorized by HHSC through a waiver. The amount, duration, and scope of benefits may exceed the scope of fee-for-service in accordance with subsection (f) of this section. These requirements will be contained in all contracts entered into by an MCO and HHSC.

(c) MCOs are encouraged to provide any value-added services or benefits beyond the level and scope required as a condition for participation in the competitive procurement process. These services and benefits must be approved by HHSC and cannot increase the cost borne or capitation rates paid by HHSC during any current contract term or in any subsequent contract term. These services or benefits cannot violate any other state or federal rule or regulation.

(d) A value-added service may be unique to an MCO, and limited to a member who meets the MCO's qualification criteria for the service.

(e) Before approving a value-added service, HHSC will determine whether it is an actual health care service, dental service, benefit, or positive incentive designed to promote a healthy lifestyle and improve a health or dental outcome. HHSC will not approve best practice approaches to delivering covered services as value-added services. Examples of potential value-added services include: health or dental-related programs; programs that encourage health-conscious behaviors; and for children enrolled in STAR Health, non-health care services and benefits that support the child's physical, mental, or developmental well being.

(f) On a case-by-case basis, an MCO may offer to individual members additional benefits that are outside the scope of services. Case-by-case services may be based on medical necessity, cost-effectiveness, the wishes of the member or the member's family, or the potential for improving the member's health status. For STAR+PLUS members, these case-by-case services may also be based on functional necessity. These services and benefits cannot increase the cost borne or capitation rates paid by HHSC during any current contract term or in any subsequent contract term and cannot violate any other state or federal rule or regulation.

**History**
- *Source Note: The provisions of this §353.409 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873.*

##### **1 Tex. Admin. Code § 353.411** Accessibility of Services {#sec-353.411 omnilex-key=us-tx-regs-official--title-1--353.411}

(a) Provider accessibility.

(1) A managed care organization (MCO) must provide a broad-based and accessible provider network within the service area to ensure member accessibility to a choice of two or more of each of the managed care program's provider types within the time or distance standards set forth below or as otherwise required by HHSC.

Attached Graphic

(2) For STAR+PLUS, STAR Health, and STAR Kids, a health care MCO must ensure the reasonable availability and accessibility of a choice of two or more of each of the long-term services and supports (LTSS) and home and community-based services providers to the extent required by HHSC. These providers must be reasonably accessible to members, as determined by HHSC.

(3) For providers not specifically listed in paragraphs (1) or (2) of this subsection, an MCO must provide reasonable availability and accessibility of providers within the service area to ensure member accessibility to providers in time or distance, or as otherwise required by HHSC.

(4) An MCO must allow a member to choose his network provider to the extent possible and appropriate, as required by 42 C.F.R. §438.3(l).

(b) Texas Health Steps. In addition to the requirements in subsection (a) of this section:

(1) a health care MCO must have a network of providers in sufficient numbers to provide medical checkups, diagnostic services, and treatment services in accordance with state and federal regulations, including 42 U.S.C. 1396d(r) and 25 TAC Chapter 33 (relating to Early and Periodic Screening, Diagnosis, and Treatment), to all enrolled members age 20 and younger in the service area; and

(2) a dental MCO must have main dentist providers in their network in sufficient numbers to provide dental checkups, diagnostic services, and treatment services in accordance with state and federal regulations, including 42 U.S.C. 1396d(r) and 25 TAC Chapter 33, to all enrolled members age 20 and younger in the service area.

(c) Wait times.

(1) A health care MCO must have PCPs in sufficient numbers to ensure that no member must wait an unreasonable amount of time for an appointment, and that no member must wait an unreasonable amount of time to be seen at their appointed time.

(2) A dental MCO must have main dentist providers in sufficient numbers to ensure that no member must wait an unreasonable amount of time for an appointment, and that no member must wait an unreasonable amount of time to be seen at their appointed time.

(d) Exceptions and exemptions. If any service or provider is not available to a member within the time or distance requirement specified in subsection (a) of this section, the MCO may submit an exemption request to HHSC. Exemptions are considered on a case-by-case basis. HHSC may also allow the MCOs to comply with subsection (a) of this section at a percentage less than 100%.

(e) Service or provider outside the service area. The provisions in subsection (a) of this section do not preclude an MCO from making arrangements with a provider outside the service area for members to receive services from a provider with a higher level of skill or specialty than the level that is available within the MCO service area. For health care MCOs, this can include treatment of cancer, burns, and cardiac diseases.

(f) Provider education and training.

(1) A health care MCO must provide education and training to providers on the specific health and behavioral health problems and needs of members.

(2) A dental MCO must provide education and training to providers on the specific dental health problems and needs of members.

(3) All MCOs must provide education and training regarding the contract and rule requirements for accessibility and availability. Each MCO must coordinate education and training activities for providers with HHSC.

(g) Cultural competency.

(1) An MCO must provide a broad-based and accessible provider network within the service area to ensure member accessibility to providers that meet cultural competency and language requirements. An MCO must ensure that cultural barriers do not deter members' timely access to health care services or dental services.

(2) An MCO must develop a written cultural competency plan describing how the MCO will effectively provide health care services or dental services to members from varying cultures, races, ethnic backgrounds, and religions as well as those with disabilities, to ensure those characteristics do not pose barriers to gaining access to needed services.

(A) The cultural competency plan must adhere to the National Standards for Culturally and Linguistically Appropriate Services in Health and Health Care (National CLAS Standards); and

(B) The MCO must:

(i) employ multi-cultural and multi-lingual staff;

(ii) arrange and pay for interpreter services, including written, spoken, and sign language interpretation, for members to ensure availability of effective communication regarding treatment, medical history, or health condition;

(iii) display to HHSC through the written plan a method for incorporating the plan into the MCO's policy-making process, administration, and daily practices;

(iv) maintain policies and procedures, and make information available to members and providers, outlining the manner in which members and the members' providers can access competent interpreter services, including written, spoken, and sign language interpretation, when the member is in a provider's office or accessing emergency services; and

(v) submit the written plan and plan updates and edits to HHSC for review and approval at intervals specified by HHSC.

(h) Verbal and physical barriers. An MCO must ensure that communication and physical access barriers do not deter members' timely access to health care services or dental services. The MCO must provide information in appropriate communication formats, including formats accessible to people with disabilities.

(i) Significant traditional providers. An MCO must not exclude Significant Traditional Providers from its network for a period of time and under conditions determined by HHSC and specified in the contract.

**History**
- *Source Note: The provisions of this §353.411 adopted to be effective April 24, 2019, 44 TexReg 1980.*

##### **1 Tex. Admin. Code § 353.413** Managed Care Benefits and Services for Children Under 21 Years of Age {#sec-353.413 omnilex-key=us-tx-regs-official--title-1--353.413}

(a) A managed care organization (MCO) must provide comprehensive, timely, and cost-effective diagnostic, screening, and treatment services for the medical, vision, hearing, and dental needs of Medicaid managed care program members under the age of 21, at a level and frequency that meet the requirements of the federal EPSDT program, as determined by the Health and Human Services Commission (HHSC). These requirements will be contained in all contracts, as applicable to each managed care program.

(b) An MCO must make available special training about Texas Health Steps (THSteps) benefits and goals to all providers of health and dental services contracting with the MCO to providers' staffs, and to all employees and contractors of the MCO who will provide oral presentations or marketing to members or prospective members. To fulfill this requirement, the MCO may use the training programs created by HHSC or its contractors, or the MCO may create its own training programs. Any training program created by the MCO under this subsection must meet the requirements of and be approved by HHSC.

(c) An MCO must coordinate and cooperate with HHSC in developing effective outreach, access, and monitoring systems to ensure that all qualified members receive THSteps benefits.

(d) The managed care programs of participating MCOs are intended to complement and enhance the effectiveness and availability of THSteps benefits in the service areas. HHSC will not delegate the responsibility and accountability for monitoring and ensuring that THSteps benefits are available and accessible to all eligible children.

**History**
- *Source Note: The provisions of this §353.413 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.415** Member Complaint and Appeal Procedures {#sec-353.415 omnilex-key=us-tx-regs-official--title-1--353.415}

(a) Managed care organizations (MCOs) must develop and maintain a system and process for taking, tracking, reviewing, and reporting member complaints and appeals.

(b) MCOs must establish and maintain internal procedures for the resolution of member complaints and appeals. The procedures must be in writing. The procedures must be detailed and specific regarding how complaints and appeals are to be taken, to whom complaints are referred, and by when a complaint must be resolved.

(c) MCOs must establish a procedure to assist members in understanding and using the MCO's internal complaint and appeal process. The member's complaint and appeal procedure must be:

(1) in writing and distributed to each member upon enrollment;

(2) provided to the member each time the member's benefits are reduced, denied, or terminated for any reason;

(3) easy for members to understand and follow; and

(4) contain a prominent notice to the member that complies with the fair hearing rules found in Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules), stating the member retains all rights as a Medicaid client to a fair hearing through the Health and Human Services Commission (HHSC), in addition to the MCO's complaint and appeal process.

(d) HHSC will review the MCO's complaint and appeals procedures to determine if they comply with HHSC's standards before HHSC approves use of the procedures. Reports containing complaint summaries must be submitted to HHSC in compliance with HHSC policy.

(e) HHSC retains the authority to make the final decision following HHSC's fair hearing process.

**History**
- *Source Note: The provisions of this §353.415 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.417** Quality Assessment and Performance Improvement {#sec-353.417 omnilex-key=us-tx-regs-official--title-1--353.417}

(a) Each MCO must develop and implement an ongoing quality assessment and performance improvement (QAPI) program for services it furnishes to its enrollees. The MCO must maintain and provide documentation of its compliance for HHSC's or its contracted External Quality Review Organization's (EQRO's) review, including performance measurement data. The MCO's quality assessment and performance improvement program must meet the requirements contained in 42 CFR §438.240 and, at a minimum, include:

(1) a program of performance improvement projects that focus on clinical and non-clinical areas;

(2) mechanisms to assess the quality and appropriateness of care furnished to enrollees with special health care needs;

(3) mechanisms to detect both under and over-utilization of services;

(4) practice guidelines that meet CMS requirements under 42 CFR §438.236.

(b) An MCO may subcontract QAPI functions. An MCO must not delegate responsibility for QAPI compliance.

(c) HHSC monitors and reviews systems and procedures to ensure MCO compliance with MCO contracts, this subchapter, and all related state and federal rules, regulations, and guidelines, including QAPI standards.

(1) An MCO must submit QAPI information at regular and periodic intervals.

(2) An MCO must submit to periodic inspection and review to determine compliance with all contract terms, and state and federal rules and policies.

(d) HHSC periodically evaluates each MCO's quality of services in each Medicaid managed care service area and the cost-effectiveness, member access, and quality of care under each federal waiver.

(1) A quality evaluation must be conducted at least annually.

(2) The assessment of cost-effectiveness, member access, and quality of care under each federal waiver must be conducted according to the terms of an approved federal waiver.

(3) HHSC will determine the need for additional evaluations after completing the evaluations described in paragraphs (1) and (2) of this subsection.

**History**
- *Source Note: The provisions of this §353.417 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873.*

##### **1 Tex. Admin. Code § 353.419** Financial Standards {#sec-353.419 omnilex-key=us-tx-regs-official--title-1--353.419}

(a) A managed care organization (MCO) must maintain compliance with the MCO contract requirements, and the Texas Insurance Code and rules promulgated and administered by the Texas Department of Insurance, requiring a fiscally sound operation.

(b) The Health and Human Services Commission (HHSC) may share in the experience rebates in accordance with §353.3 of this chapter (relating to Experience Rebate in the Managed Care Program).

(c) HHSC may establish incentive payment programs to encourage MCOs to meet or exceed the goals and objectives of the Medicaid managed care program established by HHSC through its contract.

**History**
- *Source Note: The provisions of this §353.419 adopted to be effective December 18, 1996, 21 TexReg 11822; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561; amended to be effective August 10, 2005, 30 TexReg 4466; amended to be effective September 1, 2006, 31 TexReg 6629; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.421** Special Disease Management for a Health Care Managed Care Organization {#sec-353.421 omnilex-key=us-tx-regs-official--title-1--353.421}

(a) Definitions. The following words and terms, when used in this section have the following meanings, unless the context clearly indicates otherwise.

(1) Active participation--One or more encounters in a calendar year, either face-to-face or by an approved telehealth modality, between the disease management staff of a health care managed care organization (MCO) and a member or the member's representative. In determining active participation, a member who is assessed and provided supports and services that address a chronic disease, but is not participating in the MCO's special disease management program as described in Texas Government Code §540.0708 should not be counted as participating in the disease management program.

(2) High-risk member--A member at high-risk for non-adherence to the member's plan of care that addresses the member's disease or other chronic health condition, such as heart disease; chronic kidney disease and its medical complications; respiratory illness, including asthma; diabetes; end-stage renal disease; human immunodeficiency virus infection (HIV), or acquired immunodeficiency syndrome (AIDS). A high risk member has multiple or complex medical or behavioral health conditions, or both, with clinical instability undergoing active treatment and at risk of avoidable emergency room visits or hospitalizations.

(3) Special disease management--Coordinated healthcare interventions and communications for populations with conditions in which patient self-care efforts are significant.

(b) A health care MCO must provide special disease management services. A health care MCO must:

(1) implement policies and procedures to ensure that a member who requires special disease management services are identified and enrolled into the MCO's special disease management program;

(2) develop and maintain screening and evaluation procedures for the early detection, prevention, treatment, or referral of a member at risk for or diagnosed with chronic conditions such as heart disease; chronic kidney disease and its medical complications; respiratory illness, including asthma; diabetes; HIV infection; or AIDS;

(3) ensure a member who is enrolled in the MCO's special disease management program has the opportunity to disenroll from the program within 30 days while still maintaining access to all other covered services;

(4) show evidence of the ability to manage complex diseases in the Medicaid population by demonstrating the health care MCO's ability to comply with this section; and

(5) include mechanisms to:

(A) identify:

(i) low active participation rates in the MCO's special disease management program; and

(ii) the reason for the low rates; and

(B) increase active participation in the disease management program for high-risk members.

(c) A special disease management program must include:

(1) patient self-management education;

(2) patient education regarding the role of the provider;

(3) evidence-supported models, standards of care in the medical community, and clinical outcomes;

(4) standardized protocols and participation criteria;

(5) physician-directed or physician-supervised care;

(6) implementation of interventions that address the continuum of care;

(7) mechanisms to modify or change interventions that have not been proven effective;

(8) mechanisms to monitor the impact of the special disease management program over time, including both the clinical and the financial impact;

(9) a system to track and monitor all members enrolled in a special disease management program for clinical, utilization, and cost measures;

(10) designated staff to implement and maintain the program and assist members in accessing program services;

(11) a system that enables providers to request specific special disease management interventions; and

(12) provider information, including:

(A) the differences between recommended prevention and treatment and actual care received by a member enrolled in a special disease management program;

(B) information concerning the member's adherence to a service plan; and

(C) reports on changes in each member's health status.

(d) A health care MCO's special disease management program must have performance measures for particular diseases. HHSC reviews the performance measures submitted by a special disease management program for comparability with the relevant performance measures in Texas Government Code §540.0708, relating to contracts for disease management programs.

(e) A health care MCO implementing a special disease management program for chronic kidney disease and its medical complications that includes screening for and diagnosis and treatment of this disease and its medical complications, must, for the screening, diagnosis and treatment, use generally recognized clinical practice guidelines and laboratory assessments that identify chronic kidney disease on the basis of impaired kidney function or the presence of kidney damage.

(f) A health care MCO that develops and implements a special disease management program must coordinate participant care with a provider of a disease management program under Texas Human Resources Code §32.057, during a transition period for patients that move from one disease management program to another program.

**History**
- *Source Note: The provisions of this §353.421 adopted to be effective August 19, 2007, 32 TexReg 4964; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 28, 2024, 49 TexReg 9743.*

##### **1 Tex. Admin. Code § 353.423** Expedited Credentialing {#sec-353.423 omnilex-key=us-tx-regs-official--title-1--353.423}

(a) HHSC identifies applicant provider types for which an expedited credentialing process must be established and implemented.

(b) An MCO must comply with the requirements of Texas Insurance Code Chapter 1452, Subchapters C, D, and E, regarding expedited credentialing and payment of physicians, podiatrists, and therapeutic optometrists. Additionally, each MCO must establish and implement an expedited credentialing process that allows applicant providers to provide services to members for the following provider types:

(1) dentists;

(2) dental specialists (endodontist, oral/maxillofacial surgeon, orthodontist, pediatric dentist, periodontist, prosthodontist, and physicians providing dental specialty care);

(3) licensed clinical social workers;

(4) licensed professional counselors;

(5) licensed marriage and family therapists; and

(6) psychologists.

(c) To qualify for expedited credentialing under this section and payment under subsection (e) of this section, an applicant provider must:

(1) be a member of an established health care provider group that has a current contract with an MCO;

(2) be a Medicaid-enrolled provider;

(3) agree to comply with the terms of the contract described in paragraph (1) of this subsection; and

(4) submit all documentation and information required by the MCO as necessary for the MCO to begin the credentialing process.

(d) An MCO must establish and implement an expedited credentialing process for a nursing facility that successfully undergoes a change of ownership (CHOW). The requirements for applicant providers to qualify for expedited credentialing listed in subsection (c) of this section apply to CHOWs, with the exception of subsection (c)(1) of this section.

(e) On submission by the applicant provider of the information required by the MCO under subsection (c) of this section, for Medicaid reimbursement purposes, the MCO must treat the provider as if the provider were in the MCO's provider network when the provider provides services to recipients, subject to subsections (f) and (g) of this section.

(f) Except as provided by subsection (g) of this section, if, on completion of the credentialing process, an MCO determines that the applicant provider does not meet the MCO's credentialing requirements, the MCO may recover from the provider or provider group the difference between payments for in-network benefits and out-of-network benefits.

(g) If an MCO determines on completion of the credentialing process that the applicant provider does not meet the MCO's credentialing requirements and that the provider or provider group made fraudulent claims in the provider's application for credentialing, the MCO may recover from the provider or provider group the entire amount of any payment paid to the provider or provider group.

**History**
- *Source Note: The provisions of this §353.423 adopted to be effective April 24, 2019, 44 TexReg 1980.*

##### **1 Tex. Admin. Code § 353.425** MCO Processing of Prior Authorization Requests Received with Incomplete or Insufficient Documentation {#sec-353.425 omnilex-key=us-tx-regs-official--title-1--353.425}

(a) The rules in this section apply when a prior authorization (PA) request is submitted with incomplete or insufficient information or documentation on behalf of a member who is not hospitalized at the time of the request.

(b) In this section, "incomplete PA request" means a request for service that is missing information or documentation necessary to establish medical necessity as listed in the PA requirements on the managed care organization's (MCO's) website.

(c) An MCO must comply with Title 42 Code of Federal Regulations §438.210, applicable provisions of Texas Government Code Chapter 540, and the PA process and timeline requirements included in an MCO's contract with the Texas Health and Human Services Commission (HHSC).

(d) If an MCO or an entity reviewing a request on behalf of an MCO receives a PA request with incomplete or insufficient information or documentation, the MCO or reviewing entity must comply with the following HHSC requirements.

(1) An MCO reviewing the request must notify the requesting provider and the member, in writing, of the missing information no later than three business days after the MCO receives an incomplete PA request.

(2) If an MCO does not receive the information requested within three business days after the MCO notifies the requesting provider and the PA request will result in an adverse benefit determination, the MCO must refer the PA request to the MCO medical director for review.

(3) The MCO must offer to the requesting physician an opportunity for a peer-to-peer consultation with a physician no less than one business day before the MCO issues an adverse benefit determination.

(4) The MCO must make a final determination as expeditiously as the member's condition requires but no later than three business days after the date the missing information is provided to an MCO.

(e) The HHSC requirements for MCO reconsideration of an incomplete PA request do not affect any related timeline for:

(1) an MCO's internal appeal process;

(2) a Medicaid state fair hearing;

(3) a review conducted by an external medical reviewer; or

(4) any rights of a member to appeal a determination on a PA request.

**History**
- *Source Note: The provisions of this §353.425 adopted
to be effective February 28, 2024, 49 TexReg 1042; amended to be effective
April 1, 2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.427** Accessibility of Information Regarding Medicaid Prior Authorization Requirements {#sec-353.427 omnilex-key=us-tx-regs-official--title-1--353.427}

(a) In this section, "accessible" means publicly available and capable of being found and read without impediment. Usernames and passwords cannot be required to view the information.

(b) A managed care organization (MCO) must maintain on its public-facing website the MCO's criteria and policy for prior authorizations and website links to any prior authorization request forms the provider uses.

(c) The MCO must maintain the following items on its website in an easily searchable and accessible format.

(1) Applicable timelines for prior authorization requirements, including:

(A) the timeframe in which the MCO must make a determination on a prior authorization request;

(B) a description of the notice the MCO provides to a provider or member regarding the documentation required to complete a prior authorization determination; and

(C) the deadline by which the MCO must submit the notice described in subparagraph (B) of this paragraph.

(2) An accurate and up-to-date catalogue of coverage criteria and prior authorization requirements, including:

(A) the effective date of a prior authorization requirement, if the requirement is first imposed on or after September 1, 2019;

(B) a list or description of any supporting or supplemental documentation necessary to obtain prior authorization for a specified service; and

(C) the date and results of each annual review of the MCO's prior authorization requirements as required by Texas Government Code §540.0304.

(3) The process and contact information for a provider or member to contact the MCO to:

(A) clarify prior authorization requirements; and

(B) obtain assistance in submitting a prior authorization request.

**History**
- *Source Note: The provisions of this §353.427 adopted
to be effective February 28, 2024, 49 TexReg 1042; amended to be effective
April 1, 2025, 50 TexReg 823.*

#### **Subchapter F** SPECIAL INVESTIGATIVE UNITS

##### **1 Tex. Admin. Code § 353.501** Purpose {#sec-353.501 omnilex-key=us-tx-regs-official--title-1--353.501}

(a) This subchapter implements the Health and Human Services Commission's (HHSC), Office of Inspector General (OIG) authority to approve annually, each managed care organization (MCO) plan to prevent and reduce waste, abuse, and fraud. This authority is granted by Texas Government Code §544.0352.

(b) An MCO that provides or arranges for the provision of health care services or dental services to an individual under the Medical Assistance Program (Medicaid), must arrange for a special investigative unit to investigate fraudulent claims and other types of program abuse by recipients and providers. An MCO may choose to:

(1) establish and maintain the special investigative unit within the MCO; or

(2) contract with another entity for the investigation.

(c) An MCO must:

(1) develop a plan to prevent and reduce waste, abuse, and fraud;

(2) submit the plan annually to the HHSC-OIG for approval each year the MCO is enrolled with the State of Texas; and

(3) submit the plan 90 days before the start of the State fiscal year.

(d) If HHSC-OIG does not approve the initial plan to prevent and reduce waste, abuse, and fraud, the MCO must resubmit the plan to HHSC-OIG within 15 working days of receiving the denial letter, which will explain the deficiencies. If the plan is not resubmitted within the time allotted, the MCO will be in default and remedies or sanctions may be imposed.

(e) If the MCO elects to contract with another entity for the investigation of fraudulent claims and other types of program abuse as referenced in subsection (b)(2) of this section, the MCO must comply with all requirements of Title 42, §438.230 of the Code of Federal Regulations.

**History**
- *Source Note: The provisions of this §353.501 adopted to
be effective August 8, 2004, 29 TexReg 7301; amended to be effective
March 1, 2012, 37 TexReg 1291; amended to be effective April 1, 2025,
50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.502** Managed Care Organization's Plans and Responsibilities in Preventing and Reducing Waste, Abuse, and Fraud {#sec-353.502 omnilex-key=us-tx-regs-official--title-1--353.502}

(a) Each managed care organization (MCO) subject to this section must develop a plan to prevent and reduce waste, abuse, and fraud and submit that plan annually to the Health and Human Services Commission (HHSC), Office of Inspector General (OIG) for approval.

(b) The MCO is responsible for investigating possible acts of waste, abuse, or fraud for all services, including those that the MCO subcontracts to outside entities.

(c) The plan submitted to the HHSC-OIG must include the following information to be considered for approval.

(1) A description of the MCO's procedures for detecting possible acts of waste, abuse, and fraud by providers. The description must address each of the following requirements:

(A) use of audits to monitor compliance and assist in detecting and identifying Medicaid program violations and possible waste, abuse, and fraud overpayments through data matching, analysis, trending, and statistical activities;

(B) monitoring of service patterns for providers, subcontractors, and recipients;

(C) use of a hotline or another mechanism to report potential or suspected violations;

(D) use of random payment review of claims submitted by providers for reimbursement to detect potential waste, abuse, or fraud;

(E) use of edits or other evaluation techniques to prevent payment for fraudulent or abusive claims;

(F) use of routine validation of MCO data; and

(G) verification that MCO members actually received services that were billed.

(2) A description of the MCO's procedures for investigating possible acts of waste, abuse, and fraud by providers. The procedures must satisfy the requirements in subparagraphs (A) - (C) of this paragraph.

(A) The MCO must conduct a preliminary investigation within 15 working days of the identification or reporting of suspected or potential waste, abuse, or fraud.

(B) The preliminary investigation must include the following:

(i) Determining if the MCO has received any previous reports of incidences of suspected waste, abuse, or fraud or conducted any previous investigations of the provider in question. If so, the investigation should include a review of all materials related to the previous investigations, the outcome of the previous investigations, and a determination of whether the new allegations are the same or relate to the previous investigation.

(ii) Determining if the service provider has received any educational training from the MCO in regard to the allegation.

(iii) Conducting a review of the provider's billing pattern to determine if there are any suspicious indicators.

(iv) Reviewing the provider's payment history for the past three years, if available, to determine if there are any suspicious indicators.

(v) Reviewing the policies and procedures for the program type in question to determine if what has been alleged is a violation.

(C) If it is determined that suspicious indicators of possible waste, abuse, or fraud exist, within 15 working days from the conclusion of subparagraphs (A) and (B) of this paragraph, the MCO must select a minimum of 30 recipients or 15% of a provider's claims related to the suspected waste, abuse, and fraud; provided, however, that if the MCO selects 15% of the claims, the MCO must include claims relating to at least 30 recipients. The MCO may confirm the suspicious indicators of fraud, waste, and abuse with a review of fewer recipients or claims, provided that the MCO submits, as part of the MCO's referral, a written justification for the decision to substantiate the waste, abuse, or fraud with fewer recipients or claims. Once the MCO selects the recipients or claims for review, the MCO must:

(i) within 15 working days of the selection of the recipients or claims for review, request medical or dental records and encounter data; and must

(ii) review the requested medical or dental records and encounter data within 45 working days of receipt of the records to:

(I) validate the sufficiency of service delivery data and to assess utilization and quality of care;

(II) ensure that the encounter data submitted by the provider is accurate; and

(III) evaluate if the review of other pertinent records is necessary to determine if waste, abuse, or fraud has occurred. If the review of additional records is necessary then conduct such review.

(3) A description of the MCO's procedures for detecting possible acts of waste, abuse, and fraud by recipients. The description must address the following:

(A) Review of claims when waste, abuse, or fraud is suspected or reported to determine if:

(i) Treatment(s) and/or medication(s) prescribed by more than one provider appears to be duplicative, excessive, or contraindicated; and

(ii) Recipients are using more than one provider to obtain similar treatments and/or medications; and

(iii) Providers other than the assigned Primary Care Provider (PCP) are treating the recipient, and there is no evidence that the recipient was treated by the assigned PCP for a similar or related condition; and

(iv) The recipient has a high volume of emergency room visits with a non-emergent diagnosis.

(B) Review of medical or dental records for the recipients in question if claims review does not clearly determine if waste, abuse, or fraud has occurred.

(C) For a health care MCO, use of edits or other evaluation techniques to identify possible overuse or abuse of psychotropic or controlled medications by recipients who are allegedly treated at least monthly by two or more physicians. A physician includes: psychiatrists, pain management specialists, anesthesiologists, and physical medicine and rehabilitation specialists.

(4) A description of the MCO's procedures for investigating possible acts of waste, abuse, and fraud by recipients. The procedures must satisfy the requirements in subparagraphs (A) and (B) of this paragraph, as applicable.

(A) An MCO must conduct a preliminary investigation within 15 working days of the identification or reporting of suspected or potential waste, abuse, or fraud.

(B) For a health care MCO, a preliminary investigation must include the following:

(i) Review of acute care and emergency room claims submitted by providers for the recipient suspected of waste, abuse, or fraud.

(ii) Analysis of pharmacy claim data submitted by providers for the recipient suspected of waste, abuse, or fraud to determine possible abuse of controlled or non-controlled medications. If the MCO does not have the data necessary to conduct the pharmacy claims review, the MCO must request the data within 15 working days of the initial identification or reporting of the suspected or potential waste, abuse, or fraud.

(iii) Analysis of claims submitted by providers to determine if the diagnosis is appropriate for the medications prescribed.

(5) A description of the MCO's internal procedures for referring possible acts of waste, abuse, or fraud to the MCO's Special Investigative Unit (SIU) and the mandatory reporting of possible acts of waste, abuse, or fraud by providers or recipients to the HHSC-OIG. The procedures must satisfy the requirements in subparagraphs (A) - (E) of this paragraph.

(A) Assign an officer or director the responsibility and authority for reporting all investigations resulting in a finding of possible acts of waste, abuse, or fraud to the OIG. An officer could be but is not limited to a Compliance Officer, a Manager of Government Programs, or a Regulatory Compliance Analyst.

(B) Provide specific and detailed internal procedures for officers, directors, managers, and employees to report possible acts of waste, abuse, and fraud to the MCO's SIU. The procedures must include but are not limited to:

(i) Guidance regarding what information must be reported to the MCO's SIU.

(ii) A requirement that information must be reported to the MCO's SIU within 24 hours of identification or reporting of suspected waste, abuse, and fraud.

(C) Provide specific and detailed internal procedures for the SIU to report investigations resulting in a finding of waste, abuse, or fraud to the assigned officer or director.

(i) Guidance regarding what information must be reported to the assigned officer or director.

(ii) A requirement that possible acts of waste, abuse, or fraud be reported to the assigned officer or director must occur within 15 working days of making the determination.

(D) Within 30 working days of the completion of the SIU investigation and receiving reports of possible acts of waste, abuse, or fraud from the SIU, the assigned officer or director must notify and refer all possible acts of waste, abuse or fraud to the HHSC-OIG. All reports and referrals of possible acts of waste, abuse, and fraud, with the exception of an expedited referral, must include the following information related to the referrals:

(i) the provider's enrollment/credentialing documents;

(ii) the complete SIU investigative file on the provider, which must include:

(I) an investigative report identifying the allegation, statutes/regulations/rules violated or considered, and the results of the investigation;

(II) the estimated overpayment identified;

(III) a summary of interviews conducted; and

(IV) a list of all claims and associated overpayments identified by the preliminary investigation;

(iii) a summary of all past investigations of the provider conducted by the MCO or the MCO's SIU. Upon request, the MCO shall provide the complete investigative files or any other information regarding those past investigations to the HHSC-OIG investigator;

(iv) copies of HHSC program and MCO policy, contract, and other requirements, as well as statutes/regulations/rules, alleged to be violated for the time period in question;

(v) all education letters (including education documents) and/or recoupment letters issued to the provider by the MCO or the MCO's SIU at any time;

(vi) all medical records;

(vii) all clinical review reports/summaries generated by the MCO;

(viii) any and all correspondence and/or communications between the MCO, the MCO's subcontractors, and any of their employees, contractors, or agents, and the provider related to the investigation. This should include but not be limited to agents, servants and employees of the MCO, regardless of whether those agents, servants and employees are part of the SIU who investigated the provider;

(ix) copies of all settlement agreements between the MCO and its contractors and the provider; and

(x) if the referral contains fewer recipients or claims than the minimum described in paragraph (2)(C) of this subsection, a written justification for the decision to substantiate the waste, abuse, or fraud with fewer recipients or claims. The justification will be subject to review and approval by HHSC-OIG, who may require the MCO to provide further information.

(E) An expedited referral is required when the MCO has reason to believe that a delay may result in:

(i) harm or death to patients

(ii) the loss, destruction, or alteration of valuable evidence; or

(iii) a potential for significant monetary loss that may not be recoverable; or

(iv) hindrance of an investigation or criminal prosecution of the alleged offense.

(6) A description of the MCO's procedures for educating recipients and providers and training personnel to prevent waste, abuse, and fraud. The procedures must satisfy the requirements in subparagraphs (A) - (H) of this paragraph.

(A) On an annual basis, the MCO must ensure that waste, abuse, and fraud training is provided to each employee and subcontractor who is directly involved in any aspect of Medicaid. At a minimum, training is required for all individuals responsible for data collection, provider enrollment or disenrollment, encounter data, claims processing, utilization review, appeals or grievances, quality assurance, and marketing.

(B) The training must be specific to the area of responsibility for the MCO and subcontractor staff receiving the training and contain examples of waste, abuse, or fraud in their particular area of interest.

(C) The MCO must ensure that general training is provided to all Medicaid managed care staff of the MCO and its subcontractors who are not directly involved with the areas listed in subparagraph (A) of this paragraph. The general training must provide information about the definition of waste, abuse, and fraud; how to report suspected waste, abuse, and fraud; and to whom the suspected waste, abuse, and fraud is reported.

(D) The organization must provide waste, abuse, and fraud training to all new MCO and subcontractor staff that will be directly involved with any aspect of Medicaid within 90 days of the employee's employment date.

(E) Provide updates to all affected areas when changes to policy and/or procedure may affect their area(s). The updates must be provided within 20 working days of the changes occurring.

(F) Educate recipients, providers, and employees about their responsibilities, the responsibility of others, the definition of waste, abuse, and fraud and how and where to report it. Appropriate methods of educating recipients, providers, and employees may include but are not limited to newsletters, pamphlets, bulletins, and provider manuals.

(G) The MCOs will maintain a training log for all training pertaining to waste, abuse, and/or fraud in Medicaid. The log must include the name and title of the trainer, names of all staff attending the training, and the date and length of the training. The log must be provided immediately upon request to the HHSC-OIG, Office of the Attorney General's (OAG)-Medicaid Fraud Control Unit (MFCU) and OAG-Civil Medicaid Fraud Division (CMFD), and the United States Health and Human Services-Office of Inspector General (HHS-OIG).

(H) Written standards of conduct, and written policies and procedures that include a clearly delineated commitment from the MCOs for detecting, preventing and investigating waste, abuse, and fraud.

(7) The name, title, address, telephone number, and fax number of the assigned officer or director responsible for carrying out the plan.

(A) The person carrying out the plan should be but is not limited to a Compliance Officer, a Manager of Government Programs, Regulatory Compliance Analyst, Director of Quality Integrity, or a person in senior management.

(B) When the person that is responsible for carrying out the plan changes, the required information is to be reported to HHSC-OIG within 15 working days of the change.

(8) A description, process flow diagram, or chart outlining the organizational arrangement of the MCO's personnel responsible for investigating and reporting possible acts of waste, abuse, or fraud.

(9) Advertising and marketing materials utilized by the MCOs must be complete and accurately reflect the information about the MCO. Marketing materials includes any informational materials targeted to recipients.

(d) Each MCO must satisfy the requirements in paragraphs (1) - (3) of this subsection related to investigations of waste, abuse, and fraud conducted by the MCO's SIU.

(1) On a monthly basis, submit to the HHSC-OIG a report listing all investigations conducted that resulted in no findings of waste, abuse, or fraud. The report must include the allegation, the investigated recipient's or provider's Medicaid number, the source, the time period in question, and the date of receipt of the identification and/or reporting of suspected and/or potential waste, abuse, or fraud.

(2) Maintain a log of all incidences of suspected waste, abuse and fraud received by the MCO regardless of the source. The log must contain the subject of the complaint, the source, the allegation, the date the allegation was received, the recipient's or provider's Medicaid number, and the status of the investigation.

(3) The log should be provided at the time of a reasonable request to the HHSC-OIG, OAG-MFCU, OAG-CMFD, and the HHS-OIG. A reasonable request means a request made during hours that the business or premises is open for business.

(e) MCOs must maintain the confidentiality of any patient information relevant to an investigation of waste, abuse, or fraud.

(f) MCOs must retain records obtained as the result of an investigation conducted by the SIU for a minimum period of five years or until all audit questions, appealed hearings, investigations, or court cases are resolved.

(g) Failure of the provider to supply the records requested by the MCO will result in the provider being reported to the HHSC-OIG as refusing to supply records upon request and the provider may be subject to sanction or immediate payment hold.

**History**
- *Source Note: The provisions of this §353.502 adopted to be effective August 8, 2004, 29 TexReg 7301; amended to be effective March 1, 2012, 37 TexReg 1291; amended to be effective July 18, 2019, 44 TexReg 3543.*

##### **1 Tex. Admin. Code § 353.503** Managed Care Organization's Contracts {#sec-353.503 omnilex-key=us-tx-regs-official--title-1--353.503}

If a managed care organization (MCO) contracts for the investigation of fraudulent claims and other types of programs abuse by recipients and providers under §353.501(e) of this chapter (relating to Purpose), within 10 working days of executing the contract the MCO must file with the Health and Human Services Commission, Office of Inspector General (HHSC-OIG):

(1) a copy of the written contract including any and all attachments.

(2) the names, titles, addresses, telephone numbers, and fax numbers of the principals of the entity with which the MCO has contracted; and

(3) a description of the qualifications of the principals of the entity with which the MCO has contracted to perform the contracted responsibilities.

**History**
- *Source Note: The provisions of this §353.503 adopted to be effective August 8, 2004, 29 TexReg 7301; amended to be effective March 1, 2012, 37 TexReg 1291.*

##### **1 Tex. Admin. Code § 353.504** Review of Managed Care Organization's Records {#sec-353.504 omnilex-key=us-tx-regs-official--title-1--353.504}

(a) Immediately upon request, the Health and Human Services Commission, Office of Inspector General (HHSC-OIG), Office of the Attorney General-Medicaid Fraud Control Unit (OAG-MFCU) and OAG, Office of the Attorney General-Civil Medicaid Fraud Division (OAG-CMFD), and the United States Health and Human Services, Office of Inspector General (HHS-OIG) may review the records of a managed care organization (MCO) to determine compliance with this subchapter.

(b) Upon receipt of a record review request from any state or federal agency authorized to conduct compliance, regulatory, or program integrity functions, an MCO must:

(1) At no charge to the entities identified in subsection (a) of this section, provide the records requested by a properly identified agent of any state or federal agency authorized to conduct compliance, regulatory, or program integrity functions on the provider, person, MCO, or the services rendered by the provider or person within 24 hours of the request.

(2) An exception to the 24 hours stated in paragraph (1) of this subsection may be made when the OIG or another state or federal agency representative reasonably believes that the requested records are about to be altered or destroyed or that the request may be completed at the time of the request and/or in less than 24 hours.

(c) The request for record review may include, but is not limited to:

(1) clinical medical or dental patient records;

(2) other records pertaining to the patient;

(3) any other records of services provided to Medicaid or other health and human services program recipients and payments made for those services;

(4) documents related to diagnosis, treatment, service, lab results, charting;

(5) billing records, invoices, documentation of delivery items, equipment, or supplies;

(6) radiographs and study models related to orthodontia services;

(7) business and accounting records with backup support documentation;

(8) statistical documentation;

(9) computer records and data; and

(10) contracts with providers and subcontractors.

(d) Failure to produce the records or make the records available for the purpose of reviewing, examining, and securing custody of the records may result in HHSC imposing contractual remedies or HHSC-OIG imposing sanctions against the MCO as described in Chapter 371, Subchapter G of this title (relating to Legal Action Relating to Providers of Medical Assistance), or both remedies and sanctions.

**History**
- *Source Note: The provisions of this §353.504 adopted to be effective August 8, 2004, 29 TexReg 7301; amended to be effective March 1, 2012, 37 TexReg 1291.*

##### **1 Tex. Admin. Code § 353.505** Recovery of Funds {#sec-353.505 omnilex-key=us-tx-regs-official--title-1--353.505}

(a) If a managed care organization (MCO) discovers fraud or abuse has occurred in the Medicaid or CHIP program, based on information, data, or facts obtained by the MCO, it must:

(1) notify the Health and Human Services Commission-Office of Inspector General (HHSC-OIG) and the Office of the Attorney General (OAG) through a referral as described in §353.502 of this subchapter (relating to Managed Care Organization's Plans and Responsibilities in Preventing and Reducing Waste, Abuse, and Fraud) that includes a detailed description of the fraud or abuse and each payment made to a provider as a result of the fraud or abuse;

(2) subject to subsection (b) of this section, begin payment recovery efforts; and

(3) ensure that any payment recovery efforts in which the MCO engages are in accordance with this subchapter.

(b) If the amount sought to be recovered under subsection (a)(2) of this section exceeds $100,000, the MCO may not engage in payment recovery efforts if, not later than the 10th business day after the date the MCO notified HHSC-OIG and the OAG under subsection (a)(1) of this section, the MCO receives a notice from either office indicating that the MCO is not authorized to proceed with recovery efforts.

(c) To the extent allowed by federal law, an MCO may retain one-half of any money recovered under subsection (a)(2) of this section by the MCO. The MCO shall remit the remaining money recovered under subsection (a)(2) of this section to the OIG.

(d) If the OIG notifies an MCO under subsection (b) of this section, the OIG proceeds with recovery efforts, and the OIG recovers all or part of the payments the MCO identified as required by subsection (a)(1) of this section, the MCO is entitled to one-half of the amount recovered for each payment the MCO identified after any applicable federal share is deducted. The MCO may not receive more than one-half of the total amount of money recovered after any applicable federal share is deducted.

(e) An MCO shall submit a quarterly report to the HHSC-OIG detailing the amount of money recovered under subsection (a)(2) of this section.

(f) Notwithstanding any provision of this section, if the OIG discovers waste, abuse, or fraud in Medicaid or CHIP in the performance of its duties, the OIG may recover payments made to a provider as a result of the waste, abuse, or fraud. All payments recovered by the OIG shall be deposited to the credit of the general revenue fund.

(g) The OIG shall coordinate with MCOs to ensure that the OIG and the MCOs do not both begin payment recovery efforts under this rule for the same case of waste, abuse, or fraud.

**History**
- *Source Note: The provisions of this §353.505 adopted to be effective August 8, 2004, 29 TexReg 7301; amended to be effective March 1, 2012, 37 TexReg 1291; amended to be effective July 18, 2019, 44 TexReg 3543.*

#### **Subchapter G** STAR+PLUS

##### **1 Tex. Admin. Code § 353.601** General Provisions {#sec-353.601 omnilex-key=us-tx-regs-official--title-1--353.601}

(a) HHSC administers the STAR+PLUS program.

(b) The following subchapters of this chapter apply to the STAR+PLUS program:

(1) Subchapter A (relating to General Provisions);

(2) Subchapter B (relating to Provider and Member Education Programs);

(3) Subchapter C (relating to Member Bill of Rights and Responsibilities);

(4) Subchapter E (relating to Standards for Medicaid Managed Care);

(5) Subchapter F (relating to Special Investigative Units); and

(6) Subchapter J (relating to Outpatient Pharmacy Services).

(c) HHSC selects STAR+PLUS MCOs using the purchasing methods described in Chapter 391, Subchapter D of this title (relating to Purchase of Goods and Services by the Texas Health and Human Services Commission).

(d) The STAR+PLUS program serves members in all service areas in the state.

**History**
- *Source Note: The provisions of this §353.601 adopted to be effective December 1, 1997, 22 TexReg 11403; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective February 1, 2011, 36 TexReg 231; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.603** Member Participation {#sec-353.603 omnilex-key=us-tx-regs-official--title-1--353.603}

(a) Enrollment in the STAR+PLUS program is *mandatory* for Medicaid recipients who meet one or more of the following criteria:

(1) have a physical or mental disability and qualify for Supplemental Security Income (SSI) benefits or for Medicaid due to low income;

(2) qualify for STAR+PLUS Home and Community-Based Waiver Services;

(3) are age 21 or older and receive Medicaid because they are in a Social Security Exclusion program and meet financial criteria for STAR+PLUS Home and Community-Based Services Program;

(4) are age 21 or older and reside in a nursing facility;

(5) are over 18 and under 65 and qualify for Medicaid for Breast and Cervical Cancer as described in Chapter 366, Subchapter D, of this title (relating to Medicaid for Breast and Cervical Cancer); or

(6) FFCC members age 21 through the month of his or her 26th birthday who meet the criteria in subsections (b) or (e) of this section.

(b) In addition to the Medicaid recipients who must enroll in the STAR+PLUS program under subsection (a) of this section, recipients age 21 or older residing in a community-based ICF-IID or receiving services under the following Medicaid 1915(c) waivers and not enrolled in Medicare must enroll in STAR+PLUS to receive acute care services:

(1) Home and Community-based Services (HCS);

(2) Community Living Assistance and Support Services (CLASS);

(3) Texas Home Living (TxHmL); and

(4) Deaf Blind with Multiple Disabilities (DBMD).

(c) Medicaid recipients will have a choice among at least two MCOs.

(d) The following Medicaid recipients *cannot* participate in the STAR+PLUS program:

(1) persons under age 21;

(2) residents of state supported living centers;

(3) persons not eligible for full Medicaid benefits; and

(4) persons enrolled in Programs of All-Inclusive Care for Elderly (PACE).

(e) Dual eligible individuals.

(1) Enrollment in Medicare does not affect eligibility for the STAR+PLUS program, except as specified in subsection (b) of this section.

(2) Dual eligible individuals who participate in the STAR+PLUS program receive most acute care services through their Medicare provider, and STAR+PLUS Home and Community-Based Services Program through the STAR+PLUS MCO. Dual eligible individuals who participate in the STAR+PLUS program receive most acute care services through their Medicare provider, but may receive additional services through their STAR+PLUS MCO. The STAR+PLUS program does not change the way dual eligibles receive Medicare services.

**History**
- *Source Note: The provisions of this §353.603 adopted to be effective December 1, 1997, 22 TexReg 11403; amended to be effective December 1, 2000, 25 TexReg 11666; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective February 1, 2011, 36 Tex Reg 231; amended to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 1, 2016, 41 TexReg 8265; amended to be effective September 1, 2017, 42 TexReg 4273.*

##### **1 Tex. Admin. Code § 353.605** Participating Providers {#sec-353.605 omnilex-key=us-tx-regs-official--title-1--353.605}

Acute and long-term services and supports providers who traditionally have served Medicaid clients are given the opportunity to participate in STAR+PLUS managed care organizations (MCOs), provided they meet licensing standards, the MCO's credentialing standards, agree to the MCO's contract provisions, and agree to the MCO's payment arrangements.

**History**
- *Source Note: The provisions of this §353.605 adopted to be effective December 1, 1997, 22 TexReg 11403; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective February 1, 2011, 36 TexReg 231; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.607** STAR+PLUS Handbook {#sec-353.607 omnilex-key=us-tx-regs-official--title-1--353.607}

The *STAR+PLUS Handbook* includes policies and procedures to be used by all health and human services agencies and their contractors and providers in the delivery of STAR+PLUS Program services to eligible members. The *STAR+PLUS Handbook* can be found on the Texas Health and Human Services Commission website.

**History**
- *Source Note: The provisions of this §353.607 adopted to be effective February 1, 2011, 36 TexReg 231; amended to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.608** Minimum Payment Amounts to Qualified Nursing Facilities {#sec-353.608 omnilex-key=us-tx-regs-official--title-1--353.608}

(a) Introduction. This section establishes minimum payment amounts for certain non-state government-owned nursing facility providers participating in the STAR+PLUS Program, or other Medicaid managed care programs offering nursing facility services, and the conditions for receipt of these amounts.

(b) Definitions.

(1) Calculation Period--A month used to calculate the Minimum Payment Amount. There are six calculation periods in Eligibility Period One, twelve calculation periods in Eligibility Period Two, nine calculation periods in Eligibility Period Two-A, and five calculation periods in Eligibility Period Three.

(2) CHOW Application--An application filed with the Department of Aging and Disability Services for a nursing facility change of ownership.

(3) Clean Claim--A claim submitted by a provider for health care services rendered to an enrollee with the data necessary for the managed care organization to adjudicate and accurately report the claim. Claims for Nursing Facility Unit Rate services that meet the Department of Aging and Disability Services' criteria for clean claims submission are considered Clean Claims. Additional information regarding Department of Aging and Disability Services' criteria for clean claims submission is included in HHSC's Uniform Managed Care Manual, which is available on HHSC's website.

(4) DADS--The Texas Department of Aging and Disability Services, or its successor agency.

(5) Eligibility Period--A period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section.

(6) Eligibility Period One--The first period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section, covering dates of service from the later of March 1, 2015, or the date on which nursing facility services become managed care services, to August 31, 2015.

(7) Eligibility Period Two--The second period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section, covering dates of service from September 1, 2015, to August 31, 2016.

(8) Eligibility Period Two-A--The third period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section, covering dates of service from December 1, 2015, to August 31, 2016.

(9) Eligibility Period Three--The fourth period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section, covering dates of service from April 1, 2017, to August 31, 2017. Centers for Medicare & Medicaid Services (CMS) approval is required for any payments to be made under this section for Eligibility Period Three.

(10) First Payment--The payment made in the ordinary course of business by MCOs to Qualified Nursing Facilities for the provision of covered services to Medicaid recipients.

(11) HHSC--The Texas Health and Human Services Commission or its designee.

(12) Intergovernmental transfer (IGT)--A transfer of public funds from a non-state governmental entity to HHSC.

(13) IGT Responsibility--The IGT owed by a non-state governmental entity, as determined by HHSC, for funding the non-federal share of the increase in the payments to the MCOs due to the Minimum Payment Amount program.

(14) MCO--A Medicaid managed care organization contracted with HHSC to provide nursing facility services to Medicaid recipients.

(15) Minimum Payment Amount--The minimum payment amount for a Qualified Nursing Facility, as calculated under subsection (d) of this section.

(16) Network Nursing Facility--A nursing facility that has a contract with an MCO for the delivery of Medicaid covered benefits to the MCO's enrollees.

(17) Non-state Governmental Entity--A hospital authority, hospital district, health district, city or county.

(18) Non-state Government-owned Nursing Facility--A network nursing facility where a non-state governmental entity holds the license and is a party to the nursing facility's Medicaid provider enrollment agreement with the state.

(19) Nursing Facility Add-on Services--The types of services that are provided in the nursing facility setting by a provider, but are not included in the Nursing Facility Unit Rate, including but not limited to emergency dental services, physician-ordered rehabilitative services, customized power wheel chairs, and augmentative communication devices.

(20) Nursing Facility Unit Rate--The types of services included in the DADS daily rate for nursing facility providers, such as room and board, medical supplies and equipment, personal needs items, social services, and over-the-counter drugs. The Nursing Facility Unit Rate also includes applicable nursing facility rate enhancements as described in §355.308 of this title (relating to Direct Care Staff Rate Component), and professional and general liability insurance. Nursing Facility Unit Rates exclude Nursing Facility Add-on Services.

(21) Qualified Nursing Facility--A Non-state Government-Owned Network Nursing Facility that meets the eligibility requirements described in subsection (e) of this section.

(22) Public Funds--Funds derived from taxes, assessments, levies, investments, and other public revenues within the sole and unrestricted control of a non-state governmental entity that holds the license and is party to the Medicaid provider enrollment agreement with the state. Public funds do not include gifts, grants, trusts, or donations, the use of which is conditioned on supplying a benefit solely to the donor or grantor of the funds.

(23) Regional Healthcare Partnership (RHP)--A collaboration of interested participants that work collectively to develop and submit to the state a regional plan for health care delivery system reform as defined and established under Chapter 354, Subchapter D of this title (relating to Texas Healthcare Transformation and Quality Improvement Program).

(24) RUG--For the purpose of calculations described in subsection (d)(1) of this section, a resource utilization group under Medicare Part A as established by the Centers for Medicare & Medicaid Services (CMS). For the purpose of calculations described in subsection (d)(2) of this section, a resource utilization group under the RUG-III 34 group classification system, Version 5.20, index maximizing, as established by the state and CMS.

(25) Second Payment--The amount a Qualified Nursing Facility can receive that is equal to the Minimum Payment Amount less adjustments to that amount, as described in subsection (d) of this section.

(c) Payment of Minimum Payment Amount to Qualified Nursing Facilities.

(1) An MCO must pay a Qualified Nursing Facility at or above the Minimum Payment Amount in two installment payments for a Calculation Period, using the calculation methodology described in subsection (d) of this section.

(A) The MCO must make the First Payment no later than ten calendar days after a Qualified Nursing Facility or its agent submits a Clean Claim for a Nursing Facility Unit Rate to the HHSC-designated portal or the MCO's portal, whichever occurs first. The MCO will make the First Payment for the Nursing Facility Unit Rate at or above the prevailing rate established by HHSC for the date of service. HHSC's website includes information concerning HHSC's prevailing rates. The MCO must make the Second Payment no later than 10 calendar days after being notified of the Second Payment amount by HHSC. The Second Payment will be the difference between the Minimum Payment Amount and the adjustment to the Minimum Payment Amount, as calculated by HHSC and described in subsection (d) of this section.

(B) For purposes of illustration only, if a Qualified Nursing Facility provider files a Clean Claim for a Nursing Facility Unit Rate on March 6, 2015, the MCO must make the First Payment no later than March 16, 2015, and the Second Payment no later than 10 calendar days after being notified of the Second Payment amount by HHSC.

(2) HHSC will provide each MCO with a list of its Qualified Nursing Facilities for each Calculation Period as well as the Second Payment amount, as calculated by HHSC and described in subsection (d) of this section, associated with the MCO's members for each of its Qualified Nursing Facilities.

(d) Calculation of the Second Payment. HHSC will calculate the Second Payment for each Qualified Nursing Facility using the methodology detailed in this subsection. If a Qualified Nursing Facility is contracted with more than one MCO, HHSC will calculate a separate Second Payment for each MCO with which the Qualified Nursing Facility is contracted.

(1) Calculate the Minimum Payment Amount. The Minimum Payment Amount is made up of multiple subsidiary amounts. There is a subsidiary amount for each RUG.

(A) To determine the subsidiary amount for a particular RUG, use the formula: Subsidiary Amount = Days of Service x Medicare Rate, where:

(i) "Days of Service" is the total Medicaid days of service for a particular RUG for clean claims for services that were provided during the Calculation Period; and

(ii) "Medicare Rate" is the Medicare skilled nursing facility payment rate for the RUG in effect on the date of service.

(B) The Minimum Payment Amount is equal to the sum of all subsidiary amounts calculated in accordance with subparagraph (A) of this paragraph.

(2) Calculate the Adjustment to the Minimum Payment Amount. The adjustment to the Minimum Payment Amount is equal to the sum of all adjustments for each RUG. The adjustment to the Minimum Payment Amount is determined as follows:

(A) First, determine the amount of the First Payment to the nursing facility using the formula: First Payment = Days of Service x MCO Rate, where:

(i) "Days of Service" is the total Medicaid days of service for a particular RUG for clean claims for services that were provided during the Calculation Period; and

(ii) "MCO Rate" is the rate paid by the MCO for the particular RUG.

(B) Second, sum the result in subparagraph (A) of this paragraph for each RUG.

(C) Third, add or subtract, as necessary, the amount of payment adjustments to Nursing Facility Unit Rate claims for services that were provided during the Calculation Period from the result in subparagraph (B) of this paragraph.

(D) Fourth, determine the amount related to the Nursing Facility Add-on Services using the formula: Nursing Facility Add-on Amount = Days of Service x Per Diem, where:

(i) "Days of Service" equals the number used in subparagraph (A)(i) of this paragraph; and

(ii) "Per Diem" is an estimate, as determined by HHSC, of the weighted average per diem payment amount for Nursing Facility Add-on Services provided to Medicaid recipients in Qualified Nursing Facilities.

(I) For Eligibility Period One, the per diem will equal $3.48.

(II) For Eligibility Period Two, the per diem will equal $3.48 plus medical inflation between the mid-point of Eligibility Period One and the mid-point of Eligibility Period Two, as determined by HHSC.

(III) For Eligibility Period Two-A, the per diem will equal $3.48 plus medical inflation between the mid-point of Eligibility Period One and the mid-point of Eligibility Period Two-A, as determined by HHSC.

(IV) For Eligibility Period Three, the per diem will equal $3.48 plus medical inflation between the mid-point of Eligibility Period One and the mid-point of Eligibility Period Three, as determined by HHSC.

(E) Fifth, sum the result in subparagraph (D) of this paragraph for each RUG.

(F) Sixth, determine the adjustment to the Minimum Payment Amount by adding the result from subparagraph (E) of this paragraph from the result from subparagraph (C) of this paragraph.

(3) Calculate the Second Payment. To determine the Second Payment, subtract the adjustment to the Minimum Payment Amount described in paragraph (2)(F) of this subsection from the Minimum Payment Amount described in paragraph (1) of this subsection.

(e) Eligibility for Receipt of Minimum Payment Amounts.

(1) A nursing facility is eligible to receive the Minimum Payment Amounts described in this section if it complies with the requirements described in this subsection for each Eligibility Period.

(2) Eligibility Period One. A nursing facility is eligible to receive Minimum Payment Amounts for Eligibility Period One if it meets the following requirements:

(A) The nursing facility must be a Non-state Government-owned Nursing Facility with a Medicaid contract effective date of October 1, 2014, or earlier. HHSC will finalize its list of eligible facilities on November 1, 2014. A facility may only be eligible if its contract is assigned by DADS to a non-state government entity by October 31, 2014, with an effective date of October 1, 2014, or earlier.

(B) The Non-state Governmental Entity that owns the nursing facility must have entered into an IGT Responsibility agreement with HHSC by November 3, 2014. The IGT Responsibility agreement will cover the estimated IGT Responsibility for the nursing facility for the Eligibility Period.

(C) The Non-state Governmental Entity that owns the nursing facility must certify the following facts on a form prescribed by HHSC and the form must be received by HHSC by November 3, 2014.

(i) That it is a Non-state Government-owned Nursing Facility where a Non-state Governmental Entity holds the license and is party to the facility's Medicaid contract.

(ii) That all funds transferred to HHSC via IGT for use as the state share of payments are Public Funds.

(iii) That no part of any payment made under the Minimum Payment Amount program under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds.

(3) Eligibility Period Two. A nursing facility is eligible to receive the Minimum Payment Amounts for Eligibility Period Two if it has met the following requirements:

(A) The nursing facility must be a Non-state Government-owned Nursing Facility with a Medicaid contract effective date of March 1, 2015, or earlier. HHSC will finalize its list of eligible facilities on March 1, 2015. A facility may only be eligible if its contract is assigned by DADS to a non-state government entity by February 28, 2015, with an effective date of March 1, 2015, or earlier.

(B) The Non-state Governmental Entity that owns the nursing facility must have entered into an IGT Responsibility agreement with HHSC by February 28, 2015. The IGT Responsibility agreement will cover the estimated IGT Responsibility for the nursing facility for the Eligibility Period.

(C) The Non-state Governmental Entity that owns the nursing facility must certify the following facts on a form prescribed by HHSC and the form must be received by HHSC by February 28, 2014.

(i) That it is a Non-state Government-owned Nursing Facility where a Non-state Governmental Entity holds the license and is party to the facility's Medicaid contract.

(ii) That all funds transferred to HHSC via IGT for use as the state share of payments are Public Funds.

(iii) That no part of any payment made under the Minimum Payment Amount program under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds.

(D) The Non-state Governmental Entity that owns the nursing facility must submit to HHSC, upon demand, copies of any contracts it has with third parties that reference the administration of, or payments from, the Minimum Payment Amount program.

(4) Eligibility Period Two-A. A nursing facility is eligible to receive the Minimum Payment Amounts for Eligibility Period Two-A if it has met the following requirements:

(A) The nursing facility must not be eligible to receive the Minimum Payment Amounts for Eligibility Period Two.

(B) The nursing facility must be a Non-state Government-owned Nursing Facility with a Medicaid contract effective date of June 1, 2015, or earlier. HHSC will finalize its list of eligible facilities on June 1, 2015. A facility may only be eligible if its contract is assigned by DADS to a non-state government entity by May 31, 2015, with an effective date of June 1, 2015, or earlier.

(C) The nursing facility must have given DADS written notice of the change of ownership on or before February 1, 2015, but have not qualified for Eligibility Period Two because its contract was not assigned by DADS to a non-state government entity by February 28, 2015.

(D) DADS must have received all required documents pertaining to the change of ownership (i.e., DADS must have a complete application for a change of ownership license as described under 40 TAC §19.201(b) (relating to Criteria for Licensing)) by April 15, 2015.

(E) The Non-state Governmental Entity that owns the nursing facility must have entered into an IGT Responsibility agreement with HHSC by May 31, 2015. The IGT Responsibility agreement must cover the estimated IGT Responsibility for the nursing facility for the Eligibility Period.

(F) The Non-state Governmental Entity that owns the nursing facility must certify the following facts on a form prescribed by HHSC and the form must be received by HHSC by May 31, 2015:

(i) that it is a Non-state Government-owned Nursing Facility where a Non-state Governmental Entity holds the license and is party to the facility's Medicaid contract;

(ii) that all funds transferred to HHSC via IGT for use as the state share of payments are Public Funds; and

(iii) that no part of any payment made under the Minimum Payment Amount program under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds.

(G) The Non-state Governmental Entity that owns the nursing facility must submit to HHSC, upon demand, copies of any contracts it has with third parties that reference the administration of, or payments from, the Minimum Payment Amount program.

(5) Eligibility Period Three. A nursing facility is eligible to receive the Minimum Payment Amounts for Eligibility Period Three if it has met the following requirements:

(A) The nursing facility was eligible to receive the Minimum Payment Amounts for Eligibility Period Two or Eligibility Period Two-A.

(B) The Non-state Governmental Entity that owns the nursing facility must have submitted its estimated IGT responsibility for the entire eligibility period no later than a date determined by HHSC.

(C) The Non-state Governmental Entity that owns the nursing facility must certify the following facts on a form prescribed by HHSC and the form must be received by HHSC by a date determined by HHSC:

(i) that it is a Non-state Government-owned Nursing Facility where a Non-state Governmental Entity holds the license and is party to the facility's Medicaid contract;

(ii) that all funds transferred to HHSC via IGT for use as the state share of payments are Public Funds; and

(iii) that no part of any payment made under the Minimum Payment Amount program under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds.

(D) The Non-state Governmental Entity that owns the nursing facility must submit to HHSC, upon demand, copies of any contracts it has with third parties that reference the administration of, or payments from, the Minimum Payment Amount program.

(6) Geographic Proximity to Nursing Facility.

(A) For eligibility period one, any nursing facility with a CHOW Application approved by DADS with an effective date on or after October 1, 2014, must be located in the same Regional Healthcare Partnership (RHP) as the Non-state Governmental Entity taking ownership of the nursing facility.

(B) For eligibility periods two, two-A, and three, any nursing facility with a CHOW Application approved by DADS with an effective date on or after October 1, 2014, must be located in the same RHP as, or within 150 miles of, the Non-state Governmental Entity taking ownership of the nursing facility.

(f) Claims Filing Deadline. A Qualified Nursing Facility must file a Clean Claim for a Nursing Facility Unit Rate no later than 60 calendar days after the end of the Calculation Period within which the service is provided for the claim to qualify for the Minimum Payment Amount described in this section. The MCO must pay a Clean Claim that is filed after this deadline but within 365 calendar days of the date of service, at the standard rate established in the network provider agreement for Nursing Facility Unit Services; however, claims filed after the 60 deadline will not be incorporated in the calculation of the Minimum Payment Amount.

(g) IGT Responsibility.

(1) Timing. HHSC will determine IGT responsibilities prior to finalizing the managed care capitation rates that include the increase in payments to the MCOs due to the Minimum Payment Amounts program for the Eligibility Period.

(2) Aggregate IGT Responsibility. The aggregate IGT responsibility for all Qualified Nursing Facilities for an Eligibility Period will be equal to the non-federal share of the increase in the MCOs' capitation rates due to the Minimum Payment Amount program multiplied by the estimated number of member months for which the MCOs will receive the capitation rate during the eligibility period multiplied by 1.1.

(3) Allocation of Aggregate IGT Responsibility to Individual Nursing Facilities. HHSC will allocate the aggregate IGT responsibility to each qualified nursing facility based on the percentage of the total increase in the MCOs' capitation rates due to the Minimum Payment Amount program associated with the nursing facility in the base period data used to develop the capitation rates.

(4) Reconciliation. HHSC will complete the reconciliation in two parts.

(A) The first reconciliation will occur no later than 120 days after the end of the eligibility period.

(i) HHSC will compare the amount transferred by the Non-state Governmental Entity to HHSC for the eligibility period to the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity.

(ii) The calculation of the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity will be the same as the calculation of allocated aggregate IGT responsibility to all Qualified Nursing Facilities owned by the Non-state Governmental Entity as described in paragraphs (2) and (3) of this subsection with two exceptions:

(I) "Member months" will be revised to reflect actual known member months for the eligibility period. The revision will be conducted no sooner than the day after the last day of the eligibility period and no later than 120 days after the end of the eligibility period.

(II) The "Aggregate IGT Responsibility" described in paragraph (2) of this subsection will be equal to the non-federal share of the increase in the MCO's capitation rates due to the Minimum Payment Amount program multiplied by the revised member months. The calculation will not include the additional ten percent included in the calculation of the original aggregate IGT responsibility.

(III) No other changes will be made to the calculation of the allocated aggregate IGT responsibility and no other data points included in the calculation will be updated for purposes of this reconciliation.

(iii) If the amount transferred by the Non-state Governmental Entity exceeds the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity, HHSC will refund the excess amount to the Non-state Governmental Entity, less two percent of the amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity.

(iv) If the amount transferred by the Non-state Governmental Entity is less than the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity, HHSC will notify the Non-state Governmental Entity of the amount of the shortfall and of a deadline for the Non-state Governmental Entity to transfer the shortfall plus two percent of the amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity.

(B) For Eligibility Period Three only, HHSC may complete interim reconciliations between August 31, 2017, and August 31, 2019, as updated enrollment data for the Program Period, as reflected in adjusted member months, becomes available. HHSC will follow the process described in subparagraph (A) of this paragraph for such interim reconciliations.

(C) The second reconciliation will occur no later than 25 months after the end of the eligibility period.

(i) HHSC will compare the amount transferred by the Non-state Governmental Entity to HHSC for the eligibility period to the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity.

(ii) The calculation of the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity will be the same as the calculation of allocated aggregate IGT responsibility to all Qualified Nursing Facilities owned by the Non-state Governmental Entity as described in subparagraph (A) of this paragraph except that member months will be revised to reflect updated actual known member months for the eligibility period. The revision will be conducted sometime during the 25th month after the end of the eligibility period.

(iii) If the amount transferred by the Non-state Governmental Entity exceeds the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity, HHSC will refund the excess amount to the Non-state Governmental Entity.

(iv) If the amount transferred by the Non-state Governmental Entity is less than the non-federal amount expended during the eligibility period by HHSC for all Qualified Nursing Facilities owned by the Non-state Governmental Entity, HHSC will notify the Non-state Governmental Entity of the amount of the shortfall and of a deadline for the Non-state Governmental Entity to transfer the shortfall.

(D) If the Non-state Governmental Entity does not timely complete the transfer described in subparagraph (A), (B), or (C) of this paragraph, HHSC may:

(i) withhold any or all future Medicaid payments from the Non-state Governmental Entity until HHSC has recovered an amount equal to the shortfall; and

(ii) retain any funds that would normally be returned to the Non-state Governmental Entity as part of the reconciliation process.

(5) All IGT calculations are solely at the discretion of HHSC and are not open to desk review or appeal.

(h) Changes of Ownership. If a Qualified Nursing Facility changes ownership to another non-state government entity during either of the eligibility periods described in subsection (e) of this section, then the data used for the calculations described in subsection (d) of this section will include data from the facility for the entire Calculation Period, including data relating to payments for days of service provided under the prior owner.

(i) Recoupment.

(1) If payments under this section result in an overpayment to a nursing facility, or in the event of a disallowance by CMS of federal participation related to a nursing facility's receipt of or use of payment amounts authorized under subsection (d) of this section, the MCO(s) may recoup an amount equivalent to the amount of the second payment amount that was overpaid or disallowed.

(2) Second payment amount payments under this section may be subject to any adjustments for payments made in error, including, without limitation, adjustments made under the Texas Administrative Code, the Code of Federal Regulations and state and federal statutes. The MCO(s) may recoup an amount equivalent to any such adjustment from the nursing facility in question.

(3) If HHSC determines that part of any payment made under the Minimum Payment Amount program was used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds, the MCO(s) may recoup an amount equal to the second payment amount from the nursing facility in question.

(4) If HHSC determines that an ownership change to a Non-state Governmental Entity was based on fraudulent or misleading statements on a nursing facility CHOW application or during the CHOW process, the MCO(s) may recoup an amount equal to the second payment amount from the nursing facility in question for any eligibility period affected by the fraudulent or misleading statement.

(j) Dates the Minimum Payment Amount is available. The minimum payment requirements described in this section will only cover dates of service from the later of March 1, 2015, or the date on which nursing facility services become managed care services, to August 31, 2017.

**History**
- *Source Note: The provisions of this §353.608 adopted to be effective November 1, 2014, 39 TexReg 8376; amended to be effective March 1, 2015, 40 TexReg 807; amended to be effective June 21, 2015, 40 TexReg 3631; amended to be effective May 22, 2016, 41 TexReg 3473; amended to be effective June 4, 2017, 42 TexReg 2815.*

##### **1 Tex. Admin. Code § 353.609** Service Coordination {#sec-353.609 omnilex-key=us-tx-regs-official--title-1--353.609}

(a) All STAR+PLUS members have access to service coordination. Service coordination includes:

(1) face-to-face and telephonic contacts between the member and the service coordinator;

(2) development and maintenance of a comprehensive, person-centered individual service plan (ISP);

(3) coordination, including with providers, to assist the member in accessing services provided by the STAR+PLUS MCO; and

(4) coordination, including with providers as appropriate, to assist the member in accessing services provided by other community entities or service providers.

(b) STAR+PLUS members with a demonstrated need for more intensive service coordination are assigned a single, named service coordinator by the STAR+PLUS MCO. All STAR+PLUS members have access to a single, named service coordinator upon request.

**History**
- *Source Note: The provisions of this §353.609 adopted to be effective September 1, 2017, 42 TexReg 4273.*

##### **1 Tex. Admin. Code § 353.610** Minimum Performance Standards for Nursing Facilities that Participate in the STAR+PLUS Program {#sec-353.610 omnilex-key=us-tx-regs-official--title-1--353.610}

(a) Purpose. The purpose of this section is to establish minimum performance standards applicable to nursing facility providers that participate in the STAR+PLUS program.

(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

(1) CMS--Centers for Medicare & Medicaid Services. The federal agency responsible for administering Medicare and overseeing state administration of Medicaid.

(2) Corrective actions--Actions taken for the purpose of correcting undesirable clinical performance; may also be called a corrective action plan or a performance improvement plan (PIP).

(3) HHSC--The Texas Health and Human Services Commission or its designee.

(4) Long stay quality measure--The CMS long stay quality measure specifications are based on nursing home (NH) residents whose episode is greater than or equal to 101 cumulative days in the NH at the end of the target period.

(5) MDS--Minimum data set. A federally mandated standardized clinical assessment of all residents in certified nursing facilities.

(6) Minimum performance standards--Standards applicable to a nursing facility that participates in the STAR+PLUS program that represent the minimal clinical performance expected, based on evidence-based guidelines and analysis.

(7) Nursing facility--A convalescent or nursing home or related institution licensed under Health and Safety Code Chapter 242, that provides long-term services and supports to recipients and that participates in the STAR+PLUS program.

(8) STAR+PLUS Managed Care Organization--An organization under contract with HHSC to manage delivery of Medicaid services to members in the STAR+PLUS program.

(9) STAR+PLUS Program--This term has the meaning set forth in §354.4003 of the title (relating to Definitions).

(c) HHSC establishment and monitoring of minimum performance standards.

(1) HHSC establishes the following CMS nursing facility long stay quality measures from the MDS and associated HHSC benchmarks as the minimum performance standards for evaluating the performance of a nursing facility:

(A) N028.02 Percent of residents whose need for help with activities of daily living has increased. The benchmark is 30%. Nursing facilities do not meet the benchmark if HHSC determines that more than 30% of residents have an increased need for help with activities of daily living.

(B) N015.03 Percent of high-risk residents with pressure ulcers. The benchmark is 17%. Nursing facilities do not meet the benchmark if HHSC determines that more than 17% of high-risk residents have pressure ulcers.

(C) N016.03 Percent of residents assessed and appropriately given the seasonal influenza vaccine. The benchmark is 77%. Nursing facilities do not meet the benchmark if HHSC determines that less than 77% of residents were assessed and appropriately given the seasonal influenza vaccine.

(D) N020.02 Percent of residents assessed and appropriately given the pneumococcal vaccine. The benchmark is 80%. Nursing facilities do not meet the benchmark if HHSC determines that less than 80% of residents were assessed and appropriately given the pneumococcal vaccine.

(E) N035.03 Percent of residents whose ability to move independently worsened. The benchmark is 31%. Nursing facilities do not meet the benchmark if HHSC determines that more than 31% of residents have a worsened ability to move independently.

(2) HHSC compares the performance of a nursing facility on each of the minimum performance standard measures listed in paragraph (1) of this subsection to the associated HHSC benchmarks to determine if a facility meets or does not meet the required minimum performance standards.

(3) HHSC makes the minimum performance standard measures and the associated HHSC benchmarks available on the HHSC website.

(4) HHSC monitors the performance of a nursing facility on an annual basis in accordance with the minimum performance standard measures and the associated HHSC benchmarks.

(5) HHSC may require a nursing facility that does not meet the minimum performance standard benchmarks to take corrective actions.

(6) HHSC monitors a nursing facility that has been required to initiate corrective actions in accordance with the minimum performance standard measures and the associated HHSC benchmarks and follows up with the nursing facility regarding its performance, as appropriate.

(d) HHSC coordination with Medicaid Managed Care Organizations (MCOs).

(1) HHSC shares minimum performance standards data results with STAR+PLUS MCOs, as appropriate.

(2) STAR+PLUS MCOs may act on the data, as appropriate.

**History**
- *Source Note: The provisions of this §353.610 adopted to be effective June 1, 2023, 48 TexReg 2693.*

#### **Subchapter H** STAR HEALTH

##### **1 Tex. Admin. Code § 353.701** General Provisions {#sec-353.701 omnilex-key=us-tx-regs-official--title-1--353.701}

(a) HHSC administers the STAR Health program.

(b) The following subchapters of this chapter apply to the STAR Health program:

(1) Subchapter A (relating to General Provisions);

(2) Subchapter B (relating to Provider and Member Education Programs);

(3) Subchapter C (relating to Member Bill of Rights and Responsibilities);

(4) Subchapter E (relating to Standards for Medicaid Managed Care);

(5) Subchapter F (relating to Special Investigative Units); and

(6) Subchapter J (relating to Outpatient Pharmacy Services).

(c) HHSC selects one or more STAR Health MCOs using the purchasing methods described in Chapter 391 of this title (relating to Purchase of Goods and Services by the Texas Health and Human Services Commission).

(d) The STAR Health program serves members in all service areas of the state through one statewide service area.

**History**
- *Source Note: The provisions of this §353.701 adopted to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.702** Member Participation {#sec-353.702 omnilex-key=us-tx-regs-official--title-1--353.702}

(a) Children and young adults in the following categories are eligible to participate in the STAR Health program:

(1) a child in the conservatorship of DFPS, if the state as conservator elects to place the child in the STAR Health program;

(2) a young adult, from 18 years of age through the month of his or her 22nd birthday, who voluntarily agrees to continue in foster care placement, if the state as conservator elects to place the child in the STAR Health program;

(3) a young adult, from 18 years of age through the month of his or her 21st birthday, who is an FFCC member or participating in the MTFCY Program; and

(4) a child or young adult, from birth through the month of his or her 21st birthday, who is enrolled in the Adoption Assistance Program or the Permanency Care Assistance Program and who:

(A) receives Supplemental Security Income (SSI);

(B) received SSI before becoming eligible for the Adoption Assistance Program or the Permanency Care Assistance Program;

(C) is enrolled in a Medicaid 1915(c) waiver; or

(D) is enrolled in Medicare.

(b) A young adult described in subsection (a)(2) or (3) of this section may choose to transfer from the STAR Health program to the STAR program or STAR Kids program, if the young adult meets the member participation requirements in §353.802 of this chapter (relating to Member Participation) or §353.1203 of this chapter (relating to Member Participation).

(c) The following Medicaid recipients cannot participate in the STAR Health program:

(1) Children and youth who have been adjudicated and placed with the Texas Juvenile Justice Department (TJJD);

(2) Children and youth from other states who are placed in Texas through the Interstate Compact Placement Commission (ICPC) as defined by DFPS in 40 TAC Chapter 700, Subchapter S (relating to Interstate Placement of Children);

(3) Children and youth in Medicaid-paid facilities such as nursing facilities or state supported living centers;

(4) Children and youth who are in the conservatorship of DFPS who are placed outside of Texas; and

(5) Children who are declared manifestly dangerous as defined by the Texas Department of Health Services in accordance with 25 TAC Chapter 415, Subchapter G (relating to Determination of Manifest Dangerousness).

**History**
- *Source Note: The provisions of this §353.702 adopted to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective November 1, 2016, 41 TexReg 8265; amended to be effective September 1, 2017, 42 TexReg 4273; amended to be effective August 12, 2021, 46 TexReg 4843.*

#### **Subchapter I** STAR

##### **1 Tex. Admin. Code § 353.801** General Provisions {#sec-353.801 omnilex-key=us-tx-regs-official--title-1--353.801}

(a) The Texas Health and Human Services Commission (HHSC) administers the State of Texas Access Reform (STAR) program.

(b) Rules governing the operation of the program will be in accordance with Subchapter E of this chapter (relating to Standards for Medicaid Managed Care).

(c) HHSC selects STAR managed care organizations using the purchasing methods described in Chapter 391, Subchapter D of this title (relating to Purchases of Goods and Services).

(d) The STAR program serves members in all service areas in the state.

**History**
- *Source Note: The provisions of this §353.801 adopted to be effective March 1, 2012, 37 TexReg 1283.*

##### **1 Tex. Admin. Code § 353.802** Member Participation {#sec-353.802 omnilex-key=us-tx-regs-official--title-1--353.802}

(a) Enrollment in the State of Texas Access Reform (STAR) program is *mandatory* for Medicaid recipients who meet the criteria in one or more of the following categories:

(1) individuals age 21 and over who are eligible for the Parents and Other Caretaker Relatives program outlined in Subchapter G of Chapter 366 of this title (relating to Medicaid for Parents and Caretaker Relatives Program);

(2) pregnant women receiving medical assistance with household income that meets the applicable income limits specified in Subchapter C of Chapter 366 of this title (relating to Pregnant Women's Medicaid);

(3) newborns receiving medical assistance--Children through 12 months of age with household income equal to or less than the FPL level specified in Subchapter E of Chapter 366 of this title (relating to Children's Medicaid) or born to Medicaid-eligible mothers;

(4) children receiving medical assistance age 13 months through the month of his or her 18th birthday with household income equal to or less than the FPL specified in Subchapter E of Chapter 366 of this title;

(5) FFCC members age 21 through the month of his or her 26th birthday; and

(6) children who meet both of the following criteria:

(A) are receiving medical assistance through the Texas Department of Family and Protective Services Adoption Assistance Program, as described in Title 40 of the Texas Administrative Code, Chapter 700, Subchapter H (relating to Adoption Assistance Program); or Permanency Care Assistance Program, as described in Title 40 of the Texas Administrative Code, Chapter 700, Subchapter J, Division 2 (relating to Permanency Care Assistance Program); and

(B) are not eligible for STAR Kids, as described in Subchapter N of this chapter (relating to STAR Kids).

(b) FFCC STAR Health members ages 18 through 20 may choose to transfer to the STAR program and remain enrolled through the month of his or her 26th birthday.

(c) MTFCY STAR Health members may transfer to the STAR program.

**History**
- *Source Note: The provisions of this §353.802 adopted to be effective March 1, 2012, 37 TexReg 1283; amended to be effective September 1, 2014, 39 TexReg 5873; amended to be effective September 1, 2017, 42 TexReg 4273.*

#### **Subchapter J** OUTPATIENT PHARMACY SERVICES

##### **1 Tex. Admin. Code § 353.901** Purpose {#sec-353.901 omnilex-key=us-tx-regs-official--title-1--353.901}

The purpose of this subchapter is to implement the requirements of Texas Government Code §540.0273, which establishes requirements for providing outpatient pharmacy benefits through Medicaid managed care. This subchapter applies to health care managed care organizations.

**History**
- *Source Note: The provisions of this §353.901 adopted to
be effective March 1, 2012, 37 TexReg 1292; amended to be effective
April 1, 2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.903** Definitions {#sec-353.903 omnilex-key=us-tx-regs-official--title-1--353.903}

The following words and terms, when used in this subchapter, have the following meaning unless the context clearly indicates otherwise.

(1) Clinical prior authorization (clinical PA)--A review process authorized by HHSC that is conducted by a healthcare managed care organization (health care MCO) prior to dispensing a drug. All clinical PAs must be identified on the Medicaid Vendor Drug Program website at http://www.txvendordrug.com.

(2) Covered outpatient drug--A drug or biological product included on the formulary and provided in an outpatient setting.

(3) Formulary--The list of covered outpatient drugs for the Texas Medicaid program.

(4) Maximum allowable cost--The highest unit price set by a health care MCO, or its subcontractor, for reimbursement of therapeutically equivalent multi-source drugs.

(5) Network provider--A pharmacy provider who has entered into a contract with the health care MCO to provide outpatient drug benefits to Medicaid enrollees.

(6) Non-preferred drug--A covered outpatient drug on the preferred drug list (PDL) that has been designated as non-preferred.

(7) Pharmacy benefits manager (PBM)--An entity that administers the Medicaid outpatient drug benefit on behalf of a health care MCO.

(8) Preferred drug--A covered outpatient drug on the PDL that has been designated as preferred because it has been evaluated to be safe, clinically effective, and cost-effective compared to other drugs in the same therapeutic drug class on the market.

(9) Preferred drug list (PDL)--The list of covered outpatient drugs reviewed by the Drug Utilization Review Board (DUR Board). Reviewed drugs are recommended by the DUR Board as either preferred or non-preferred and HHSC establishes the final designation.

(10) Preferred drug list prior authorization (PDL PA)--A review conducted by a health care MCO prior to dispensing a non-preferred drug.

**History**
- *Source Note: The provisions of this §353.903 adopted to be effective March 1, 2012, 37 TexReg 1292; amended to be effective September 1, 2013, 38 TexReg 5429; amended to be effective February 9, 2016, 41 TexReg 960.*

##### **1 Tex. Admin. Code § 353.905** Managed Care Organization Requirements {#sec-353.905 omnilex-key=us-tx-regs-official--title-1--353.905}

(a) A health care managed care organization (health care MCO) must adopt and exclusively use the Health and Human Services Commission's (HHSC's) Medicaid formulary and preferred drug list.

(b) A health care MCO is not authorized to negotiate rebates for covered outpatient drugs with drug manufacturers, or to receive confidential drug pricing regarding covered outpatient drugs from drug manufacturers.

(c) A health care MCO cannot pay claims submitted by a pharmacy provider who is under sanction or exclusion from the Medicaid or CHIP Programs.

(d) Except as provided in subsection (e) of this section, a health care MCO must enter into a network provider agreement with any pharmacy provider that meets the health care MCO's credentialing requirements, and agrees to the health care MCO's financial terms and other reasonable administrative and professional terms.

(e) A health care MCO can enter into selective pharmacy provider agreements for specialty drugs, as defined in §354.1853 of this title (relating to Specialty Drugs), subject to the following limitations:

(1) A health care MCO is prohibited from entering into an exclusive contract for specialty drugs with a pharmacy owned in full or part by a pharmacy benefits manager contracted with the health care MCO.

(2) The selective contracting agreement cannot require the pharmacy provider to contract exclusively with the health care MCO.

(3) A health care MCO cannot require a member to obtain a specialty drug from a mail-order pharmacy.

(f) A health care MCO must allow pharmacy providers to fill prescriptions for covered outpatient drugs ordered by any licensed prescriber regardless of the prescriber's network participation.

(g) A health care MCO must pay claims in accordance with Texas Insurance Code §843.339, relating to prescription drug claims payment requirements.

(h) A health care MCO must comply with Texas Government Code §540.0273 related to outpatient pharmacy benefit requirements in Medicaid managed care.

(i) A health care MCO must comply with the rules in Chapter 354, Subchapter F (relating to Pharmacy Services) of this title with the exception of:

(1) Section 354.1867 (relating to Refills);

(2) Section 354.1873 (relating to Freedom of Choice);

(3) Section 354.1877 (relating to Quantity Limitations); and

(4) Division 6 (relating to Pharmacy Claims).

(j) A health care MCO must require its subcontractors to comply with the requirements of this subchapter when providing outpatient pharmacy benefits through Medicaid managed care.

**History**
- *Source Note: The provisions of this §353.905 adopted to
be effective March 1, 2012, 37 TexReg 1292; amended to be effective
September 1, 2013, 38 TexReg 5429; amended to be effective April 1,
2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.907** Prior Authorization Requirements {#sec-353.907 omnilex-key=us-tx-regs-official--title-1--353.907}

(a) A health care managed care organization (health care MCO) may not impose a preferred drug list prior authorization (PDL PA) on a covered outpatient drug before the drug has been considered at a meeting of the Health and Human Services Commission's (HHSC's) Drug Utilization Review Board.

(b) A health care MCO may not impose a PDL PA on a covered outpatient drug that was prescribed before HHSC's designation of the drug as non-preferred, unless the member has exhausted all of the prescription, including any authorized refills.

(c) A health care MCO must allow a provider to submit a request for prior authorization of a covered outpatient drug by telephone, fax, or electronic communications through the Internet.

(d) A health care MCO must respond to a request for prior authorization by telephone, fax, or electronic communications through the Internet no later than 24 hours after receiving the request. If the health care MCO cannot respond to the prior authorization request within this time, then the health care MCO must allow a pharmacy to dispense a 72-hour supply of the prescribed drug.

(e) A health care MCO cannot require a PDL PA for a preferred drug.

(f) A health care MCO must require a PDL PA for a non-preferred drug.

(g) If a member's medical condition does not match the health care MCO's clinical criteria for dispensing a covered outpatient drug, the health care MCO may require a clinical PA for a preferred or non-preferred drug.

(h) HHSC will post on its website clinical PAs that are used in HHSC's fee-for-service Vendor Drug Program. A health care MCO must implement all clinical PAs that HHSC has designated as "mandatory" for the Medicaid managed care programs.

(i) A health care MCO must accept a standard prior authorization form for a covered outpatient drug in accordance with Texas Insurance Code Chapter 1369, Subchapter F.

**History**
- *Source Note: The provisions of this §353.907 adopted to be effective March 1, 2012, 37 TexReg 1292; amended to be effective September 1, 2013, 38 TexReg 5429; amended to be effective February 9, 2016, 41 TexReg 960.*

##### **1 Tex. Admin. Code § 353.909** Participating Pharmacy Providers {#sec-353.909 omnilex-key=us-tx-regs-official--title-1--353.909}

(a) To participate in a health care MCO's network, a pharmacy provider must be licensed with the Texas State Board of Pharmacy, have a national provider identifier, and be enrolled as a Medicaid provider with HHSC. To provide services to a member of a MCO when the member is located in another state, the pharmacy provider must be licensed with the pharmacy licensing entity in that state, have a national provider identifier, and be enrolled as a Medicaid provider with HHSC.

(b) A pharmacy provider is subject to the Vendor Drug Program rules in Chapter 354, Subchapter F, Division 1 and Division 5 of this title (relating to Participation; and Audits).

(c) The prescription requirements in §354.1863(a), (b), and (d) of this title (relating to Prescription Requirements) apply to all pharmacy providers.

(d) Except as prohibited by the health care MCO, a pharmacy provider may substitute one covered outpatient drug for another covered outpatient drug in a prescription only if authorized by the prescribing physician in accordance with 22 TAC §309.3 (relating to Generic Substitution).

**History**
- *Source Note: The provisions of this §353.909 adopted to be effective March 1, 2012, 37 TexReg 1292; amended to be effective September 1, 2014, 39 TexReg 5873.*

##### **1 Tex. Admin. Code § 353.911** Members {#sec-353.911 omnilex-key=us-tx-regs-official--title-1--353.911}

(a) A member must obtain a covered outpatient drug from a network pharmacy provider contracted with the member's health care MCO, except at provided in §353.913 of this subchapter (relating to Managed Care Organization Requirements Concerning Out-of-network Outpatient Pharmacy Services).

(b) A member may receive up to a 90-day supply of a covered outpatient drug.

(c) A health care MCO cannot require a member to obtain a specialty drug or other covered outpatient drug from a mail-order pharmacy unless a mail-order pharmacy is the only available dispensing source for the drug. A health care MCO cannot charge the member for mail-order services, including the cost of the drug, fees, or other related services.

**History**
- *Source Note: The provisions of this §353.911 adopted to be effective March 1, 2012, 37 TexReg 1292.*

##### **1 Tex. Admin. Code § 353.913** Managed Care Organization Requirements Concerning Out-of-Network Outpatient Pharmacy Services {#sec-353.913 omnilex-key=us-tx-regs-official--title-1--353.913}

(a) Network adequacy.

(1) The Health and Human Services Commission (HHSC) is the state agency responsible for overseeing and monitoring the Medicaid managed care program. A health care managed care organization (health care MCO) participating in the Medicaid managed care program must offer a network of pharmacy providers that is sufficient to meet the needs of the health care MCO's members. HHSC will monitor health care MCO members' access to an adequate provider network through reports from the health care MCOs and complaints received from providers and members. The reporting requirements are discussed in subsection (c) of this section.

(2) A health care MCO may not refuse to reimburse an out-of-network pharmacy provider for emergency covered outpatient pharmacy services.

(b) Reasonable reimbursement methodology. If a health care MCO and an out-of-network pharmacy provider cannot agree on a reimbursement amount, then the health care MCO must reimburse the provider at the usual and customary rate that prevails in the service area, unless payment is limited by state or federal law.

(c) Reporting requirements. A health care MCO must submit a quarterly report to HHSC regarding out-of-network pharmacy utilization, as described in §353.4 of this chapter (relating to Managed Care Organization Requirements Concerning Out-of-Network Providers). For purposes of such reporting, the health care MCO will include out-of-network pharmacy utilization under the "other services" category.

(d) Utilization.

(1) Upon review of a report described in subsection (c) of this section, HHSC may determine that a health care MCO exceeded maximum out-of-network usage standards set by HHSC for out-of-network access to covered outpatient pharmacy services during the reporting period.

(2) Out-of-network usage standards. No more than 20 percent of total dollars billed to a health care MCO for covered outpatient pharmacy services may be billed by out-of-network providers.

(e) Provider complaints.

(1) HHSC will accept provider complaints regarding reimbursement for or overuse of out-of-network pharmacy providers and will conduct investigations into any such complaints.

(2) When a pharmacy provider files a complaint regarding out-of-network payment, HHSC will require the health care MCO to submit data to support its position on the adequacy of the payment to the provider. The data will include at a minimum a copy of the claim for services rendered and an explanation of the amount paid and of any amounts denied.

(3) Not later than the 60th day after HHSC receives a pharmacy provider complaint, HHSC will notify the pharmacy provider of the conclusions of HHSC's investigation regarding the complaint. The notification to the complaining pharmacy provider will include:

(A) a description of the corrective actions, if any, required of the health care MCO in order to resolve the complaint; and

(B) if applicable, a conclusion regarding the amount of reimbursement owed to an out-of-network pharmacy provider.

(4) If HHSC determines through investigation that a health care MCO did not reimburse an out-of-network pharmacy provider based on a reasonable reimbursement methodology as described in subsection (b) of this section, HHSC will initiate a corrective action plan. Refer to subsection (f) of this section for information about the contents of the corrective action plan.

(5) If, after an investigation, HHSC determines that additional reimbursement is owed to an out-of-network pharmacy provider, the health care MCO must pay the additional reimbursement owed to the out-of-network pharmacy provider within 90 days from the date the complaint was received by HHSC, or 18 days from the date the clean claim, or information required that makes the claim clean, is received by the health care MCO, whichever comes first.

(6) If the health care MCO does not pay the entire amount of the additional reimbursement by the due date described in paragraph (5) of this subsection, HHSC may require the health care MCO to pay interest on the unpaid amount. If required by HHSC, interest accrues at a rate of 18 percent simple interest per year on the unpaid amount from the due date described in paragraph (5) of this subsection until the date the entire amount of the additional reimbursement is paid.

(7) HHSC will pursue any appropriate remedy authorized in the contract between the health care MCO and HHSC if the MCO fails to comply with a corrective action plan under subsection (f) of this section.

(f) Corrective action plan.

(1) A corrective action plan is required by HHSC in the following situations:

(A) The health care MCO exceeds a maximum standard established by HHSC for out-of-network access to covered outpatient pharmacy services described in subsection (d) of this section; or

(B) The health care MCO does not reimburse an out-of-network pharmacy provider based on a reasonable reimbursement methodology as described in subsection (b) of this section.

(2) A corrective action plan imposed by HHSC will require one of the following:

(A) Reimbursements by the health care MCO to out-of-network pharmacy providers at rates that equal the allowable rates for the health care services as determined under Human Resources Code §32.028 and §32.0281 for all covered outpatient pharmacy services provided during the period:

(i) the health care MCO is not in compliance with a utilization standard established by HHSC; or

(ii) the health care MCO is not reimbursing out-of-network pharmacy providers based on a reasonable reimbursement methodology, as described in subsection (c) of this section;

(B) Initiation of an immediate freeze by HHSC on the enrollment of additional recipients in the health care MCO until HHSC determines that the provider network under the health care MCO can adequately meet the needs of its members;

(C) Education of the health care MCO's members regarding the proper use of the health care MCO's pharmacy provider network; or

(D) Any other actions HHSC determines are necessary to ensure that the health care MCO members have access to appropriate covered outpatient pharmacy services and that pharmacy providers are properly reimbursed by the health care MCO for providing such services to those recipients.

**History**
- *Source Note: The provisions of this §353.913 adopted to be effective March 1, 2012, 37 TexReg 1292; amended to be effective September 1, 2013, 38 TexReg 5429.*

##### **1 Tex. Admin. Code § 353.915** Access to Network Pharmacies {#sec-353.915 omnilex-key=us-tx-regs-official--title-1--353.915}

(a) A health care managed care organization (MCO) must ensure that a member has access to at least one network pharmacy within 15 miles from his or her residence.

(b) A health care MCO must ensure that a member has access to at least one network pharmacy with 24-hour coverage within 75 miles of his or her residence.

(c) If a network pharmacy provider is not available to a member within the mileage radius specified in subsection (a) or (b) of this section, the health care MCO must submit to the Health and Human Services Commission for approval data that indicates covered outpatient pharmacy services are not available to the member within the required distance.

**History**
- *Source Note: The provisions of this §353.915 adopted to be effective March 1, 2012, 37 TexReg 1292.*

#### **Subchapter K** CHILDREN'S MEDICAID DENTAL SERVICES

##### **1 Tex. Admin. Code § 353.1001** General Provisions {#sec-353.1001 omnilex-key=us-tx-regs-official--title-1--353.1001}

(a) The Texas Health and Human Services Commission (HHSC) administers Children's Medicaid Dental Services.

(b) Rules governing the operation of Children's Medicaid Dental Services will be in accordance with Subchapter E of this chapter (relating to Standards for Medicaid Managed Care).

(c) HHSC selects dental managed care organizations using the purchasing methods described in Chapter 391, Subchapter D of this title (relating to Purchase of Goods and Services).

(d) Children's Medicaid Dental Services are provided in all areas of the state.

**History**
- *Source Note: The provisions of this §353.1001 adopted to be effective July 8, 2012, 37 TexReg 4851.*

##### **1 Tex. Admin. Code § 353.1003** Member Participation {#sec-353.1003 omnilex-key=us-tx-regs-official--title-1--353.1003}

(a) Except as provided in subsection (b) of this section, enrollment in Children's Medicaid Dental Services is *mandatory* for clients from birth through age 20.

(b) The following clients are not eligible for Children's Medicaid Dental Services provided through managed care:

(1) clients age 21 and over;

(2) clients, regardless of age, residing in Medicaid-paid facilities such as nursing facilities, state supported living centers, or intermediate care facilities for people with intellectual and developmental disabilities; and

(3) STAR Health program recipients.

**History**
- *Source Note: The provisions of this §353.1003 adopted to be effective July 8, 2012, 37 TexReg 4851.*

#### **Subchapter L** TEXAS DUAL ELIGIBLES INTEGRATED CARE DEMONSTRATION PROJECT

##### **1 Tex. Admin. Code § 353.1101** Purpose {#sec-353.1101 omnilex-key=us-tx-regs-official--title-1--353.1101}

The purpose of this subchapter is to implement the Texas Dual Eligibles Integrated Care Demonstration Project (Dual Demonstration) which is a federal-state partnership between the Centers for Medicare & Medicaid Services (CMS) and the Texas Health and Human Services Commission (HHSC) that provides integrated Medicare and Medicaid services through a managed care model. The rules in this subchapter address eligibility for, and enrollment in, the Dual Demonstration and the responsibilities of HHSC as the Medicaid agency.

**History**
- *Source Note: The provisions of this §353.1101 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1103** General Provisions {#sec-353.1103 omnilex-key=us-tx-regs-official--title-1--353.1103}

(a) HHSC, in conjunction with CMS, administers the Dual Demonstration. The Medicare and Medicaid services are provided through STAR+PLUS Medicare-Medicaid Plans (MMPs).

(b) A STAR+PLUS MMP is a managed care plan contracted with CMS and HHSC to participate in the Dual Demonstration.

(c) Medicare Advantage and Medicare Part D provided through this demonstration are the responsibility of CMS.

(d) All other rules in this chapter governing Medicaid managed care apply to the Dual Demonstration, as applicable, unless specific deviations are noted in this subchapter.

(e) The Dual Demonstration serves members whose primary residence is in one of the following counties:

(1) Bexar;

(2) Dallas;

(3) El Paso;

(4) Harris;

(5) Hidalgo;

(6) Tarrant; and

(7) other counties as authorized by a federal waiver approved by CMS. The dual demonstration will not be implemented in other counties without prior public notice.

**History**
- *Source Note: The provisions of this §353.1103 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1105** Eligibility {#sec-353.1105 omnilex-key=us-tx-regs-official--title-1--353.1105}

(a) Enrollment in the Dual Demonstration is optional for dual eligible individuals who live in the designated counties and meet the following criteria:

(1) eligible for STAR+PLUS, including those eligible for STAR+PLUS home and community-based waiver services;

(2) enrolled in Medicare Parts A, B, and D; and

(3) age 21 or older.

(b) The following dual eligible individuals cannot participate in the Dual Demonstration:

(1) under age 21;

(2) individuals not eligible for STAR+PLUS, including individuals:

(A) residing in an intermediate care facility for individuals with an intellectual disability or related conditions;

(B) receiving services under the following Medicaid 1915(c) waivers:

(i) Home and Community-based Services (HCS);

(ii) Community Living Assistance and Support Services (CLASS);

(iii) Texas Home Living (TxHmL); or

(iv) Deaf Blind with Multiple Disabilities (DBMD);

(C) not eligible for full Medicaid benefits; or

(D) in the conservatorship of the Texas Department of Family and Protective Services.

**History**
- *Source Note: The provisions of this §353.1105 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1107** Member Enrollment and Disenrollment {#sec-353.1107 omnilex-key=us-tx-regs-official--title-1--353.1107}

(a) HHSC and CMS, or their designee(s), conduct enrollment and disenrollment activities.

(b) HHSC and CMS establish procedures for enrolling new members into participating MMPs, including enrollment periods and time limits within which enrollment must occur.

(c) HHSC assigns eligible individuals to an MMP based on current Medicare or Medicaid enrollment.

(d) Beginning 60 days prior to the enrollment of an eligible individual in the Dual Demonstration, HHSC sends initial and reminder notifications of the proposed assigned MMP to the eligible individual, informing the individual of their right to either opt out of the Dual Demonstration or to select another MMP.

(e) At any time prior to enrollment, individuals may choose not to participate in the Dual Demonstration, or to select another MMP in their county by notifying HHSC or CMS.

(f) Once enrolled, individuals may notify HHSC or CMS of the choices referenced in subsection (e) of this section at any time. An individual's choice to not participate in the Dual Demonstration or to select another MMP is effective the first day of the month following the date the individual notified HHSC or CMS.

**History**
- *Source Note: The provisions of this §353.1107 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1109** Participating Providers {#sec-353.1109 omnilex-key=us-tx-regs-official--title-1--353.1109}

Acute care and long-term services and supports providers who serve Medicare and Medicaid members are eligible to participate in the Dual Demonstration if they:

(1) meet licensing standards, as applicable;

(2) meet the STAR+PLUS MMP's credentialing standards; and

(3) have a contract with an MMP.

**History**
- *Source Note: The provisions of this §353.1109 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1111** Benefits {#sec-353.1111 omnilex-key=us-tx-regs-official--title-1--353.1111}

Members enrolled in the Dual Demonstration have access to acute care and long-term covered services and supports under Medicare and Medicaid which are coordinated through a single, integrated managed care plan, the MMP.

**History**
- *Source Note: The provisions of this §353.1111 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1113** Appeals and Fair Hearings {#sec-353.1113 omnilex-key=us-tx-regs-official--title-1--353.1113}

For Medicaid covered services, members enrolled in the Dual Demonstration have 60 days from a notice of action to file an appeal with the STAR+PLUS MMP. Members may also file a request for an HHSC fair hearing instead of, or in addition to, a health plan appeal. Rules governing fair hearings for Medicaid covered services are in Chapter 357, Subchapter A, of this title (relating to Uniform Fair Hearing Rules).

**History**
- *Source Note: The provisions of this §353.1113 adopted to be effective April 1, 2015, 40 TexReg 1705.*

##### **1 Tex. Admin. Code § 353.1115** Network Adequacy for Certain Service Providers {#sec-353.1115 omnilex-key=us-tx-regs-official--title-1--353.1115}

STAR+PLUS MMPs will adhere to Medicare network adequacy standards set forth by CMS for the following types of Medicaid benefits:

(1) nursing facility;

(2) speech therapy;

(3) occupational therapy; and

(4) physical therapy.

**History**
- *Source Note: The provisions of this §353.1115 adopted to be effective April 1, 2015, 40 TexReg 1705.*

#### **Subchapter M** HOME AND COMMUNITY BASED SERVICES IN MANAGED CARE

##### **1 Tex. Admin. Code § 353.1151** General Provisions {#sec-353.1151 omnilex-key=us-tx-regs-official--title-1--353.1151}

(a) Home and Community Based Services (HCBS) are community-based services and supports to eligible individuals as an alternative to institutional services, such as those described in Section 1915 of the Social Security Act. HCBS are intended to enhance the individual's integration into the community, maintain or improve the individual's independent functioning, and prevent the individual's admission to an institution.

(b) Delivery of HCBS in managed care must comply with 42 CFR §441.530, with the exception of the delivery of out of home respite.

(c) Participation in managed care does not affect an individual's ability to receive HCBS operated by HHSC or another agency if the delivery of HCBS is not through an MCO.

(d) Participation in managed care does not impact an individual's ability to access or maintain a slot on the interest list(s) of an HCBS program.

(e) Delivery of Community First Choice Services in managed care must comply with Chapter 354, Subchapter A, Division 27 of this title (relating to Community First Choice).

(f) HCBS providers contracted with MCOs are subject to investigation of suspected or alleged abuse, neglect, or exploitation as described in 40 TAC, Chapter 700 (relating to Child Protective Services), Chapter 705 (relating to Adult Protective Services), and Chapter 745 (relating to Licensing).

**History**
- *Source Note: The provisions of this §353.1151 adopted to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.1153** STAR+PLUS Home and Community Based Services (HCBS) Program {#sec-353.1153 omnilex-key=us-tx-regs-official--title-1--353.1153}

(a) The MCO assesses an individual's eligibility for STAR+PLUS HCBS.

(1) To be eligible for the STAR+PLUS HCBS program, an individual must:

(A) be 21 years of age or older;

(B) reside in Texas;

(C) meet the level-of-care criteria for medical necessity for nursing facility care as determined by HHSC;

(D) have an unmet need for support in the community that can be met through one or more of the STAR+PLUS HCBS program services;

(E) choose the STAR+PLUS HCBS program as an alternative to nursing facility services, as described in 42 CFR §441.302(d);

(F) not be enrolled in another Medicaid HCBS waiver program approved by CMS; and

(G) be determined by HHSC to be financially eligible for Medicaid, as described in Chapter 358 of this title (relating to Medicaid Eligibility for the Elderly and People with Disabilities) and Chapter 360 of this title (relating to Medicaid Buy-In Program).

(2) An individual receiving Medicaid nursing facility services is approved for the STAR+PLUS HCBS program if the individual requests services while residing in the nursing facility and meets eligibility criteria listed in paragraph (1) of this subsection. If the individual is voluntarily discharged from the nursing facility into a community setting before being determined eligible for Medicaid nursing facility services and the STAR+PLUS program, the individual is denied immediate enrollment in the program.

(b) HHSC maintains a statewide interest list of individuals not enrolled in STAR+PLUS interested in receiving services through the STAR+PLUS HCBS program. There is no interest list for individuals currently enrolled in STAR+PLUS who are eligible to receive services through the STAR+PLUS HCBS program. Individuals enrolled in STAR+PLUS may contact their MCO for more information about STAR+PLUS HCBS.

(1) A person may request an individual's name be added to the STAR+PLUS HCBS interest list by:

(A) calling HHSC toll-free at 1-855-937-2372;

(B) submitting a written request to HHSC; or

(C) generating a referral through YourTexasBenefits.com, Find Support Services screening and referral tool.

(2) HHSC removes an individual's name from the STAR+PLUS HCBS interest list if:

(A) the individual is deceased;

(B) the individual is assessed for the program and determined to be ineligible;

(C) the individual or LAR requests in writing that the individual's name be removed from the interest list; or

(D) the individual is no longer a Texas resident, unless the individual is a military family member living outside of Texas as described in Texas Government Code §526.0602:

(i) while the military member is on active duty; or

(ii) for less than one year after the former military member's active duty ends.

(c) The MCO develops a person-centered individual service plan (ISP) for each member, and all applicable documentation, as described in the STAR+PLUS Handbook.

(1) The ISP must:

(A) include services described in the Texas Healthcare Transformation and Quality Improvement Program Waiver, governed by §1115(a) of the Social Security Act.

(B) include services necessary to protect the individual's health and welfare in the community;

(C) include services that supplement rather than supplant the individual's natural supports and other non-STAR+PLUS HCBS supports and services for which the individual may be eligible;

(D) include services designed to prevent the individual's admission to an institution;

(E) include the most appropriate type and amount of services to meet the individual's needs in the community;

(F) be reviewed and revised if an individual's needs or natural supports change or at the request of the individual or their legally authorized representative;

(G) be approved by HHSC; and

(H) be cost effective.

(2) If an individual's ISP exceeds 202 percent of the cost of the individual's level-of-care in a nursing facility to safely serve the individual's needs in the community, the MCO must submit a request for a clinical assessment for general revenue funds to HHSC.

(d) MCOs are responsible for conducting reassessments and ISP development for their enrollees' continued eligibility for STAR+PLUS HCBS, in accordance with the policies and procedures outlined in the STAR+PLUS Handbook and in accordance with the timeframes outlined in the managed care contracts governing STAR+PLUS.

(e) MCOs are responsible for authorizing a network provider of the individual's choosing to deliver services outlined in an individual's ISP.

(f) Individuals participating in STAR+PLUS HCBS have the same rights and responsibilities as any individual enrolled in managed care, as described in Subchapter C of this chapter (relating to Member Bill of Rights and Responsibilities), including the right to appeal a decision made by HHSC or an MCO and the right to a fair hearing, as described in Chapter 357, Subchapter A, of this title (relating to Uniform Fair Hearing Rules).

(g) HHSC conducts utilization reviews of STAR+PLUS MCOs as described in Texas Government Code §540.0755.

**History**
- *Source Note: The provisions of this §353.1153 adopted to
be effective November 1, 2016, 41 TexReg 8265; amended to be effective
April 1, 2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.1155** Medically Dependent Children Program {#sec-353.1155 omnilex-key=us-tx-regs-official--title-1--353.1155}

(a) An MCO assesses an individual's eligibility for MDCP.

(1) To be eligible for MDCP, an individual must:

(A) be under 21 years of age;

(B) reside in Texas;

(C) meet the level of care criteria for medical necessity for nursing facility care as determined by HHSC;

(D) have an unmet need for support in the community that can be met through one or more MDCP services;

(E) choose MDCP as an alternative to nursing facility services, as described in 42 CFR §441.302(d);

(F) not be enrolled in one of the following Medicaid HCBS waiver programs approved by CMS:

(i) the Community Living Assistance and Support Services (CLASS) Program;

(ii) the Deaf Blind with Multiple Disabilities (DBMD) Program;

(iii) the Home and Community-based Services (HCS) Program;

(iv) the Texas Home Living (TxHmL) Program; or

(v) the Youth Empowerment Services waiver;

(G) live in:

(i) the individual's home; or

(ii) an agency foster home as defined in Texas Human Resource Code, §42.002, (relating to Definitions); and

(H) be determined by HHSC to be financially eligible for Medicaid under Chapter 358 of this title (relating to Medicaid Eligibility for the Elderly and People with Disabilities), Chapter 360 of this title (relating to Medicaid Buy-In Program), or Chapter 361 of this title (relating to Medicaid Buy-In for Children Program).

(2) An individual receiving Medicaid nursing facility services is approved for MDCP if the individual requests services while residing in a nursing facility and meets the eligibility criteria listed in paragraph (1) of this subsection. If an individual is discharged from a nursing facility into a community setting before being determined eligible for Medicaid nursing facility services and MDCP, the individual is denied immediate enrollment in the program.

(b) HHSC maintains a statewide interest list of individuals interested in receiving services through MDCP.

(1) A person may request that an individual's name be added to the MDCP interest list by:

(A) calling HHSC toll-free 1-877-438-5658;

(B) submitting a written request to HHSC; or

(C) generating a referral through the YourTexasBenefits.com, Find Support Services screening and referral tool.

(2) If a request is made in accordance with paragraph (1) of this subsection, HHSC adds an individual's name to the MDCP interest list:

(A) if the individual is a Texas resident; and

(B) using the date HHSC receives the request as the MDCP interest list date.

(3) For an individual determined diagnostically or functionally ineligible during the enrollment process for the CLASS Program, DBMD Program, HCS Program, or TxHmL Program:

(A) if the individual's name is not on the MDCP interest list, at the request of the individual or LAR, HHSC adds the individual's name to the MDCP interest list using the individual's interest list date for the waiver program for which the individual was determined ineligible as the MDCP interest list date;

(B) if the individual's name is on the MDCP interest list and the individual's interest list date for the waiver program for which the individual was determined ineligible is earlier than the individual's MDCP interest list date, at the request of the individual or LAR, HHSC changes the individual's MDCP interest list date to the individual's interest list date for the waiver program for which the individual was determined ineligible; or

(C) if the individual's name is on the MDCP interest list and the individual's MDCP interest list date is earlier than the individual's interest list date for the waiver program for which the individual was determined ineligible, HHSC does not change the individual's MDCP interest list date.

(4) This paragraph applies to an individual who is enrolled in MDCP and, because the individual does not meet the level of care criteria for medical necessity for nursing facility care, is determined ineligible for MDCP after November 30, 2019. The individual or the individual's LAR may request one time that HHSC add the individual's name to the first position on the MDCP interest list.

(5) This paragraph applies to an individual who is enrolled in MDCP and, because the individual does not meet the level of care criteria for medical necessity for nursing facility care or the requirement to be under 21 years of age, is determined ineligible for MDCP after November 30, 2019. The individual or the individual's LAR may request that HHSC add the individual's name to the interest list for any of the following programs or change the individual's interest list date for any of the following programs in accordance with:

(A) 40 TAC §45.202 (relating to CLASS Interest List) for the CLASS Program;

(B) 40 TAC §42.202 (relating to DBMD Interest List) for the DBMD Program;

(C) 40 TAC §9.157 (relating to HCS Interest List) for the HCS Program; and

(D) 40 TAC §9.566 (relating to TxHmL Interest List) for the TxHmL Program.

(6) HHSC removes an individual's name from the MDCP interest list if:

(A) the individual is deceased;

(B) the individual is assessed for MDCP and determined to be ineligible and has had an opportunity to exercise the individual's right to a fair hearing, as described in Chapter 357 of this title (relating to Hearings);

(C) the individual, medical consenter, or LAR requests in writing that the individual's name be removed from the interest list; or

(D) the individual moves out of Texas, unless the individual is a military family member living outside of Texas as described in Texas Government Code §526.0602:

(i) while the military member is on active duty; or

(ii) for less than one year after the former military member's active duty ends.

(7) An individual assessed for MCDP and determined to be ineligible, as described in paragraph (6)(B) of this subsection, may request to have the individual's name added to the MDCP interest list as described in paragraph (1) of this subsection.

(c) An MCO develops a person-centered individual service plan (ISP) for each member in MDCP, and all applicable documentation, as described in the STAR Kids Handbook and the Uniform Managed Care Manual (UMCM).

(1) An ISP must:

(A) include services described in the waiver approved by CMS;

(B) include services necessary to protect a member's health and welfare in the community;

(C) include services that supplement rather than supplant the member's natural supports and other non-Medicaid supports and services for which the member may be eligible;

(D) include services designed to prevent the member's admission to an institution;

(E) include the most appropriate type and amount of services to meet the member's needs in the community;

(F) be reviewed and revised if the member's needs or natural supports change or at the request of the member or LAR; and

(G) be cost effective.

(2) If a member's ISP exceeds 50 percent of the cost of the member's level of care in a nursing facility to safely serve the member's needs in the community, HHSC must review the circumstances and, when approved, provide funds through general revenue.

(d) An MCO is responsible for conducting a reassessment and developing an ISP for each member's continued eligibility for MDCP, in accordance with the policies and procedures outlined in the STAR Kids Handbook, UMCM, or materials designated by HHSC and in accordance with the timeframes outlined in the MCO's contract.

(e) An MCO is responsible for authorizing a provider of a member's choice to deliver services outlined in the member's ISP.

(f) A member participating in MDCP has the same rights and responsibilities as any member enrolled in managed care, as described in Subchapter C of this chapter (relating to Member Bill of Rights and Responsibilities), including the right to appeal a decision made by HHSC or an MCO and the right to a fair hearing, as described in Chapter 357 of this title.

(g) HHSC conducts utilization reviews of MCOs providing MDCP services.

**History**
- *Source Note: The provisions of this §353.1155 adopted to
be effective November 1, 2016, 41 TexReg 8265; amended to be effective
February 7, 2022, 47 TexReg 494; amended to be effective April 1,
2025, 50 TexReg 823.*

#### **Subchapter N** STAR KIDS

##### **1 Tex. Admin. Code § 353.1201** General Provisions {#sec-353.1201 omnilex-key=us-tx-regs-official--title-1--353.1201}

(a) HHSC administers the STAR Kids program.

(b) The following subchapters of this chapter apply to the STAR Kids program:

(1) Subchapter A (relating to General Provisions);

(2) Subchapter B (relating to Provider and Member Education Programs);

(3) Subchapter C (relating to Member Bill of Rights and Responsibilities);

(4) Subchapter E (relating to Standards for Medicaid Managed Care);

(5) Subchapter F (relating to Special Investigative Units); and

(6) Subchapter J (relating to Outpatient Pharmacy Services).

(c) HHSC selects STAR Kids MCOs using the purchasing methods described in Chapter 391 of this title (relating to Purchase of Goods and Services by the Texas Health and Human Services Commission).

(d) The STAR Kids program serves members in all service areas in the state.

**History**
- *Source Note: The provisions of this §353.1201 adopted to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.1203** Member Participation {#sec-353.1203 omnilex-key=us-tx-regs-official--title-1--353.1203}

(a) Except as provided in subsection (b) of this section, enrollment in the STAR Kids program is *mandatory* for a Medicaid client who is younger than 21 years of age and meets one or both of the following criteria:

(1) has a physical or mental disability and qualifies for Supplemental Security Income (SSI) or SSI-related Medicaid; or

(2) is enrolled in the Medically Dependent Children Program (MDCP) waiver.

(b) Clients younger than 21 years of age residing in a community-based ICF-IID or nursing facility or receiving services under the following Medicaid 1915(c) waivers must enroll in STAR Kids to receive acute care services and non-facility based state plan services:

(1) Home and Community-based Services (HCS);

(2) Community Living Assistance and Support Services (CLASS);

(3) Texas Home Living (TxHmL); or

(4) Deaf Blind with Multiple Disabilities (DBMD).

(c) Clients younger than 21 years of age receiving services under the Youth Empowerment Services (YES) Medicaid 1915(c) waiver must enroll in STAR Kids to receive acute care services and non-facility based state plan services other than Community First Choice state plan services.

(d) The following Medicaid clients cannot participate in the STAR Kids program:

(1) clients residing in the Truman W. Smith Children's Care Center;

(2) residents of state supported living centers;

(3) residents of state veterans' homes;

(4) persons not eligible for full Medicaid benefits; and

(5) children in the conservatorship of DFPS.

(e) Dual eligible clients.

(1) Enrollment in Medicare does not affect eligibility for the STAR Kids program.

(2) Dual eligible clients who participate in the STAR Kids program receive most acute care services through their Medicare provider, and long term services and supports through the STAR Kids MCO. Participation in the STAR Kids program does not change the way dual eligible clients receive Medicare services.

(f) Individuals younger than 21 years of age who participate in the Medicaid Buy-In for Children Program or the Medicaid Buy-In Program must enroll in STAR Kids.

(g) FFCC members at least 18 years of age but younger than 21 years of age may choose to transfer from STAR Health to STAR Kids if they meet the criteria in subsections (b), (c), (e), or (f) of this section.

(h) A STAR Kids member has a choice among at least two MCOs.

(i) Except as provided in subsection (d) of this section, a child or young adult, from birth through the month of his or her 21st birthday, who is enrolled in the Adoption Assistance Program or the Permanency Care Assistance Program and who meets one or more of the following criteria is eligible to participate in the STAR Kids program:

(1) receives SSI;

(2) received SSI before becoming eligible for the Adoption Assistance Program or the Permanency Care Assistance Program;

(3) is enrolled in a Medicaid 1915(c) waiver; or

(4) is enrolled in Medicare.

**History**
- *Source Note: The provisions of this §353.1203 adopted to be effective November 1, 2016, 41 TexReg 8265; amended to be effective September 1, 2017, 42 TexReg 4273; amended to be effective August 12, 2021, 46 TexReg 4843.*

##### **1 Tex. Admin. Code § 353.1205** Service Coordination {#sec-353.1205 omnilex-key=us-tx-regs-official--title-1--353.1205}

(a) All STAR Kids members have access to service coordination. Service coordination includes:

(1) face-to-face and telephonic contacts between the member or the LAR and the service coordinator;

(2) development and maintenance of a comprehensive, person-centered individual service plan (ISP);

(3) coordination to assist the member in accessing services provided by the STAR Kids MCO;

(4) coordination to assist the member or the LAR in accessing services provided by other community entities or service providers; and

(5) transition planning, beginning no later than age 15, to help the member prepare for changes in life circumstances and changes in available healthcare services to ease the shift to adulthood.

(b) STAR Kids members with an identified need for more intensive service coordination are assigned a single, named service coordinator by the STAR Kids MCO. All STAR Kids members have access to a single, named service coordinator upon request.

**History**
- *Source Note: The provisions of this §353.1205 adopted to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.1207** Participating Providers {#sec-353.1207 omnilex-key=us-tx-regs-official--title-1--353.1207}

Acute and long-term services and supports providers have the opportunity to participate in STAR Kids, provided they:

(1) comply with the applicable provisions of this chapter;

(2) comply with Chapter 352 of this title (relating to Medicaid and Children's Health Insurance Program Provider Enrollment);

(3) meet applicable licensing standards;

(4) meet the MCO's credentialing standards; and

(5) contract with the MCO.

**History**
- *Source Note: The provisions of this §353.1207 adopted to be effective November 1, 2016, 41 TexReg 8265.*

##### **1 Tex. Admin. Code § 353.1209** STAR Kids Handbook {#sec-353.1209 omnilex-key=us-tx-regs-official--title-1--353.1209}

The STAR Kids Handbook includes policies and procedures to be used by all health and human services agencies and their contractors and providers in the delivery of STAR Kids Program services to eligible members. The STAR Kids Handbook can be found on the Texas Health and Human Services Commission website.

**History**
- *Source Note: The provisions of this §353.1209 adopted to be effective November 1, 2016, 41 TexReg 8265.*

#### **Subchapter O** DELIVERY SYSTEM AND PROVIDER PAYMENT INITIATIVES

##### **1 Tex. Admin. Code § 353.1301** General Provisions {#sec-353.1301 omnilex-key=us-tx-regs-official--title-1--353.1301}

(a) Purpose. The purpose of this subchapter is to describe the circumstances and programs under which the Texas Health and Human Services Commission may direct expenditures for delivery system and provider payment initiatives through its contracts with Medicaid managed care organizations. Federal authority for such directed expenditures is codified at 42 C.F.R. §438.6(c).

(b) Definitions. The following definitions apply when the terms are used in this subchapter. Terms that are used in only one program described in this subchapter may be defined in the section of this subchapter describing that program.

(1) Capitation rate--A fixed, predetermined fee paid by HHSC to the managed care organization each month, in accordance with the contract, for each enrolled member. In exchange for this, the managed care organization arranges for or provides a defined set of covered services to the enrolled member, regardless of the amount of covered services used by the enrolled member.

(2) Centers for Medicare & Medicaid Services (CMS)--The federal agency within the United States Department of Health and Human Services responsible for overseeing and directing Medicare and Medicaid.

(3) HHSC--The Texas Health and Human Services Commission or its designee.

(4) Intergovernmental transfer (IGT)--A transfer of public funds from another state agency or a non-state governmental entity to HHSC.

(5) Managed care organization (MCO)--A Medicaid managed care organization contracted with HHSC to provide health care services to Medicaid recipients.

(6) Non-federal share--The portion of program expenditures that is not federal funds. The non-federal share is equal to 100 percent minus the federal medical assistance percentage (FMAP) for Texas for the state fiscal year corresponding to the program year and for the population served.

(7) Non-state governmental entity--A hospital authority, hospital district, health district, city, or county.

(8) Program rate component--The fixed percentage of the capitation rate that is attributable to the delivery system or provider payment initiative.

(9) Provider--A credentialed and licensed individual, facility, agency, institution, organization, or other entity that has a contract with the MCO for the delivery of covered services to the MCO's members.

(10) Public funds--Funds derived from taxes, assessments, levies, and investments. Public funds also include other public revenues within the sole and unrestricted control of a governmental entity. Public funds do not include gifts, grants, trusts, or donations, the use of which is conditioned on supplying a benefit solely to the donor or grantor of the funds.

(11) Service delivery area (SDA)--The counties included in any HHSC-defined geographic area as applicable to each MCO.

(12) Sponsoring governmental entity--A state or non-state governmental entity that agrees to transfer to HHSC some or all of the non-federal share of program expenditures under this subchapter.

(c) CMS approval. Implementation of each of the programs described in this subchapter is contingent upon HHSC receiving written approval from CMS of the contract provisions directing the MCO expenditures. Federal requirements for CMS approval of directed MCO expenditures are codified in 42 C.F.R. §438.6(c)(2).

(d) Program specifications, provider eligibility, and payment calculations. Descriptions of program specifications, provider eligibility, and payment calculations are contained in the sections of this subchapter that describe each delivery system or provider payment initiative program.

(e) Source of the non-federal share. The non-federal share of expenditures under this subchapter is limited to timely receipt by HHSC of public funds from sponsoring governmental entities.

(1) State-owned providers. A state-owned provider may transfer to HHSC any non-federal funds within the control of the provider, including appropriated state general revenue funds, as the non-federal share of program expenditures associated with that provider.

(2) All other providers. For all other providers, the non-federal share of program expenditures is funded through IGTs. No state general revenue appropriated to HHSC is available to support program expenditures to non-state providers under this subchapter.

(f) Amount and timing of transfer of the non-federal share. The amount of the non-federal share that governmental entities transfer to HHSC for expenditures under this subchapter and the timing of such transfers are specific to each delivery system or provider payment initiative and are described in the section of this subchapter governing each such program.

(g) Reconciliation of the non-federal share.

(1) Purpose. The amount of HHSC's expenditures under this subchapter is dependent on member enrollment in each participating MCO, which may fluctuate from month to month. HHSC's actual expenditures cannot be determined until final member enrollment data is available, which may not occur for up to two years following the end of the program period. The purpose of the reconciliation process is to ensure that HHSC's actual total expenditures for each program are determined based on accurate and final member enrollment data for each program period, and that the non-federal share of HHSC's actual expenditures are borne by the appropriate governmental entity or entities.

(2) Methodology. For each program described in this subchapter, HHSC reconciles the amount of the non-federal funds actually expended during the program period with the amount of funds transferred to HHSC by the sponsoring governmental entities. For programs with multiple provider classes, HHSC reconciles expenditures for each provider class. HHSC completes each reconciliation in multiple parts.

(A) The first reconciliation occurs no later than 120 days after the end of the program period.

(i) Using the best-available member enrollment data at the time of the first reconciliation, HHSC:

(I) calculates the amount expended for the program period by multiplying the program rate component by the total member months included in the program period;

(II) calculates the non-federal share of the amount determined in subclause (I) of this clause; and

(III) compares the amount determined in subclause (II) of this clause to the amount previously transferred to HHSC by the participating governmental entities for the program period.

(ii) If the amount previously transferred is less than 102 percent of the amount determined in clause (i)(II) of this subparagraph:

(I) the participating governmental entities must transfer additional funds to HHSC such that total transferred funds equals 102 percent of the amount determined in clause (i)(II) of this subparagraph;

(II) if more than one governmental entity is responsible for the non-federal share of payments under the program, the additional required funds are allocated proportional to each governmental entity's initial contribution to funding the program; and

(III) HHSC notifies the governmental entities of the amount and timing of the required transfers.

(iii) If the amount previously transferred is more than 102 percent of the amount determined in clause (i)(II) of this subparagraph, HHSC refunds the excess amount to the governmental entities in proportion to each entity's initial contribution to funding the program.

(B) Interim reconciliations may occur as updated member enrollment data for the program period becomes available. HHSC follows the process described in subparagraph (A) of this paragraph for such interim reconciliations.

(C) The final reconciliation occurs no later than 25 months after the end of the program period.

(i) Using the final member enrollment data for the program period, HHSC:

(I) calculates the amount expended for the program period by multiplying the program rate component by the total member months included in the program period;

(II) calculates the non-federal share of the amount determined in subclause (I) of this clause; and

(III) compares the amount determined in subclause (II) of this clause to the amount previously transferred to HHSC by the sponsoring governmental entities for the program period, including any amounts transferred pursuant to subparagraphs (A)(ii) or (B) of this paragraph.

(ii) If the amount previously transferred is less than the non-federal share of the amount expended:

(I) the participating governmental entities must transfer additional funds to HHSC such that total transferred funds equals the amount determined in clause (i)(II) of this subparagraph;

(II) if more than one governmental entity is responsible for the non-federal share of payments under the program, the additional required funds are allocated proportional to each governmental entity's initial contribution to funding the program; and

(III) HHSC notifies the governmental entities of the amount and timing of the required transfers.

(iii) If the amount previously transferred is more than the amount determined in clause (i)(II) of this subparagraph, HHSC refunds the excess amount to the governmental entities in proportion to each entity's initial contribution to funding the program.

(h) Failure of a governmental entity to transfer funds. If a governmental entity does not timely complete the transfer of funds described in this section, HHSC withholds Medicaid payments from any provider operated by the governmental entity until HHSC has recovered an amount equal to the amount of the funding shortfall.

(i) Failure of an MCO to comply with contract provisions. HHSC may review MCO payments to network providers or other documentation to verify that the MCO is in compliance with contract provisions directing expenditures for delivery system and provider payment initiatives. HHSC must investigate provider claims of contract violations. In the event HHSC identifies any contract deficiency or violation, HHSC takes corrective action to remedy such deficiency or violation, as authorized by §353.5 of this chapter (relating to Internet Posting of Sanctions Imposed For Contractual Violations).

(j) Disallowance of federal funds.
If payments under this subchapter are disallowed by CMS, HHSC may recoup the amount of the disallowance from MCOs, providers, or governmental entities that participated in the program associated with the disallowance. If the recoupment from an MCO, provider, or governmental entity for such a disallowance results in a subsequent disallowance, HHSC will recoup the amount of that subsequent disallowance from the same entity.

(k) Overpayment.

(1) If payments under this subchapter result in an overpayment to an MCO, HHSC may recoup the amount of the overpayment from the MCO, pursuant to the terms of the contract between them.

(2) If payments under this subchapter result in an overpayment to a provider, the MCO may recoup an amount equivalent to the overpayment.

(3) Payments made under this subchapter may be subject to any adjustments for payments made in error or due to fraud, including without limitation adjustments made under the Texas Administrative Code, the Code of Federal Regulations, and state and federal statutes. The MCOs may recoup an amount equal to any such adjustments from the providers in question. Nothing in this section may be construed to limit the independent authority of another federal or state agency or organization to recover from the provider for a payment made due to fraud.

(l) State's cost of administering programs. To the extent authorized under state and federal law, HHSC will collect the state's cost of administering a program authorized under this subchapter from participants in the program generating the costs.

**History**
- *Source Note: The provisions of this §353.1301 adopted to be effective April 9, 2017, 42 TexReg 1737; amended to be effective November 1, 2017, 42 TexReg 5999.*

##### **1 Tex. Admin. Code § 353.1302** Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019 {#sec-353.1302 omnilex-key=us-tx-regs-official--title-1--353.1302}

(a) Introduction. This section establishes the Quality Incentive Payment Program (QIPP) for nursing facilities (NFs) providing services under Medicaid managed care on or after September 1, 2019. QIPP is designed to incentivize NFs to improve quality and innovation in the provision of NF services to Medicaid recipients through the use of metrics that are expected to advance at least one of the goals and objectives of the state's quality strategy.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 (relating to General Provisions) or §353.1304 (relating to Quality Metrics for the Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019) of this subchapter.

(1) CHOW application--An application filed with HHSC for a NF change of ownership (CHOW).

(2) Program period--A period of time for which an eligible and enrolled NF may receive the QIPP amounts described in this section. Each QIPP program period is equal to a state fiscal year (FY) beginning September 1 and ending August 31 of the following year.

(3) Network nursing facility--A NF located in the state of Texas that has a contract with a Managed Care Organization (MCO) for the delivery of Medicaid covered benefits to the MCO's enrollees.

(4) Non-state government-owned NF--A network nursing facility where a non-state governmental entity located in the state of Texas holds the license and is a party to the NF's Medicaid provider enrollment agreement with the state.

(5) Private NF--A network nursing facility not owned by a governmental entity located in the state of Texas, and holds a license.

(6) Regional Healthcare Partnership (RHP)--A collaboration of interested participants that work collectively to develop and submit to the state a regional plan for health care delivery system reform as defined and established under Chapter 354, Subchapter D, of this title (relating to Texas Healthcare Transformation and Quality Improvement Program).

(7) Runout period--A period of 23 months following the end of the program period during which the MCO may make adjustments to the MCO member months.

(c) Eligibility for participation in QIPP. A NF is eligible to participate in QIPP if it complies with the requirements described in this subsection.

(1) The NF is a non-state government-owned NF.

(A) The non-state governmental entity that owns the NF must certify the following facts on a form prescribed by HHSC.

(i) That it is a non-state government-owned NF where a non-state governmental entity holds the license and is party to the facility's Medicaid contract; and

(ii) That all funds transferred to HHSC via an intergovernmental transfer (IGT) for use as the state share of payments are public funds.

(B) For the program periods beginning on or before September 1, 2023, but on or after September 1, 2019, the NF must be located in the state of Texas in the same RHP as, or within 150 miles of, the non-state governmental entity taking ownership of the facility; must be owned by the non-state governmental entity for no less than four years prior to the first day of the program period; or must be able to certify in connection with the enrollment application that they can demonstrate an active partnership between the NF and the non-state governmental entity that owns the NF.

(C) For the program period beginning September 1, 2024, the NF must be located in the state of Texas in the same county as, or if separate counties, a contiguous county of, the non-state governmental entity taking ownership of the facility; must be owned by the non-state governmental entity for no less than four years prior to the first day of the program period; or must be able to provide documentation of activities that demonstrate an active partnership that have occurred in the prior two months before application as well as a detailed plan for maintaining the partnership in the months following the application date through the end of the program period.

(D) For program periods beginning on or after September 1, 2025, the NF must be located in the state of Texas in the same county as, or if separate counties, a contiguous county of, the non-state governmental entity taking ownership of the facility; must be owned by the non-state governmental entity for no less than four years prior to the first day of the program period; or must be able to provide documentation of activities that demonstrate an active partnership that have occurred in the prior nine months before application as well as a detailed plan for maintaining the partnership in the months following the application date through the end of the program period.

(E) The following criteria demonstrate an active partnership between the NF and the non-state governmental entity that owns the NF.

(i) Monthly meetings (in-person or virtual) with NF administrative staff to review the NF's clinical and quality operations and identify areas for improvement. Meetings should include patient observations; regulatory findings; review of Certification And Survey Provider Enhanced Reports (CASPER) reports, quality measures, grievances, staffing, risk, incidents, accidents, and infection control measures; root cause analysis, if applicable; and design of performance improvement plans.

(ii) Quarterly joint trainings on topics and trends in nursing home care best practices or on needed areas of improvement.

(iii) Annual, on-site inspections of the NF by a non-state governmental entity-sponsored Quality Assurance team.

(2) The NF is a private NF. The NF must have a percentage of Medicaid NF days of service that is greater than or equal to 65 percent. For each private NF, the percentage of Medicaid NF days is calculated by summing the NF's Medicaid NF fee-for-service and managed care days of service, including dual-eligible demonstration days of service, and dividing that sum by the facility's total days of service in all licensed beds. Medicaid hospice days of service are included in the denominator but excluded from the numerator.

(A) The days of service will be annualized based on the NF's latest cost report or accountability report but from a year in which HHSC required the submission of cost reports.

(B) HHSC will exclude any calendar days that the NF was closed due to a natural or man-made disaster. In such cases, HHSC will annualize the days of service based on calendar days when the NF was open.

(d) Data sources for historical units of service. Historical units of service are used to determine an individual private NF's QIPP eligibility status and the distribution of QIPP funds across eligible and enrolled NFs.

(1) All data sources referred to in this subsection are subject to validation using HHSC auditing processes or procedures as described under §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).

(2) Data sources for the determination of each private NF's QIPP eligibility status are listed in priority order below. For each program period, the data source must be from a cost-reporting year and must align with the NF's fiscal year.

(A) The most recently available Medicaid NF cost report for the private NF. If no Medicaid NF cost report is available, the data source in subparagraph (B) of this paragraph must be used.

(B) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for the private NF. If no Medicaid Direct Care Staff Rate Staffing and Compensation Report is available, the data source in subparagraph (C) of this paragraph must be used.

(C) The most recently available Medicaid NF cost report for a prior owner of the private NF. If no Medicaid NF cost report for a prior owner of the private NF is available, the data source in subparagraph (D) of this paragraph must be used.

(D) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the private NF. If no Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the private NF is available, the private NF is not eligible for participation in QIPP.

(3) Data sources for determination of distribution of QIPP funds across eligible and enrolled NFs are listed in priority order below. For each program period, the data source must be from a cost-reporting year and must align with the NF's fiscal year.

(A) The most recently available Medicaid NF cost report for the NF. If the cost report covers less than a full year, reported values are annualized to represent a full year. If no Medicaid NF cost report is available, the data source in subparagraph (B) of this paragraph must be used.

(B) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for the NF. If the Staffing and Compensation Report covers less than a full year, reported values are annualized to represent a full year. If no Staffing and Compensation Report is available, the data source in subparagraph (C) of this paragraph must be used.

(C) The most recently available Medicaid NF cost report for a prior owner of the NF. If the cost report covers less than a full year, reported values are annualized to represent a full year. If no Medicaid NF cost report for a prior owner of the NF is available, the data source in subparagraph (D) of this paragraph must be used.

(D) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the NF. If the Staffing and Compensation Report covers less than a full year, reported values are annualized to represent a full year.

(e) Conditions of Participation. As a condition of participation, all NFs participating in QIPP must do the following.

(1) The NF must submit a properly completed enrollment application on a form prescribed by HHSC by the due date determined by HHSC. The enrollment period must be no less than 30 calendar days, and the final date of the enrollment period will be at least nine days prior to the IGT notification.

(2) The entity that owns the NF must certify, on a form prescribed by HHSC, that no part of any payment made under the QIPP will be used to pay a contingent fee; and that the entity's agreement with the nursing facility does not use a reimbursement methodology containing any type of incentive, direct or indirect, for inappropriately inflating, in any way, claims billed to Medicaid, including the NF's receipt of QIPP funds. The certification must be received by HHSC with the enrollment application described in paragraph (1) of this subsection.

(3) If a provider has changed ownership in the past five years in a way that impacts eligibility for the program, the provider must submit to HHSC, upon demand, copies of contracts it has with third parties with respect to the transfer of ownership or the management of the provider, and which reference the administration of, or payment from, this program.

(4) The NF must ensure that HHSC has access to the NF records referenced in subsection (c) of this section and the data for the NF from one of the data sources listed in subsection (d) of this section. Participating facilities must ensure that these records and data are accurate and sufficiently detailed to support legal, financial, and statistical information used to determine a NF's eligibility during the program period.

(A) The NF must maintain these records and data through the program period and until at least 90 days following the conclusion of the runout period.

(B) The NF will have 14 business days from the date of a request from HHSC to submit to HHSC the records and data.

(C) Failure to provide the records and data could result in adjustments pursuant to §353.1301(k) of this subchapter.

(5) Report all quality data denoted as required as a condition of participation in subsection (g) of this section.

(6) Failure to meet any conditions of participation described in this subsection will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

(f) Non-federal share of QIPP payments. The non-federal share of all QIPP payments is funded through IGTs from sponsoring non-state governmental entities. No state general revenue is available to support QIPP.

(1) HHSC will share suggested IGT responsibilities for the program period with all QIPP eligible and enrolled non-state government-owned NFs at least 15 days prior to the IGT declaration of intent deadline. Suggested IGT responsibilities will be based on the maximum dollars available under the QIPP program, plus eight percent, for the program period as determined by HHSC; forecast STAR+PLUS NF member months for the program period as determined by HHSC; and the distribution of historical Medicaid days of service across non-state government-owned NFs enrolled in QIPP for the program period. HHSC will also share estimated maximum revenues each eligible and enrolled NF could earn under QIPP for the program period. Estimates are based on HHSC's suggested IGT responsibilities and an assumption that all enrolled NFs will meet 100 percent of their quality metrics. The purpose of sharing this information is to provide non-state government-owned NFs with information they can use to determine the amount of IGT they wish to transfer.

(2) Sponsoring governmental entities will determine the amount of IGT they wish to transfer to HHSC for the entire program period and provide a declaration of intent to HHSC 15 business days before the first half of the IGT amount is transferred to HHSC.

(A) The declaration of intent is a form prescribed by HHSC that includes the total amount of IGT the sponsoring governmental entity wishes to transfer to HHSC and whether the sponsoring governmental entity intends to accept Component One payments.

(B) The declaration of intent is certified to the best knowledge and belief of a person legally authorized to sign for the sponsoring governmental entity but does not bind the sponsoring governmental entity to transfer IGT.

(3) Sponsoring governmental entities will transfer the first half of the IGT amount by a date determined by HHSC. The second half of the IGT amount will be transferred by a date determined by HHSC. The IGT deadlines and all associated dates will be published on the HHSC QIPP webpage by January 15 of each year.

(4) Reconciliation. HHSC will reconcile the actual amount of the non-federal funds expended under this section during each program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(g) QIPP capitation rate components. QIPP funds will be paid to MCOs through four components of the STAR+PLUS NF managed care per member per month (PMPM) capitation rates. The MCOs' distribution of QIPP funds to the enrolled NFs will be based on each NF's performance related to the quality metrics as described in §353.1304 of this subchapter. The NF must have had at least one Medicaid client in the care of that NF for each reporting period to be eligible for payments.

(1) Component One.

(A) The total value of Component One will be equal to:

(i) For program periods beginning on or before September 1, 2023, but on or after September 1, 2019, 110 percent of the estimated amount of the non-federal share of the QIPP.

(ii) For program periods beginning on or after September 1, 2024, 44 percent of total program value for the program period.

(B) Interim allocation of funds across qualifying non-state government-owned NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Private NFs are not eligible for payments from Component One.

(D) For program periods beginning on or before September 1, 2023, but on or after September 1, 2019, the interim allocation of funds across qualifying non-state government-owned NFs will be reconciled to the actual distribution of Medicaid NF days of service across these NFs during the program period as captured by HHSC's Medicaid contractors for fee-for-service and managed care 120 days after the last day of the program period.

(E) For program periods beginning on or before September 1, 2023, but on or after September 1, 2019, NFs must report quality data as described in §353.1304 of this subchapter as a condition of participation in the program.

(F) For program periods beginning on or after September 1, 2024, payments to NFs will be triggered by achievement of performance requirements as described in §353.1304 of this subchapter.

(2) Component Two.

(A) The total value of Component Two will be equal to:

(i) For the program periods beginning on or before September 1, 2020, but on or after September 1, 2019, 30 percent of total program value for the program period after accounting for the funding of Component One and Component Four.

(ii) For the program periods beginning on or before September 1, 2023, but on or after September 1, 2021, 40 percent of total program value for the program period after accounting for the funding of Component One and Component Four.

(iii) For program periods beginning on or after September 1, 2024, 20 percent of total program value for the program period.

(B) Allocation of funds across qualifying non-state government-owned and private NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Payments to NFs will be triggered by achievement of performance requirements as described in §353.1304 of this subchapter or, if applicable in a program period, a uniform rate increase for which a NF must report quality data as described in §353.1304 of this subchapter as a condition of participation in the program.

(3) Component Three.

(A) The total value of Component Three will be equal to:

(i) For the program periods beginning on or before September 1, 2020, but on or before September 1, 2019, 70 percent total program value for the program period after accounting for the funding of Component One and Component Four.

(ii) For the program periods beginning on or before September 1, 2023, but on or after September 1, 2021, 60 percent after accounting for the funding of Component One and Component Four.

(iii) For the program period beginning September 1, 2024, 20 percent of the program period funds.

(B) Allocation of funds across qualifying non-state government-owned and private NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Payments to NFs will be triggered by achievement of performance requirements as described in §353.1304 of this subchapter.

(4) Component Four.

(A) The total value of Component Four will be equal to 16 percent of the total program value for the program period.

(B) Allocation of funds across qualifying non-state government-owned NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Payments to non-state government-owned NFs will be triggered by achievement of performance requirements as described in §353.1304 of this subchapter.

(D) Private NFs are not eligible for payments from Component Four.

(5) Non-Disbursed Funds.

(A) For program periods that begin on or before September 1, 2023, funds that are non-disbursed due to failure of one or more NFs to meet performance requirements will be distributed across all QIPP NFs based on each NF's proportion of total earned QIPP funds from Components One, Two, Three, and Four combined.

(B) For program periods that begin on or after September 1, 2024, funds that are non-disbursed due to failure of one or more NFs to meet performance requirements will be distributed across QIPP NFs who have demonstrated achievement of a measure established in accordance with §353.1304 of this subchapter and designated by HHSC as the measure on which distribution of non-disbursed funds will be based. Funds distributed under this subparagraph will be allocated to each achieving NF based upon each NF's proportion of total earned QIPP funds from Components One, Two, Three, and Four combined compared to the total amount paid to achieving NFs from all components.

(h) Distribution of QIPP payments.

(1) Prior to the beginning of the program period, HHSC will calculate the portion of each PMPM associated with each QIPP-enrolled NF broken down by QIPP capitation rate component, quality metric, and payment period. For example, for a NF, HHSC will calculate the portion of each PMPM associated with that NF that would be paid from the MCO to the NF as follows.

(A) Component One.

(i) For the program periods beginning on or before September 1, 2023, but on or after September 1, 2019, monthly payments from Component One as a uniform rate increase will be equal to the total value of Component One for the NF divided by twelve.

(ii) For program periods beginning on or after September 1, 2024, quarterly payments from Component One associated with each quality metric will be equal to the total value of Component One associated with the quality metric divided by four.

(B) Component Two.

(i) For the program periods beginning on or before September 1, 2023, but on or after September 1, 2019, monthly payments from Component Two associated with each quality metric will be equal to the total value of Component Two associated with the quality metric divided by twelve.

(ii) For program periods beginning on or after September 1, 2024, quarterly payments from Component Two associated with each quality metric will be equal to the total value of Component Two associated with the quality metric divided by four.

(C) Component Three. For program periods beginning on or after September 1, 2019, quarterly payments from Component Three associated with each quality metric will be equal to the total value of Component Three associated with the quality metric divided by four.

(D) Component Four. For program periods beginning on or after September 1, 2019, quarterly payments from Component Four associated with each quality metric will be equal to the total value of Component Four associated with the quality metric divided by four.

(E) Allocation Across Quality Metrics.

(i) For program periods beginning on or before September 1, 2023, but on or after September 1, 2019, for purposes of the calculations described in subparagraphs (B), (C), and (D) of this paragraph, each quality metric will be allocated an equal portion of the total dollars included in the component.

(ii) For program periods beginning on or after September 1, 2024, for purposes of the calculations described in subparagraph (A) of this paragraph, achievement in 1 metric earns 90 percent and achievement in 2 metrics earns 100 percent of total dollars included in the component. For the calculations described in subparagraphs (C) and (D) of this paragraph, each quality metric will be allocated an equal portion of the total dollars included in the component.

(iii) For purposes of the calculations described in subparagraph (B) of this paragraph:

(I) for program periods beginning on September 1, 2024, achievement in 1 metric earns 70 percent and achievement in 2 metrics earns 100 percent of total dollars included in the component;

(II) for program periods beginning on September 1, 2025, achievement in 1 metric earns 60 percent, achievement in 2 metrics earns 85 percent, and achievement in 3 metrics earns 100 percent of total dollars included in the component; and

(III) for program periods beginning on or after September 1, 2026, each quality metric will be allocated an equal portion of the total dollars included in the component.

(F) In situations where a NF does not have enough data for all quality metrics to be calculated, the funding associated with that metric will be evenly distributed across all remaining metrics within the component. If a NF does not have enough data for any quality metrics to be calculated, no funds will be earned.

(2) MCOs will distribute payments to enrolled NFs as they meet their reporting and quality metric requirements. Payments will be equal to the portion of the QIPP PMPM associated with the achievement for the time period in question multiplied by the number of member months for which the MCO received the QIPP PMPM. In the event of a CHOW, the MCO will distribute the payment to the owner of the NF at the time of the payment.

(i) Changes of ownership.

(1) A NF undergoing a CHOW from privately owned to non-state government-owned or from non-state government-owned to privately-owned will only be eligible to enroll as the new class of facility if HHSC received a completed CHOW application no later than 30 days prior to the first day of the enrollment period. All required documents pertaining to the CHOW (i.e., HHSC must have a complete application for a change of ownership license as described under 26 TAC §554.201 (relating to Criteria for Licensing) and 26 TAC §554.210 (relating to Change of Ownership and Notice of Changes) must be submitted in the timeframe required by HHSC.

(2) If an enrolled NF changes ownership, including to a new class of facility following the enrollment period or during the program period, the NF under the new ownership must meet the eligibility requirements described in this section for the new owner's facility class in order to continue QIPP participation during the program period.

(3) For program periods beginning on or after September 1, 2025, if an enrolled NF undergoes a CHOW that changes the class of the facility, from privately owned to non-state government-owned or from non-state government-owned to privately owned, during the program period, the enrolled NF will be removed from the program for the remainder of the program period after the CHOW effective date.

(4) An enrolled NF must notify the MCOs it has contracts with of a potential CHOW at least 30 days before the anticipated date of the CHOW. Notification is considered to have occurred when the MCO receives the notice.

(j) Changes in operation. If an enrolled NF closes voluntarily or ceases to provide NF services in its facility, the NF must notify the HHSC Provider Finance Department by email at qipp@hhs.texas.gov. Notification is considered to have occurred when HHSC receives the notice.

(k) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(j) and §353.1301(k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1302 adopted to be effective December 30, 2018, 43 TexReg 8079; amended to be effective August 19, 2021, 46 TexReg 5015; amended to be effective May 31, 2022, 47 TexReg 3113; amended to be effective January 30, 2024, 49 TexReg 397.*

##### **1 Tex. Admin. Code § 353.1303** Quality Incentive Payment Program for Nursing Facilities before September 1, 2019 {#sec-353.1303 omnilex-key=us-tx-regs-official--title-1--353.1303}

(a) Introduction. This section establishes the Quality Incentive Payment Program (QIPP) for nursing facilities (NFs) providing services under Medicaid managed care (MC) before September 1, 2019. QIPP is designed to incentivize NFs to improve quality and innovation in the provision of NF services to Medicaid recipients, using the Centers for Medicare & Medicaid Services (CMS) Five-Star Quality Rating System as its measure of success.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 of this subchapter (related to General Provisions).

(1) Baseline--A NF-specific starting measure used as a comparison against NF performance throughout the eligibility period to determine progress in the QIPP Quality Measures.

(2) Benchmark--The CMS National Average prior to the start of the eligibility period by which a NF's progress with the Quality Measures is determined.

(3) CHOW application--An application filed with the Department of Aging and Disability Services (DADS) for a NF change of ownership (CHOW).

(4) DADS--The Texas Department of Aging and Disability Services or its successor agency.

(5) Eligibility period--A period of time for which an eligible and enrolled NF may receive the QIPP amounts described in this section. Each QIPP eligibility period is equal to a state fiscal year (FY) beginning September 1 and ending August 31 of the following year. Eligibility Period One is equal to FY 2018, beginning September 1, 2017, and ending August 31, 2018.

(6) MCO--A Medicaid managed care organization contracted with HHSC to provide NF services to Medicaid recipients.

(7) Network nursing facility--A NF that has a contract with an MCO for the delivery of Medicaid covered benefits to the MCO's enrollees.

(8) Non-state government-owned NF--A network NF where a non-state governmental entity holds the license and is a party to the NF's Medicaid provider enrollment agreement with the state.

(9) Private NF--A NF that is not owned by a governmental entity.

(10) Quality Assurance Performance Improvement (QAPI) Validation Report--A monthly report submitted by a NF, that is eligible for and enrolled in QIPP, to an MCO that demonstrates that the NF has convened a meeting to review the NF's CMS-compliant plan for maintaining and improving safety and quality in the NF.

(11) Regional Healthcare Partnership (RHP)--A collaboration of interested participants that work collectively to develop and submit to the state a regional plan for health care delivery system reform as defined and established under Chapter 354, Subchapter D, of this title (relating to Texas Healthcare Transformation and Quality Improvement Program).

(c) Eligibility for participation in QIPP. A NF is eligible to participate in QIPP if it complies with the requirements described in this subsection for each eligibility period.

(1) Eligibility Period One. A NF is eligible to participate in QIPP for Eligibility Period One if it meets the following requirements:

(A) The NF is a non-state government-owned NF.

(i) The NF must be a non-state government-owned NF with a Medicaid contract effective date of April 1, 2017, or earlier. A NF undergoing a CHOW from privately owned to non-state government owned will only be eligible under this subparagraph if DADS received a completed CHOW application by March 2, 2017, and all required documents pertaining to the CHOW (i.e., DADS must have a complete application for a change of ownership license as described under 40 TAC §19.201 (relating to Criteria for Licensing), §19.210 (relating to Change of Ownership License), and §19.2308 (relating to Change of Ownership)) by March 31, 2017.

(ii) The non-state governmental entity that owns the NF must certify the following facts on a form prescribed by HHSC.

(I) that it is a non-state government-owned NF where a non-state governmental entity holds the license and is party to the facility's Medicaid contract; and

(II) that all funds transferred to HHSC via an intergovernmental transfer (IGT) for use as the state share of payments are public funds.

(iii) The NF must have been a participant in the Minimum Payment Amounts Program (MPAP) or must be located in the same RHP as, or within 150 miles of, the non-state governmental entity taking ownership of the facility. This geographic proximity criterion does not apply to NFs that can establish good cause for an exception to this criterion.

(B) Private NFs. The NF must have a percentage of Medicaid NF days of service that is greater than or equal to the private NF QIPP eligibility cut-off point. The private NF QIPP eligibility cut-off point will be equal to the mean percentage of historical Medicaid NF days of service provided under fee-for-service (FFS) and MC by all private NFs plus one standard deviation, as determined by HHSC. For each private NF, the percentage of Medicaid NF days is calculated by summing the NF's Medicaid NF FFS and MC days of service and dividing that sum by the facility's total days of service in all licensed beds. Medicaid hospice days of service are included in the denominator but excluded from the numerator.

(2) Future eligibility periods. Eligibility requirements for eligibility periods after Eligibility Period One are the same as the requirements under paragraph (1) of this subsection except that the deadlines specified in paragraph (1)(A)(i) of this subsection will be updated by HHSC. Updated deadlines will be shared with all NFs by a date to be determined by HHSC.

(d) Data sources for historical units of service. Historical units of service are used to determine the private NF QIPP eligibility cut-off point, individual private NF QIPP eligibility status, and the distribution of QIPP funds across eligible and enrolled NFs.

(1) All data sources referred to in this subsection are subject to validation using HHSC auditing processes or procedures as described under §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).

(2) The data source for the determination of the private NF QIPP eligibility cut-off point is the most recently available, audited Texas Medicaid NF cost report database.

(3) Data sources for the determination of each private NF's QIPP eligibility status are listed in priority order below. For each eligibility period, the data source must align with the NF's fiscal year that ends no more recently than in the calendar year four years prior to the calendar year within which the eligibility period ends. For example, for the eligibility period ending on August 31, 2018, the data source must align with the NF's 2014 fiscal year or an earlier fiscal year and for the eligibility period ending on August 31, 2019, the data source must align with the NF's 2015 fiscal year or an earlier fiscal year.

(A) The most recently available Medicaid NF cost report for the private NF. If no Medicaid NF cost report is available, the data source in subparagraph (B) of this paragraph must be used.

(B) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for the private NF. If no Medicaid Direct Care Staff Rate Staffing and Compensation Report is available, the data source in subparagraph (C) of this paragraph must be used.

(C) The most recently available Medicaid NF cost report for a prior owner of the private NF. If no Medicaid NF cost report for a prior owner of the private NF is available, the data source in subparagraph (D) of this paragraph must be used.

(D) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the private NF. If no Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the private NF is available, the private NF is not eligible for participation in QIPP.

(4) Data sources for determination of distribution of QIPP funds across eligible and enrolled NFs. For each eligibility period, the data source must align with the NF's fiscal year that ends no more recently than in the calendar year four years prior to the calendar year within which the eligibility period ends. For example, for the eligibility period ending on August 31, 2018, the data source must align with the NF's 2014 fiscal year or an earlier fiscal year and for the eligibility period ending on August 31, 2019, the data source must align with the NF's 2015 fiscal year or an earlier fiscal year.

(A) The most recently available Medicaid NF cost report for the NF. If the cost report covers less than a full year, reported values are annualized to represent a full year. If no audited Medicaid NF cost report is available, the data source in subparagraph (B) of this paragraph must be used.

(B) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for the NF. If the Staffing and Compensation Report covers less than a full year, reported values are annualized to represent a full year. If no Staffing and Compensation Report is available, the data source in subparagraph (C) of this paragraph is must be used.

(C) The most recently available Medicaid NF cost report for a prior owner of the NF. If the cost report covers less than a full year, reported values are annualized to represent a full year. If no Medicaid NF cost report for a prior owner of the NF is available, the data source in subparagraph (D) of this paragraph must be used.

(D) The most recently available Medicaid Direct Care Staff Rate Staffing and Compensation Report for a prior owner of the NF. If the Staffing and Compensation Report covers less than a full year, reported values are annualized to represent a full year.

(e) Participation requirements. As a condition of participation, all NFs participating in QIPP must allow for the following:

(1) HHSC must be able to access data for the NF from one of the data sources listed in subsection (d) of this section.

(2) The NF must submit a properly completed enrollment application by the due date determined by HHSC.

(3) The entity that owns the NF must certify, on a form prescribed by HHSC, that no part of any payment made under the QIPP will be used to pay a contingent fee, consulting fee, or legal fee associated with the NF's receipt of QIPP funds and the certification must be received by HHSC with the enrollment application described in paragraph (2) of this subsection.

(4) The entity that owns the NF must submit to HHSC, upon demand, copies of contracts it has with third parties that reference the administration of, or payments from, QIPP.

(f) Non-federal share of QIPP payments. The non-federal share of all QIPP payments is funded through IGTs from sponsoring non-state governmental entities. No state general revenue is available to support QIPP.

(1) HHSC will share suggested IGT responsibilities for the eligibility period with all QIPP eligible and enrolled non-state government-owned NFs on or around May 15 of the calendar year that also contains the first month of the eligibility period. Suggested IGT responsibilities will be based on the maximum dollars to be available under the QIPP program for the eligibility period as determined by HHSC, plus ten percent; forecast STAR+PLUS NF member months for the eligibility period as determined by HHSC; and the distribution of historical Medicaid days of service across non-state government-owned NFs enrolled in QIPP for the eligibility period. HHSC will also share estimated maximum revenues each eligible and enrolled NF could earn under QIPP for the eligibility period with those estimates based on HHSC's suggested IGT responsibilities and an assumption that all enrolled NFs will meet 100 percent of their quality metrics. The purpose of sharing this information is to provide non-state government-owned NFs with information they can use to determine the amount of IGT they wish to transfer.

(2) Sponsoring governmental entities will determine the amount of IGT they wish to transfer to HHSC for the entire eligibility period and will transfer one-half of that amount by May 31 of the calendar year that also contains the first month of the eligibility period. The second half of the IGT amount will be transferred by November 30 of the calendar year that also contains the first month of the eligibility period.

(3) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during each eligibility period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(g) QIPP capitation rate components. QIPP funds will be paid to MCOs through three new components of the STAR+PLUS NF MC per member per month (PMPM) capitation rates. The MCOs' distribution of QIPP funds to the enrolled NFs will be based on each NF's performance on a set of defined quality metrics.

(1) Component One.

(A) The total value of Component One will be equal to 110 percent of the non-federal share of the QIPP program.

(B) Interim allocation of funds across qualifying non-state government-owned NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Monthly payments to non-state government-owned NFs will be triggered by the NF's submission to the MCOs of a monthly QAPI Validation Report.

(D) Private NFs are not eligible for payments from Component One.

(E) The interim allocation of funds across qualifying non-state government-owned NFs will be reconciled to the actual distribution of Medicaid NF days of service across these NFs during the eligibility period as captured by HHSC's Medicaid contractors for fee-for-service and managed care 180 days after the last day of the eligibility period. This reconciliation will only be performed if the weighted average (weighted by Medicaid NF days of service during the eligibility period) of the absolute values of percentage changes between each NFs proportion of historical Medicaid days of NF service and actual Medicaid days of NF service is greater than 20 percent.

(2) Component Two.

(A) The total value of Component Two will be equal to 35 percent of remaining QIPP funds after accounting for the funding of Component One.

(B) Allocation of funds across qualifying non-state government-owned and private NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Quarterly payments to NFs will be triggered by achievement of performance requirements as described in subsection (h) of this section.

(3) Component Three.

(A) The total value of Component Three will be equal to 65 percent of remaining QIPP funds after accounting for the funding of Component One.

(B) Allocation of funds across qualifying non-state government-owned and private NFs will be proportional, based upon historical Medicaid days of NF service.

(C) Quarterly payments to NFs will be triggered by achievement of performance requirements as described in subsection (h) of this section. Payments made to NFs meeting the standards of Component Three will include both the 35 percent allocated for Component Two and the remaining 65 percent allocated for Component Three.

(4) Funds that would lapse due to failure of one or more NFs to meet QAPI reporting requirements or quality metrics will be distributed across all QIPP NFs based on each NF's proportion of total earned QIPP funds from Components One, Two, and Three combined.

(h) Distribution of QIPP payments.

(1) Prior to the beginning of the eligibility period, HHSC will calculate the portion of each PMPM associated with each QIPP-enrolled NF broken down by QIPP capitation rate component, quality metric, and payment period. For example, for NF A, HHSC will calculate the portion of each PMPM associated with that NF that would be paid from the MCO to the NF as follows:

(A) Monthly payments from Component One as QAPI reporting requirements are met will be equal to the total value of Component One for the NF divided by twelve.

(B) Quarterly payments from Component Two associated with each quality metric will be equal to the total value of Component Two associated with the quality metric divided by four.

(C) Quarterly payments from Component Three associated with each quality metric will be equal to the total value of Component Three associated with the quality metric divided by four.

(D) For purposes of the calculations described in subparagraphs (B) and (C) of this paragraph, each metric will be allocated an equal portion of the total dollars included in the component.

(E) In situations where a NF does not have enough data for a metric to be calculated, the funding associated with that metric will be evenly distributed across all remaining metrics.

(2) MCOs will distribute payments to enrolled NFs as they meet their reporting and quality metric requirements. Payments will be equal to the portion of the QIPP PMPM associated with the achievement for the time period in question multiplied by the number of member months for which the MCO received the QIPP PMPM.

(i) Performance requirements.

(1) Quality metrics.

(A) There will be a minimum of three quality metrics for an eligibility period. For eligibility period one, there are the following four quality metrics:

(i) high-risk long-stay residents with pressure ulcers;

(ii) percent of residents who received an antipsychotic medication (long-stay);

(iii) residents experiencing one or more falls with major injury; and

(iv) residents who were physically restrained.

(B) Quality metrics may change from eligibility period to eligibility period but will always be limited to those under the CMS Five-Star Quality Rating System. Information regarding specific quality metrics for an eligibility period will be provided annually through the QIPP webpage on the HHSC website on or before February 1 of the calendar year that also contains the first month of the eligibility period.

(C) Quality metric baselines will be based on each individual NF's average performance on the metric as reported by CMS for the federal quarter that ends prior to the first day of the eligibility period and the three prior federal quarters, or as determined by HHSC.

(D) Quality metric benchmarks will be based on the national average for the metric as reported by CMS for the federal quarter that ends prior to the first day of the eligibility period, or as determined by HHSC.

(2) Achievement requirements. In order to receive payments from Components Two and Three for a quality metric, a NF must show improvement over the baseline or exceed the benchmark for the metric.

(A) To qualify for a payment from Component Two, a NF must meet at least the initial quarterly goal of 1.7 percent improvement from the baseline, with subsequent quarterly goals increasing to a maximum of seven percent by the end of the eligibility period. For example, to qualify for a payment from Component Two for a quality metric for the second quarter of the eligibility period, the NF must meet at least the second quarter goal of 3.4 percent improvement from the baseline.

(B) To qualify for a payment from Component Three, a NF must meet at least the initial quarterly goal of 5.0 percent improvement from the baseline with subsequent quarterly goals increasing to a maximum of 20 percent by the end of the eligibility period. For example, to qualify for a payment from Component Three for a quality metric for the second quarter of the eligibility period, the NF must meet at least the second quarter goal of 10.0 percent improvement from the baseline. A NF that qualifies for a payment from Component Three for a metric automatically qualifies for a payment from Component Two for the same metric.

(C) A NF that exceeds the benchmark for a metric qualifies for a payment from both Component Two and Component Three for that metric. A NF that exceeds the benchmark may decline in performance and still qualify for a payment from both Component Two and Component Three as long as the NF continues to exceed the benchmark for the metric.

(j) Changes of ownership.

(1) If an enrolled NF changes ownership during the eligibility period to private ownership, the NF under the new ownership must meet the private NF eligibility requirements described in this section in order to continue QIPP participation during the eligibility period.

(2) If a non-state government-owned NF changes ownership during the eligibility period to another non-state governmental entity, the NF under the new ownership must meet the non-state government-owned eligibility requirements described in this section in order to continue QIPP participation during the eligibility period.

(k) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1303 adopted to be effective April 9, 2017, 42 TexReg 1741; amended to be effective December 30, 2018, 43 TexReg 8079.*

##### **1 Tex. Admin. Code § 353.1304** Quality Metrics for the Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019 {#sec-353.1304 omnilex-key=us-tx-regs-official--title-1--353.1304}

(a) Introduction. This section establishes the quality metrics that may be used in the Quality Incentive Payment Program (QIPP) for nursing facilities (NFs) on or after September 1, 2019.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 (relating to General Provisions) or §353.1302 (relating to Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019) of this subchapter.

(1) Baseline--A NF-specific initial standard used as a comparison against NF performance in each metric throughout the program period to determine progress in the QIPP quality metrics.

(2) Benchmark--A metric-specific initial standard set prior to the start of the program period and used as a comparison against a NF's progress throughout the program period.

(c) Quality metrics. For each program period, HHSC will designate one or more quality metrics. Any quality metric included in QIPP will be evidence-based. HHSC may modify quality metrics from one program period to the next. The proposed quality metrics for a program period will be presented to the public for comment in accordance with subsection (f) of this section.

(d) Performance requirements. For each program period, HHSC will specify the performance requirements associated with designated quality metrics. The proposed performance requirements for a program period will be presented to the public for comment in accordance with subsection (f) of this section. Achievement of performance requirements will trigger payments for the QIPP capitation rate components as described in §353.1302 of this subchapter.

(e) Quality assurance. All data and documentation supplied to HHSC by the NF to demonstrate achievement of performance requirements is subject to validation and audit. HHSC will select a random, representative sample of participating NFs for quality assurance review each program period and will conduct reviews on one-fourth of the total sample each program quarter.

(1) If selected, the NF will have 14 business days from the date of the request from HHSC to submit to HHSC the required data and documentation.

(2) If the selected NF fails to participate in the review or to provide the required data or documentation, any payments to the provider for the quality metric or component under review may be considered an Overpayment and subject to recoupment or adjustment as described in §353.1301(k) of this subchapter.

(f) Notice and hearing.

(1) HHSC will publish notice of the proposed metrics and their associated performance requirements no later than December 1 of the calendar year that precedes the first month of the program period. The notice must be published either by publication on HHSC's Internet web site or in the *Texas Register.* The notice required under this section will include the following:

(A) instructions for interested parties to submit written comments to the HHSC regarding the proposed metrics and performance requirements; and

(B) the date, time, and location of a public hearing.

(2) Written comments will be accepted within 15 business days of publication. There will also be a public hearing within that 15-day period to allow interested persons to present comments on the proposed metrics and performance requirements.

(g) Quality metric publication. Final quality metrics and performance requirements will be provided through the QIPP webpage on HHSC's website on or before February 1 of the calendar year that also contains the first month of the program period.

(h) Substitution of Measures. Alternate measures may be substituted for measures proposed under subsection (f) of this section or adopted under subsection (g) of this section if required by the Centers for Medicare and Medicaid Services for federal approval of the program.

**History**
- *Source Note: The provisions of this §353.1304 adopted to be effective December 30, 2018, 43 TexReg 8079; amended to be effective August 19, 2021, 46 TexReg 5015; amended to be effective May 31, 2022, 47 TexReg 3113.*

##### **1 Tex. Admin. Code § 353.1305** Uniform Hospital Rate Increase Program {#sec-353.1305 omnilex-key=us-tx-regs-official--title-1--353.1305}

(a) Introduction. This section describes the circumstances for program periods before September 1, 2022, or for the time period as approved by the Centers for Medicare and Medicaid Services, under which HHSC directs a Managed Care Organization (MCO) to provide a uniform percentage rate increase to hospitals in the MCO's network in a designated service delivery area (SDA) for the provision of inpatient services, outpatient services, or both. This section also describes the methodology used by HHSC to calculate and administer such rate increase.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 of this subchapter (relating to General Provisions).

(1) Children's hospital--A Medicaid hospital designated by Medicare as a children's hospital.

(2) Inpatient hospital services--Services ordinarily furnished in a hospital for the care and treatment of inpatients under the direction of a physician or dentist, or a subset of these services identified by HHSC. Inpatient hospital services do not include skilled nursing facility or intermediate care facility services furnished by a hospital with swing-bed approval, and any other services that HHSC determines should not be subject to the rate increase.

(3) Institution for mental diseases (IMD)--A hospital that is primarily engaged in providing psychiatric diagnosis, treatment, or care of individuals with mental illness.

(4) Non-urban public hospital--

(A) A hospital owned and operated by a governmental entity, other than a hospital described in paragraph (8) of this subsection, defining rural public hospital, or a hospital described in paragraph (10) of this subsection, defining urban public hospital; or

(B) A hospital meeting the definition of rural public-financed hospital in §355.8065(b)(37) of this title (relating to Disproportionate Share Hospital Reimbursement Methodology), other than a hospital described in paragraph (7) of this subsection defining rural private hospital.

(5) Outpatient hospital services--Preventive, diagnostic, therapeutic, rehabilitative, or palliative services that are furnished to outpatients of a hospital under the direction of a physician or dentist, or a subset of these services identified by HHSC. HHSC may, in its contracts with MCOs governing rate increases under this section, exclude from the definition of outpatient hospital services such services as are not generally furnished by most hospitals in the state, or such services that HHSC determines should not be subject to the rate increase.

(6) Program period--A period of time for which HHSC will contract with participating MCOs to pay increased capitation rates for the purpose of provider payments under this section. Each program period is equal to a state fiscal year beginning September 1 and ending August 31 of the following year. An SDA that is unable to participate in the program described in this section beginning September 1 may apply to participate beginning March 1 of the program period and ending August 31. Participation during such a modified program period is subject to the application and intergovernmental-transfer deadlines described in subsection (g) of this section.

(7) Rural private hospital--A privately-operated hospital that is a rural hospital as defined in §355.8052 of this title (relating to Inpatient Hospital Reimbursement).

(8) Rural public hospital--A hospital that is owned and operated by a governmental entity and is a rural hospital as defined in §355.8052 of this title.

(9) State-owned hospital--A hospital that is owned and operated by a state university or other state agency.

(10) Urban public hospital--A hospital that is operated by or under a lease contract with one of the following entities: the Dallas County Hospital District, the El Paso County Hospital District, the Harris County Hospital District, the Tarrant County Hospital District, the Travis County Healthcare District dba Central Health, the University Health System of Bexar County, the Ector County Hospital District, the Lubbock County Hospital District, or the Nueces County Hospital District.

(c) Classes of participating hospitals.

(1) HHSC may direct the MCOs in an SDA that is participating in the program described in this section to provide a uniform percentage rate increase to all hospitals within one or more of the following classes of hospital with which the MCO contracts for inpatient or outpatient services:

(A) children's hospitals;

(B) non-urban public hospitals;

(C) rural private hospitals;

(D) rural public hospitals;

(E) state-owned hospitals;

(F) urban public hospitals;

(G) non-state-owned IMDs; and

(H) all other hospitals.

(2) If HHSC directs rate increases to more than one class of hospital within the SDA, the percentage rate increases directed by HHSC may vary between classes of hospital.

(d) Eligibility. HHSC determines eligibility for rate increases by SDA and class of hospital.

(1) Service delivery area. Only hospitals in an SDA that includes at least one sponsoring governmental entity are eligible for a rate increase.

(2) Class of hospital. HHSC will identify the class or classes of hospital within each SDA described in paragraph (1) of this subsection to be eligible for a rate increase. HHSC will consider the following factors when identifying the class or classes of hospital eligible for a rate increase and the percent increase applicable to each class:

(A) whether a class of hospital contributes more or less significantly to the goals and objectives in HHSC's quality strategy, as required in 42 C.F.R. §438.340, relative to other classes;

(B) which class or classes of hospital the sponsoring governmental entity wishes to support through intergovernmental transfers (IGTs) of public funds, as indicated on the application described in subsection (g) of this section; and

(C) the percentage of Medicaid costs incurred by the class of hospital in providing care to Medicaid managed care clients that are reimbursed by Medicaid MCOs prior to any uniform rate increase administered under this section.

(e) Services subject to rate increase.

(1) HHSC may direct the MCOs in an SDA to increase rates for all or a subset of inpatient services, all or a subset of outpatient services, or all or a subset of both, based on the service or services that will best advance the goals and objectives of HHSC's quality strategy.

(2) In addition to the limitations described in paragraph (1) of this subsection, rate increases for a non-state-owned IMD are limited to inpatient psychiatric hospital services provided to individuals under the age of 21 and to inpatient hospital services provided to individuals 65 years or older.

(3) UHRIP rate increases will apply only to the in-network managed care claims billed under a hospital's primary National Provider Identifier (NPI) and will not be applicable to NPIs associated with non-hospital sub-providers owned or operated by a hospital.

(f) Determination of percentage of rate increase.

(1) In determining the percentage of rate increase applicable to one or more classes of hospital, HHSC will consider the following factors:

(A) information from the participants in the SDA (including hospitals, managed-care organizations, and sponsoring governmental entities) on one or both of the following, as indicated on the application described in subsection (g) of this section:

(i) the amount of IGT the sponsoring governmental entities propose to transfer to HHSC to support the non-federal share of the increased rates for the first six months of a program period; and

(ii) the percentage rate increase the SDA participants propose for one or more classes of hospital for the first six months of a program period;

(B) the class or classes of hospital determined in subsection (d)(2) of this section;

(C) the type of service or services determined in subsection (e) of this section;

(D) actuarial soundness of the capitation payment needed to support the rate increase;

(E) available budget neutrality room under any applicable federal waiver programs;

(F) hospital market dynamics within the SDA; and

(G) other HHSC goals and priorities.

(2) HHSC will limit the percentage rate increases determined pursuant to this subsection to no more than the levels that are supported by the amount described in paragraph (1)(A)(i) of this subsection. Nothing in this section may be construed to limit the authority of the state to require the sponsoring governmental entities to transfer additional funds to HHSC following the reconciliation process described in §353.1301(g) of this title, if the amount previously transferred is less than the non-federal share of the amount expended by HHSC in the SDA for this program.

(3) After determining the percentage of rate increase using the process described in paragraphs (1) and (2) of this subsection, HHSC will modify its contracts with the MCOs in the SDA to direct the percentage rate increases.

(g) Application process; timing and amount of transfer of non-federal share.

(1) The stakeholders in an SDA initiate the request for HHSC to implement a uniform hospital rate increase program by submitting an application using a form prescribed by HHSC.

(A) The stakeholders in the SDA, including hospitals, sponsoring governmental entities, and MCOs, are expected to work cooperatively to complete the application.

(B) The application provides an opportunity for stakeholders to have input into decisions about which classes of hospital and services are subject to the rate increases, and the percentage rate increase applicable to each class, but HHSC retains the final decision-making authority on these aspects of the program following the processes described in subsections (d) - (f) of this section.

(C) HHSC must receive the completed application no later than six months before the beginning of the program period or modified program period in which the SDA proposes to participate.

(D) HHSC will process the application, contact SDA representatives or stakeholders if there are questions, and notify the stakeholders in the SDA of its decisions on the application, including the classes of hospital eligible for the rate increase, the services subject to the increase, the percentage rate increase applicable to each class, and the total amount of IGT required for the first six months of the program period.

(2) Sponsoring governmental entities must complete the IGT for the first six months of the program period no later than four months prior to the start of the program period, unless otherwise instructed by HHSC. For example, for the program period beginning September 1, 2017, HHSC must receive the IGT for the first six months no later than May 1, 2017; for the modified program period beginning March 1, 2018, HHSC must receive the IGT no later than November 1, 2017.

(3) Following the transfer of funds described in paragraph (2) of this subsection, sponsoring governmental entities must transfer additional IGT at such times and in such amounts as determined by HHSC to be necessary to ensure the availability of funding of the non-federal share of the state's expenditures under this section and HHSC's compliance with the terms of its contracts with MCOs in the SDA. In no event may transfers for directed increases in a program period occur later than November 1 of the calendar year.

(4) HHSC will instruct sponsoring governmental entities as to the required IGT amounts. Required IGT amounts will include all costs associated with the uniform rate increase, including costs associated with premium taxes, risk margins, and administration, plus ten percent.

(h) Effective date of rate increases. HHSC will direct MCOs to increase rates under this section beginning the first day of the program period that includes the increased capitation rates paid by HHSC to each MCO pursuant to the contract between them.

(i) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during the program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(j) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(k) of this subchapter.

(k) December 2017 limited eligibility. Notwithstanding the other provisions of this section, any SDA that received approval from CMS by April 15, 2017, may participate in the program described in this section for dates of service beginning December 1, 2017. Sponsoring governmental entities must complete the IGT for the period of December 1, 2017, through February 28, 2018, by a date to be determined by HHSC.

**History**
- *Source Note: The provisions of this §353.1305 adopted to be effective April 9, 2017, 42 TexReg 1748; amended to be effective December 1, 2017, 42 TexReg 6369; amended to be effective August 9, 2020, 45 TexReg 5337; amended to be effective March 28, 2021, 46 TexReg 1977; amended to be effective January 17, 2022, 47 TexReg 85.*

##### **1 Tex. Admin. Code § 353.1306** Comprehensive Hospital Increase Reimbursement Program for Program Periods on or after September 1, 2021 {#sec-353.1306 omnilex-key=us-tx-regs-official--title-1--353.1306}

(a) Introduction. This section establishes the Comprehensive Hospital Increase Reimbursement Program (CHIRP) for program periods on or after September 1, 2021, wherein the Health and Human Services Commission (HHSC) directs a managed care organization (MCO) to provide a uniform reimbursement increase to hospitals in the MCO's network in a designated service delivery area (SDA) for the provision of inpatient services, outpatient services, or both. This section also describes the methodology used by HHSC to calculate and administer such reimbursement increases. CHIRP is designed to incentivize hospitals to improve access, quality, and innovation in the provision of hospital services to Medicaid recipients through the use of metrics that are expected to advance at least one of the goals and objectives of the state's managed care quality strategy.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this section may be defined in §353.1301 of this subchapter (relating to General Provisions).

(1) Average Commercial Reimbursement (ACR) gap--The difference between what an average commercial payor is estimated to pay for the services and what Medicaid actually paid for the same services.

(2) Average Commercial Reimbursement (ACR) Upper Payment Limit (UPL)--A calculated estimation of what an average commercial payor pays for the same Medicaid services.

(3) Children's hospital--A children's hospital as defined by §355.8052 of this title (relating to Inpatient Hospital Reimbursement).

(4) Inpatient hospital services--Services ordinarily furnished in a hospital for the care and treatment of inpatients under the direction of a physician or dentist, or a subset of these services identified by HHSC. Inpatient hospital services do not include skilled nursing facility or intermediate care facility services furnished by a hospital with swing-bed approval, or any other services that HHSC determines should not be subject to the rate increase.

(5) Institution for mental diseases (IMD)--A hospital that is primarily engaged in providing psychiatric diagnosis, treatment, or care of individuals with mental illness. IMD hospitals are reimbursed as freestanding psychiatric facilities under §355.8060 of this title (relating to Reimbursement Methodology for Freestanding Psychiatric Facilities).

(6) Medicare payment gap--The difference between what Medicare is estimated to pay for the services and what Medicaid actually paid for the same services.

(7) Outpatient hospital services--Preventive, diagnostic, therapeutic, rehabilitative, or palliative services that are furnished to outpatients of a hospital under the direction of a physician or dentist, or a subset of these services identified by HHSC. HHSC may, in its contracts with MCOs governing rate increases under this section, exclude from the definition of outpatient hospital services such services as are not generally furnished by most hospitals in the state, or such services that HHSC determines should not be subject to the rate increase.

(8) Program period--A period of time for which HHSC will contract with participating MCOs to pay increased capitation rates for the purpose of provider payments under this section. Each program period is equal to a state fiscal year beginning September 1 and ending August 31 of the following year.

(9) Rural hospital--A hospital that is a rural hospital as defined in §355.8052 of this title.

(10) State-owned non-IMD hospital--A hospital that is owned and operated by a state university or other state agency that is not primarily engaged in providing psychiatric diagnosis, treatment, or care of individuals with mental disease.

(11) Urban hospital--An urban hospital as defined by §355.8052 of this title.

(c) Conditions of Participation. As a condition of participation, all hospitals participating in CHIRP must allow for the following.

(1) The hospital must submit a properly completed enrollment application by the due date determined by HHSC. The enrollment period must be no less than 21 calendar days and the final date of the enrollment period will be at least nine days prior to the IGT notification.

(A) In the application, the hospital must select whether it will participate in the optional program components described in subsections (g)(3) and (g)(4) of this section. A hospital cannot participate in the program component described in subsection (g)(3) or (g)(4) of this section without also participating in the program component described in subsection (g)(2) of this section. In the application, the hospital must also select whether the hospital elects to receive interim payments described by subsection (h)(2)(D) of this section.

(B) All hospitals must submit certain necessary data to calculate the ACR gap. However, a hospital may indicate that it does not wish to participate in the optional program component described in subsection (g)(3) of this section.

(C) A hospital is required to maintain all supporting documentation at the hospital for any information provided under subparagraph (B) of this paragraph for a period of no less than 5 years.

(D) For a program period that begins on or after September 1, 2021, any hospital that did not report the data described in subparagraph (B) of this paragraph in the application for the program must report the data within four months of Centers for Medicare and Medicaid Services (CMS) approval of the program.

(2) The entity that owns the hospital must certify, on a form prescribed by HHSC, that no part of any payment made under the CHIRP will be used to pay a contingent fee and that the entity's agreement with the hospital does not use a reimbursement methodology that contains any type of incentive, directly or indirectly, for inappropriately inflating, in any way, claims billed to the Medicaid program, including the hospitals' receipt of CHIRP funds. The certification must be received by HHSC with the enrollment application described in paragraph (1) of this subsection.

(3) If a provider has changed ownership in the past five years in a way that impacts eligibility for this program, the provider must submit to HHSC, upon demand, copies of contracts it has with third parties with respect to the transfer of ownership or the management of the provider and which reference the administration of, or payment from, this program.

(4) All quality metrics for which a hospital is eligible based on class, as described in subsection (d) of this section, must be reported by the participating hospital.

(5) Failure to meet any conditions of participation described in this subsection will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

(d) Classes of participating hospitals.

(1) HHSC may direct the MCOs in an SDA that is participating in the program described in this section to provide a uniform percentage rate increase or another type of payment to all hospitals within one or more of the following classes of hospital with which the MCO contracts for inpatient or outpatient services:

(A) children's hospitals;

(B) rural hospitals;

(C) state-owned non-IMD hospitals;

(D) urban hospitals;

(E) non-state-owned IMDs; and

(F) state-owned IMDs.

(2) If HHSC directs rate increases or other payments to more than one class of hospital within the SDA, the percentage rate increases or other payments directed by HHSC may vary between classes of hospital.

(e) Eligibility. HHSC determines eligibility for rate increases and other payments by SDA and class of hospital.

(1) Service delivery area. Only hospitals in an SDA that includes at least one sponsoring governmental entity are eligible for a rate increase.

(2) Class of hospital. HHSC will identify the class or classes of hospital within each SDA described in paragraph (1) of this subsection to be eligible for a rate increase or other payment. HHSC will consider the following factors when identifying the class or classes of hospital eligible for a rate increase or other payment and the percent increase applicable to each class:

(A) whether a class of hospital contributes more or less significantly to the goals and objectives in HHSC's managed care quality strategy, as required in 42 C.F.R. §438.340, relative to other classes;

(B) which class or classes of hospital the sponsoring governmental entity wishes to support through IGTs of public funds, as indicated on the application described in subsection (c) of this section;

(C) the estimated Medicare gap for the class of hospitals, based upon the upper payment limit demonstration most recently submitted by HHSC to CMS;

(D) the estimated ACR gap for the class or individual hospitals, as indicated on the application described in subsection (c) of this section; and

(E) the percentage of Medicaid costs incurred by the class of hospital in providing care to Medicaid managed care clients that are reimbursed by Medicaid MCOs prior to any rate increase administered under this section.

(f) Services subject to rate increase and other payment.

(1) HHSC may direct the MCOs in an SDA to increase rates for all or a subset of inpatient services, all or a subset of outpatient services, or all or a subset of both, based on the service or services that will best advance the goals and objectives of HHSC's managed care quality strategy.

(2) In addition to the limitations described in paragraph (1) of this subsection, rate increases for a state-owned IMD or non-state-owned IMD are limited to inpatient psychiatric hospital services provided to individuals under the age of 21 and to inpatient hospital services provided to individuals 65 years or older.

(3) CHIRP rate increases will apply only to the in-network managed care claims billed under a hospital's primary National Provider Identifier (NPI) and will not be applicable to NPIs associated with non-hospital sub-providers owned or operated by a hospital.

(g) CHIRP capitation rate components. For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, CHIRP funds will be paid to MCOs through two components of the managed care per member per month (PMPM) capitation rates. For program periods beginning on or after September 1, 2024, CHIRP funds will be paid to MCOs through three components of the managed care per member per month (PMPM) capitation rates. The MCOs' distribution of CHIRP funds to the enrolled hospitals may be based on each hospital's performance related to the quality metrics as described in §353.1307 of this subchapter (relating to Quality Metrics for the Comprehensive Hospital Increase Reimbursement Program). The hospital must have provided at least one Medicaid service to a Medicaid client for each reporting period to be eligible for payments.

(1) In determining the percentage increases described under subsection (h)(1) of this section, HHSC will consider:

(A) information from the participants in the SDA (including hospitals, managed-care organizations, and sponsoring governmental entities) on the amount of IGT the sponsoring governmental entities propose to transfer to HHSC to support the non-federal share of the increased rates for the first six months of a program period, as indicated on the applications described in subsection (c) of this section;

(B) the class or classes of hospital determined in subsection (e)(2) of this section;

(C) the type of service or services determined in subsection (f) of this section;

(D) actuarial soundness of the capitation payment needed to support the rate increase;

(E) available budget neutrality room under any applicable federal waiver programs;

(F) hospital market dynamics within the SDA; and

(G) other HHSC goals and priorities.

(2) The Uniform Hospital Rate Increase Payment (UHRIP) is the first component.

(A) The total value of UHRIP will be equal to a percentage of the estimated Medicare gap on a per class basis.

(B) Allocation of funds across hospital classes will be proportional to the combined Medicare gap of each hospital class within an SDA to the total Medicare gap of all hospital classes within the SDA.

(3) The Average Commercial Incentive Award (ACIA) is the second component.

(A) The total value of ACIA will be equal to a percentage of the ACR gap less payments received under UHRIP, subject to the limitations described by subparagraph (B) of this paragraph. For program periods beginning on or before September 1, 2024, for the purposes of this subparagraph, the ACR gap and UHRIP payment are based on the individual hospital's data. For program periods beginning on or after September 1, 2025, for the purposes of this subparagraph, the ACR gap and the UHRIP payment are based on the aggregated amounts by class; and the allocation of available funds across hospital classes will be proportional to the combined ACR gap less UHRIP payments of each hospital class within an SDA to the total ACR gap of all hospital classes within the SDA.

(B) The maximum ACIA payments for each class will be equal to a percentage of the total estimated ACR UPL for the class, less what Medicaid paid for the services and any payments received under UHRIP, including hospitals that are not participating in ACIA. The percentage for each program period is as follows.

(i) For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, the percentage is 90 percent.

(ii) For the program periods beginning on September 1, 2024, and September 1, 2025, the percentage may not exceed 90 percent.

(iii) For the program period beginning on September 1, 2026, the percentage may not exceed 95 percent.

(iv) For program periods beginning on or after September 1, 2027, the percentage may not exceed 100 percent.

(C) The ACIA payment for the class will be equal to the minimum of the sum of the ACIA payment in subparagraph (A) of this paragraph and the limit in subparagraph (B) of this paragraph. If the amount calculated under subparagraph (B) of this paragraph is negative, the maximum, aggregated ACIA payments for that class will be equal to zero.

(D) For program periods beginning on or before September 1, 2024, the ACIA payment for each provider will be equal to the amount in subparagraph (A) of this paragraph multiplied by the amount determined in subparagraph (C) of this paragraph for the class divided by the sum of the preliminary ACIA payment determined in subparagraph (A) of this paragraph for the class, rounded down to the nearest percentage. For example, if two hospitals in a class in an SDA both have anticipated base payments of $100 and UHRIP payments of $50, but one hospital has an estimated ACR UPL of $400 and an ACR gap of $300 between its base payment and ACR UPL, and the other hospital has an estimated ACR UPL of $600 and an ACR gap of $500, HHSC will first reduce the gaps by the UHRIP payment of $50 to a gap of $250 and $450, respectively. The preliminary ACIA rates are 250 percent and 450 percent. These are the amounts available under subparagraph (A) of this paragraph. HHSC would then sum the ACR UPLs for the two hospitals to get $1000 available to the class and apply the percentage in subparagraph (B) of this paragraph (e.g., 50 percent of the gap), which results in an ACR UPL of $500. Then, HHSC will subtract the $200 in base payments and $100 in UHRIP payments from the reduced ACR UPL for a total of $200 of maximum ACIA payments under subparagraph (B) of this paragraph. The amount under subparagraph (A) for the class was $700 and the limit under subparagraph (B) of this paragraph is $200, so all provider in the SDA will have their ACIA percentage multiplied by $200 divided by $700 to stay under the $200 cap. The individual ACIA rates would be 71 percent (e.g., 200/700*250 percent) and 128 percent (e.g., 200/700*450 percent), respectively. The estimated ACIA payments would be $71 and $128. HHSC will then direct the MCOs to pay a percentage increase for the first hospital of 71 percent in addition to the 50 percent increase under UHRIP for the first hospital for a total increase of 121 percent above the contracted base rate, and 128 percent in addition to the 50 percent increase under UHRIP for the second hospital for a total increase of 178 percent.

(4) For program periods beginning on or after September 1, 2024, the Alternate Participating Hospital Reimbursement for Improving Quality Award (APHRIQA) is the third component.

(A) The total value of APHRIQA will be equal to the sum of:

(i) a percentage of the Medicare gap, not to exceed 100 percent, on a per class basis less the amount determined in paragraph (2)(A) of this subsection; and

(ii) a percentage of the total estimated ACR UPL, not to exceed the applicable percentage specified in paragraph (3)(B) of this subsection, on a per class basis less what Medicaid paid for the services and any payments received under UHRIP, including hospitals that are not participating in ACIA and less any payments received under ACIA.

(B) Allocation of funds across hospitals will be calculated by allocating to each hospital the sum of:

(i) the difference in the amount the hospital is estimated to be paid under paragraph (2)(A) of this subsection and the amount they would be paid if the percentage described in paragraph (2)(A) of this subsection were the same percentage cited in subparagraph (A)(i) of this paragraph; and

(ii) the difference in the amount the hospital is estimated to be paid under paragraph (3)(C) of this subsection and the amount they would be paid if the percentage described in paragraph (3)(B) of this subsection were the same percentage cited in subparagraph (A)(ii) of this paragraph.

(h) Distribution of CHIRP payments.

(1) CHIRP payments for UHRIP and ACIA components will be based upon actual utilization and will be paid as a percentage increase above the contracted rate between the MCO and the hospital. The determination of percentage of rate increase will be as follows.

(A) HHSC will determine the percentage of rate increase applicable to one or more classes of hospital by program component.

(B) UHRIP rate increases will be determined by HHSC to be the percentage that is estimated to result in payments for the class that are equivalent to the amount described under subsection (g)(2)(A) of this section.

(C) ACIA will be determined by HHSC to be a percentage that is estimated to result in payments for the hospital that are equivalent to the amount described under subsection (g)(3)(D) of this section.

(2) For program periods beginning on or after September 1, 2024, CHIRP final payments for the APHRIQA component will be based on achievement of performance measures established in accordance with §353.1307 of this subchapter.

(A) Except as otherwise provided by subparagraph (D) of this paragraph, MCOs will be directed by HHSC to pay hospitals on a monthly, quarterly, semi-annual, or annual basis that aligns with the applicable performance achievement measurement period under §353.1307 of this subchapter.

(B) MCOs will be required to distribute payments to providers within 20 business days of notification by HHSC of provider achievement results.

(C) Funds that are not earned by a provider due to failure to achieve performance requirements will be redistributed to other hospitals in the same hospital SDA and class based on each hospital's proportion of total earned APHRIQA funds in the SDA. If no other hospital in the SDA and class receives performance payments, unearned funds will be redistributed to all hospitals in the SDA based on each hospital's proportion of total earned APHRIQA funds and projected to be paid to the hospitals through UHRIP and ACIA.

(D) For any performance measures for which achievement is determined on an annual basis, a hospital may elect, on the hospital's enrollment application, to receive two interim payments the amount of each which will be equal to 20 percent of the total estimated value of the hospital's potential APHRIQA payment if the hospital were to earn 100 percent of available payments under the APHRIQA component.

(i) Any interim payments will be reconciled with final payment for APHRIQA after measurement achievement has been determined under §353.1307 of this subchapter. If a hospital's final payment is calculated to be less than the amount that the hospital was paid on an interim basis, the interim payments are subject to recoupment as described by this subparagraph. If a hospital's final payment is calculated to be greater than the amount that the hospital was paid on an interim basis, the hospital's final payment will be an amount equal to the amount the hospital earned for measurement achievement under §353.1307 of this subchapter minus the amount the hospital was paid on an interim basis.

(ii) Prior to the beginning of the program period, for hospitals that make the election described by this subparagraph, HHSC will calculate the total estimated value of the hospital's potential APHRIQA payment if the provider were to earn 100 percent of available payments under the APHRIQA component. MCOs will distribute interim payments described by this subparagraph to enrolled hospitals as directed by HHSC.

(iii) Interim payments made under this subparagraph are not an indication of presumed measurement achievement by a provider under §353.1307 of this subchapter.

(iv) If a provider is notified by HHSC that an interim payment, or any portion of an interim payment, is being recouped under this subparagraph, the provider must return all funds subject to recoupment to the MCO that made the interim payment subject to recoupment within 20 business days of notification by HHSC.

(3) HHSC will limit the amounts paid to providers determined pursuant to this subsection to no more than the levels that are supported by the amount described in subsection (i)(3) of this section. Nothing in this section may be construed to limit the authority of the state to require the sponsoring governmental entities to transfer additional funds to HHSC following the reconciliation process described in §353.1301(g) of this subchapter, if the amount previously transferred is less than the non-federal share of the amount expended by HHSC in the SDA for this program.

(4) After determining the percentage of rate increase using the process described in paragraph (1) of this subsection, HHSC will modify its contracts with the MCOs in the SDA to direct the percentage rate increases.

(i) Non-federal share of CHIRP payments. The non-federal share of all CHIRP payments is funded through IGTs from sponsoring governmental entities. No state general revenue is available to support CHIRP.

(1) HHSC will communicate suggested IGT responsibilities for the program period with all CHIRP hospitals at least 10 calendar days prior to the IGT declaration of intent deadline. Suggested IGT responsibilities will be based on the maximum dollars to be available under the CHIRP program for the program period as determined by HHSC, plus eight percent; and forecast member months for the program period as determined by HHSC. HHSC will also communicate estimated revenues each enrolled hospital could earn under CHIRP for the program period with those estimates based on HHSC's suggested IGT responsibilities and an assumption that all enrolled hospitals will meet 100 percent of their quality metrics and maintain consistent utilization with the prior year.

(2) Sponsoring governmental entities will determine the amount of IGT they intend to transfer to HHSC for the entire program period and provide a declaration of intent to HHSC no later than 21 business days before the first half of the IGT amount is transferred to HHSC.

(A) The declaration of intent is a form prescribed by HHSC that includes the total amount of IGT the sponsoring governmental entity intends to transfer to HHSC.

(B) The declaration of intent is certified to the best knowledge and belief of a person legally authorized to sign for the sponsoring governmental entity but does not bind the sponsoring governmental entity to transfer IGT.

(3) HHSC will issue an IGT notification to specify the date that IGT is requested to be transferred no fewer than 14 business days before IGT transfers are due. Sponsoring governmental entities will transfer the first half of the IGT amount by a date determined by HHSC, but no later than June 1. Sponsoring governmental entities will transfer the second half of the IGT amount by a date determined by HHSC, but no later than December 1. HHSC will publish the IGT deadlines and all associated dates on its Internet website no later than March 15 of each year.

(j) Effective date of rate increases. HHSC will direct MCOs to increase rates under this section beginning the first day of the program period that includes the increased capitation rates paid by HHSC to each MCO pursuant to the contract between them.

(k) Changes in operation. If an enrolled hospital closes voluntarily or ceases to provide hospital services in its facility, the hospital must notify the HHSC Provider Finance Department by hand delivery, United States (U.S.) mail, or special mail delivery within 10 business days of closing or ceasing to provide hospital services. Notification is considered to have occurred when the HHSC Provider Finance Department receives the notice.

(l) Data correction request. Any provider-requested data or calculation correction must be submitted prior to the date on which the first half of the IGT amount is due under subsection (i)(3) of this section.

(m) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during the program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(n) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(j) and §353.1301(k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1306 adopted to
be effective March 28, 2021, 46 TexReg 1977; amended to be effective
May 31, 2022, 47 TexReg 3113; amended to be effective January 29,
2024, 49 TexReg 404; amended to be effective April 2, 2025, 50 TexReg
2182.*

##### **1 Tex. Admin. Code § 353.1307** Quality Metrics for the Comprehensive Hospital Increase Reimbursement Program {#sec-353.1307 omnilex-key=us-tx-regs-official--title-1--353.1307}

(a) Introduction. This section establishes the quality metrics for the Comprehensive Hospital Increase Reimbursement Program (CHIRP).

(b) Definitions. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1306 of this subchapter (relating to the Comprehensive Hospital Increase Reimbursement Program for program periods on or after September 1, 2021).

(c) Quality metrics. For each program period, HHSC will designate one or more quality metrics for each CHIRP capitation rate component as described in §353.1306(g) of this subchapter. Any quality metric included in CHIRP will be evidence-based and will be identified as a structure, process, or outcome measure. HHSC may modify quality metrics from one program period to the next. The proposed quality metrics for a program period will be presented to the public for comment in accordance with subsection (g) of this section.

(d) Performance requirements. For each program period, HHSC will specify the performance requirements associated with designated quality metrics. The proposed performance requirements for a program period will be presented to the public for comment in accordance with subsection (g) of this section. Achievement of performance requirements will trigger payments as described in §353.1306 of this subchapter.

(e) Quality metrics and program evaluation. HHSC will use reported performance of quality metrics to evaluate the degree to which the arrangement advances at least one of the goals and objectives that are incentivized by the payments described under §353.1306(g) of this subchapter.

(1) All quality metrics for which a hospital is eligible based on class must be reported by the participating hospital as a condition of participation.

(2) Participating hospitals must stratify any reported data by payor type and must report data according to requirements published under subsection (h) of this section.

(f) Participating Hospital Reporting Frequency.

(1) Participating hospitals will be required to report on quality metrics semiannually unless otherwise specified by the metric.

(2) Participating hospitals will also be required to furnish information and data related to quality metrics and performance requirements established in accordance with subsection (g) of this section within 30 calendar days after a request from HHSC for more information.

(g) Notice and hearing.

(1) HHSC will publish notice of the proposed metrics and their associated performance requirements no later than August 10 of the calendar year that precedes the first month of the program period. The notice must be published either by publication on HHSC's website or in the *Texas Register.* The notice required under this section will include the following:

(A) instructions for interested parties to submit written comments to HHSC regarding the proposed metrics and performance requirements; and

(B) the date, time, and location of a public hearing.

(2) Written comments will be accepted within 30 calendar days of publication. There will also be a public hearing within that 30-day period to allow interested persons to present comments on the proposed metrics and performance requirements.

(h) Quality metric publication. Final quality metrics and performance requirements will be provided through the CHIRP quality webpage on HHSC's website on or before October 1 of the calendar year that precedes the first month of the program period.

(i) Alternate measures may be substituted for measures proposed under subsection (g) of this section or published under subsection (h) of this section if required by the Centers for Medicare and Medicaid Services for federal approval of the program. If Centers for Medicare and Medicaid Services requires changes to quality metrics or performance requirements after October 1, HHSC will provide notice of the changes through HHSC's website.

(j) Evaluation Reports.

(1) HHSC will evaluate the success of the program based on a statewide review of reported metrics. HHSC may publish more detailed information about specific performance of various participating hospitals, classes of hospitals, or service delivery areas.

(2) HHSC will publish interim evaluation findings regarding the degree to which the arrangement advanced the established goal and objectives of each capitation rate component.

(3) HHSC will publish a final evaluation report within 270 days of the conclusion of the program period.

**History**
- *Source Note: The provisions of this §353.1307 adopted to be effective March 28, 2021, 46 TexReg 1977; amended to be effective May 31, 2022, 47 TexReg 3113; amended to be effective January 29, 2024, 49 TexReg 404.*

##### **1 Tex. Admin. Code § 353.1309** Texas Incentives for Physicians and Professional Services {#sec-353.1309 omnilex-key=us-tx-regs-official--title-1--353.1309}

(a) Introduction. This section establishes the Texas Incentives for Physicians and Professional Services (TIPPS) program. TIPPS is designed to incentivize physicians and certain medical professionals to improve quality, access, and innovation in the provision of medical services to Medicaid recipients through the use of metrics that are expected to advance at least one of the goals and objectives of the state's managed care quality strategy.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this section may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1311 of this subchapter (relating to Quality Metrics for the Texas Incentives for Physicians and Professional Services Program).

(1) Health Related Institution (HRI) physician group--A network physician group owned or operated by an institution named in Texas Education Code §63.002.

(2) Indirect Medical Education (IME) physician group--A network physician group contracted with, owned, or operated by a hospital receiving either a medical education add-on or a teaching medical education add-on as described in §355.8052 of this title (relating to Inpatient Hospital Reimbursement) for which the hospital is assigned or retains billing rights for the physician group.

(3) Intergovernmental Transfer (IGT) Notification--Notice and directions regarding how and when IGTs should be made in support of the program.

(4) Network physician group--A physician group located in the state of Texas that has a contract with a Managed Care Organization (MCO) for the delivery of Medicaid-covered benefits to the MCO's enrollees.

(5) Network status--A provider's network status with a contracted MCO, as determined by the national provider identification (NPI) number and Plan Code combination.

(6) Other physician group--A network physician group other than those specified under paragraphs (1) and (2) of this subsection.

(7) Plan code--A unique 2-digit alphanumeric code established by HHSC denoting the individual managed care organization, program, and service delivery area.

(8) Program period--A period of time for which an eligible and enrolled physician group may receive the TIPPS amounts described in this section. Each TIPPS program period is equal to a state fiscal year beginning September 1 and ending August 31 of the following year.

(9) Suggested IGT responsibility--Notice of potential amounts that a governmental entity may wish to consider transferring in support of the program.

(10) Total program value--The maximum amount available under the TIPPS program for a program period, as determined by HHSC.

(c) Eligibility for participation in TIPPS. A physician group is eligible to participate in TIPPS if it complies with the requirements described in this subsection.

(1) Physician group composition. A physician group must indicate the eligible physicians, clinics, and other locations to be considered for payment and quality measurement purposes in the application process.

(2) Minimum volume. For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, physician groups must have a minimum denominator volume of 30 Medicaid managed care patients in at least 50 percent of the quality metrics in each component to be eligible to participate in the component. For program periods beginning on or after September 1, 2024, no minimum denominator volume is required.

(3) The physician group is:

(A) an HRI physician group;

(B) an IME physician group; or

(C) any other physician group that:

(i) can achieve the minimum volume during program periods beginning on or before September 1, 2023, but on or after September 1, 2021, as described in paragraph (2) of this subsection;

(ii) is located in a service delivery area with at least one sponsoring governmental entity; and

(iii) for program periods beginning on or before September 1, 2023, but on or after September 1, 2021, served at least 250 unique Medicaid managed care clients in the prior state fiscal year. For program periods beginning on or after September 1, 2024, no minimum volume is required.

(d) Data sources for historical units of service and clients served. Historical units of service are used to determine a physician group's eligibility status and the estimated distribution of TIPPS funds across enrolled physician groups.

(1) HHSC will use encounter data and will identify encounters based upon the billing provider's NPI number and taxonomy code combination that are billed as a professional encounter only.

(2) HHSC will use the most recently available Medicaid encounter data for a complete state fiscal year to determine the eligibility status of other physician groups for program periods beginning on or before September 1, 2023, but on or after September 1, 2021.

(3) HHSC will use the most recently available Medicaid encounter data for a complete state fiscal year to determine distribution of TIPPS funds across eligible and enrolled physician groups.

(4) In the event of a disaster, HHSC may use data from a different state fiscal year at HHSC's discretion.

(5) The data used to estimate eligibility and distribution of funds will align with the data used for purposes of setting the capitated rates for managed care organizations for the same period.

(6) HHSC will calculate the estimated rate that an average commercial payor would have paid for the same services using either data that HHSC obtains independently or data that is collected from providers through the application process described in subsection (c) of this section.

(7) If HHSC is unable to compute an actuarially sound payment rate based on private payor information described in paragraph (6) of this subsection for any services, then those services will be removed from consideration from the TIPPS program.

(8) All services billed and delivered at a Federally Qualified Health Center, dental services, and ambulance services are excluded from the scope of the TIPPS program.

(9) Encounter data used to calculate payments for this program must be designated as paid status. Encounters reported as a paid status, but with zero or negative dollars as a reported paid amount will not be included in the data used to calculate payments for the TIPPS program.

(10) If a provider with the same Tax Identification Number as the payor is being paid more than 200 percent of the Medicaid reimbursement on average for the same services in a one-year period, then a related-party-adjustment will be applied to the encounter data for those encounters. This adjustment will apply a calculated average payment rate from the rest of the provider pool to the related parties paid units of service.

(e) Conditions of Participation. As a condition of participation, all physician groups participating in TIPPS must allow for the following.

(1) The physician group must submit a properly completed enrollment application by the due date determined by HHSC. The enrollment period will be no less than 21 calendar days, and the final date of the enrollment period will be at least nine days prior to the release of suggested IGT responsibilities.

(2) Enrollment is conducted annually, and participants may not join the program after the enrollment period closes. Any updates to enrollment information must be submitted prior to the publication of the suggested IGT responsibilities under subsection (f)(1) of this section. For each program period, a physician group must be located in a Service Delivery Area (SDA) in which at least one sponsoring governmental entity that agrees to transfer to HHSC some or all of the non-federal share under this section is also located. An SDA is designated by HHSC for each provider, or physician group with multiple locations, based on the SDA in which the majority of a physician group's claims are billed. Services that are provided outside of a designated SDA may be included in the designated SDA.

(3) Network status for providers for the entire program period will be determined at the time of enrollment based on the submission of documentation through the enrollment process that shows an MCO has identified the provider as having a network agreement.

(4) The entity that bills on behalf of the physician group must certify, on a form prescribed by HHSC, that no part of any TIPPS payment will be used to pay a contingent fee nor may the entity's agreement with the physician group use a reimbursement methodology that contains any type of incentive, directly or indirectly, for inappropriately inflating, in any way, claims billed to the Medicaid program, including the physician group's receipt of TIPPS funds. The certification must be received by HHSC with the enrollment application described in paragraph (1) of this subsection.

(5) If a provider has changed ownership in the past five years in a way that impacts eligibility for the TIPPS program, the provider must submit to HHSC, upon demand, copies of contracts it has with third parties with respect to the transfer of ownership or the management of the provider and which reference the administration of, or payment from, the TIPPS program.

(6) Report all quality data denoted as required as a condition of participation in §353.1311(d)(1) of this subchapter.

(7) Failure to meet any conditions of participation described in this subsection will result in the removal of the provider from the program and recoupment of all funds previously paid during the program period.

(f) Non-federal share of TIPPS payments. The non-federal share of all TIPPS payments is funded through IGTs from sponsoring governmental entities. No state general revenue is available to support TIPPS.

(1) HHSC will communicate suggested IGT responsibilities for the program period with all TIPPS eligible and enrolled HRI physician groups and IME physician groups at least 10 calendar days prior to the IGT declaration of intent deadline. Suggested IGT responsibilities will be based on the maximum dollars available under the TIPPS program for the program period as determined by HHSC, plus eight percent; forecasted member months for the program period as determined by HHSC; and the distribution of historical Medicaid utilization across HRI physician groups and IME physician groups, plus estimated utilization for eligible and enrolled other physician groups within the same service delivery area, for the program period. HHSC will also communicate the estimated maximum revenues each eligible and enrolled physician group could earn under TIPPS for the program period with those estimates based on HHSC's suggested IGT responsibilities and an assumption that all enrolled physician groups will meet 100 percent of their quality metrics.

(2) Sponsoring governmental entities will determine the amount of IGT they intend to transfer to HHSC for the entire program period and provide a declaration of intent to HHSC 21 business days before the first half of the IGT amount is transferred to HHSC.

(A) The declaration of intent is a form prescribed by HHSC that includes the total amount of IGT the sponsoring governmental entity intends to transfer to HHSC.

(B) The declaration of intent is certified to the best knowledge and belief of a person legally authorized to sign for the sponsoring governmental entity but does not bind the sponsoring governmental entity to transfer IGT.

(3) HHSC will issue an IGT notification to specify the date that IGT is requested to be transferred no fewer than 14 business days before IGT transfers are due. Sponsoring governmental entities will transfer the first half of the IGT amount by a date determined by HHSC, but no later than June 1. Sponsoring governmental entities will transfer the second half of the IGT amount by a date determined by HHSC, but no later than December 1. HHSC will publish the IGT deadlines and all associated dates on its Internet website by March 15 of each year.

(4) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during each program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(g) TIPPS capitation rate components. TIPPS funds will be paid to Managed Care Organizations (MCOs) through three components of the managed care per member per month (PMPM) capitation rates. The MCOs' distribution of TIPPS funds to the enrolled physician groups will be based on each physician group's performance related to the quality metrics as described in §353.1311 of this subchapter. The physician group must have provided at least one Medicaid service to a Medicaid client in each reporting period to be eligible for payments.

(1) Component One.

(A) For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, the total value of Component One will be equal to 65 percent of the total program value.

(i) Allocation of funds across qualifying HRI and IME physician groups will be proportional, based on historical Medicaid clients served.

(ii) Monthly payments to HRI and IME physician groups will be a uniform rate increase.

(iii) Other physician groups are not eligible for payments from Component One.

(iv) Providers must report quality data as described in §353.1311 of this subchapter as a condition of participation in the program.

(v) HHSC will reconcile the interim allocation of funds across qualifying HRI and IME physician groups to the actual distribution of Medicaid clients served across these physician groups during the program period, as captured by Medicaid MCOs contracted with HHSC for managed care 120 days after the last day of the program period.

(vi) Redistribution resulting from the reconciliation will be based on the actual utilization of enrolled NPIs.

(vii) If a provider eligible for TIPPS payments was not included in the monthly scorecards, the provider may be included in the reconciliation by HHSC.

(B) For the program period beginning on September 1, 2024, the total value of Component One will be equal to 90 percent of the total program value.

(i) Allocation of funds across qualifying HRI and IME physician groups will be proportional, based upon historical Medicaid utilization.

(ii) Payments to physician groups will be a uniform rate increase paid at the time of claim adjudication.

(iii) Other physician groups are not eligible for payments from Component One.

(iv) Providers must report quality data as described in §353.1311 of this subchapter as a condition of participation in the program.

(C) For program periods beginning on or after September 1, 2025, the total value of component one will be equal to 55 percent of the total program value.

(i) Allocation of funds across qualifying HRI and IME physician groups will be proportional, based upon historical Medicaid utilization.

(ii) Payments to physician groups will be a uniform rate increase paid at the time of claim adjudication.

(iii) Other physician groups are not eligible for payments from Component One.

(iv) Providers must report quality data as described in §353.1311 of this subchapter as a condition of participation in the program.

(2) Component Two.

(A) For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, the total value of Component Two will be equal to 25 percent of the total program value.

(i) Allocation of funds across qualifying HRI and IME physician groups will be proportional, based upon historical Medicaid utilization.

(ii) Payments to physician groups will be a uniform rate increase.

(iii) Other physician groups are not eligible for payments from Component Two.

(iv) Providers must report quality data as described in §353.1311 of this subchapter as a condition of participation in the program.

(v) HHSC will reconcile the interim allocation of funds across qualifying HRI and IME physician groups to the actual distribution of Medicaid clients served across these physician groups during the program period as captured by Medicaid MCOs contracted with HHSC for managed care 120 days after the last day of the program period.

(vi) Redistribution resulting from the reconciliation will be based on the actual utilization of enrolled NPIs.

(vii) If a provider eligible for TIPPS payments was not included in the monthly scorecards, the provider may be included in the reconciliation by HHSC.

(B) For the program period beginning September 1, 2024, Component Two will be equal to 0 percent of the program.

(C) For program periods beginning on or after September 1, 2025, the total value of Component Two will be equal to 35 percent of the total program value.

(i) Allocation of funds across qualifying HRI and IME physician groups will be proportional, based upon historical Medicaid utilization.

(ii) Payments to physician groups will be made through a pay-for-performance model based on their achievement of quality measures and paid through a scorecard.

(iii) Other physician groups are not eligible for payments from Component Two.

(3) Component Three.

(A) The total value of Component Three will be equal to 10 percent of the total program value.

(B) Allocation of funds across physician groups will be proportional, based upon actual Medicaid utilization of specific procedure codes as identified in the final quality metrics or performance requirements described in §353.1311 of this subchapter.

(C) Payments to physician groups will be a uniform rate increase.

(D) Providers must report quality data as described in §353.1311 of this subchapter as a condition of participation in the program.

(h) Distribution of TIPPS payments.

(1) Before the beginning of the program period, HHSC will calculate the portion of each PMPM associated with each TIPPS enrolled practice group broken down by TIPPS capitation rate component and payment period. The model for scorecard payments and the reconciliation calculations will be based on the enrolled NPIs and the MCO network status at the time of the application under subsection (e)(1) of this section. For example, for a physician group, HHSC will calculate the portion of each PMPM associated with that group that would be paid from the MCO to the physician group as follows.

(A) Payments from Component One.

(i) For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, payments will be monthly and will be equal to the total value of Component One for the physician group divided by twelve.

(ii) For program periods beginning on or after September 1, 2024, payments will be made as a uniform percentage increase paid at the time of claim adjudication.

(B) Payments from Component Two.

(i) For program periods beginning on or before September 1, 2023, but on or after September 1, 2021, payments will be semi-annual and will be equal to the total value of Component Two for the physician group divided by 2.

(ii) For the program period beginning on September 1, 2024, no payments will be made for Component Two.

(iii) For program periods beginning on or after September 1, 2025, payment will be made on a scorecard basis at payments based on the reporting of quality measures and paid through a scorecard at the time of achievement. Funds that are not earned by a physician group due to failure to achieve performance requirements will be redistributed to other physician groups in the same SDA and physician group class (HRI or IME) based on each physician group's proportion of total earned Component Two funds in the SDA. If no other physician group in the SDA and physician group class receives performance payments, unearned funds will be redistributed to all HRI or IME physician groups in the SDA based on each physician group's proportion of total earned Component Two funds. If no physician group in the SDA receives performance payments, unearned funds will be redistributed to all HRI and IME physician groups participating in TIPPS based on each physician group's proportion of total earned Component Two funds.

(C) Payments from Component Three will be equal to the total value of Component Three attributed as a uniform rate increase based upon historical utilization.

(2) MCOs will distribute payments to enrolled physician groups as directed by HHSC. Payments will be equal to the portion of the TIPPS PMPM associated with the achievement for the time period in question multiplied by the number of member months for which the MCO received the TIPPS PMPM.

(i) Changes in operation. If an enrolled physician group closes voluntarily or ceases to provide Medicaid services, the physician group must notify the HHSC Provider Finance Department by hand delivery, United States (U.S.) mail, or special mail delivery within 10 business days of closing or ceasing to provide Medicaid services. Notification is considered to have occurred when the HHSC Provider Finance Department receives the notice.

(j) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during each program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(k) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(j) and §353.1301(k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1309 adopted to
be effective March 21, 2021, 46 TexReg 1617; amended to be effective
May 31, 2022, 47 TexReg 3113; amended to be effective January 28,
2024, 49 TexReg 413; amended to be effective February 27, 2025, 50
TexReg 972.*

##### **1 Tex. Admin. Code § 353.1311** Quality Metrics for the Texas Incentives for Physicians and Professional Services Program {#sec-353.1311 omnilex-key=us-tx-regs-official--title-1--353.1311}

(a) Introduction. This section establishes the quality metrics for the Texas Incentives for Physician and Professional Services (TIPPS) program.

(b) Definitions. Terms that are used in this and other sections of this subchapter may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1309 of this subchapter (relating to the Texas Incentives for Physicians and Professional Services).

(c) Quality metrics. For each program period, HHSC will designate one or more quality metrics for each TIPPS capitation rate component as described in §353.1309(g) of this subchapter. Any quality metric included in TIPPS will be evidence-based and identified as a structure, process, or outcome measure. HHSC may modify quality metrics from one program period to the next. The proposed quality metrics for a program period will be presented to the public for comment in accordance with subsection (g) of this section.

(d) Performance requirements. For each program period, HHSC will specify the performance requirements associated with designated quality metrics. The proposed performance requirements for a program period will be presented to the public for comment in accordance with subsection (g) of this section. Achievement of performance requirements will trigger payments as described in §353.1309 of this subchapter.

(e) Quality metrics and program evaluation. HHSC will use reported performance of quality metrics to evaluate the degree to which the arrangement advances at least one of the goals and objectives that are incentivized by the payments described under §353.1309(g) of this subchapter.

(1) All quality metrics for any Component in which a physician group is participating must be reported by the participating physician group as a condition of participation.

(2) Participating physician groups must stratify any reported data by payor type and must report data according to requirements published under subsection (f) of this section.

(f) Participating physician group reporting frequency.

(1) Participating physician groups will be required to report on quality metrics semi-annually unless otherwise specified by the metric.

(2) Participating physician groups will also be required to furnish information and data related to quality metrics and performance requirements established in accordance with subsection (g) of this section within 30 calendar days after a request from HHSC for more information.

(g) Notice and hearing.

(1) HHSC will publish notice of the proposed metrics and their associated performance requirements no later than August 10 of the calendar year that precedes the first month of the program period. The notice must be published either by publication on the HHSC website or in the *Texas Register.* The notice required under this section will include:

(A) instructions for interested parties to submit written comments to HHSC regarding the proposed metrics and performance requirements; and

(B) the date, time, and location of a public hearing.

(2) Written comments will be accepted within 30 calendar days of publication. There will also be a public hearing within that 30-day period to allow interested persons to present comments on the proposed metrics and performance requirements.

(h) Quality metric publication. Final quality metrics and performance requirements will be provided through the TIPPS quality webpage on the HHSC website on or before October 1 of the calendar year that precedes the first month of the program period.

(i) Alternate measures may be substituted for measures proposed under subsection (g) of this section or published under subsection (h) of this section if required by the Centers for Medicare and Medicaid Services for federal approval of the program. If the Centers for Medicare and Medicaid Services requires changes to quality metrics or performance requirements after October 1, HHSC will provide notice of the changes through the HHSC website.

(j) Evaluation Reports.

(1) HHSC will evaluate the success of the program based on a statewide review of reported metrics. HHSC may publish more detailed information about specific performance of various participating physician groups, classes of physician groups, or service delivery areas.

(2) HHSC will publish interim evaluation findings regarding the degree to which the arrangement advanced the established goal and objectives of each capitation rate component.

(3) HHSC will publish a final evaluation report within 270 days of the conclusion of the program period.

**History**
- *Source Note: The provisions of this §353.1311 adopted to be effective March 21, 2021, 46 TexReg 1617; amended to be effective May 31, 2022, 47 TexReg 3113; amended to be effective November 13, 2024, 49 TexReg 8853.*

##### **1 Tex. Admin. Code § 353.1315** Rural Access to Primary and Preventive Services Program {#sec-353.1315 omnilex-key=us-tx-regs-official--title-1--353.1315}

(a) Introduction. This section establishes the Rural Access to Primary and Preventive Services (RAPPS) program. RAPPS is designed to incentivize rural health clinics (RHCs) to improve quality, access, and innovation in the provision of medical services to Medicaid recipients through the use of metrics that are expected to advance at least one of the goals and objectives of the state's managed care quality strategy.

(b) Definitions. The following definitions apply when the terms are used in this section. Other terms used in this section may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1317 of this subchapter (relating to Quality Metrics for Rural Access to Primary and Preventive Services Program).

(1) Freestanding rural health clinic (RHC)--A network RHC that is not affiliated with a hospital.

(2) Hospital-based RHC--A network RHC that is affiliated with a hospital.

(3) Intergovernmental transfer (IGT) notification--Notice and directions regarding how and when IGTs should be made in support of RAPPS.

(4) Network RHC--An RHC located in the state of Texas that has a contract with a managed care organization (MCO) for the delivery of Medicaid-covered services to the MCO's enrollees.

(5) Program period--A period of time for which the Texas Health and Human Services Commission (HHSC) contracts with MCOs to pay increased capitation rates for the purpose of making RHC payments under this section. Each program period is equal to a state fiscal year beginning September 1 and ending August 31 of the following year.

(6) Rural health clinic (RHC)--Has the meaning assigned by 42 U.S.C. §1396d(l)(1).

(7) Suggested IGT responsibility--Notice of potential amounts that a sponsoring governmental entity may wish to consider transferring in support of RAPPS.

(8) Total program value--The maximum amount available under the RAPPS program for a program period, as determined by HHSC.

(c) Classes of RHCs.

(1) HHSC may direct an MCO to provide an increased payment or percentage rate increase for certain services to all RAPPS-enrolled RHCs in one or more of the following classes of RHCs with which the MCO contracts for Medicaid services:

(A) hospital-based RHCs; and

(B) freestanding RHCs.

(2) If HHSC directs rate increases or payments to more than one RHC class in the service delivery area (SDA), the rate increases or payments may vary by RHC class. HHSC will consider the following factors in identifying the amount of the rate increase or payment for each class:

(A) the RHC class's contribution to the goals and objectives in the HHSC managed care quality strategy, as required in 42 C.F.R. §438.340, relative to other classes;

(B) the class or classes of RHC the sponsoring governmental entity wishes to support through IGTs of public funds, as indicated on the application described in subsection (f) of this section; and

(C) the actuarial soundness of the capitation payment needed to support the rate increase or payment.

(d) Eligibility. An RHC is eligible to participate in RAPPS if it meets the requirements described in this subsection.

(1) Location. The RHC must be located in an SDA with at least one sponsoring governmental entity.

(2) Minimum number of Medicaid managed care encounters. The RHC must have provided at least 30 Medicaid managed care encounters in the prior state fiscal year.

(e) Data sources for historical units of service and clients served. Historical units of service are used to determine an RHC's eligibility status and the estimated distribution of RAPPS funds across enrolled RHCs.

(1) HHSC will use encounter data and will identify encounters based on the billing provider's national provider identification (NPI) number and provider type code.

(2) HHSC will use the most recently available Medicaid encounter data for a complete state fiscal year to determine the eligibility status of an RHC.

(3) HHSC will use the most recently available Medicaid encounter data for a complete state fiscal year to determine the distribution of RAPPS funds across enrolled RHCs.

(4) In the event that the historical data are not deemed appropriate for use by actuarial standards, HHSC may utilize data from a different state fiscal year at HHSC's discretion.

(5) The data used to estimate eligibility and distribution of funds will align with the data used for purposes of setting the capitation rates for MCOs for the same period.

(6) To determine total program value, HHSC will calculate the estimated rate that Medicare would have paid for the same services using either each RHC's state fiscal year 2019 federal cost report or its last submitted cost report. For RHCs where a filed cost report was not found, the RHC's Medicare payments will be estimated using the SDA weighted average ratio of Medicare encounter-based reimbursements divided by MCO reimbursement data.

(7) Encounter data used to calculate RAPPS payments must be designated as paid status with a reported paid amount greater than zero. Encounters reported as paid status but with a reported paid amount of zero or negative dollars will be excluded from the data used to calculate RAPPS payments.

(8) If a provider with the same Tax Identification Number as the payor is being paid more than 200 percent of the Medicaid reimbursement on average for the same services in a one-year period, then a related party adjustment will be applied to the encounter data for those encounters. This adjustment will apply a calculated average payment rate from the rest of the provider pool to the related party's paid units of service.

(f) Conditions of Participation. As a condition of participation, all RHCs participating in RAPPS, as well as any entities billing on their behalf, must meet the following requirements.

(1) The RHC must submit a properly completed enrollment application by the due date determined by HHSC. The enrollment period will be no less than 21 calendar days, and the final date of the enrollment period will be at least nine calendar days prior to the release of suggested IGT responsibilities.

(A) Enrollment is conducted annually and participants may not join the program after the enrollment period closes. Any updates to enrollment information must be submitted prior to the publication of the IGT notification under subsection (g)(3) of this section.

(B) Network status for providers for the entire program period will be determined at the time of enrollment based on the submission of documentation through the enrollment process that shows an MCO has identified the provider as having a network agreement.

(2) An entity that bills on behalf of the RHC must certify, on a form prescribed by HHSC, that no part of any RAPPS payment will be used to pay a contingent fee and that the entity's agreement with the RHC does not use a reimbursement methodology that contains any type of incentive, directly or indirectly, for inappropriately inflating, in any way, claims billed to the Medicaid program, including the RHC's receipt of RAPPS funds. The certification must be received by HHSC with the enrollment application described in paragraph (1) of this subsection.

(3) If an RHC has changed ownership in the past five years in a way that impacts eligibility for RAPPS, the RHC must submit to HHSC, upon demand, copies of contracts it has with third parties with respect to the transfer of ownership or the management of the RHC and which reference the administration of, or payments from, RAPPS.

(4) Report all quality data denoted as required as a condition of participation in subsection (h) of this section.

(5) Failure to meet any conditions of participation described in this subsection will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

(g) Non-federal share of RAPPS payments. The non-federal share of all RAPPS payments is funded with IGTs from sponsoring governmental entities. No state general revenue is available to support RAPPS.

(1) HHSC will communicate the following information for the program period to all RAPPS-enrolled hospital-based RHCs and sponsoring governmental entities at least 10 calendar days prior to the IGT declaration of intent deadline:

(A) suggested IGT responsibilities for the program period, which will be based on:

(i) the maximum funding amount available under RAPPS for the program period as determined by HHSC, plus ten percent;

(ii) forecasted member months for the program period as determined by HHSC; and

(iii) the distribution of historical Medicaid utilization across RHCs, plus the estimated utilization for enrolled RHCs within the same SDA, for the program period; and

(B) the estimated maximum revenues each enrolled RHC could earn under RAPPS for the program period will be based on HHSC's suggested IGT responsibilities and the assumption that all enrolled RHCs will meet 100 percent of their quality metrics.

(2) The estimated maximum revenues each enrolled RHC could earn under RAPPS for the program period, which will be based on HHSC's suggested IGT responsibilities and the assumption that all enrolled RHCs will meet 100 percent of their quality metrics.

(3) HHSC will issue an IGT notification to specify the date that IGT is requested to be transferred, no fewer than 14 business days before IGT transfers are due. The IGT notification will instruct sponsoring governmental entities as to the required IGT amounts. Required IGT amounts will include all costs associated with RHC payments and rate increases, including costs associated with MCO premium taxes, risk margin, and administration, plus ten percent.

(4) Sponsoring governmental entities will transfer the first half of the IGT amount by a date determined by HHSC, but no later than June 1. Sponsoring governmental entities will transfer the second half of the IGT amount by a date determined by HHSC, but no later than December 1. HHSC will publish the IGT deadlines and all associated dates on the HHSC website by March 15 of each year.

(h) RAPPS capitation rate components. RAPPS funds will be paid to MCOs through the managed care per member per month (PMPM) capitation rates. The MCOs' distribution of RAPPS funds to the enrolled RHCs will be based on each RHC's performance related to the quality metrics as described in §353.1317 of this subchapter. The RHC must have provided at least one Medicaid service to a Medicaid client for each reporting period to be eligible for payments.

(1) Component One.

(A) The total value of Component One will be equal to 75 percent of total program value for program periods beginning on or before September 1, 2023. For program periods beginning on or after September 1, 2024, Component One will be 100 percent of the total program value.

(B) Allocation of funds across qualifying RHCs will be based on historical Medicaid utilization and RHC class.

(C) Monthly payments to RHCs will be paid prospectively.

(D) HHSC will reconcile the interim allocation of funds across RAPPS-enrolled RHCs to the actual Medicaid utilization across these RHCs during the program period as captured by Medicaid MCOs contracted with HHSC for managed care 120 days after the last day of the program period.

(i) Redistribution resulting from the reconciliation will be based on actual utilization of enrolled NPIs.

(ii) If a provider eligible for RAPPS payments was not included in the monthly scorecards, the provider may be included in the reconciliation by HHSC.

(E) Providers must report quality data as described in §353.1317 of this subchapter as a condition of participation in the program.

(2) Component Two.

(A) The total value of Component Two will be equal to 25 percent of the total program value for program periods beginning on or before September 1, 2023. For program periods beginning on or after September 1, 2024, the total value of Component Two will be equal to zero percent of the total program value.

(B) Allocation of funds across qualifying RHCs will be based upon actual Medicaid utilization of specific procedure codes as identified in the final quality metrics and performance requirements described in §353.1317 of this subchapter.

(C) A percent increase on all applicable services will begin when an RHC demonstrates achievement of performance requirements as described in §353.1317 of this subchapter during the reporting period.

(D) Providers must report quality data as described in §353.1317 of this subchapter as a condition of participation in the program.

(i) Distribution of RAPPS payments.

(1) Prior to the beginning of the program period, HHSC will calculate the portion of each monthly prospective payment associated with each RAPPS-enrolled RHC broken down by RAPPS capitation rate component and payment period. The model for scorecard payments and the reconciliation calculations will be based on the enrolled NPIs at the time of the application under subsection (f)(1) of this section. For example, for an RHC, HHSC will calculate the portion of each monthly prospective payment associated with that RHC that would be paid from the MCO to the RHC as follows.

(A) Monthly payments from Component One will be equal to the total value of Component One for the RHC divided by twelve.

(B) For program periods beginning on or before September 1, 2023, payments from Component Two will be equal to the total value of Component Two attributed as a rate increase for specific services based upon historical utilization.

(C) For purposes of the calculation described in subparagraph (B) of this paragraph, an RHC must achieve quality metrics to be eligible for full payment as determined by performance requirements described in §353.1317(d) of this subchapter.

(2) An MCO will distribute payments to an enrolled RHC based on criteria established under this subsection.

(j) Changes in operation. If a RAPPS-enrolled RHC closes voluntarily or ceases to provide Medicaid services, the RHC must notify the HHSC Provider Finance Department by electronic mail to an address designated by HHSC, by hand delivery, United States (U.S.) mail, or by special mail delivery within 10 business days of closing or ceasing to provide Medicaid services. Notification is considered to have occurred when the HHSC Provider Finance Department receives the notice.

(k) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during each program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(l) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(j) and §353.1301(k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1315 adopted to be effective April 25, 2021, 46 TexReg 2717; amended to be effective May 31, 2022, 47 TexReg 3113; amended to be effective January 25, 2024, 49 TexReg 243.*

##### **1 Tex. Admin. Code § 353.1317** Quality Metrics for Rural Access to Primary and Preventive Services Program {#sec-353.1317 omnilex-key=us-tx-regs-official--title-1--353.1317}

(a) Introduction. This section establishes the quality metrics that may be used in the Rural Access to Primary and Preventive Services (RAPPS) program.

(b) Definitions. The following definitions apply when the terms are used in this section. Other terms used in this section may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1315 of this subchapter (relating to Rural Access to Primary and Preventive Services Program).

(1) Baseline--An initial standard used as a comparison against performance in each metric throughout the program period to determine progress in a RAPPS quality metric.

(2) Benchmark--A metric-specific initial standard set prior to the start of the program period and used as a comparison against a rural health clinic's (RHC's) progress throughout the program period.

(3) Measurement period--The time period used to measure achievement of a quality metric.

(c) Quality metrics. For each program period, the Texas Health and Human Services Commission (HHSC) will designate quality metrics for each RAPPS capitation rate component as described in §353.1315(h) of this subchapter.

(1) Each quality metric will be identified as a structure measure, improvement over self (IOS) measure, or benchmark measure.

(2) Each quality metric will be evidence-based.

(d) Quality metric requirements. For each program period, HHSC will specify the requirements that will be associated with the designated quality metric.

(1) Reporting of quality metrics. An RHC must report all quality metrics as a condition of participation in the program. An RHC must stratify any reported data by payor type and must report data according to requirements published under subsection (g) of this section.

(2) Achievement of quality metrics.

(A) To achieve a structure measure, an RHC must report its progress on associated activities for each measurement period.

(B) To achieve an IOS or benchmark measure, an RHC must meet or exceed the measure's goal for a measurement period. Goals will be established as either a target percentage improvement over self or performance above a benchmark as specified by the metric and determined by HHSC. In year one of the program, providers will establish a baseline for IOS measures.

(e) Participating RHC reporting frequency. Participating RHCs must report quality metrics semi-annually unless otherwise specified by the quality metric. Participating RHCs will also be required to furnish information and data related to quality measures and performance requirements established in accordance with subsection (f) of this section within 30 calendar days after a request from HHSC for more information.

(f) Notice and hearing.

(1) HHSC will publish notice of the proposed quality metrics and their associated requirements no later than January 31, preceding the first month of the program period. The notice must be published either by publication on HHSC's website or in the *Texas Register.* The notice required under this section will include the following:

(A) instructions for interested parties to submit written comments to HHSC regarding the proposed metrics and requirements; and

(B) the date, time, and location of a public hearing.

(2) Written comments will be accepted for 15 business days following publication. There will also be a public hearing within that 15-day period to allow interested persons to present comments on the proposed metrics and requirements.

(g) Publication of final metrics and requirements. Final quality metrics and requirements will be provided through HHSC's website on or before February 28 of the calendar year that also contains the first month of the program period. If the Centers for Medicare and Medicaid Services requires changes to quality metrics or requirements after February 28, HHSC will provide notice of the changes through HHSC's website.

(h) Evaluation Reports.

(1) HHSC will evaluate the success of the program based on a review of reported metrics. HHSC may publish more detailed information about specific performance of various participating RHCs, classes of RHCs, or service delivery areas.

(2) HHSC will publish interim evaluation findings regarding the degree to which the arrangement advanced the established goal and objectives of each capitation rate component.

(3) HHSC will publish a final evaluation report within 270 days of the conclusion of the program period.

**History**
- *Source Note: The provisions of this §353.1317 adopted to be effective April 25, 2021, 46 TexReg 2717; amended to be effective May 31, 2022, 47 TexReg 3113.*

##### **1 Tex. Admin. Code § 353.1320** Directed Payment Program for Behavioral Health Services {#sec-353.1320 omnilex-key=us-tx-regs-official--title-1--353.1320}

(a) Introduction. This section establishes the Directed Payment Program for Behavioral Health Services (DPP BHS). DPP BHS is designed to incentivize behavioral health providers to improve quality, access, and innovation in the provision of medical and behavioral health services to Medicaid recipients through the use of metrics that are expected to advance at least one of the goals and objectives of the state's managed care quality strategy.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this section may be defined in §353.1301 of this subchapter (relating to General Provisions) or §353.1322 of this subchapter (relating to Quality Metrics for the Directed Payment Program for Behavioral Health Services).

(1) Average Commercial Reimbursement (ACR) gap--The difference between what an average commercial payor is estimated to pay for the services and what Medicaid actually paid for the same services.

(2) Certified Community Behavioral Health Clinic (CCBHC)--A clinic certified by the state in accordance with federal criteria and with the requirements of the Protecting Access to Medicare Act of 2014 (PAMA).

(3) CCBHC cost-reporting gap--The difference between what Medicaid pays for services and what the reimbursement would be based on the CCBHC cost-reporting methodology.

(4) Community Mental Health Center (CMHC)--An entity that is established under Texas Health and Safety Code §534.0015 and that:

(A) Provides outpatient services, including specialized outpatient services for children, the elderly, individuals with serious mental illness, and residents of its mental health service area who have been discharged from inpatient treatment at a mental health facility.

(B) Provides 24-hour-a-day emergency care services.

(C) Provides day treatment or other partial hospitalization services, or psychosocial rehabilitation services.

(D) Provides screening for patients being considered for admission to state mental health facilities to determine the appropriateness of such admission.

(5) Intergovernmental transfer (IGT) notification--Notice and directions regarding how and when IGTs should be made in support of DPP BHS.

(6) Local Behavioral Health Authority (LBHA)--An entity that is designated under Texas Health and Safety Code §533.0356.

(7) Program period--A period of time for which the Texas Health and Human Services (HHSC) contracts with participating managed care organizations (MCOs) to pay increased capitation rates for the purpose of provider payments under this section. Each program period is equal to a state fiscal year beginning September 1 and ending August 31 of the following year.

(8) Providers--For program periods on or before August 31, 2022, an entity described in paragraph (4) of this subsection. For program periods on or after September 1, 2022, an entity described in paragraph (4) or (6) of this subsection.

(9) Suggested IGT responsibility--Notice of potential amounts that a sponsoring governmental entity may wish to consider transferring in support of DPP BHS.

(10) Total program value--The maximum amount available under the Directed Payment Program for Behavioral Health Services for a program period, as determined by HHSC.

(c) Classes of participating providers.

(1) HHSC may direct the MCOs to provide a uniform percentage rate increase or a uniform dollar increase to all providers within one or more of the following classes of providers with which the MCO contracts for services:

(A) For program periods beginning on or before September 1, 2023, providers that are certified CCBHCs and providers that are not certified CCBHCs.

(B) For program periods beginning on or after September 1, 2024, providers who are certified CCBHCs.

(2) If HHSC directs rate or dollar increases to more than one class of providers within the service delivery area, the rate or dollar increases directed by HHSC may vary between classes.

(d) Data sources for historical units of service. Historical units of service are used to determine a provider's eligibility status to receive the estimated distribution of program funds across enrolled providers.

(1) HHSC will use encounter data and will identify encounters based upon the billing provider's national provider identification (NPI) number.

(2) The most recently available Medicaid encounter data for a complete state fiscal year will be used to determine the distribution of program funds across eligible and enrolled providers.

(3) In the event that the historical data are not deemed appropriate for use by actuarial standards, HHSC may use data from a different state fiscal year at the discretion of the HHSC actuaries.

(4) The data used to estimate the distribution of funds will align to the extent possible with the data used for purposes of setting the capitation rates for MCOs for the same period.

(5) HHSC will calculate the estimated rate that an average commercial payor or Medicare would have paid for similar services or based on the CMS-approved CCBHC cost report rate methodology using either data from Medicare cost reports or collected from providers.

(6) Encounter data used to calculate DPP BHS payments must be designated as paid status with a reported paid amount greater than zero. Encounters reported as paid status, but with a reported paid amount of zero or negative dollars, will be excluded from the data used to calculate DPP BHS payments.

(e) Conditions of Participation. As a condition of participation, all providers participating in the program must allow for the following.

(1) The provider must submit a properly completed enrollment application by the due date determined by HHSC. The enrollment period must be no less than 21 calendar days, and the final date of the enrollment period will be at least nine calendar days prior to the release of suggested IGT responsibilities.

(A) Enrollment is conducted annually and participants may not join the program after the enrollment period closes. Any updates to enrollment information must be submitted prior to the publication of the IGT suggestion under subsection (j)(1) of this section.

(B) Network status for providers for the entire program period will be determined at the time of enrollment based on the submission of documentation through the enrollment process that shows an MCO has identified the provider as having a network agreement.

(2) The entity that bills on behalf of the provider must certify, on a form prescribed by HHSC, that no part of any payment made under the program will be used to pay a contingent fee and that the entity's agreement with the provider does not use a reimbursement methodology that contains any type of incentive, directly or indirectly, for inappropriately inflating, in any way, claims billed to the Medicaid program, including the provider's receipt of program funds. The certification must be received by HHSC with the enrollment application described in paragraph (1) of this subsection.

(3) If a provider contracts with another entity to provide DPP BHS-eligible services on behalf of the provider, the provider must submit all claims to the MCO using an NPI assigned to the provider as the billing provider's NPI.

(4) If a provider has changed ownership in the past five years in a way that impacts eligibility for DPP BHS, the provider must submit to HHSC, upon demand, copies of contracts it has with third parties with respect to the transfer of ownership or the management of the provider and which reference the administration of, or payment from, DPP BHS.

(5) Report all quality data denoted as required as a condition of participation in subsection (h) of this section.

(6) Failure to meet any conditions of participation described in this section will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

(f) Determination of percentage of rate and dollar increase.

(1) HHSC will determine the percentage of rate or dollar increase applicable to providers by program component.

(2) HHSC will consider the following factors when determining the rate increase:

(A) the estimated Medicare gap for providers, based upon the upper payment limit demonstration most recently submitted by HHSC to the Centers for Medicare and Medicaid Services (CMS);

(B) the estimated Average Commercial Reimbursement (ACR) gap for the class or individual providers, as indicated in data collected from providers;

(C) the estimated gap for providers, based on the CCBHC cost-reporting methodology that is consistent with the CMS guidelines;

(D) the percentage of Medicaid costs incurred by providers in providing care to Medicaid managed care clients that are reimbursed by Medicaid MCOs prior to any rate increase administered under this section; and

(E) the actuarial soundness of the capitation payment needed to support the rate increase.

(g) Services subject to rate and dollar increase. HHSC may direct the MCOs to increase rates or dollar amounts for all or a subset of provider services.

(h) Program capitation rate components. Program funds will be paid to MCOs through the managed care per member per month (PMPM) capitation rates. The MCOs' distribution of program funds to the enrolled providers will be based on each provider's performance related to the quality metrics as described in §353.1322 of this subchapter. The provider must have provided at least one Medicaid service to a Medicaid managed care client for each reporting period to be eligible for payments.

(1) Component One.

(A) The total value of Component One will be equal to 65 percent of the total program value for program periods beginning on or before September 1, 2023. For program periods beginning on or after September 1, 2024, Component One will be 100 percent of the total program value.

(B) Allocation of funds across all qualifying providers will be proportional, based upon historical Medicaid utilization.

(C) Monthly payments to providers will be a uniform rate increase.

(D) The interim allocation of funds across qualifying providers will be reconciled to the actual Medicaid utilization across these providers during the program period, as captured by Medicaid MCOs contracted with HHSC for managed care 120 days after the last day of the program period.

(i) Redistribution resulting from the reconciliation will be based on actual utilization of enrolled NPIs.

(ii) If a provider eligible for DPP BHS payments was not included in the monthly scorecards, the provider may be included in the reconciliation by HHSC.

(E) Providers must report quality data as described in §353.1322 of this subchapter as a condition of participation in the program.

(2) Component Two.

(A) The total value of Component Two will be equal to 35 percent of the total program value program periods beginning on or before September 1, 2023. For program periods beginning on or after September 1, 2024, the total value of Component Two will be equal to 0 percent of the total program value.

(B) Allocation of funds across all qualifying providers will be based upon historical Medicaid utilization.

(C) Payments to providers will be a uniform rate increase.

(D) Providers must report quality data as described in §353.1322 of this subchapter as a condition of participation in the program.

(i) Distribution of the Directed Payment Program for Behavioral Health Services payments.

(1) Prior to the beginning of the program period, HHSC will calculate the portion of each payment associated with each enrolled provider broken down by program capitation rate component and payment period. The model for scorecard payments and the reconciliation calculations will be based on the enrolled NPIs and the MCO network status at the time of the application under subsection (e)(1) of this section. For example, for a provider, HHSC will calculate the portion of each payment associated with that provider that would be paid from the MCO to the provider as follows.

(A) Monthly payments in the form of a uniform dollar increase for Component One will be equal to the total value of Component One attributed based upon historical utilization of the provider divided by twelve. An annual reconciliation will be performed for each provider based on actual utilization.

(B) For program periods beginning on or before September 1, 2023, rate increases from Component Two will be a uniform percentage rate increase on applicable services calculated based on the total value of Component Two for the providers divided by historical utilization of the respective services.

(C) For purposes of the calculation described in subparagraph (B) of this paragraph, a provider must achieve a minimum number of measures as identified in §353.1322 of this subchapter to be eligible for full payment.

(2) MCOs will distribute payments to enrolled providers based on criteria established under paragraph (1) of this subsection.

(j) Non-federal share of DPP BHS payments. The non-federal share of all DPP BHS payments is funded through IGTs from sponsoring governmental entities. No state general revenue that is not otherwise available to providers is available to support DPP BHS.

(1) HHSC will communicate suggested IGT responsibilities for the program period with all DPP BHS eligible and enrolled providers at least 10 calendar days prior to the IGT declaration of intent deadline. Suggested IGT responsibilities will be based on the maximum dollars available under DPP BHS for the program period as determined by HHSC, plus 10 percent; forecasted member months for the program period as determined by HHSC; and the distribution of historical Medicaid utilization across providers, for the program period. HHSC will also communicate estimated maximum revenues each eligible and enrolled provider could earn under DPP BHS for the program period with those estimates based on HHSC's suggested IGT responsibilities and an assumption that all enrolled providers will meet 100 percent of their quality metrics.

(2) Sponsoring governmental entities will determine the amount of IGT they intend to transfer to HHSC for the entire program period and provide a declaration of intent to HHSC 21 business days before the first half of the IGT amount is transferred to HHSC.

(A) The declaration of intent is a form prescribed by HHSC that includes the total amount of IGT the sponsoring governmental entity intends to transfer to HHSC.

(B) The declaration of intent is certified to the best knowledge and belief of a person legally authorized to sign for the sponsoring governmental entity but does not bind the sponsoring governmental entity to transfer IGT.

(3) HHSC will issue an IGT notification to specify the date that IGT is requested to be transferred no fewer than 14 business days before IGT transfers are due. HHSC will instruct sponsoring governmental entities as to the IGT amounts necessary to fund the program at estimated levels. IGT amounts will include the non-federal share of all costs associated with the provider rate increase, including costs associated with MCO (Capitation) premium taxes, risk margin, and administration, plus 10 percent.

(4) Sponsoring governmental entities will transfer the first half of the IGT amount by a date determined by HHSC, but no later than June 1. Sponsoring governmental entities will transfer the second half of the IGT amount by a date determined by HHSC, but no later than December 1. HHSC will publish the IGT deadlines and all associated dates on its Internet website by March 15 of each year.

(k) Effective date of rate and dollar reimbursement increases. HHSC will direct MCOs to increase reimbursements under this section beginning the first day of the program period that includes the increased capitation rates paid by HHSC to each MCO pursuant to the contract between them.

(l) Changes in operation. If an enrolled provider closes voluntarily or ceases to provide Medicaid services, the provider must notify the HHSC Provider Finance Department by electronic mail to an address designated by HHSC, by hand delivery, United States (U.S.) mail, or special mail delivery within 10 business days of closing or ceasing to provide Medicaid services. Notification is considered to have occurred when HHSC Provider Finance Department receives the notice.

(m) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during each program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period using the methodology described in §353.1301(g) of this subchapter.

(n) Recoupment. Payments under this section may be subject to recoupment as described in §353.1301(j) - (k) of this subchapter.

**History**
- *Source Note: The provisions of this §353.1320 adopted to be effective April 21, 2021, 46 TexReg 2579; amended to be effective May 31, 2022, 47 TexReg 3113; amended to be effective January 25, 2024, 49 TexReg 243.*

##### **1 Tex. Admin. Code § 353.1322** Quality Metrics for the Directed Payment Program for Behavioral Health Services {#sec-353.1322 omnilex-key=us-tx-regs-official--title-1--353.1322}

(a) Introduction. This section establishes the quality metrics and required reporting that may be used in the Directed Payment Program for Behavioral Health Services.

(b) Definitions. The following definitions apply when the terms are used in this section. Terms that are used in this section may be defined in §353.1301 (relating to General Provisions) or §353.1320 (relating to Directed Payment Program for Behavioral Health Services) of this subchapter.

(1) Baseline--An initial standard used as a comparison against performance in each metric throughout the program period to determine progress in the program's quality metrics.

(2) Benchmark--A metric-specific initial standard set prior to the start of the program period and used as a comparison against a provider's progress throughout the program period.

(3) Measurement period--The time period used to measure achievement of a quality metric.

(c) Quality metrics. For each program period, the Texas Health and Human Services Commission (HHSC) will designate quality metrics for each of the program's capitation rate components as described in §353.1320(h) of this subchapter.

(1) Each quality metric will be identified as a structure measure, improvement over self (IOS) measure, or benchmark measure.

(2) Each quality metric will be evidence-based and will be presented to the public for comment in accordance with subsection (e) of this section.

(d) Quality Metric requirements. For each program period, HHSC will specify the requirements that will be associated with the designated quality metric that is expected to advance at least one of the goals and objectives in the Medicaid quality strategy. Quality metric data will be used to evaluate the degree to which the arrangement advances at least one of the goals and objectives that are incentivized by the payments described under §353.1320(h) of this subchapter.

(1) Reporting of quality metrics. All quality metrics must be reported as a condition of participation in the program. Participating providers must stratify any reported data by payor type and must report data according to requirements published under subsection (f) of this section.

(2) Reporting frequency. Providers must report quality metrics semi-annually, unless otherwise specified by the metric. Participating providers will also be required to furnish information and data related to quality measures and performance requirements established in accordance with subsection (e) of this section within 30 calendar days after a request from HHSC for more information.

(3) Other metrics related to improving the quality of care for Texas Medicaid beneficiaries. If HHSC develops additional metrics for inclusion in the Directed Payment Program for Behavioral Health Services, the associated performance requirements will be presented to the public for comment in accordance with subsection (e) of this section.

(e) Notice and hearing.

(1) HHSC will publish notice of the proposed quality metrics and their associated requirements no later than January 31 preceding the first month of the program period. The notice must be published either by publication on HHSC's website or in the *Texas Register.* The notice required under this section will include the following:

(A) instructions for interested parties to submit written comments to HHSC regarding the proposed metrics and requirements; and

(B) the date, time, and location of a public hearing.

(2) Written comments will be accepted for 15 business days following publication. There will also be a public hearing within that 15-day period to allow interested persons to present comments on the proposed metrics and requirements.

(f) Publication of final metrics and requirements. Final quality metrics and requirements will be provided through HHSC's website on or before February 28 of the calendar year that also contains the first month of the program period. If the Centers for Medicare and Medicaid Services requires changes to quality metrics or requirements after February 28 of the calendar year, HHSC will provide notice of the changes through HHSC's website.

(g) Evaluation Reports.

(1) HHSC will evaluate the success of the program based on a statewide review of reported metrics. HHSC may publish more detailed information about specific performance of various participating providers, classes of providers, or service delivery areas.

(2) HHSC will publish interim evaluation findings regarding the degree to which the arrangement advanced the established goal and objectives of each capitation rate component.

(3) HHSC will publish a final evaluation report within 270 days of the conclusion of the program period.

**History**
- *Source Note: The provisions of this §353.1322 adopted to be effective April 21, 2021, 46 TexReg 2579; amended to be effective May 31, 2022, 47 TexReg 3113.*

#### **Subchapter P** MENTAL HEALTH TARGETED CASE MANAGEMENT AND MENTAL HEALTH REHABILITATION

##### **1 Tex. Admin. Code § 353.1401** Purpose {#sec-353.1401 omnilex-key=us-tx-regs-official--title-1--353.1401}

(a) The purpose of this subchapter is to establish requirements for providing mental health targeted case management and mental health rehabilitative services through Medicaid managed care. This subchapter applies to managed care organizations and public and private comprehensive provider agencies of mental health targeted case management and mental health rehabilitative services.

(b) Managed care organizations and public and private comprehensive provider agencies providing mental health targeted case management and mental health rehabilitative services under this subchapter must meet the applicable requirements outlined in Chapter 354, Subchapter M, of this title (relating to Mental Health Targeted Case Management and Mental Health Rehabilitation).

**History**
- *Source Note: The provisions of this §353.1401 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1403** Definitions {#sec-353.1403 omnilex-key=us-tx-regs-official--title-1--353.1403}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Adult--An individual who is age 21 or older.

(2) CFP--Certified Family Partner. A person who meets the credentialing requirements in §353.1415(d) of this subchapter (relating to Staff Member Credentialing).

(3) CFR--Code of Federal Regulations.

(4) Child or youth--An individual who is under age 21.

(5) Clinical supervision--An LPHA's or QMHP-CS's oversight of a staff member who delivers mental health targeted case management and mental health rehabilitative services to ensure that services are clinically appropriate and in compliance with this subchapter.

(6) Community data--Additional information gathered during the uniform assessment.

(7) CSSP--Community services specialist. A staff member of a local mental health authority who has documented full-time experience in the provision of mental health targeted case management and mental health rehabilitative services prior to August 31, 2004. See definition in 25 TAC §412.303 (relating to Definitions).

(8) Comprehensive provider agency--An entity that provides or subcontracts for the delivery of the full array of mental health targeted case management and mental health rehabilitative services set forth in Chapter 354, Subchapter M of this title (relating to Mental Health Targeted Case Management and Mental Health Rehabilitation), with the exception of §354.2715 of this title (relating to Day Programs for Acute Needs).

(9) Credentialing--A process by which the comprehensive provider agency reviews and approves a staff member's educational background, work experience, and licensure status (as applicable) to ensure that the staff member meets requirements for staff member credentialing as outlined in §353.1415. The process includes primary source verification of credentials, establishing and applying specific criteria and prerequisites to determine the staff member's initial and ongoing competency, and assessing and validating the staff member's qualifications to deliver care.

(10) HHSC--The Texas Health and Human Services Commission, or its designee.

(11) Individual--A person seeking or receiving mental health targeted case management, mental health rehabilitative services, or both under this subchapter.

(12) Intensive case management--A level of mental health targeted case management that includes a focused effort to coordinate community resources, uses evidence-based wraparound process planning to address a child's or youth's unmet needs across life domains, and assists a child or youth in gaining access to necessary care and services appropriate to the child's or youth's needs.

(13) Intensive case management plan--A written document that is part of the medical record for a child or youth receiving intensive case management and is developed by a case manager, in collaboration with the child or youth and the child's or youth's LAR or primary caregiver, that identifies services needed by the child or youth and sets forth a plan for how the child or youth may gain access to the identified services.

(14) LAR--Legally authorized representative. A person authorized by law to act on behalf of an individual with regard to a matter described in this subchapter, including a parent, guardian, or managing conservator of a minor, or the guardian of an adult.

(15) Life domains--Areas of life, including safety, health, emotional, psychological, social, educational, cultural, and legal.

(16) LPHA--Licensed Practitioner of the Healing Arts. A staff member who is:

(A) a physician;

(B) a licensed professional counselor;

(C) a licensed clinical social worker;

(D) a licensed psychologist;

(E) an advanced practice registered nurse;

(F) a physician assistant; or

(G) a licensed marriage and family therapist.

(17) Management information system--An information system designed to plan, organize, staff, direct, and control the operations and clinical decision-making of a managed care organization or comprehensive provider agency.

(18) Medication training and support services--Medication training and support services consist of education and guidance about medications and their possible side effects.

(19) Mental health rehabilitative services--Services that are individualized, age-appropriate, and provide training and instructional guidance that restore an individual's functional deficits due to serious mental illness or serious emotional disturbance. The services are designed to improve or maintain the individual's ability to remain in the community as a fully integrated and functioning member of that community.

(20) Mental health targeted case management--Services furnished to assist individuals with severe mental illness and functional impairments or serious emotional disorders and functional impairments to gain access to needed medical, social, educational, and other services.

(21) Peer provider--Staff with lived experience with a mental health condition who meet the credentialing requirements in §353.1415(c) of this subchapter.

(22) Pharmacological management--In-depth management of psychopharmacological agents to treat an individual's mental health symptoms.

(23) Primary caregiver--A person 18 years of age or older who has:

(A) actual care, control, and possession of a child or youth; or

(B) assumed responsibility for providing shelter and care for an adult.

(24) Psychiatric diagnostic evaluation--An integrated biopsychosocial assessment, including history, mental status, and recommendations.

(25) QMHP-CS--Qualified Mental Health Professional-Community Services. Staff who meet the credentialing requirements in §353.1415(a) of this subchapter.

(26) Re-credentialing--The periodic process of reevaluating a staff member's competency and qualifications.

(27) Recovery--A process of change through which individuals improve their health and wellness, live a self-directed life, and strive to reach their full potential.

(28) Recovery or treatment plan (recovery/treatment plan)--A written plan that:

(A) is developed with the individual, the LAR if required, other persons whose inclusion is requested by the individual or LAR and who agree to participate, and a QMHP-CS or LPHA;

(B) is completed in conjunction with the uniform assessment;

(C) is amended at any time based on an individual's needs;

(D) guides the recovery process and fosters resiliency;

(E) identifies the individual's changing strengths, capacities, goals, preferences, needs, and desired outcomes; and

(F) identifies services and supports to meet the individual's goals, preferences, needs and desired outcomes.

(29) Referral and linkage--Activities that help link an individual with medical, social, educational, and other providers that are capable of providing needed services.

(30) Staff member--Comprehensive provider agency personnel, including a full-time or part-time employee, contractor, or intern, but excluding a volunteer.

(31) Strengths-based--The concept used in service delivery that identifies, builds on, and enhances the capabilities, knowledge, skills, and assets of the individual, LAR, or primary caregiver, and family, their community, and other team members. The focus is on increasing functional strengths and assets rather than on the elimination of deficits.

(32) UA--Uniform assessment. A required assessment that assists in determining the medical necessity of services. For adults, the UA includes the Adult Needs and Strengths Assessment (ANSA), community data, relevant rating scales, diagnostic information, and any other state-required assessment tools and procedures. For children or youth, the UA includes the Child and Adolescent Needs and Strengths (CANS) assessment, community data, relevant rating scales, diagnostic information, and any other state-required assessment tools and processes.

(33) Utilization management guidelines--Guidelines developed by HHSC that establish the type, amount, and duration of mental health targeted case management services and mental health rehabilitative services for each individual.

(34) Wraparound Process Planning--A strengths-based approach used in intensive case management to develop an intensive case management plan that addresses the child's or youth's unmet needs across life domains.

**History**
- *Source Note: The provisions of this §353.1403 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1405** Managed Care Organization Responsibilities {#sec-353.1405 omnilex-key=us-tx-regs-official--title-1--353.1405}

(a) A managed care organization (MCO) must ensure that each contracted comprehensive provider agency meets the requirements established in this subchapter.

(b) An MCO must develop policies, procedures, and contract requirements to ensure that contracted comprehensive provider agencies adhere to the requirements in this subchapter.

(c) An MCO must not approve or contract with a comprehensive provider agency as a provider of mental health targeted case management and mental health rehabilitative services unless the comprehensive provider agency:

(1) is enrolled as a Texas Medicaid provider in accordance with §352.7 of this title (related to Applying for Enrollment);

(2) attests in the credentialing application to the MCO and agrees in the contract to comply with applicable state and federal regulations, rules, policies, and procedures relating to mental health targeted case management and mental health rehabilitative services;

(3) agrees to comply with applicable state and federal laws governing participation of providers in the Medicaid program;

(4) agrees to submit accurate and complete cost reports in accordance with applicable HHSC requirements;

(5) is not listed on the HHSC Inspector General's Excluded Individuals/Entities Listing;

(6) provides or subcontracts for the full array of mental health targeted case management and mental health rehabilitative services listed in Chapter 354, Subchapter M, of this title (relating to Mental Health Targeted Case Management and Mental Health Rehabilitation), with the exception of §354.2715 of this title (relating to Day Programs for Acute Needs (DPAN)); and

(7) has staff that are credentialed in accordance with §353.1415 of this subchapter (relating to Staff Member Credentialing).

(d) If an MCO contracts with a comprehensive provider agency to provide mental health targeted case management and mental health rehabilitative services specific to children who are at risk of juvenile justice involvement, expulsion from school, displacement from the home, hospitalization, residential treatment, or serious injury to self, others, or animals, the MCO must ensure the comprehensive provider agency has a referral arrangement with a Texas Medicaid enrolled provider within the MCO network that has the ability to otherwise meet the needs of the child and that can provide the services to the child without interruption in services and without otherwise affecting the child's access to care.

**History**
- *Source Note: The provisions of this §353.1405 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1407** Information Systems and Medical Records Systems {#sec-353.1407 omnilex-key=us-tx-regs-official--title-1--353.1407}

(a) Management information system. Managed care organizations (MCOs) and comprehensive provider agencies must ensure their management information systems provide timely, accurate, and accessible information that supports clinical, administrative, and fiscal decision-making.

(b) Maintenance of medical records. MCOs and comprehensive provider agencies must ensure:

(1) protection against unauthorized access, disclosure, modification, or destruction of medical records, whether accidental or deliberate;

(2) the availability, integrity, utility, authenticity, and confidentiality of information within the medical record;

(3) a current, organized, legible, and comprehensive records system that:

(A) conforms to good professional practice;

(B) permits effective clinical review and audit; and

(C) facilitates prompt and systematic retrieval of information;

(4) a medical records system with sufficient redundancy to ensure access to individual records; and

(5) a medical records system that ensures compliance with applicable federal and state laws, rules, and regulations, including the Health Insurance Portability and Accountability Act and 42 CFR Part 2.

(c) Documentation retention. A comprehensive provider agency must maintain all records necessary to fully disclose the services delivered. These records must be retained for a period of ten years from the date of the service, or until all audit questions are resolved, whichever is longer. Records and supporting information regarding any payment of claims, as well as premises access, must be made available to HHSC, HHSC OIG, the federal Health and Human Services, the State Auditor's Office, or any person acting on behalf of such entity, upon request.

(d) Disaster recovery plan. A comprehensive provider agency must maintain a written disaster recovery plan for information resources in order to ensure service continuity, and must implement the plan as necessary.

**History**
- *Source Note: The provisions of this §353.1407 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1409** Patient Safety, Rights, and Protections {#sec-353.1409 omnilex-key=us-tx-regs-official--title-1--353.1409}

(a) Each comprehensive provider agency and staff member must adhere to the following rules regarding patient safety, rights, and protections even if the comprehensive provider agency is not a type of entity specified in the rule:

(1) 25 TAC §404.154 (relating to Rights of All Persons Receiving Mental Health Services);

(2) 25 TAC §404.165 (relating to Staff Member Training in Rights of All Persons Receiving Mental Health Services);

(3) 25 TAC §412.312 (relating to Environment of Care and Safety);

(4) 25 TAC §412.313 (relating to Rights and Protection);

(5) 25 TAC §412.315 (relating to Medical Records System);

(6) 25 TAC Chapter 415 (relating to Provider Clinical Responsibilities--Mental Health Services), Subchapter F (relating to Interventions in Mental Health Services); and

(7) 40 TAC §711.201 (relating to What is Your Duty to Report If You Are a Direct Provider or Service Provider?).

(b) A comprehensive provider agency must ensure effective communication with each individual and LAR, if applicable, in an understandable format as appropriate to meet the needs of each individual, which may require the use of:

(1) interpretative services;

(2) translated materials; or

(3) staff who can effectively respond to the cultural and language needs of an individual and LAR, if applicable.

(c) A comprehensive provider agency must obtain a criminal history background check on each staff member and applicant to whom an offer of employment is made if the responsibilities of the position include personal contact with an individual receiving services, in order to ensure that individuals do not come in contact with, and are not provided services by, a staff member who has a conviction for any of the criminal offenses listed in Texas Health and Safety Code §250.006, or for any criminal offense that the comprehensive provider agency has determined to be a contraindication to employment.

**History**
- *Source Note: The provisions of this §353.1409 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1411** Access to Mental Health Services {#sec-353.1411 omnilex-key=us-tx-regs-official--title-1--353.1411}

(a) Telephone system access. A comprehensive provider agency must ensure the availability of a telephone system that allows individuals to contact the comprehensive provider agency through a toll-free number that must:

(1) be answered by a person without being answered by telephone answering equipment at least on business days during normal business hours, except:

(A) on national holidays;

(B) due to uncontrollable interruption of service; or

(C) with prior approval of HHSC;

(2) have sufficient staff to operate efficiently;

(3) collect, document, and store detailed information, including special needs information, on all telephone inquiries and calls;

(4) during times other than those described in paragraph (1) of this subsection, provide electronic call answering methods that:

(A) include an outgoing message providing a toll-free crisis hotline telephone number in languages relevant to the service area; and

(B) allows callers to leave a message; and

(5) return routine calls before the end of the next business day for all messages left during non-business hours.

(b) Crisis services access during non-business hours. The comprehensive provider agency must assist individuals in their care to access crisis services outside of business hours by documenting in each individual's recovery/treatment plan:

(1) how the individual will access emergency medical and psychiatric crisis services during non-business hours;

(2) a list of all crisis resources that are easily accessible to the individual; and

(3) the toll-free telephone number to access crisis services.

**History**
- *Source Note: The provisions of this §353.1411 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1413** Staff Member Competency {#sec-353.1413 omnilex-key=us-tx-regs-official--title-1--353.1413}

(a) Prior to providing services or accessing an individual's confidential information, the comprehensive provider agency must ensure that each staff member:

(1) can provide services within the scope of the staff member's license, job description, or contract specification;

(2) has completed required training modules as identified by HHSC; and

(3) has the following minimum competencies:

(A) an understanding of the nature of severe mental illness and serious emotional disturbances;

(B) an understanding of the developmental needs of an adult, child, or youth;

(C) the ability to interact appropriately with an individual who has a physical disability;

(D) the ability to respond to an individual's linguistic and cultural needs through knowledge of customs, beliefs, and values of various, racial, ethnic, religious, and social groups;

(E) identification of an individual experiencing a crisis and the process for accessing crisis services;

(F) knowledge of appropriate actions to take in managing a crisis;

(G) knowledge of available resources within the local community;

(H) an understanding of the dignity and rights of an individual, as described in 25 TAC §404.154 (relating to Rights of All Persons Receiving Mental Health Services) and 25 TAC §404.163 (relating to Communication of Rights to Individuals Receiving Mental Health Services);

(I) the ability to identify, prevent, and report abuse, neglect, and exploitation, in accordance with 40 TAC Chapter 705 (relating to Adult Protective Services) and Chapter 711 (relating to Investigations of Individuals Receiving Services from Certain Providers);

(J) knowledge of individual confidentiality and relevant state and federal laws affecting confidentiality of medical records, including Title 42 CFR Part 2;

(K) knowledge of professional ethics and standards of conduct;

(L) knowledge of proper documentation of services provided;

(M) understanding exposure control of blood borne pathogens; and

(N) the ability to respond to severe weather, disasters, and bioterrorism.

(b) For a staff member whose primary duties include assessment and service authorization, the comprehensive provider agency must ensure that the staff member has the ability to:

(1) complete the uniform assessment; and

(2) understand and apply the utilization management guidelines.

(c) For a staff member whose primary duties include individual service contacts and interactions, the comprehensive provider agency must ensure that the staff member has adequate knowledge of:

(1) cardiopulmonary resuscitation (CPR);

(2) first aid;

(3) safe management of verbally and physically aggressive behavior;

(4) use of assistive technology, such as communication devices, with individuals who are deaf or hard of hearing or have a physical disability;

(5) seizure assessment and response;

(6) infection control;

(7) how to recognize, report, and record side effects, contraindications, and drug interactions of psychoactive medication;

(8) assessment and intervention with children, youth, and families; and

(9) clinical specialties directly related to the services to be performed.

(d) A staff member who provides mental health targeted case management must also have:

(1) knowledge of strategies for advocating effectively on behalf of individuals;

(2) the ability to document the mental health targeted case management services described in §354.2655 of this title (relating to Case Management Services); and

(3) knowledge gained from the completion of training modules as identified by HHSC.

(e) A staff member who provides intensive case management, before providing services to children and youth, must complete training approved by HHSC on wraparound process planning and demonstrate understanding of wraparound process planning.

(f) A staff member who routinely provides or supervises the provision of mental health targeted intensive case management to a child or youth must receive training and demonstrate competency in the aspects of a child's or youth's growth and development (including physical, emotional cognitive, educational and social) and the treatment needs of a child or youth.

(g) Additional competencies for providers of mental health rehabilitative services.

(1) A comprehensive provider agency must ensure that a staff member who provides mental health rehabilitative services is trained in the rehabilitative practice techniques related to:

(A) medication training and support services;

(B) skills training and development; and

(C) psychosocial rehabilitation.

(2) A comprehensive provider agency must ensure that staff members who provide or supervise the provision of mental health rehabilitative services receive initial training in:

(A) the nature of serious mental illness and serious emotional disturbance;

(B) the concepts of recovery and resilience;

(C) the rehabilitative practice techniques found in curricula, program practices, and protocols;

(D) the prevalence of physical health risk factors; and

(E) other training modules as identified by HHSC.

**History**
- *Source Note: The provisions of this §353.1413 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1415** Staff Member Credentialing {#sec-353.1415 omnilex-key=us-tx-regs-official--title-1--353.1415}

(a) Qualified Mental Health Professional-Community Services (QMHP-CS). A staff member must meet at least one of three minimum requirements to be credentialed as a QMHP-CS:

(1) The staff member has at least a bachelor's degree from an accredited college or university and a minimum number of hours that is equivalent to a major in psychology, social work, medicine, nursing, rehabilitation, counseling, sociology, human growth and development, physician assistant, gerontology, special education, educational psychology, early childhood education, or early childhood intervention.

(2) The staff member is a registered nurse.

(3) The staff member is a Licensed Practitioner of the Healing Arts (LPHA).

(b) Community Services Specialist (CSSP). A staff member who, as of August 31, 2004, met the criteria set forth in 25 TAC §412.303 (relating to Definitions).

(c) Peer Provider. The minimum requirements to credential a staff member as a peer provider are that the staff member has:

(1) a high school diploma or high school equivalency certificate issued in accordance with the law of the issuing state;

(2) at least one cumulative year of receiving mental health services; and

(3) demonstrated competency in the provision and documentation of mental health rehabilitative services, supported employment, or supported housing.

(d) Certified Family Partners (CFPs). The minimum requirements to credential a staff member as a CFP include verifying that the staff member:

(1) is 18 years of age or older;

(2) has a high school diploma or high school equivalency certificate issued in accordance with the law of the issuing state;

(3) has at least one year of personal experience as a parent or LAR raising a child or youth with serious emotional disturbance or mental illness;

(4) has at least one year of personal experience as a parent or LAR navigating a child-service system (e.g., mental health, juvenile justice, social security, or special education); and

(5) has successfully completed and passed the HHSC-approved certification process.

**History**
- *Source Note: The provisions of this §353.1415 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1417** Comprehensive Provider Agency Requirements for Staff Member Credentialing and Appeals {#sec-353.1417 omnilex-key=us-tx-regs-official--title-1--353.1417}

(a) A comprehensive provider agency must:

(1) justify in writing and document in a staff member's personnel file support of the staff member's qualifications to provide mental health targeted case management and mental health rehabilitative services based on credentialing requirements listed in §353.1415 of this division (relating to Staff Member Credentialing); and

(2) regularly monitor each staff member's demonstrated competency throughout the staff member's tenure.

(b) A comprehensive provider agency must:

(1) credential each staff member in a timely fashion; and

(2) have a process for staff members to appeal credentialing decisions.

**History**
- *Source Note: The provisions of this §353.1417 adopted to be effective October 17, 2018, 43 TexReg 6816.*

##### **1 Tex. Admin. Code § 353.1419** Supervision Requirements {#sec-353.1419 omnilex-key=us-tx-regs-official--title-1--353.1419}

(a) Policies and procedures. The comprehensive provider agency must develop and implement written policies and procedures for supervision of all applicable levels of staff members providing services to individuals.

(b) Licensed staff member supervision. All licensed staff members must be supervised in accordance with applicable law and rules.

(c) Clinical supervision.

(1) Clinical supervision must be provided by an LPHA or a QMHP-CS.

(2) The supervising LPHA or QMHP-CS must conduct at least monthly documented meetings with each staff member being supervised.

(3) For staff members providing mental health rehabilitative services, the supervising LPHA or QMHP-CS must be an employee of the comprehensive provider agency and conduct a documented observation of the staff member providing mental health rehabilitative services at a frequency determined by the supervisor based on the staff member's skill level.

(4) For staff members providing mental health targeted case management, the supervising QMHP-CS must:

(A) be an employee of the comprehensive provider agency;

(B) demonstrate competency in mental health targeted case management evidenced-based practices; and

(C) demonstrate competencies outlined in §353.1413 of this subchapter (relating to Staff Member Competency).

(d) QMHP-CS supervision. A QMHP-CS's designated clinical duties must be clinically supervised by:

(1) a QMHP-CS; or

(2) an LPHA if the QMHP-CS is clinically supervising another QMHP-CS for the provision of mental health targeted case management and mental health rehabilitative services.

(e) CSSP supervision. A CSSP's designated clinical duties must be clinically supervised by a QMHP-CS. The CSSP must have access to clinical consultation with an LPHA when necessary.

(f) CFP supervision. A CFP must be directly supervised by a QMHP-CS who has at least one year's experience in the HHSC-approved recovery and resilience protocol.

(g) Peer provider supervision.

(1) A peer provider's designated clinical duties must be under the direct clinical supervision of an LPHA.

(2) The supervising LPHA must conduct at least monthly documented meetings with each peer provider being supervised.

(3) The supervising LPHA must conduct and document an additional monthly observation of each peer provider providing mental health rehabilitative services.

(h) Peer review. The comprehensive provider agency must implement a peer review process for licensed staff members that:

(1) promotes sound clinical practice consistent with the HHSC-approved resiliency and recovery protocol;

(2) promotes professional growth; and

(3) complies with applicable state laws and rules.

(i) Documentation. All clinical supervision must be documented.

**History**
- *Source Note: The provisions of this §353.1419 adopted to be effective October 17, 2018, 43 TexReg 6816.*

#### **Subchapter Q** PROCESS TO RECOUP CERTAIN OVERPAYMENTS

##### **1 Tex. Admin. Code § 353.1451** Purpose and Authority {#sec-353.1451 omnilex-key=us-tx-regs-official--title-1--353.1451}

The purpose of this subchapter is to describe the due process a managed care organization (MCO) must give to recoup an overpayment related to an electronic visit verification visit transaction in accordance with Texas Government Code §544.0503 and the due process an MCO must give to recoup an overpayment related to a determination of fraud or abuse in accordance with Texas Government Code §544.0502.

**History**
- *Source Note: The provisions of this §353.1451 adopted to
be effective February 7, 2022, 47 TexReg 496; amended to be effective
April 1, 2025, 50 TexReg 823.*

##### **1 Tex. Admin. Code § 353.1452** Definitions {#sec-353.1452 omnilex-key=us-tx-regs-official--title-1--353.1452}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Abuse--This term has the meaning set forth in §371.1 of this title (relating to Definitions).

(2) EVV visit transaction--Electronic visit verification visit transaction. This term has the meaning set forth in §354.4003 of this title (relating to Definitions).

(3) FMSA--Financial management services agency. An entity that contracts with a managed care organization to provide financial management services to a consumer directed services employer as described in Title 40, Texas Administrative Code, Chapter 41 (relating to Consumer Directed Services Option).

(4) Fraud--This term has the meaning set forth in §371.1 of this title.

**History**
- *Source Note: The provisions of this §353.1452 adopted to be effective February 7, 2022, 47 TexReg 496.*

##### **1 Tex. Admin. Code § 353.1453** Due Process Procedures to Recoup an Overpayment Related to an EVV Visit Transaction that is not Fraud or Abuse and Limitation on Audit Period {#sec-353.1453 omnilex-key=us-tx-regs-official--title-1--353.1453}

(a) In an audit of a provider or FMSA conducted by a managed care organization (MCO), the MCO must limit the review of EVV visit transactions to those that occurred during the 24 months prior to the audit.

(b) If, based on an audit or investigation of a provider or FMSA, an MCO identifies a deficiency related to an EVV visit transaction that is not fraud or abuse and the MCO decides to recoup an overpayment because of the deficiency, the MCO must give the provider or FMSA written notice of the MCO's intent to recoup overpayments not later than the 30th day after the date the audit or investigation is completed.

(c) An MCO must include the following in the written notice required by subsection (b) of this section:

(1) a description of the basis for the intended recoupment;

(2) if the basis of the intended recoupment is an EVV visit transaction, the specific EVV visit transaction and associated claim that are the basis of the intended recoupment;

(3) if the basis of the intended recoupment is a missing EVV visit transaction, the claim for which there is no associated EVV visit transaction;

(4) that the MCO must receive a response to the notice from the provider or FMSA no later than the 30th day after the date the provider or FMSA receives the written notice, if the provider or FMSA intends to respond;

(5) the specific number of days allowed to correct and explain the deficiency before the MCO begins any efforts to collect overpayments, which must be no fewer than 60 days from the notice date;

(6) the process by which the provider or FMSA should communicate with and send information to the MCO about the EVV visit transactions that are the basis of the intended recoupment;

(7) the provider's or FMSA's option to seek an informal resolution with the MCO of the intended recoupment; and

(8) the MCO's process for the provider or FMSA to appeal the intended recoupment.

(d) A corrected deficiency is one that a provider or FMSA makes by doing one or both of the following:

(1) performing visit maintenance to correct an EVV visit transaction in accordance with HHSC EVV policy; or

(2) correcting and resubmitting a claim in accordance with MCO policies and procedures.

(e) An MCO may recoup an overpayment only if a provider or FMSA:

(1) does not correct the deficiency and does not appeal the alleged overpayment; or

(2) appeals the alleged overpayment and the final decision from the appeal is favorable to the MCO.

(f) If an MCO determines that a deficiency related to an EVV visit transaction is fraud or abuse, the MCO must comply with §353.1454 of this subchapter (relating to Due Process Procedures to Recoup an Overpayment Because of a Discovery of Fraud or Abuse).

**History**
- *Source Note: The provisions of this §353.1453 adopted to be effective February 7, 2022, 47 TexReg 496.*

##### **1 Tex. Admin. Code § 353.1454** Due Process Procedures to Recoup an Overpayment Because of a Discovery of Fraud or Abuse {#sec-353.1454 omnilex-key=us-tx-regs-official--title-1--353.1454}

(a) If a managed care organization (MCO) decides to recoup an overpayment from a provider or FMSA because of a discovery of fraud or abuse as permitted by §353.505 of this chapter (relating to Recovery of Funds), the MCO must have due process procedures that include the following:

(1) written notice to the provider or FMSA of the MCO's intent to recoup overpayments that includes the following:

(A) a description of the basis for the intended recoupment;

(B) the specific claims that are the basis of the intended recoupment;

(C) the process by which the provider or FMSA should send information to the MCO about claims that are the basis of the intended recoupment;

(D) the provider's or FMSA's option to seek an informal resolution with the MCO of the intended recoupment; and

(E) the MCO's process for the provider or FMSA to appeal the intended recoupment;

(2) a process for the provider or FMSA to seek informal resolution; and

(3) a process for the provider or FMSA to appeal the intended recoupment.

(b) An MCO may recoup an overpayment only if a provider or FMSA:

(1) does not appeal the alleged overpayment; or

(2) appeals the alleged overpayment and the final decision from the appeal is favorable to the MCO.

**History**
- *Source Note: The provisions of this §353.1454 adopted to be effective February 7, 2022, 47 TexReg 496.*

#### **Subchapter R** TELECOMMUNICATIONS IN MANAGED CARE SERVICE COORDINATION AND ASSESSMENTS

##### **1 Tex. Admin. Code § 353.1501** Purpose {#sec-353.1501 omnilex-key=us-tx-regs-official--title-1--353.1501}

This subchapter establishes requirements for the use of telecommunications in Medicaid managed care for service coordination and assessments conducted by managed care organizations (MCOs) contracted with the Texas Health and Human Services Commission. Medicaid MCOs must be fully compliant with the rules contained in this subchapter no later than July 1, 2023.

**History**
- *Source Note: The provisions of this §353.1501 adopted to be effective June 8, 2023, 48 TexReg 2837.*

##### **1 Tex. Admin. Code § 353.1502** Definitions {#sec-353.1502 omnilex-key=us-tx-regs-official--title-1--353.1502}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Assessments--Managed care organization (MCO) evaluation of a member's medical and functional service needs, including community-based long-term services and supports, behavioral health services, therapies (e.g., physical, occupational, speech), and nursing services. This includes the MCO's completion of program-specific instruments and forms.

(2) Audio-only--Synchronous interactive, two-way audio communication that uses only sound and that meets the privacy requirements of the Health Insurance Portability and Accountability Act. Audio-only includes the use of telephonic communication. Audio-only does not include face-to-face communication.

(3) Audio-visual--Synchronous interactive, two-way audio and video communication that conforms to privacy requirements under the Health Insurance Portability and Accountability Act. Audio-visual does not include audio-only or in-person communication.

(4) C.F.R.--Code of Federal Regulations.

(5) Change in condition--A significant change in a member's health, caregiver support, or functional status that will not normally resolve itself without further intervention and requires review of and revision to the member's current service plan or individual service plan.

(6) Community-based long-term services and supports (LTSS)--Services provided to a qualified member in the member's home or another community-based setting necessary to allow the member to remain in the most integrated setting possible. Community-based LTSS includes Medicaid state plan services available to all members, as well as services available to members who qualify for the Home and Community Based Services (HCBS) Program or Medicaid 1915(c) waiver programs, including the STAR+PLUS Home and Community-Based Services (HCBS) Program and the Medically Dependent Children Program. Community-based LTSS is available to both HCBS -eligible and non-HCBS eligible members. Community-based LTSS in Medicaid managed care varies by program model.

(7) Community First Choice (CFC)--A Medicaid state plan benefit described in 1 TAC Chapter 354, Subchapter A, Division 27 (relating to Community First Choice).

(8) Covered services--Unless a service or item is specifically excluded under the terms of the state plan, a federal waiver, a managed care services contract, or an amendment to any of these, the phrase "covered services" means all health care, long term services and supports, nonemergency medical transportation services, or dental services or items that the MCO must arrange to provide and pay for on a member's behalf under the terms of the contract executed between the MCO and the Texas Health and Human Services Commission, including:

(A) all services or items comprising "medical assistance" as defined in Human Resources Code §32.003; and

(B) all value-added services under such contract.

(9) Declared state of disaster--A State of Disaster declared by the governor in accordance with Texas Government Code §418.014.

(10) Face-to-face--In-person or audio-visual communication that meets the requirements of the Health Insurance Portability and Accountability Act. Face-to-face does not include audio-only communication.

(11) Functionally necessary covered services--Community-based long-term services and supports provided to assist members with activities of daily living based on a functional assessment of the member's activities of daily living and a determination of the amount of supplemental supports necessary for the member to remain independent or in the most integrated setting.

(12) Healthcare service plan--An individualized plan developed with and for a member with special healthcare needs in the STAR Health program. The healthcare service plan includes the following:

(A) the member's history;

(B) a summary of current medical and social needs and concerns;

(C) short and long-term needs and goals; and

(D) a treatment plan to address the member's physical, psychological, and emotional healthcare problems and needs, including:

(i) a list of required services;

(ii) the frequency of each service;

(iii) a description of who will provide each service; and

(iv) for a member in the Early Childhood Intervention program, the individual family service plan.

(13) HHSC--The Texas Health and Human Services Commission or its designee.

(14) HIPAA--Health Insurance Portability and Accountability Act. Collectively, the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. §§1320d et seq., and regulations adopted under that act, as modified by the Health Information Technology for Economic and Clinical Health Act (HITECH) (P.L. 111-105), and regulations adopted under that act at 45 CFR Parts 160 and 164.

(15) Individual service plan (ISP)--An individualized and person-centered plan in which a member enrolled in the STAR Kids, STAR Health or STAR+PLUS HCBS program operated by an MCO, with assistance as needed, identifies and documents the member's preferences, strengths, and health and wellness needs in order to develop short term objectives and action steps to ensure personal outcomes are achieved within the most integrated setting by using identified supports and services. The ISP is supported by the results of a member's program-specific assessment and must meet the requirements of 42 C.F.R. §441.301.

(16) Information technology--Includes text, email, fax, secure transmission of clinical information, and HIPAA-compliant telecommunication tools such as health plan websites where a member or the member's legally authorized representative can access the member's healthcare information, including service plans.

(17) In-person (or in person)--Within the physical presence of another person. In-person or in person does not include audio-visual or audio-only communication.

(18) Legally authorized representative (LAR)--A person authorized by law to act on behalf of an individual with regard to a matter described in this subchapter, and may, depending on the circumstances, include a parent, guardian, or managing conservator of a minor, or the guardian of an adult, or a representative designated pursuant to 42 C.F.R. §435.923.

(19) Managed care organization (MCO)--An entity licensed and approved by the Texas Department of Insurance with which HHSC contracts to provide Medicaid services and that complies with Chapter 353 of this title (relating to Medicaid Managed Care).

(20) Medical consenter--The person who may consent to medical care for a member under Texas Family Code Chapter 266.

(21) Medically Dependent Children Program (MDCP)--A 1915(c) waiver program that provides community-based services to assist Medicaid beneficiaries under age 21 to live in the community and avoid institutionalization.

(22) Medically necessary--Has the meaning as defined in §353.2 of this chapter (relating to Definitions).

(23) Medical Necessity Level of Care (MN/LOC)--An assessment instrument used to determine medical necessity for a nursing facility as defined by 26 TAC §554.2601. An MN/LOC is required for STAR+PLUS HCBS Program and CFC eligibility.

(24) Member--A person who is eligible for benefits under Medicaid, is in a Medicaid eligibility category included in the Medicaid managed care program, and is enrolled in a Medicaid MCO.

(25) Minimum data set (MDS)--Has the meaning as defined in 26 TAC §554.101.

(26) Nursing facility--An entity that provides organized and structured nursing care and services, and is subject to licensure under Texas Health and Safety Code, Chapter 242.

(27) Nursing facility level of care--The determination that the level of care required to adequately serve a member is at or above the level of care provided by a nursing facility.

(28) Person-centered care--An approach to care that focuses on members as individuals and supports caregivers working most closely with members. It involves a continual process of listening, testing new approaches, and changing routines and organizational approaches in an effort to individualize and de-institutionalize the care environment.

(29) Resident Assessment Instrument (RAI)--Has the meaning as defined in 26 TAC §554.101.

(30) Resource Utilization Group (RUG)--A categorization method, consisting of multiple categories based on the minimum data set core elements in a resident assessment instrument, that is used to determine a recipient's service and care requirements for a nursing facility. A RUG determination is necessary for MDCP and the STAR+PLUS HCBS Program eligibility because these programs require a nursing facility level of care.

(31) Service coordination--A specialized care management service that is performed or arranged by the MCO to identify needs, including physical health, mental health services and long term support services, facilitate development of a service plan or individualized service plan to address those identified needs, and coordination of services among the member's primary care provider, specialty providers, and non-medical providers to ensure timely access to covered services, non-capitated services, and community services.

(32) Service coordinator--The person with primary responsibility for providing service coordination to Medicaid managed care members.

(33) Service plan (SP)--An individualized and person-centered plan in which a member, with assistance as needed, identifies and documents the member's preferences, strengths, and needs in order to develop short-term objectives and action steps to ensure personal outcomes are achieved within the most integrated setting by using identified supports and services. The service plan is supported by the results of the member's program-specific assessment. In STAR+PLUS, a service plan applies to members who are not enrolled in the STAR+PLUS HCBS Program.

(34) STAR+PLUS Home and Community-Based Services (HCBS) Program--The program that provides person-centered care services that are delivered in the home or in a community setting, as authorized through a federal waiver under §1115 of the Social Security Act, to qualified Medicaid-eligible clients who are age 21 or older, as cost-effective alternatives to institutional care in nursing facilities.

(35) Telecommunications--An exchange of information by electronic and electrical means.

(36) Telephonic--Audio-only communication using a telephone. Telephonic communication does not include audio-visual communication.

(37) Verbal consent--The spoken agreement of a member, a member's legally authorized representative, or a member's medical consenter.

**History**
- *Source Note: The provisions of this §353.1502 adopted
to be effective June 8, 2023, 48 TexReg 2837; amended to be effective
April 14, 2025, 50 TexReg 2375.*

##### **1 Tex. Admin. Code § 353.1503** Use of Telecommunications in Assessments {#sec-353.1503 omnilex-key=us-tx-regs-official--title-1--353.1503}

(a) STAR+PLUS.

(1) STAR+PLUS managed care organizations (MCOs) must conduct initial assessments and annual reassessments using HHSC-developed tools for STAR+PLUS HCBS Program eligibility in-person.

(2) STAR+PLUS MCOs must conduct all initial and annual assessments using HHSC-developed tools for functionally necessary covered services such as personal assistance services, Community First Choice services, and day activity and health services, in -person.

(3) Change in condition assessments that require or potentially require a change in the Resource Utilization Group (RUG) level must be conducted in-person.

(4) MCOs may offer to STAR+PLUS members a choice of audio-visual communication in place of in-person change in condition assessments, as long as the assessment does not require or potentially require a change in the RUG level.

(A) When an MCO conducts a change in condition assessment using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) If verbal consent for audio-visual communication is not received, the MCO must use in-person communication.

(C) The MCO must inform members who utilize audio-visual communication for change in condition assessments that the member's services will be subject to the following:

(i) The MCO must monitor services for fraud, waste, and abuse.

(ii) The MCO must determine whether additional social services or supports are needed.

(iii) The MCO must ensure that verbal consent to use telecommunications is documented in writing.

(5) A STAR+PLUS MCO may not conduct an initial assessment, annual reassessment, or change in condition assessment without the in-person presence of the member.

(6) During a declared state of disaster, HHSC may issue direction to STAR+PLUS MCOs regarding whether initial, annual renewal, or change in condition assessments may be conducted through audio-visual or audio-only communication for STAR+PLUS members who reside in the area subject to the declared state of disaster.

(7) STAR+PLUS MCOs must adhere to §353.1153 of this chapter (relating to STAR+PLUS Home and Community Based Services (HCBS) Program) for STAR+PLUS assessments and service planning, and §353.1(c) of this chapter (relating to Purpose) regarding compliance with all terms of the contract with HHSC.

(8) For limited circumstances, STAR+PLUS MCOs may submit, in a manner and format prescribed by HHSC, an exceptions policy for required in-person assessments for approval by HHSC. The policy must be developed by the MCO's clinical staff, such as the Chief Medical Director or the Director's designee.

(b) STAR Kids.

(1) The STAR Kids MCO must administer the initial assessment and annual reassessments using the HHSC-developed STAR Kids assessment tool in-person.

(2) Change in condition assessments that require or potentially require a change in the RUG level must be conducted in-person.

(3) MCOs may offer STAR Kids members a choice of audio-visual communication in place of in-person change in condition assessments, as long as the assessment does not require or potentially require a change in the RUG level.

(A) When an MCO conducts a change in condition assessment using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) If verbal consent for audio-visual communication is not received, the MCO must use in-person communication.

(C) The MCO must inform members who utilize audio-visual communication for change in condition assessments that the member's services will be subject to the following:

(i) The MCO must monitor services for fraud, waste, and abuse.

(ii) The MCO must determine whether additional social services or supports are needed.

(iii) The MCO must ensure that verbal consent to use telecommunications is documented in writing.

(4) A STAR Kids MCO may not conduct an assessment without the in-person presence of the member.

(5) During a declared state of disaster, HHSC may issue direction to STAR Kids MCOs regarding whether initial, annual renewal, or change in condition assessments may be conducted through audio-visual or audio-only communication for STAR Kids members who reside in the area subject to the declared state of disaster.

(6) STAR Kids MCOs must adhere to §353.1155 of this chapter (relating to Medically Dependent Children Program) for assessments and service planning, and §353.1(c) of this chapter regarding compliance with all terms of the contract with HHSC.

(7) For limited circumstances, STAR Kids MCOs may submit, in a manner and format prescribed by HHSC, an exceptions policy for required in-person assessments for approval by HHSC. The policy must be developed by the MCO's clinical staff, such as the Chief Medical Director or the Director's designee.

(c) STAR Health.

(1) The STAR Health MCO must administer the HHSC-developed assessment tool for initial Medically Dependent Children Program (MDCP) eligibility and annual reassessments in -person.

(2) The STAR Health MCO must conduct all initial and annual reassessments using HHSC-developed tools for functionally necessary covered services such as personal assistance services, personal care services, and Community First Choice services, in -person.

(3) Change in condition assessments that require or potentially require a change in the RUG level must be conducted in-person.

(4) MCOs may offer STAR Health members a choice of audio-visual communication in place of in-person change in condition assessments, as long as the assessment does not require or potentially require a change in the RUG level.

(A) When an MCO conducts a change in condition assessment using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) If verbal consent for audio-visual communication is not received, the MCO must use in-person communication.

(C) The MCO must inform members who utilize audio-visual communication for change in condition assessments that the member's services will be subject to the following:

(i) The MCO must monitor services for fraud, waste, and abuse.

(ii) The MCO must determine whether additional social services or supports are needed.

(iii) The MCO must ensure that verbal consent to use telecommunications is documented in writing.

(5) A STAR Health MCO may not conduct an assessment without the in-person presence of the member.

(6) During a declared state of disaster, HHSC may issue direction to STAR Health MCOs regarding whether initial, annual renewal, or change in condition assessments may be conducted through audio-visual or audio-only communication for STAR Health members who reside in the area subject to the declared state of disaster.

(7) A STAR Health MCO must adhere to §353.1155 of this chapter for MDCP assessments and service planning, and §353.1(c) of this chapter regarding compliance with all terms of the contract with HHSC.

(8) For limited circumstances, a STAR Health MCO may submit, in a manner and format prescribed by HHSC, an exceptions policy for required in-person assessments for approval by HHSC. The policy must be developed by the MCO's clinical staff, such as the Chief Medical Director or the Director's designee.

**History**
- *Source Note: The provisions of this §353.1503 adopted to be effective June 8, 2023, 48 TexReg 2837.*

##### **1 Tex. Admin. Code § 353.1504** Use of Telecommunications in Service Coordination {#sec-353.1504 omnilex-key=us-tx-regs-official--title-1--353.1504}

(a) STAR+PLUS.

(1) Managed care organizations (MCOs) must ensure all level 1 and 2 members receive at least one in-person service coordination visit per year.

(2) An in-person assessment satisfies the annual in-person service coordination visit requirement for level 1 and 2 members.

(3) MCOs may offer level 1 and 2 members in STAR+PLUS a choice of audio-visual communication for service coordination in place of an in-person visit if no assessment is occurring.

(A) When an MCO conducts service coordination using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) If verbal consent for audio-visual communication is not received, the MCO must use in-person communication.

(C) The MCO must inform members who utilize audio-visual communication for service coordination that the member's services will be subject to the following:

(i) the MCO must monitor services for fraud, waste, and abuse;

(ii) the MCO must determine whether additional social services or supports are needed; and

(iii) the MCO must ensure that verbal consent to use telecommunications is documented in writing.

(4) During a declared state of disaster, HHSC may issue direction to MCOs regarding whether service coordination required to be conducted using face-to-face communication may be conducted through audio-only communication.

(5) MCOs may offer level 3 members in STAR+PLUS a choice of in-person, audio-visual, or audio-only communication for service coordination.

(6) Nursing facility residents must have at least one in-person service coordination visit per year for service planning purposes.

(7) STAR+PLUS MCOs must conduct nursing facility discharge planning visits in-person, including when a member is transitioning to the STAR+PLUS HCBS Program. The in-person nursing facility discharge planning visit may satisfy the requirement for the in-person STAR+PLUS HCBS initial assessment when a nursing facility member is transitioning to the STAR+PLUS HCBS Program. The requirement to conduct the in-person STAR+PLUS HCBS initial assessment is satisfied during the in-person nursing facility discharge planning visit if the MCO:

(A) uses the member's valid Minimum Data Set (MDS) assessment to gather the information necessary to complete the STAR+PLUS HCBS individual service plan; or

(B) conducts a Medical Necessity and Level of Care assessment if the member does not have a valid MDS or in lieu of the member's valid MDS to gather the information necessary to complete the STAR+PLUS HCBS individual service plan.

(8) MCOs must provide service coordination in accordance with §353.609 of this chapter (relating to Service Coordination).

(b) STAR Kids.

(1) MCOs must ensure all members receive at least one in-person service coordination visit per year.

(2) An in-person assessment using the HHSC-developed STAR Kids assessment tool satisfies the annual in-person service coordination visit requirement.

(3) MCOs may offer STAR Kids members a choice of audio-visual communication for service coordination in place of in-person service coordination visits if no assessment is occurring.

(A) When an MCO conducts service coordination using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) If verbal consent for audio-visual communication is not received, the MCO must use in-person communication.

(C) The MCO must inform members who utilize audio-visual communication for service coordination that the member's services will be subject to the following:

(i) the MCO must monitor services for fraud, waste, and abuse;

(ii) the MCO must determine whether additional social services or supports are needed; and

(iii) the MCO must ensure that verbal consent to use telecommunications is documented in writing.

(4) During a declared state of disaster, HHSC may issue direction to MCOs regarding whether service coordination required to be conducted using face-to-face communication may be conducted through audio-only communication.

(5) STAR Kids MCOs must provide service coordination in accordance with §353.1205 of this chapter (relating to Service Coordination).

(c) STAR Health.

(1) The MCO must ensure all members receive at least one in-person service coordination visit per year.

(2) The MCO must ensure that the service coordinator for a Medically Dependent Children Program member continues to make required contacts with the member and the member's medical consenter to ensure the member's needs are met.

(3) The MCO may offer members or the member's medical consenter a choice of using audio-visual or telephonic communication to conduct a service coordination visit in place of conducting the visit in-person if an assessment is not conducted during the visit.

(A) When an MCO conducts service coordination using audio-visual communication, verbal consent must be obtained and documented, and a HIPAA-compliant audio-visual communication product must be used.

(B) The MCO must inform members who utilize audio-visual or telephonic communication for service coordination that the member's services will be subject to the following:

(i) the MCO must monitor services for fraud, waste, and abuse;

(ii) the MCO must determine whether additional social services or supports are needed; and

(iii) the MCO must ensure that verbal consent to use telecommunications is documented in writing.

(C) During a declared state of disaster, HHSC may issue direction to the MCO regarding whether service coordination required to be conducted using face-to-face communication may be conducted through audio-only communication.

**History**
- *Source Note: The provisions of this §353.1504
adopted to be effective June 8, 2023, 48 TexReg 2837; amended to be
effective April 14, 2025, 50 TexReg 2375.*

##### **1 Tex. Admin. Code § 353.1505** Additional Requirements for Assessments and Service Coordination in STAR+PLUS and STAR Kids {#sec-353.1505 omnilex-key=us-tx-regs-official--title-1--353.1505}

(a) Information technology, including HIPAA-compliant text or email, may supplement audio-visual communication or in-person assessments, but may not be used as the sole means of conducting an assessment or service coordination visit.

(b) When a managed care organization (MCO) conducts an assessment or service coordination visit using telecommunications, the MCO must:

(1) monitor the health care services provided to the recipient for evidence of fraud, waste, and abuse;

(2) determine whether additional social services or supports are needed;

(3) document verbal consent to use telecommunications; and

(4) adhere to HIPAA, including the use of a HIPAA-compliant audio-visual communication product.

(c) HHSC may, on a case-by-case basis, require an MCO to discontinue telecommunications for the delivery of service coordination or assessments if HHSC determines that the discontinuation is in the best interest of the member.

(d) An MCO may conduct additional in-person visits with members, as determined by the MCO.

(e) MCOs must have a means to document verbal consent to the use of telecommunications for the delivery of assessments or service coordination.

(f) Where HHSC contractually requires face-to-face service coordination, the MCOs may conduct these visits in-person or using audio-visual means. Audio-visual may not be used if an assessment is being conducted during the service coordination visit, unless HHSC issues direction allowing audio-visual assessments during a declared state of disaster.

(g) MCOs may not leave blank fields in assessment tools, including tools to evaluate home and community-based service needs, nursing needs, and functional needs. Audio-visual is not an appropriate means of assessing a member if it results in blank fields.

(h) MCOs must explain to the member or the member's LAR what verbal consent means, and what the member or member's LAR is consenting to.

(1) The verbal consent for audio-visual communication in place of an in-person visit applies only to that visit.

(2) Verbal consent must be obtained for each service coordination visit conducted using audio-visual communication in place of an in-person visit.

(i) When telephonic service coordination visits are authorized by contract, these visits may continue to be provided by telephonic communication.

(j) An MCO must honor a member's request to receive service coordination or assessments in-person. Only when HHSC issues direction to MCOs during a declared state of disaster that service coordination or assessments must be conducted using audio-visual or audio-only communication due to the specific nature of a governor declared disaster, may an MCO deny a member's request for an in-person visit.

(k) MCOs may use their discretion on how to document verbal consent in a HIPAA-compliant manner. However, MCOs must be able to produce the documentation of verbal consent for audit and compliance purposes.

**History**
- *Source Note: The provisions of this §353.1505 adopted to be effective June 8, 2023, 48 TexReg 2837.*

##### **1 Tex. Admin. Code § 353.1506** Additional Requirements for Assessments and Service Coordination in STAR Health {#sec-353.1506 omnilex-key=us-tx-regs-official--title-1--353.1506}

(a) Information technology, including HIPAA-compliant text or email, may supplement audio-visual or in-person assessments, but may not be used as the sole means of conducting an assessment or service coordination visit.

(b) When a managed care organization (MCO) conducts an assessment or service coordination visit using telecommunications, the MCO must:

(1) monitor the health care services provided to the recipient for evidence of fraud, waste, and abuse;

(2) determine whether additional social services or supports are needed;

(3) document verbal consent to use telecommunications; and

(4) adhere to HIPAA, including the use of a HIPAA-compliant audio-visual communication product.

(c) HHSC may, on a case-by-case basis, require an MCO to discontinue telecommunications for the delivery of service coordination or assessments if HHSC determines that the discontinuation is in the best interest of the member.

(d) An MCO may conduct additional in-person visits with members, as determined by the MCO.

(e) MCOs must have a means to document verbal consent to the use of telecommunications for the delivery of assessments or service coordination.

(f) Audio-visual may not be used if an initial or annual assessment for the Medically Dependent Children Program or functionally necessary covered services is being conducted, unless HHSC issues direction allowing audio-visual assessments during a declared state of disaster.

(g) MCOs may not leave blank fields in assessment tools, including tools to evaluate home and community-based service needs, nursing needs, and functional needs. Audio-visual is not an appropriate means of assessing a member if it results in blank fields.

(h) MCOs must explain to the member or medical consenter what verbal consent means, and what the member or medical consenter is consenting to.

(1) The verbal consent for an audio-visual in place of an in-person visit applies only to that visit.

(2) Verbal consent must be obtained for each audio-visual service coordination visit conducted in place of an in-person visit.

(i) When telephonic screenings or service coordination visits are authorized by contract, these visits may continue to be provided by telephonic communication.

(j) An MCO must honor a member's request to receive service coordination or assessment in person. Only when HHSC issues direction to MCOs during a declared state of disaster that service coordination or assessments must be conducted using audio-visual or audio-only communication due to the specific nature of the disaster, may an MCO deny a member's request for in-person contact.

(k) MCOs may use discretion on how to document verbal consent in a HIPAA-compliant manner. However, MCOs must be able to produce the documentation of verbal consent for audit and compliance purposes.

**History**
- *Source Note: The provisions of this §353.1506 adopted to
be effective June 8, 2023, 48 TexReg 2837; amended to be effective
April 14, 2025, 50 TexReg 2375.*

### **Chapter 354** MEDICAID HEALTH SERVICES

#### **Subchapter B** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 354.1450** Audits of Medicaid Providers {#sec-354.1450 omnilex-key=us-tx-regs-official--title-1--354.1450}

(a) In this section, "provider" means an individual, firm, partnership, corporation, agency, association, institution, or other entity that is or was approved by HHSC to provide Medicaid under contract or provider agreement with HHSC.

(b) This section does not apply to a computerized audit conducted using the Medicaid Fraud Detection Audit System or an audit or investigation conducted by the Medicaid Fraud Control Unit of the Office of the Attorney General, the Office of the State Auditor, the Office of Inspector General, or the Office of Inspector General in the United States Department of Health and Human Services.

(c) Except as described in subsection (b) of this section, an agency auditing division or entity must:

(1) Notify the provider, and the provider's corporate headquarters, if the provider is a pharmacy that is incorporated, of the impending audit not later than the seventh day before the date the field audit portion of the audit begins;

(2) Limit the period covered by an audit to three years;

(3) Accommodate the provider's schedule to the greatest extent possible when scheduling the field audit portion of the audit;

(4) Conduct an entrance interview before beginning the field audit portion of the audit;

(5) Audit all providers of the same type under the same standards and parameters;

(6) Conduct the audit in accordance with generally accepted government auditing standards issued by the Comptroller General of the United States or other appropriate standards;

(7) Conduct an exit interview at the close of the field audit portion of the audit with the provider to review the agency's initial findings;

(8) At the exit interview, allow the provider to:

(A) Respond to questions by the agency;

(B) Comment, if the provider desires, on the initial findings of the agency; and

(C) Submit additional supporting documentation, for consideration, that meets the auditing standards required by paragraph (6) of this subsection, to correct a questioned cost, if there is no indication that the error or omission that resulted in the questioned cost demonstrates intent to commit fraud;

(9) Provide to the provider a preliminary audit report and a copy of any document used to support a proposed adjustment to the provider's cost report;

(10) Permit the provider to produce, for consideration, documentation to address any exception found during an audit not later than the 10th day after the date the field audit portion of the audit is completed;

(11) Deliver a draft audit report to the provider not later than the 60th day after the date the field audit portion of the audit is completed;

(12) Permit the provider to submit, for consideration, a written management response to the draft audit report or to informally appeal the findings in the draft audit report not later than the 30th day after the date the draft audit report is delivered to the provider. The informal appeal will consist of a desk review by the auditing division or entity; and

(13) Deliver the final audit report to the provider not later than the 180th day after the date the field audit portion of the audit is completed or the date on which a final decision is issued on an appeal made under subsection (d) of this section, whichever is later.

(d) Upon receipt of the final audit report specified in subsection (c)(13) of this section, the provider may request an informal, early review of a final audit report or an unfavorable audit finding by an HHSC ad hoc review panel without the need to obtain legal counsel. All recommendations of the ad hoc review panel are advisory in nature and are not binding on HHSC.

**History**
- *Source Note: The provisions of this §354.1450 adopted to be effective August 1, 2006, 31 TexReg 5799.*

##### **1 Tex. Admin. Code § 354.1451** Medicaid Recovery Audit Contractor Program {#sec-354.1451 omnilex-key=us-tx-regs-official--title-1--354.1451}

(a) Purpose. The Medicaid Recovery Audit Contractor (RAC) Program is established under §1902(a)(42)(B) of the Social Security Act (42 U.S.C. 1396a (a)(42)(B)) to review and identify underpayments and overpayments, and to recoup overpayments for items or services defined under the Medicaid State Plan or a waiver of the Medicaid State Plan.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context clearly indicates otherwise:

(1) HHSC--The Texas Health and Human Services Commission, the state Medicaid agency.

(2) HHS agency--One of the following health and human services agencies:

(A) Department of Aging and Disability Services (DADS).

(B) Department of Assistive and Rehabilitative Services (DARS).

(C) Department of Family and Protective Services (DFPS).

(D) Department of State Health Services (DSHS).

(3) Improper payment--An overpayment or an underpayment.

(4) Overpayment--An amount paid by HHSC or an HHS agency to a provider that is in excess of the amount that is allowable for services furnished under §1902 of the Social Security Act and its implementing regulations and policies, as defined by the Centers for Medicare & Medicaid Services (CMS), and that is required to be refunded under §1903 of the Social Security Act.

(5) Recovery audit contractor (RAC)--An eligible company or consultant contracted with HHSC to perform recovery audit services.

(6) Underpayment--An amount paid by HHSC or an HHS agency to a provider at a lesser amount due and payable for items or services furnished under §1902 of the Social Security Act and its implementing regulations and policies, as defined by CMS.

(c) Scope of audits.

(1) A RAC will review Medicaid claims submitted to HHSC by Medicaid providers for which payment has been made for any item or service defined under the Medicaid State Plan or a waiver of the Medicaid State Plan.

(2) The RAC will analyze Medicaid paid claims data to determine if services were provided based on federal and state policies and procedures in effect on the adjudication date for the claim date of service. The analysis includes review of medical documentation to determine if services were medically necessary.

(3) In conducting its audit review, the RAC will exclude claims reviewed or under review by the HHSC Office of Inspector General (OIG), or associated with any other audit already underway or completed, including other federal and state audits or reviews.

(4) The RAC will make referrals of suspected fraud and/or abuse, as defined in 42 CFR §455.2, to HHSC OIG. Any enforcement action by HHSC OIG will be conducted under Chapter 371, Subchapter G, of this title (relating to Legal Action Relating to Providers of Medical Assistance).

(d) Audit procedures.

(1) A RAC will provide notification in writing to providers of:

(A) audit policies and procedures;

(B) requests for medical documentation for selected claims;

(C) results of the audit review (underpayment, overpayment, or no findings), unless fraud is suspected; and

(D) the dispute resolution and appeals process.

(2) The RAC will accept medical documentation from providers via mail; electronic submission on CD, DVD, or other method of electronic submission allowed by the RAC; or by fax. All transmissions of documentation must be protected in such a manner to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and in a manner that is safe and secure.

(3) To identify improper payments, the RAC will review medical charts and documentation including:

(A) duplicate payments;

(B) pricing errors;

(C) payments for services not provided;

(D) payments for non-covered services; or

(E) any other errors resulting in improper payments.

(4) HHSC will recoup identified overpayments from providers and will refund identified underpayments to providers as a result of the audit review.

(e) Notice. A RAC will provide written notification to providers of the following during the course of the audit:

(1) audit review information (for example, audit name, audit description);

(2) potential improper payment;

(3) detailed reason for the potential improper payment; and

(4) appeal rights.

(f) Provider appeals. A provider has a right to appeal any adverse RAC determination using the following processes, as applicable:

(1) HHSC paid claims. For Medicaid claims processed and paid through the Texas Medicaid claims administrator on behalf of HHSC, the appeal will be processed through the Medicaid Program Appeals Procedures process under §354.2217 of this chapter (relating to Provider Appeals and Reviews).

(2) HHS agency paid claims. For Medicaid claims adjudicated by the Texas Medicaid claims administrator and paid by an HHS agency, or adjudicated and paid by an HHS agency, the appeals process for that HHS agency will be followed.

**History**
- *Source Note: The provisions of this §354.1451 adopted to be effective July 12, 2012, 37 TexReg 5114.*

##### **1 Tex. Admin. Code § 354.1452** Provider Marketing {#sec-354.1452 omnilex-key=us-tx-regs-official--title-1--354.1452}

(a) Prohibited marketing activities. A provider participating in the Medicaid or child health plan program, including a provider participating in the network of a managed care organization that contracts with the Health and Human Services Commission to provide services under the Medicaid or child health plan program, may not engage in any marketing activity, including any dissemination of material or other attempt to communicate, that:

(1) Involves unsolicited personal contact, including by door-to-door solicitation, solicitation at a child care facility or other type of facility, direct mail, or telephone, with a Medicaid client or a parent whose child is enrolled in the Medicaid or child health plan program;

(2) Is directed at the client or parent solely because the client or the parent's child is receiving benefits under the Medicaid or child health plan program; and

(3) Is intended to influence the client's or parent's choice of provider.

(b) Permissible marketing activities by providers participating in Medicaid or child health plan programs. Nothing in this rule prohibits a provider participating in the Medicaid or child health plan program from:

(1) Engaging in a marketing activity, including any dissemination of material or other attempt to communicate, that is intended to influence the choice of provider by a Medicaid client or a parent whose child is enrolled in the Medicaid program, if the marketing activity:

(A) Is conducted at a community-sponsored educational event, health fair, outreach activity, or other similar community or nonprofit event in which the provider participates and does not involve unsolicited personal contact or promotion of the provider's practice that is not used as part of health education; or

(B) Involves only the general dissemination of information, including by television, radio, newspaper, or billboard advertisement, and does not involve unsolicited personal contact;

(2) As permitted under the provider's contract, engaging in the dissemination of material or another attempt to communicate with a Medicaid client or a parent whose child is enrolled in the Medicaid program or child health plan program, including communication in person or by direct mail or telephone, for the purpose of:

(A) Providing an appointment reminder;

(B) Distributing promotional health materials;

(C) Providing information about the types of services offered by the provider; or

(D) Coordinating patient care; or

(3) Engaging in a marketing activity that has been submitted for review and obtained a notice of prior authorization from the Health and Human Services Commission under subsection (c) of this section.

(c) Review and prior authorization. At the provider's option, a provider participating in the Medicaid program may submit proposed marketing materials to the Health and Human Services Commission for review and prior authorization to ensure that the materials are in compliance with this rule. The Commission may grant or deny a provider's request for prior authorization.

**History**
- *Source Note: The provisions of this §354.1452 adopted to be effective July 6, 2014, 39 TexReg 4952.*

#### **Subchapter K** MEDICAID RECIPIENT UTILIZATION REVIEW AND CONTROL

##### **1 Tex. Admin. Code § 354.2401** Definitions {#sec-354.2401 omnilex-key=us-tx-regs-official--title-1--354.2401}

The following words and terms, when used in the sections under this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Abuse--Practices that are inconsistent with sound fiscal, business, or medical practices and that result in unnecessary program cost or in reimbursement for services that are not medically necessary, do not meet professionally recognized standards for health care, or do not meet standards required by contract, statute, regulation, previously sent interpretations of any of the items listed, or authorized governmental explanations of any of the foregoing.

(2) Conflicting--Incompatible, unsuitable for use together because of undesirable chemical or physiological effects. For example, the recipient may receive drugs and/or health care services which may be inadvisable in the presence of certain medical conditions or which conflict with the care ordered by another provider.

(3) Contraindicated--Condition or factor that indicates the inadvisability of a medical treatment or procedure.

(4) Designated Provider--A provider enrolled in the Texas Medicaid program that is not on payment review status; under administrative action, sanction, or investigation for failure to comply with Medicaid rules or acceptable Medicaid practices; or under sanction or inactive or other limited administrative status by a state licensing board or other regulatory entity. The designated provider oversees the Medicaid benefits or services provided to a recipient in lock-in status. A designated provider includes:

(A) a primary health care provider who provides and/or directs all medically necessary health care benefits or services for which the recipient is eligible. The primary health care provider may include a physician, physician group, dentist, dental home, advanced practice nurse, physician assistant, outpatient clinic, Rural Health Clinic, or Federally Qualified Health Center; or

(B) a pharmacy that monitors medications prescribed to a recipient in lock-in status for contraindicative, conflicting, duplicative, or excessive use and that ensures the recipient's use does not represent abuse, misuse, or fraud.

(5) Emergency medical condition--A medical condition (including emergency labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical care could result in:

(A) placing the patient's health in serious jeopardy;

(B) serious impairment to bodily functions;

(C) serious dysfunction of any bodily organ or part;

(D) serious disfigurement; or

(E) serious jeopardy to the health of the fetus of a pregnant Medicaid recipient.

(6) Emergency services--Covered inpatient and outpatient services that are furnished by a provider who is qualified to furnish such services under a Medicaid provider agreement and are services which are needed to evaluate or stabilize an emergency medical condition.

(7) Excessive Use or Overuse--Exceeding what is usual, medically necessary or customary use of Medicaid services and benefits. Also defined as, but not limited to, the following:

(A) receipt of Medicaid benefits or services from one or multiple providers of service in an amount, duration, or scope in excess of which would reasonably be expected to result in a medical or health benefit to the patient; or

(B) use exceeding the standards and criteria for utilization of outpatient drugs or products, as listed in the compendia and peer reviewed medical literature and/or criteria and standards approved by the Texas Medicaid Drug Utilization Review Board.

(8) Fraud--Any act that constitutes fraud under applicable federal or state law, including any intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to that person or some other person. Fraud may include any acts prohibited by the Texas Human Resources Code, Chapter 36, or Texas Penal Code, Chapter 35A. Fraudulent activities include, but are not limited to:

(A) lending or altering a Medicaid card for the purpose of obtaining Medicaid benefits or services for which a person is not legitimately entitled;

(B) falsely representing medical coverage;

(C) using the Medicaid Identification card of another or altering or duplicating Medicaid identification;

(D) furnishing incorrect eligibility or false information to a vendor to obtain treatment;

(E) possessing blank or forged prescription pads;

(F) forging, duplicating or altering a prescription;

(G) assisting providers in rendering services or defrauding the Medicaid program; or

(H) selling or trading, or attempting to sell or trade, drugs, products, or supplies acquired independently or through Medicaid that results in duplicative services.

(9) Lock-in--An action taken by the Health and Human Services Commission (HHSC) restricting a Medicaid recipient to a designated pharmacy or health care provider.

(10) Lock-in period--The effective time period of a lock-in measured in cumulative eligibility time frames of 36 months, 60 months, or lifetime. Eligibility time frames may or may not be contiguous.

(11) Misuse--To use incorrectly, misapply, or illegally use Medicaid benefits or services. To seek or obtain medical services from a number of like providers and in quantities that exceed the levels considered medically necessary by current medical practices, standards and policies.

(12) Recipient--Any individual who is deemed eligible to receive Medicaid benefits and services under the Texas Medicaid Program.

(13) Referrals--Complaint information regarding recipient use of Medicaid benefits or services supplied to HHSC for lock-in review. Sources may include, but are not limited to, providers, state agencies, law enforcement officials, Medicaid managed care organizations, or members of the general public. HHSC may make referrals to other state agencies and/or Medicaid managed care plans.

(14) Waste--Practices that a reasonably prudent person would deem careless or that would allow inefficient use of resources, items, or services.

**History**
- *Source Note: The provisions of this §354.2401 adopted to be effective April 2, 2000, 25 TexReg 2817; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4563; amended to be effective April 6, 2003, 28 TexReg 2738; amended to be effective April 2, 2013, 38 TexReg 2095.*

##### **1 Tex. Admin. Code § 354.2403** Monitoring and Review {#sec-354.2403 omnilex-key=us-tx-regs-official--title-1--354.2403}

(a) The Health and Human Services Commission (HHSC), in accordance with the Code of Federal Regulations, Chapter 42, §431.54(e), conducts a review and analysis of data and/or incoming referrals, such as referrals from medical providers, managed care organizations, state agencies, law enforcement officials, or members of the general public, to identify Texas Medicaid eligible recipients for lock-in.

(1) HHSC may impose a lock-in if it finds that:

(A) a recipient received duplicative, excessive, contraindicated, or conflicting health care services, including drugs; or

(B) a review indicates abuse, misuse or fraudulent actions related to Medicaid benefits and services.

(2) All Texas Medicaid eligible recipients are subject to lock-in regardless of age, program type, or Medicare eligibility.

(b) HHSC may continue the lock-in, change a designated provider(s), and/or take other interventions based on:

(1) utilization pattern(s) indicating excessive use or overuse;

(2) abuse, misuse, or fraud related to Medicaid services or benefits;

(3) non-compliance resulting in receipt of services or medications from one or more non-designated providers in the absence of a designated provider referral or emergency medical condition, including cash payment for services, or obtaining services through illicit methods that result in overutilization or duplicative medication or services;

(4) a designated provider's recommendation to continue the lock-in because the recipient demonstrated non-compliant behavior; or

(5) any change in designated provider due to the recipient's or provider's non-compliance.

(c) HHSC may terminate a recipient's lock-in status for:

(1) the lack of a designated provider accepting responsibility for the recipient; or

(2) evidence of medical necessity provided by the recipient or the designated provider.

(d) The recipient or designated provider may request a medical review of the lock-in at any time.

**History**
- *Source Note: The provisions of this §354.2403 adopted to be effective April 2, 2000, 25 TexReg 2817; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4563; amended to be effective April 6, 2003, 28 TexReg 2738; amended to be effective April 2, 2013, 38 TexReg 2095.*

##### **1 Tex. Admin. Code § 354.2405** Utilization Control {#sec-354.2405 omnilex-key=us-tx-regs-official--title-1--354.2405}

(a) The Health and Human Services Commission (HHSC) controls a recipient's inappropriate use of Medicaid benefits or services by restricting the recipient to a designated provider(s).

(b) HHSC will send a recipient written notification of intent to restrict the recipient to a designated provider. The notice will include a form allowing the recipient the opportunity to select a designated provider and will inform the recipient of the length of the lock-in period and the recipient's right to a hearing. HHSC will select a designated provider for the recipient if it does not receive the completed form within ten days from the date of the initial notice.

(c) HHSC assigns a lock-in period to a recipient. A recipient remains in lock-in status regardless of a change in address or eligibility program type. HHSC will review and determine whether to continue a recipient's lock-in status prior to the end of a lock-in period.

(1) A recipient who has never been in lock-in status will be assigned a 36-month lock-in period. If a recipient's Medicaid eligibility ends and reactivates during the 36-month lock-in period, then upon reenrollment in Medicaid, that recipient will be locked in for the remaining number of months in the original lock-in period.

(2) A recipient who has completed the 36-month lock-in period and is reinstated to lock-in status will be assigned a 60-month lock-in period. If a recipient's Medicaid eligibility ends or reactivates during the 60-month lock-in period, then upon reenrollment in Medicaid, that recipient will be locked in for the remaining number of months in the lock-in period.

(3) A recipient is assigned a lifetime lock-in period if the recipient:

(A) has completed the 60-month lock-in period;

(B) is arrested, indicted, or convicted of a crime relating to Medicaid fraud, or of a felony offense relating to controlled substances; or

(C) admits guilt of Medicaid fraud, or a felony offense related to controlled substances.

(d) A recipient may request a change of a designated provider(s) during a lock-in period.

(1) HHSC determines whether a change in the designated provider is required or warranted.

(2) A designated provider change that is not the result of a recipient's request during the course of the lock-in period does not require recipient approval.

(3) HHSC may change a designated provider for, but not limited to, the following reasons:

(A) a change of the recipient's residence from the geographic area of the designated provider(s);

(B) notice from the designated provider(s) that they will no longer serve as the designated provider;

(C) closure or relocation of a designated provider's office;

(D) death of the designated provider;

(E) disenrollment of the designated provider(s) from the Medicaid program;

(F) notice that the designated provider is under administrative action, sanction or investigation or failure to comply with Medicaid rules or acceptable Medicaid practice;

(G) notice that the designated provider is under sanction or other administrative actions by a state licensing board or other regulatory entity that prevents the provider from practicing;

(H) the primary health care provider may be overprescribing medication or services;

(I) the designated pharmacy provider is filling prescriptions from multiple providers other than the designated primary health care provider or a prescriber to whom the recipient was referred by the designated primary health care provider; or

(J) a change in the recipient's medical condition that the designated primary health care provider is unable to treat or refer to another provider.

(e) A change in the designated provider or Medicaid provider does not affect the status of the lock-in period unless the recipient was receiving prescriptions pursuant to subsection (d)(3)(H) or (I) of this section.

**History**
- *Source Note: The provisions of this §354.2405 adopted to be effective April 2, 2000, 25 TexReg 2817; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4563; amended to be effective April 6, 2003, 28 TexReg 2738; amended to be effective April 2, 2013, 38 TexReg 2095.*

##### **1 Tex. Admin. Code § 354.2407** Recipient Rights {#sec-354.2407 omnilex-key=us-tx-regs-official--title-1--354.2407}

(a) The Health and Human Services Commission (HHSC) gives a recipient timely and adequate notice of an action to assign the recipient to a designated provider and opportunity for a fair hearing. Hearings are conducted under Chapter 357, Subchapter A, of this title (relating to Uniform Fair Hearing Rules).

(1) The written notice to a recipient of the recipient's right to a hearing will be mailed at least ten calendar days before the lock-in period effective date.

(2) HHSC will grant a hearing if it receives a recipient's request for a hearing no later than:

(A) 90 calendar days from the date of the initial notice of intent to assign a designated provider; or

(B) 90 calendar days from the date of the notice of intent to continue a lock-in period.

(3) If a request for a hearing is received by the lock-in effective date, HHSC will not implement the lock-in status until the hearing has been held and a final decision rendered.

(4) If a request for a hearing is received after the lock-in effective date, the lock-in status will remain in effect until the hearing has been held and a final decision rendered that reverses the lock-in action.

(5) The recipient does not have the right to a fair hearing when the lock-in is the result of a misdemeanor or felony offense related to fraud and/or abuse of Medicaid benefits and/or services, or to controlled substances.

(6) During the lock-in period, the recipient is not entitled to a fair hearing for denial of either of the following requests:

(A) change in designated provider; or

(B) termination of the lock-in period.

(b) A lock-in recipient must have reasonable access to Medicaid services and benefits and must be able to receive emergency services for an emergency medical condition. A provider other than the designated providers may provide the emergency services. The emergency care provider must certify that the recipient required emergency services for an emergency medical condition.

**History**
- *Source Note: The provisions of this §354.2407 adopted to be effective April 2, 2000, 25 TexReg 2817; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4563; amended to be effective April 6, 2003, 28 TexReg 2738; amended to be effective April 2, 2013, 38 TexReg 2095.*

#### **Subchapter L** QUALITY IMPROVEMENT PROCESS FOR CLINICAL INITIATIVES

##### **1 Tex. Admin. Code § 354.2501** Definitions {#sec-354.2501 omnilex-key=us-tx-regs-official--title-1--354.2501}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Advisory committee--In this subchapter, refers to an existing advisory committee that provides guidance to the HHSC executive commissioner and the agency on matters related to the Medicaid program and any quality-related issue and policy.

(2) Authorized submitter--A member of the state legislature; the executive commissioner of HHSC; commissioners of DADS, DARS, DFPS, and DSHS; and chairs of the Medical Care Advisory Committee, the Physician Payment Advisory Committee, and the Electronic Health Information Exchange System Advisory Committee may submit suggestions of clinical initiatives.

(3) Children's Health Insurance Program (CHIP)--The Texas State CHIP that is established under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa, et seq.) and Chapter 62 of the Health and Safety Code.

(4) Clinical initiative--Any effort, project, intervention, or best practice currently being explored, tested, or examined to improve the quality of care for recipients of health care services provided by public or private insurers that can potentially be implemented under the Medicaid program.

(5) Approved clinical initiative--Suggested clinical initiative that has met preliminary review criteria and been determined to warrant further analysis.

(6) Clinical trial--A clinical trial is a type of research study conducted in the clinical setting that follows a pre-determined plan or protocol that compares one treatment against another. The treatment can be a new drug, a new invasive medical device, or care protocol on human subjects.

(7) Department of Aging and Disability Services (DADS)--The HHS agency that administers long-term services and supports for people who are aging and for people with intellectual and physical disabilities. DADS also licenses and regulates providers of these services and administers the state's Guardianship program.

(8) Department of Assistive and Rehabilitation Services (DARS)--The HHS agency that administers programs for people with disabilities and children who have developmental delays.

(9) Department of Family Protective Services (DFPS)--The HHS agency that works with communities to protect children, the elderly, and people with disabilities from abuse, neglect, and exploitation. It also works to protect the health and safety of children in daycare, as well as foster care and other types of 24-hour care. The agency conducts investigations, provides services and referrals, enforces regulation, and provides prevention programs.

(10) Department of State Health Services (DSHS)--The HHS agency that is the state's designated public health agency.

(11) Electronic Health Information Exchange System Advisory Committee--The committee established under §531.904, Human Resources Code.

(12) Full analysis--A complete analysis of a suggestion for a clinical initiative that has met all preliminary review criteria. The analysis is conducted to determine whether the clinical initiative will improve quality of care under Medicaid and is cost-effective to the state. The analysis includes all elements described under Analysis of Clinical Initiative.

(13) Texas Health and Human Services Commission (HHSC)--The single state agency that administers and oversees the Texas Medicaid program. HHSC is established by and its authority is described in Texas Government Code Chapter 521.

(14) Institution of higher education--As defined by §61.003, Education Code, is any public technical institute, public junior college, public senior college or university, medical or dental unit, public state college, or other agency of higher education as defined in this section.

(15) Internet website--HHSC designated website related to the quality improvement process required under this subchapter.

(16) Medicaid--The medical assistance program authorized and funded pursuant to Title XIX of the Social Security Act (42 U.S.C. §1396 et seq) and administered by HHSC.

(17) Medical Care Advisory Committee--The committee established under the authority of Title XIX of the Social Security Act, 42 CFR §431.12, and §32.022, Human Resource Code.

(18) Medicare--A federal system of health insurance for people over 65 years of age and for certain people younger than 65 years of age who have disabilities.

(19) Physician Payment Advisory Committee--The committee created under §32.022(d), Human Resources Code.

(20) Preliminary review--An administrative process that determines whether a suggestion for a clinical initiative warrants a full analysis.

(21) Quality improvement--A system to continuously examine, monitor, and revise processes and systems that support and improve administrative and clinical functions.

(22) State-operated health care programs--In this subchapter, refers to programs that are funded solely through state general funds and operated and administered under state laws and rules.

(23) Suggestions--Proposed clinical initiatives submitted by authorized individuals either in written or electronic form.

**History**
- *Source Note: The provisions of this §354.2501 adopted
to be effective January 1, 2014, 38 TexReg 9467; amended to be effective
April 1, 2025, 50 TexReg 825.*

##### **1 Tex. Admin. Code § 354.2503** Clinical Initiative Evaluation Process {#sec-354.2503 omnilex-key=us-tx-regs-official--title-1--354.2503}

(a) Clinical initiative evaluation process. This process consists of the submission, preliminary review, analysis, and approval of a clinical initiative.

(1) Authorized submitters may submit suggestions of clinical initiatives in written form sent via postal mail, in electronic form via email, or using the designated online form available via the HHSC Internet website required under this subchapter.

(2) Each suggestion for a clinical initiative will be submitted to the state Medicaid director.

(3) Designated HHSC staff will review each suggestion and determine if it warrants a full analysis. Suggestions selected for full analysis will be posted on HHSC Internet website for public comment within 30 days of receipt by the state Medicaid director.

(4) HHSC will determine the number of selected suggestions to undergo full analysis depending on available staff resources. If sufficient staff resources are available, the full analysis will be completed within 180 days of receipt of the suggestion by the state Medicaid director.

(5) HHSC staff will consult appropriate subject matter experts both internally and externally for determination of whether a clinical initiative suggestion warrants full analysis. Subject matter experts will also be consulted during full analysis and report development of the clinical initiative, if additional input is needed.

(b) Number of clinical initiatives selected for full analysis. HHSC is authorized by statute to determine the number of clinical initiatives that will receive full analysis. This determination will be based on staff resources and external contractor availability and whether a clinical initiative is already a Texas Medicaid benefit.

(c) Preliminary review of clinical initiatives suggestions. HHSC staff will consult with the appropriate advisory committees to determine whether a clinical initiative suggestion warrants full analysis. A suggestion of a clinical initiative will be reviewed and the determination as to whether it warrants a full analysis will be based on the following criteria:

(1) Suggestion is not currently a benefit under the Medicaid program;

(2) There is evidence that the suggestion will improve quality of care under Medicaid;

(3) There is evidence that the suggestion will improve the cost-effectiveness of Medicaid;

(4) Suggestion is not undergoing clinical trials; and

(5) Suggestion will not expand a health care provider's scope of practice beyond the law governing the provider's practice.

(d) Analysis of clinical initiative.

(1) HHSC staff will consult with the appropriate internal and external stakeholders and subject matter experts during the full analysis. These sources can include:

(A) Advisory committees that advise HHSC on quality-related issues and policies;

(B) Internal HHSC business and clinical units, including but not limited to, the Office of Medical Director and the Office of Medicaid/CHIP Policy; and

(C) External contractors as designated by HHSC.

(2) A full analysis of selected clinical initiatives is based on the following sources relating to the initiative (where applicable and if available):

(A) Public comments and submitted research;

(B) Available clinical research and historical utilization information;

(C) Published medical literature;

(D) Any adoption of the initiative by medical societies or other clinical groups;

(E) Implementation by Medicare, another state Medicaid program or the Children's Health Insurance Program;

(F) Results of reports, research, pilot programs, or clinical studies relating to the initiative conducted by institutions of higher education, governmental entities and agencies, private and nonprofit think tanks and research groups;

(G) Impact the initiative would have on the Medicaid program if implemented in Texas, including an estimated number of recipients under Medicaid and potential cost savings to the state; and

(H) Any statutory barriers to implement the approved clinical initiative.

(e) Final reports.

(1) HHSC staff will consult with the appropriate internal and external clinical experts on developing the final reports, including:

(A) Internal HHSC business and clinical units, such as the Office of Medical Director and the Office of Medicaid/CHIP Policy; and

(B) External contractors as determined by HHSC.

(2) A final report of an approved clinical initiative will include the following information:

(A) The feasibility of implementing the initiative;

(B) The likely impact on quality of care provided under the Medicaid program;

(C) Any anticipated cost savings to the state;

(D) A summary of public comments, including a description of any opposition to implementing the initiative;

(E) The identification of any statutory barriers; and

(F) If the initiative is not implemented, an explanation of why.

**History**
- *Source Note: The provisions of this §354.2503 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 354.2505** Action on Approved Clinical Initiatives {#sec-354.2505 omnilex-key=us-tx-regs-official--title-1--354.2505}

Action on approved clinical initiatives. After HHSC conducts an analysis of a clinical initiative:

(1) If the commission determines that the initiative is cost-effective and will improve the quality of care under the Medicaid program, HHSC may:

(A) Implement the initiative if implementation of the initiative is not otherwise prohibited by law; or

(B) If implementation requires a change in law, submit a copy of the final report together with recommendations relating to the initiative's implementation to the standing committees of the Senate and House of Representatives having jurisdiction over the Medicaid program; and

(2) If the commission determines that the initiative is not cost-effective or will not improve quality of care under the Medicaid program, the commission may not implement the initiative.

**History**
- *Source Note: The provisions of this §354.2505 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 354.2507** Internet Website {#sec-354.2507 omnilex-key=us-tx-regs-official--title-1--354.2507}

Internet website. The content of this website required under this subchapter will include:

(1) An explanation of the clinical initiative evaluation process;

(2) An explanation of how members of the public may submit comments or research related to an initiative;

(3) A copy of each initiative selected for further analysis;

(4) The status of each initiative in the approval process; and

(5) A copy of the final report for each approved clinical initiative.

**History**
- *Source Note: The provisions of this §354.2507 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter O** ELECTRONIC VISIT VERIFICATION

##### **1 Tex. Admin. Code § 354.4001** Purpose and Authority {#sec-354.4001 omnilex-key=us-tx-regs-official--title-1--354.4001}

The purpose of this subchapter is to describe requirements related to electronic visit verification authorized by:

(1) Title XIX, Section 1903(l) of the Social Security Act (42 U.S.C. §1396b(l));

(2) Texas Government Code Chapter 532, Subchapter F; and

(3) Texas Human Resources Code §161.086.

**History**
- *Source Note: The provisions of this §354.4001 adopted
to be effective December 23, 2020, 45 TexReg 9178; amended to be effective
January 1, 2024, 48 TexReg 7171; amended to be effective April 1,
2025, 50 TexReg 825.*

##### **1 Tex. Admin. Code § 354.4003** Definitions {#sec-354.4003 omnilex-key=us-tx-regs-official--title-1--354.4003}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.

(1) CDS employer--Consumer directed services employer. A member or the member's legally authorized representative who participates in the CDS option and whose financial management services agency (FMSA) uses an electronic visit verification (EVV) vendor system or an EVV proprietary system.

(2) CDS option--Consumer directed services option. A service delivery option described in 26 TAC Chapter 264 (relating to Consumer Directed Services Option). In the CDS option, a CDS employer:

(A) hires the service provider; and

(B) manages how the service provider delivers a service described in §354.4005 of this subchapter (relating to Personal Care Services that Require the Use of EVV) or §354.4006 of this subchapter (relating to Home Health Care Services that Require the Use of EVV).

(3) CFC--Community First Choice. A Medicaid state plan option governed by 42 CFR, Part 441, Subpart K, Home and Community-Based Attendant Services and Supports State Plan Option (Community First Choice). CFC services include the following.

(A) CFC HAB--CFC habilitation. A Medicaid state plan service that provides habilitation through CFC as described in §354.1361 of this chapter (relating to Definitions).

(B) CFC PAS--CFC personal assistance services. A Medicaid state plan service that provides personal assistance services through CFC as described in §354.1361 of this chapter.

(C) CFC PAS/HAB--CFC personal assistance services/habilitation. A Medicaid state plan service provided through CFC that provides both personal assistance services and habilitation.

(4) CLASS Program--Community Living Assistance and Support Services Program. A Medicaid waiver program approved by the Centers for Medicare & Medicaid Services under Title XIX, Section 1915(c) of the Social Security Act, as described in 26 TAC Chapter 259 (relating to Community Living Assistance and Support Services (CLASS) Program and Community First Choice (CFC) Services).

(5) CMS--Centers for Medicare & Medicaid Services. The federal agency within the United States Department of Health and Human Services that administers the Medicare and Medicaid programs.

(6) Community Attendant Services Program--A Medicaid state plan program operating under Title XIX of the Social Security Act, as described in 26 TAC Chapter 277 (relating to Primary Home Care, Community Attendant Services, and Family Care Programs).

(7) DBMD Program--Deaf Blind with Multiple Disabilities. The Medicaid waiver program approved by CMS under Title XIX, Section 1915(c) of the Social Security Act, as described in 26 TAC Chapter 260 (relating to Deaf Blind with Multiple Disabilities (DBMD) Program and Community First Choice (CFC) Services).

(8) Dual eligible member--A member who is eligible for both Medicare and Medicaid.

(9) EVV--Electronic visit verification. The documentation and verification of service delivery through an EVV system.

(10) EVV aggregator--A centralized database that collects, validates, and stores statewide EVV visit data transmitted by an EVV system.

(11) EVV claim--A request for payment of a service described in §354.4005 or §354.4006 of this subchapter submitted to HHSC, HHSC's designated contractor, or a managed care organization (MCO) in accordance with the EVV Policy Handbook.

(12) EVV Policy Handbook--A handbook promulgated by HHSC that contains policies and requirements related to EVV.

(13) EVV portal--An online system established by HHSC that allows users to perform searches, view reports and view EVV claim match results associated with data in the EVV aggregator.

(14) EVV portal user--A person who is employed by or contracts with a program provider or FMSA and has access to the EVV portal.

(15) EVV proprietary system--An EVV system that:

(A) a program provider or an FMSA uses instead of the EVV state vendor system; and

(B) HHSC approves, in accordance with §354.4017 of this subchapter (relating to Process to Request Approval of a Proposed EVV Proprietary System and Additional Requirements for a PSO).

(16) EVV system--An EVV vendor system or an EVV proprietary system used to electronically document and verify the data elements described in §354.4009(a) of this subchapter (relating to EVV Visit Transaction and EVV Claim) for a visit conducted to provide a service described in §354.4005 or §354.4006 of this subchapter.

(17) EVV system user--A person who has access to the EVV system, including a person employed by or contracting with a program provider, FMSA, or CDS employer.

(18) EVV state vendor system--An EVV system:

(A) created and operated by a vendor that has a contract with HHSC or an HHSC designated contractor; and

(B) that a program provider or an FMSA may use for free instead of using an EVV proprietary system.

(19) EVV visit transaction--A record generated by an EVV system that contains the data elements described in §354.4009(a) of this subchapter for a visit conducted to provide a service described in §354.4005 or §354.4006 of this subchapter.

(20) FC Program--Family Care Program. A program funded under Title XX, Subtitle A of the Social Security Act, as described in 26 TAC Chapter 277.

(21) FMSA--Financial management services agency. A program provider that contracts with HHSC or an MCO to provide financial management services to a CDS employer as described in 26 TAC Chapter 264 (relating to Consumer Directed Services Option).

(22) HCBS-AMH Program--Home and Community-Based Services Adult Mental Health Program. A Medicaid state plan option approved by CMS under Title XIX, Section 1915(i) of the Social Security Act, as described in 26 TAC Chapter 307, Subchapter B (relating to Home and Community-Based Services--Adult Mental Health Program).

(23) HCS Program--Home and Community-based Services Program. A Medicaid waiver program approved by CMS under Title XIX, Section 1915(c) of the Social Security Act, as described in 26 TAC Chapter 263 (relating to Home and Community-based Services (HCS) Program and Community First Choice (CFC)).

(24) HHSC--The Texas Health and Human Services Commission.

(25) Home health aide--Has the meaning set forth in 26 TAC §558.2 (relating to Definitions).

(26) ICF/IID--Intermediate care facility for individuals with an intellectual disability or related conditions. An ICF/IID is a facility that is licensed in accordance with THSC Chapter 252 or certified by HHSC.

(27) IMD--Institution for mental diseases. Has the meaning set forth in 26 TAC §273.3 (relating to Definitions).

(28) LVN--Licensed vocational nurse. A person licensed to practice as a vocational nurse as described in Texas Occupations Code Chapter 301.

(29) MCO--Managed care organization. Has the meaning set forth in Texas Government Code §543A.0001.

(30) MDCP--Medically Dependent Children Program. A Medicaid waiver program approved by CMS under Title XIX, Section 1915(c) of the Social Security Act, as described in Chapter 353, Subchapter M of this title (relating to Home and Community Based Services in Managed Care).

(31) MDCP STAR Health covered service--Medically Dependent Children Program STAR Health covered service. A service provided to a member eligible to receive MDCP benefits under the STAR Health Program.

(32) MDCP STAR Kids covered service--Medically Dependent Children Program STAR Kids covered service. A service provided to a member eligible to receive MDCP benefits under the STAR Kids Program.

(33) Member--A person enrolled in one of the following:

(A) traditional Medicaid service delivery model also referred to as fee-for-service;

(B) the CLASS Program;

(C) the Community Attendant Services Program;

(D) the DBMD Program;

(E) the FC Program;

(F) the HCBS-AMH Program;

(G) the HCS Program;

(H) the Primary Home Care Program;

(I) the STAR Program;

(J) the STAR Health Program;

(K) the STAR Kids Program;

(L) the STAR+PLUS Program;

(M) the STAR+PLUS Home and Community-Based Services Program;

(N) the STAR+PLUS Medicare-Medicaid Program;

(O) the Texas Home Living Program;

(P) Texas Health Steps Comprehensive Care Program (CCP); or

(Q) the Youth Empowerment Services Program.

(34) Nursing facility--A facility licensed in accordance with Texas Health and Safety Code Chapter 242.

(35) Occupational therapist--A person licensed as an occupational therapist in accordance with Texas Occupations Code Chapter 454.

(36) PCS--Personal Care Services. Support services provided to a member enrolled in Texas Health Steps CCP who requires assistance with activities of daily living or instrumental activities of daily living as described in §363.602 of this title (relating to Definitions).

(37) PDN--Private duty nursing. Has the same meaning as the term "Private duty nursing (PDN) Services" in §363.303 of this title (relating to Definitions).

(38) Primary Home Care Program--A Medicaid state plan program operating under Title XIX of the Social Security Act, as described in 26 TAC Chapter 277.

(39) Physical therapist--A person licensed as a physical therapist in accordance with Texas Occupations Code Chapter 453.

(40) Program provider--An entity that contracts with HHSC or an MCO to provide a service listed in §354.4005 or §354.4006 of this subchapter and that uses an EVV state vendor system or an EVV proprietary system.

(41) PSO--Proprietary system operator. A program provider or an FMSA that uses an EVV proprietary system.

(42) Reason code--A standardized HHSC-approved code entered in an EVV system to explain the reason for completing visit maintenance.

(43) RN--Registered nurse. A person licensed to practice as a registered nurse as described in Texas Occupations Code Chapter 301.

(44) Service provider--A person who provides a service described in §354.4005 or §354.4006 of this subchapter and who:

(A) is employed by or contracting with:

(i) a program provider; or

(ii) a CDS employer; or

(B) who is contracting with:

(i) an MCO; or

(ii) HHSC.

(45) SRO--Service responsibility option. A service delivery option described in 26 TAC Chapter 265 (relating to Service Responsibility Option) in which a member or legally authorized representative selects, trains, and provides daily management of a service provider, while the fiscal, personnel, and service back-up plan responsibilities remain with the program provider.

(46) STAR--State of Texas Access Reform.

(47) STAR Health Program--A Medicaid program operating under Title XIX, Section 1915(a) of the Social Security Act and Texas Family Code, Chapter 266. The program provides services through a managed care delivery model to a member enrolled in STAR Health as described in Chapter 353, Subchapter H of this title (relating to STAR Health).

(48) STAR Kids Program--A Medicaid program operating under Title XIX, Section 1115 of the Social Security Act and Texas Government Code Chapter 540. The program provides services through a managed care delivery model to a member enrolled in STAR Kids as described in Chapter 353, Subchapter N of this title (relating to STAR Kids).

(49) STAR Program--A Medicaid program operating under Title XIX, Section 1115 of the Social Security Act. The program provides services through a managed care delivery model to a member enrolled in STAR as described in Chapter 353, Subchapter I of this title (relating to STAR).

(50) STAR+PLUS HCBS Program--STAR+PLUS Home and Community-Based Services Program. A Medicaid program operating through a federal waiver under Title XIX, Section 1115 of the Social Security Act. The program provides services to a member eligible to receive HCBS benefits under the STAR+PLUS Program, as described in Chapter 353, Subchapter M of this title (relating to Home and Community Based Services in Managed Care).

(51) STAR+PLUS MMP--STAR+PLUS Medicare-Medicaid Plan. A managed care program operating under Title XIX, Section 1115A of the Social Security Act that provides the authority to test and evaluate a fully integrated care model for dual eligible members. The STAR+PLUS MMPs contract with CMS and HHSC to participate in the Dual Demonstration Program described in Chapter 353, Subchapter L of this title (relating to Texas Dual Eligibles Integrated Care Demonstration Project). The MMP Dual Demonstration Program ended on December 31, 2025.

(52) STAR+PLUS Program--A Medicaid program operating under Title XIX, Section 1115 of the Social Security Act, and Texas Government Code Chapter 540. The program provides services through a managed care delivery model to a member enrolled in STAR+PLUS as described in Chapter 353, Subchapter G of this title (relating to STAR+PLUS).

(53) TAC--Texas Administrative Code.

(54) Texas Health Steps CCP--Texas Health Steps Comprehensive Care Program. A Medicaid comprehensive program approved by CMS under Title XIX, Section 1905 of the Social Security Act, as described in Chapter 363 of this title (relating to Texas Health Steps Comprehensive Care Program).

(55) TxHmL--Texas Home Living Program. A Medicaid waiver program approved by CMS under Title XIX, Section 1915(c) of the Social Security Act, as described in 26 TAC Chapter 262 (relating to Texas Home Living (TxHmL) Program and Community First Choice (CFC)).

(56) Vendor hold--A temporary suspension of payments for claims that are due to a program provider or FMSA.

(57) Visit maintenance--As described in the EVV Policy Handbook, a process to:

(A) manually enter data elements described in §354.4009(a) of this subchapter in an EVV system;

(B) correct the data elements described in §354.4009(a) of this subchapter that are inaccurate in an EVV visit transaction; or

(C) include the data elements described in §354.4009(a) of this subchapter that are missing in an EVV visit transaction.

(58) YES Program--Youth Empowerment Services Program. A Medicaid waiver approved by CMS under Title XIX, Section 1915(c) of the Social Security Act as described in 26 TAC Chapter 307, Subchapter A (relating to Youth Empowerment Services (YES)).

**History**
- *Source Note: The provisions of this §354.4003 adopted
to be effective December 23, 2020, 45 TexReg 9178; amended to be effective
January 1, 2024, 48 TexReg 7171; amended to be effective April 1,
2025, 50 TexReg 825; amended to be effective August 13, 2026, 51 TexReg
5177.*

##### **1 Tex. Admin. Code § 354.4005** Personal Care Services that Require the Use of EVV {#sec-354.4005 omnilex-key=us-tx-regs-official--title-1--354.4005}

(a) A program provider must use EVV to document the delivery of the following personal care services by the program provider if HHSC, an HHSC designated contractor, or an MCO pays for any part of the claim for these services:

(1) in the traditional Medicaid service model also referred to as fee-for-service, including for members enrolled in STAR who receive PCS through fee-for-service:

(A) CFC PAS;

(B) CFC HAB;

(C) PCS provided under Texas Health Steps CCP, including SRO; and

(D) PCS-Behavioral Health provided under Texas Health Steps CCP, including SRO;

(2) in the CLASS Program:

(A) CFC PAS/HAB; and

(B) in-home respite;

(3) personal attendant services provided through the Community Attendant Services Program, including SRO;

(4) in the DBMD Program:

(A) CFC PAS/HAB; and

(B) in-home respite;

(5) personal attendant services provided through the FC Program, including SRO;

(6) in the HCBS-AMH Program:

(A) supported home living; and

(B) in-home respite;

(7) in the HCS Program:

(A) CFC PAS/HAB;

(B) in-home respite; and

(C) in-home individualized skills and socialization provided to members with the residential type of "own/family home";

(8) personal attendant services provided through the Primary Home Care Program, including SRO;

(9) in the STAR Health Program:

(A) CFC PAS, including SRO;

(B) CFC HAB, including SRO; and

(C) for a member in STAR Health MDCP:

(i) in-home respite, with and without RN delegation, including SRO; and

(ii) flexible family support, with and without RN delegation, including SRO;

(10) in the STAR Kids Program:

(A) CFC PAS, including SRO;

(B) CFC HAB, including SRO; and

(C) for a member in STAR Kids MDCP:

(i) in-home respite, with and without RN delegation, including SRO; and

(ii) flexible family support, with and without RN delegation, including SRO;

(11) in the STAR+PLUS Program:

(A) personal assistance services, including SRO;

(B) CFC PAS, including SRO; and

(C) CFC HAB, including SRO;

(12) in the STAR+PLUS HCBS Program:

(A) in-home respite care, including SRO;

(B) protective supervision, including SRO;

(C) personal assistance services, including SRO;

(D) CFC PAS, including SRO; and

(E) CFC HAB, including SRO;

(13) in the STAR+PLUS MMP, if delivered before January 1, 2026:

(A) in-home respite care, including SRO;

(B) protective supervision, including SRO;

(C) personal assistance services, including SRO;

(D) CFC PAS, including SRO; and

(E) CFC HAB, including SRO;

(14) in the TxHmL Program:

(A) CFC PAS/HAB;

(B) in-home respite; and

(C) in-home individualized skills and socialization;

(15) in-home respite provided in the YES Program; and

(16) any other service required by federal or state mandates.

(b) A CDS employer must ensure a service provider uses EVV to document the delivery of the following personal care services through the CDS option if HHSC, an HHSC designated contractor, or an MCO pays for any part of the claim for these services:

(1) in the traditional Medicaid service model also referred to as fee-for-service:

(A) CFC PAS;

(B) CFC HAB;

(C) PCS provided under Texas Health Steps CCP; and

(D) PCS-Behavioral Health provided under Texas Health Steps CCP;

(2) in the CLASS Program:

(A) CFC PAS/HAB; and

(B) in-home respite;

(3) personal attendant services provided through the Community Attendant Services Program;

(4) in the DBMD Program:

(A) CFC PAS/HAB; and

(B) in-home respite;

(5) personal attendant services provided through the FC Program;

(6) in the HCS Program:

(A) CFC PAS/HAB; and

(B) in-home respite;

(7) personal attendant services provided through the Primary Home Care Program;

(8) in the STAR Health Program:

(A) CFC PAS;

(B) CFC HAB; and

(C) for a member in STAR Health MDCP:

(i) in-home respite, with and without RN delegation; and

(ii) flexible family support, with and without RN delegation;

(9) in the STAR Kids Program:

(A) CFC PAS;

(B) CFC HAB; and

(C) for a member in STAR Kids MDCP:

(i) in-home respite, with and without RN delegation; and

(ii) flexible family support, with and without RN delegation;

(10) in the STAR+PLUS Program:

(A) personal assistance services;

(B) CFC PAS; and

(C) CFC HAB;

(11) in the STAR+PLUS HCBS Program:

(A) in-home respite care;

(B) protective supervision;

(C) personal assistance services;

(D) CFC PAS; and

(E) CFC HAB;

(12) in the STAR+PLUS MMP, if delivered before January 1, 2026:

(A) in-home respite care;

(B) protective supervision;

(C) personal assistance services;

(D) CFC PAS; and

(E) CFC HAB; and

(13) in the TxHmL Program:

(A) CFC PAS/HAB;

(B) in-home respite; and

(C) in-home individualized skills and socialization.

**History**
- *Source Note: The provisions of this §354.4005
adopted to be effective January 1, 2024, 48 TexReg 7171; amended to
be effective August 13, 2026, 51 TexReg 5177.*

##### **1 Tex. Admin. Code § 354.4006** Home Health Care Services that Require the Use of EVV {#sec-354.4006 omnilex-key=us-tx-regs-official--title-1--354.4006}

(a) A program provider must use EVV to document the delivery of the following home health care services by the program provider if HHSC, an HHSC designated contractor, or an MCO pays for any part of the claim for these services:

(1) in the traditional Medicaid service model also referred to as fee-for-service, for a member who does not reside in a nursing facility, an ICF/IID, or an IMD, the following services when provided in the residence of the member:

(A) any nursing service, other than PDN;

(B) occupational therapy; and

(C) physical therapy;

(2) in the CLASS Program, for a member who does not receive support family services or continued family services, the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy;

(3) in the DBMD Program, for a member who does not receive licensed assisted living or licensed home health assisted living, the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy;

(4) in the HCS Program, for a member whose residential type is "own/family home," the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy;

(5) in the HCBS-AMH Program, for a member who does not receive host home/companion care, supervised living services, or assisted living services, the following services when provided in the residence of the member:

(A) nursing - RN; and

(B) nursing - LVN;

(6) in the STAR Program, the following services when provided in the residence of the member:

(A) home health nursing;

(B) occupational therapy;

(C) physical therapy; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist;

(7) in the STAR Health Program, the following services when provided in the residence of the member:

(A) home health nursing, other than PDN;

(B) occupational therapy;

(C) physical therapy; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist;

(E) nursing delegation and supervision of PCS and CFC tasks; and

(F) for a member in STAR Health MDCP, the following services when provided in the residence of the member:

(i) RN delegation and supervision of personal care services and CFC tasks, other than PDN;

(ii) flexible family supports services performed by RN or an LVN; and

(iii) in-home respite performed by RN or an LVN;

(8) in the STAR Kids Program, the following services when provided in the residence of the member:

(A) home health nursing, other than PDN;

(B) occupational therapy;

(C) physical therapy;

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist;

(E) nursing delegation and supervision of PCS and CFC tasks; and

(F) for a member in STAR Kids MDCP, the following services when provided in the residence of the member:

(i) RN delegation and supervision of personal care services and CFC tasks, other than PDN;

(ii) flexible family supports services performed by an RN or LVN; and

(iii) in-home respite performed by an RN or LVN;

(9) in the STAR+PLUS Program, the following services when provided in the residence of the member:

(A) home health nursing;

(B) occupational therapy;

(C) physical therapy; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist;

(10) in the STAR+PLUS HCBS Program, for members not receiving adult foster care, assisted living services - single occupancy, assisted living services - double occupancy, or assisted living services - non-apartment, the following services when provided in the residence of the member:

(A) home health nursing, including SRO;

(B) occupational therapy, including SRO;

(C) physical therapy, including SRO; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist, including SRO;

(11) in the STAR+PLUS MMP, for members not receiving adult foster care, assisted living services - single occupancy, assisted living services - double occupancy, or assisted living services - non-apartment, the following services when provided in the member's home, if delivered before January 1, 2026:

(A) home health nursing, including SRO;

(B) occupational therapy, including SRO;

(C) physical therapy, including SRO; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist, including SRO;

(12) in the TxHmL Program, the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy; and

(13) any other service required by federal or state mandates.

(b) A CDS employer must ensure a service provider uses EVV to document the delivery of the following home health care services using the CDS option, if HHSC, an HHSC designated contractor, or an MCO pays for any part of the claim for these services:

(1) in the CLASS Program, the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy;

(2) in the HCS Program, for a member whose residential type is "own/family home," the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy;

(3) in the STAR Health Program for a member in STAR Health MDCP, the following services when provided in the residence of the member:

(A) flexible family supports services performed by any RN or any LVN; and

(B) in-home respite performed by any RN or any LVN;

(4) in the STAR Kids Program for a member in STAR Kids MDCP, the following services when provided in the residence of the member:

(A) flexible family supports services performed by any RN or any LVN; and

(B) in-home respite performed by any RN or any LVN;

(5) in the STAR+PLUS Program, the following services when provided in the residence of the member:

(A) home health nursing;

(B) occupational therapy;

(C) physical therapy; and

(D) personal care services provided by a home health aide under the supervision of an RN, occupational therapist, or physical therapist;

(6) in the STAR+PLUS HCBS Program, the following services when provided in the residence of the member:

(A) home health nursing;

(B) occupational therapy;

(C) physical therapy; and

(D) home health aide services as an extension of physical therapy, occupational therapy, or nursing services;

(7) in the STAR+PLUS MMP, the following services when provided in the member's home, if delivered before January 1, 2026:

(A) home health nursing;

(B) occupational therapy;

(C) physical therapy; and

(D) home health aide services as an extension of physical therapy, occupational therapy, or nursing services; and

(8) in the TxHmL Program, the following services when provided in the residence of the member:

(A) any nursing service;

(B) occupational therapy; and

(C) physical therapy.

**History**
- *Source Note: The provisions of this §354.4006
adopted to be effective January 1, 2024, 48 TexReg 7171; amended to
be effective August 13, 2026, 51 TexReg 5177.*

##### **1 Tex. Admin. Code § 354.4007** EVV System {#sec-354.4007 omnilex-key=us-tx-regs-official--title-1--354.4007}

(a) A program provider or FMSA must use one of the following EVV systems to electronically document the provision of a service described in §354.4005 or §354.4006 of this subchapter (relating to Personal Care Services that Require the Use of EVV and Home Health Care Services that Require the use of EVV):

(1) an EVV vendor system; or

(2) an EVV proprietary system.

(b) A CDS employer must use the EVV system selected by their FMSA.

(c) Except as provided in subsection (d) of this section, a program provider, an FMSA, and a CDS employer must ensure that a service provider uses an EVV system to electronically document the provision of a service described in §354.4005 or §354.4006 of this subchapter as described in the EVV Policy Handbook.

(d) If a service provider fails to use an EVV system to document the provision of a service described in §354.4005 or §354.4006 of this subchapter or if a service provider cannot use an EVV system because the EVV system is unavailable, a program provider, FMSA or a CDS employer must:

(1) ensure the data elements required by §354.4009(a)(1) of this subchapter (relating to EVV Visit Transaction and EVV Claim) are accurate; and

(2) complete visit maintenance.

(e) If a program provider or an FMSA does not comply with subsections (a), (c), or (d) of this section, HHSC or an MCO may do one or more of the following:

(1) deny payment for a service;

(2) take enforcement action including:

(A) requiring a program provider or FMSA to complete a corrective action plan; or

(B) propose to terminate the contract of the program provider or FMSA.

(f) If a CDS employer does not comply with subsections (b), (c), or (d) of this section, HHSC or an MCO may:

(1) require the CDS employer to complete a corrective action plan; or

(2) propose to terminate the member's participation in the CDS option.

**History**
- *Source Note: The provisions of this §354.4007 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4009** EVV Visit Transaction and EVV Claim {#sec-354.4009 omnilex-key=us-tx-regs-official--title-1--354.4009}

(a) A program provider and an FMSA must:

(1) ensure that an EVV visit transaction contains the data elements required by the EVV system, including:

(A) the first and last name of the member who received the service;

(B) the type of service provided;

(C) the date the service was provided;

(D) the time the service began and the time the service ended;

(E) the first and last name of the service provider who provided the service;

(F) the location, including the address or geolocation, where the service was provided; and

(G) other information HHSC determines necessary to ensure the accurate payment of a claim for services, as described in the EVV Policy Handbook; and

(2) ensure the data elements required by paragraph (1) of this subsection are accurate.

(b) A CDS employer who elects to complete visit maintenance on the HHSC Employer's Selection for Electronic Visit Verification Responsibilities form must:

(1) ensure that an EVV visit transaction contains the data elements required by the EVV system, including those listed in subsection (a)(1) of this section; and

(2) ensure the data elements required by paragraph (1) of this subsection are accurate.

(c) A program provider and an FMSA must:

(1) before submitting an EVV claim:

(A) ensure that the EVV visit transaction is transmitted to and accepted by the EVV Portal; and

(B) ensure that the data elements on the EVV claim match the data elements in the accepted EVV visit transaction; and

(2) submit the EVV claim in accordance with HHSC or MCO billing requirements and the EVV Policy Handbook.

(d) HHSC or an MCO denies an EVV claim or recoups a payment made to a program provider or an FMSA if the EVV claim does not meet requirements described in the EVV Policy Handbook, including if:

(1) the EVV claim does not match the accepted EVV visit transaction; or

(2) there is no accepted EVV visit transaction that supports the EVV claim.

**History**
- *Source Note: The provisions of this §354.4009 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4011** Visit Maintenance {#sec-354.4011 omnilex-key=us-tx-regs-official--title-1--354.4011}

(a) A program provider and an FMSA must complete visit maintenance, including the visit maintenance described in §354.4007(d) of this subchapter (relating to EVV System):

(1) in accordance with the EVV Policy Handbook; and

(2) within the visit maintenance time frame after the date a service was provided as described in the EVV Policy Handbook.

(b) If a CDS employer elects to complete visit maintenance on the HHSC Employer's Selection for Electronic Visit Verification Responsibilities form, the CDS employer must complete visit maintenance in accordance with subsection (a)(1) and (2) of this section.

(c) After the visit maintenance time frame has expired, the program provider, FMSA, and CDS employer may complete visit maintenance only if:

(1) the program provider, FMSA, or CDS employer submits a Visit Maintenance Unlock Request in accordance with the EVV Policy Handbook; and

(2) HHSC or an MCO approves the Visit Maintenance Unlock Request.

**History**
- *Source Note: The provisions of this §354.4011 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4013** HHSC and MCO Compliance Reviews and Enforcement Actions {#sec-354.4013 omnilex-key=us-tx-regs-official--title-1--354.4013}

(a) HHSC and an MCO conduct the following compliance reviews in accordance with the EVV Policy Handbook:

(1) an EVV Usage Review;

(2) an EVV Landline Phone Verification Review; and

(3) an EVV Alternative Device Compliance Review.

(b) If HHSC or an MCO determines from an EVV Usage Review that a program provider's or FMSA's EVV Usage score is less than 80% and such score is:

(1) the first occurrence within a 24-month period, HHSC or an MCO may require the program provider or FMSA to complete EVV policy, system, and portal trainings within a specific time frame;

(2) the second occurrence within a 24-month period, HHSC or an MCO may require the program provider or FMSA to complete a corrective action plan within 10 business days after the date the program provider or FMSA is notified that the EVV Usage score is less than 80%; or

(3) the third occurrence within a 24-month period, HHSC or an MCO may propose to terminate the contract of the program provider or FMSA.

(c) If HHSC or an MCO determines from an EVV Usage Review that a CDS Employer's EVV Usage score is less than 80% and such score is:

(1) the first occurrence within a 24-month period, HHSC or an MCO may require the CDS employer to complete EVV policy and system trainings within a specific time frame;

(2) the second occurrence within a 24-month period, HHSC or an MCO may require the CDS employer to complete a corrective action plan within 10 business days after the date the CDS employer is notified that the EVV Usage score is less than 80%; or

(3) the third occurrence within a 24-month period, HHSC or an MCO may propose to end the member's participation in the CDS option.

(d) If a program provider or an FMSA does not complete the required EVV trainings listed in subsection (b)(1) of this section, or does not complete a corrective action plan as required by subsection (b)(1) and (2) of this section, HHSC or the MCO may place a vendor hold or payment hold on the program provider or FMSA until the EVV trainings or a corrective action plan is completed.

(e) If a CDS employer does not complete EVV trainings required by subsection (c)(1) of this section, HHSC or the MCO may require the CDS employer to complete a corrective action plan within 10 business days after the date the CDS employer is notified that EVV trainings were not completed.

(f) If a CDS employer does not complete a corrective action plan as required by subsections (c)(2) or (e) of this section, HHSC or the MCO may propose to end the member's participation in the CDS option.

(g) If HHSC or an MCO determines from an EVV Landline Phone Verification Review that a service provider has used an unallowable phone type as described in the EVV Policy Handbook to clock in and clock out of the EVV system:

(1) HHSC or an MCO provides written notification of such determination to the program provider or FMSA;

(2) within 20 business days after receipt of the written notification, the program provider or FMSA must provide the documentation described in the written notification to HHSC or the MCO; and

(3) if the program provider or FMSA does not send the documentation listed in the written notice to HHSC or the MCO within the deadline described in paragraph (2) of this subsection, HHSC or the MCO may place a vendor hold or payment hold on the program provider or FMSA until the date HHSC or the MCO receives the documentation from the program provider or FMSA.

(h) If HHSC or an MCO determines from an EVV Alternative Device Compliance Review that a program provider's EVV Alternative Device Compliance score exceeds the allowable percentage described in the EVV Policy Handbook and such score is:

(1) the first occurrence within a 24-month period, HHSC or an MCO may require the program provider to complete EVV policy, system, and portal trainings within a time frame specified by HHSC or the MCO;

(2) the second occurrence within a 24-month period, HHSC or an MCO may require the program provider to complete a corrective action plan within 10 business days after the program provider receives a notice that the EVV Alternative Device Compliance score exceeds the allowable percentage described in the EVV Policy Handbook; or

(3) the third occurrence within a 24-month period, HHSC or an MCO may propose to terminate the contract of the program provider.

(i) If HHSC or an MCO determines from an EVV Alternative Device Compliance Review that a CDS Employer's EVV Alternative Device Compliance score exceeds the allowable percentage described in the EVV Policy Handbook and such score is:

(1) the first occurrence within a 24-month period, HHSC or an MCO may require the CDS employer to complete EVV policy and system trainings within a time frame specified by HHSC or the MCO;

(2) the second occurrence within a 24-month period, HHSC or an MCO may require the CDS employer to complete a corrective action plan within 10 business days after the date the CDS employer receives a notice that the Alternative Device Compliance score exceeds the allowable percentage described in the EVV Policy Handbook; or

(3) the third occurrence within a 24-month period, HHSC or an MCO may propose to end the member's participation in the CDS option.

(j) If a program provider does not complete the EVV trainings or a corrective action plan as required by subsection (b)(1) and (2) of this section respectively, HHSC or the MCO may place a vendor hold or payment hold on the program provider until the program provider completes the required EVV trainings or corrective action plan.

(k) If a CDS employer does not complete the EVV trainings listed in subsection (c)(1) of this section, HHSC or the MCO may require the CDS employer to complete a corrective action plan within 10 business days after the date the CDS employer receives a notice that the CDS employer did not complete the required EVV trainings.

(l) If a CDS employer does not complete a corrective action plan required by subsections (c)(2) or (e) of this section, HHSC or the MCO may propose to end the member's participation in the CDS option.

**History**
- *Source Note: The provisions of this §354.4013 adopted to
be effective January 1, 2024, 48 TexReg 7171; amended to be effective
August 13, 2026, 51 TexReg 5177.*

##### **1 Tex. Admin. Code § 354.4015** EVV Training Requirements {#sec-354.4015 omnilex-key=us-tx-regs-official--title-1--354.4015}

(a) A program provider that uses an EVV vendor system, an FMSA that uses a vendor system, and a CDS employer whose FMSA uses an EVV vendor system must ensure that an EVV system user completes EVV System Training described in the EVV Policy Handbook and provided by the EVV vendor:

(1) before the EVV system user begins using the EVV system; and

(2) yearly thereafter.

(b) A PSO or a CDS employer whose FMSA is a PSO must ensure that an EVV system user completes EVV System Training described in the EVV Policy Handbook and provided by the PSO or an entity on behalf of the PSO:

(1) before the EVV system user begins using the EVV system; and

(2) yearly thereafter.

(c) A program provider, an FMSA, and a CDS employer must ensure that an EVV system user completes EVV Policy Training described in the EVV Policy Handbook and provided by HHSC or the MCO with which the program provider or FMSA contracts:

(1) before the EVV system user begins using the EVV system; and

(2) yearly thereafter.

(d) A program provider and FMSA must ensure that an EVV portal user:

(1) completes EVV Portal Training described in the EVV Policy Handbook and provided by HHSC or its designated contractor:

(A) before the EVV portal user begins using the EVV portal; and

(B) yearly thereafter; and

(2) completes EVV Policy Training described in the EVV Policy Handbook provided by HHSC or the MCO with which the program provider or FMSA contracts:

(A) before the EVV portal user begins using the EVV portal; and

(B) yearly thereafter.

(e) A program provider and a CDS employer must train a service provider on the clock in and clock out portion of the EVV System Training described in subsections (a) and (b) of this section:

(1) before the service provider begins using the EVV system; and

(2) yearly thereafter.

(f) A program provider that is not an FMSA and uses an EVV vendor system must document the following to demonstrate compliance with subsections (a) and (c) - (e) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(g) A PSO that is not an FMSA must document the following to demonstrate compliance with subsections (b) - (e) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(h) An FMSA that is not a PSO must document the following to demonstrate compliance with subsections (a), (c) and (d) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(i) An FMSA that is a PSO must document the following to demonstrate compliance with subsections (b) - (d) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(j) A CDS employer whose FMSA is not a PSO must document the following to demonstrate compliance with subsections (a), (c) and (e) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(k) A CDS employer whose FMSA is a PSO must document the following to demonstrate compliance with subsections (b), (c) and (e) of this section:

(1) the name of the training;

(2) the name of the person who completed the training; and

(3) the date of the training.

(l) If a program provider or an FMSA does not comply with subsections (a), (c), or (d) of this section, HHSC or an MCO may require the program provider or FMSA to complete a corrective action plan.

(m) If a PSO does not comply with subsection (b) of this section, HHSC or an MCO may require the PSO to complete a corrective action plan.

(n) If a program provider that is not an FMSA does not comply with subsection (e) of this section, HHSC or an MCO may require the program provider to complete a corrective action plan.

(o) If a CDS employer whose FMSA is not a PSO does not comply with subsections (a), (c), and (e), an FMSA may require the CDS employer to complete a corrective action plan.

(p) If a CDS employer whose FMSA is a PSO does not comply with subsections (b), (c) and (e), an FMSA may require the CDS employer to complete a corrective action plan.

**History**
- *Source Note: The provisions of this §354.4015 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4017** Process to Request Approval of a Proposed EVV Proprietary System and Additional Requirements for a PSO {#sec-354.4017 omnilex-key=us-tx-regs-official--title-1--354.4017}

(a) This section applies to a program provider or FMSA seeking HHSC's approval of a proposed EVV proprietary system. To request HHSC's approval of a proposed EVV proprietary system, a program provider or FMSA must comply with the onboarding process described in the EVV Policy Handbook, which includes:

(1) completing and submitting the EVV Proprietary System Request Form; and

(2) participating in an operational readiness review session.

(b) HHSC approves a proposed EVV proprietary system if a program provider or FMSA:

(1) demonstrates that the proposed EVV proprietary system complies with:

(A) the EVV Policy Handbook;

(B) the EVV Business Rules for Proprietary Systems; and

(C) state and federal laws governing EVV; and

(2) successfully completes the operational readiness review by receiving a score of 100% in the following methods, as described in the EVV Policy Handbook:

(A) certification;

(B) documentation;

(C) demonstration; and

(D) trading partner testing.

(c) A PSO must:

(1) ensure the EVV proprietary system complies with the HHSC EVV Policy Handbook, the EVV Business Rules for Proprietary Systems, and state and federal laws governing EVV;

(2) assume responsibility for the design, development, operation, and performance of the EVV proprietary system;

(3) cover all costs to develop, implement, operate, and maintain the EVV proprietary system;

(4) ensure the accuracy of EVV data collected, stored, and reported by the EVV proprietary system;

(5) assume all liability and risk for the use of the EVV proprietary system;

(6) maintain all data generated by the EVV proprietary system to demonstrate compliance with this subchapter and for general business purposes;

(7) develop training materials on the proprietary system and train HHSC staff and MCO staff;

(8) provide access to all HHSC-approved clock in and clock out methods offered by the PSO to a service provider at no cost to a member, HHSC, an MCO, or HHSC's designated contractor;

(9) ensure the functionality and accuracy of all clock in and clock out methods provided to a service provider;

(10) comply with the process in the HHSC EVV Policy Handbook if transferring EVV proprietary systems; and

(11) notify HHSC, in writing, if:

(A) the EVV proprietary system is not in compliance with the HHSC EVV Policy Handbook, the EVV Business Rules for Proprietary Systems, and state and federal laws governing EVV; or

(B) if the PSO plans to make significant changes to the EVV system.

(d) HHSC may, at its discretion, audit an EVV proprietary system. Such audit may be conducted by a contractor of HHSC.

(e) If HHSC determines that a PSO is not in compliance with subsection (c) of this section, HHSC may, in accordance with the HHSC EVV Policy Handbook:

(1) require the PSO to correct the non-compliance within a time frame specified by HHSC;

(2) reject EVV visit transactions from the proprietary system until HHSC determines the non-compliance is corrected;

(3) cancel the use of the EVV proprietary system if:

(A) the PSO fails to correct the non-compliance within the time frame specified by HHSC; or

(B) the PSO does not respond to a written communication from HHSC about the non-compliance within the time frame specified by HHSC; and

(4) cancel the use of an EVV proprietary system without giving the PSO the opportunity to correct the non-compliance:

(A) if the non-compliance is egregious, as determined by HHSC; or

(B) because of a substantiated allegation of fraud, waste, or abuse by the Office of Inspector General.

**History**
- *Source Note: The provisions of this §354.4017 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4019** Access to EVV System and EVV Documentation {#sec-354.4019 omnilex-key=us-tx-regs-official--title-1--354.4019}

A program provider and an FMSA must:

(1) allow HHSC and the MCO with which the program provider or FMSA has a contract immediate, direct, and on-site access to the EVV system the program provider or FMSA uses;

(2) at HHSC's request, allow HHSC to review EVV system documentation or obtain a copy of that documentation at no charge to HHSC; and

(3) at the request of an MCO with which an EVV claim is filed, allow the MCO to review EVV system documentation related to the EVV claim or obtain a copy of that documentation at no charge to the MCO.

**History**
- *Source Note: The provisions of this §354.4019 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4021** Additional Requirements {#sec-354.4021 omnilex-key=us-tx-regs-official--title-1--354.4021}

A program provider, an FMSA, a CDS employer, a service provider, a member, and an MCO must comply with:

(1) applicable state and federal laws, rules, regulations, including the Health Insurance Portability Accountability Act of 1966 at 42 U.S.C. §1320d, et. seq., and regulations adopted under that act at 45 CFR Parts 160 and 164; and

(2) the EVV Policy Handbook.

**History**
- *Source Note: The provisions of this §354.4021 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4023** Sanctions {#sec-354.4023 omnilex-key=us-tx-regs-official--title-1--354.4023}

(a) HHSC or an MCO may propose to recoup funds paid to a program provider or FMSA as described in:

(1) §354.4009(d) of this subchapter (relating to EVV Visit Transaction and EVV Claim); and

(2) §354.4013(h) of this subchapter (relating to HHSC and MCO Compliance Reviews and Enforcement Actions.

(b) HHSC or an MCO may impose a vendor hold against a program provider or FMSA as described in §354.4013(d) and (g)(3) of this subchapter.

(c) HHSC or an MCO may propose to terminate the contract of program provider or FMSA as described in:

(1) §354.4007(e)(2)(B) of this subchapter (relating to EVV System); and

(2) §354.4013(b)(3) of this subchapter.

**History**
- *Source Note: The provisions of this §354.4023 adopted to be effective January 1, 2024, 48 TexReg 7171.*

##### **1 Tex. Admin. Code § 354.4025** Administrative Hearing {#sec-354.4025 omnilex-key=us-tx-regs-official--title-1--354.4025}

(a) If, as described in this subchapter, HHSC proposes to terminate the contract of a program provider or FMSA, proposes to recoup funds paid to a program provider or FMSA, or imposes a vendor hold on a program provider or FMSA, the program provider or FMSA may request an administrative hearing in accordance with §357.484 of this title (relating to Request for a Hearing).

(b) If, as described in this subchapter, an MCO proposes to terminate the contract of a program provider or FMSA, proposes to recoup funds paid to a program provider or FMSA, or imposes a vendor hold on a program provider or FMSA, the program provider or FMSA may appeal the proposed action in accordance with the MCO's policy.

**History**
- *Source Note: The provisions of this §354.4025 adopted to be effective January 1, 2024, 48 TexReg 7171.*

### **Chapter 355** REIMBURSEMENT RATES

#### **Subchapter A** COST DETERMINATION PROCESS

##### **1 Tex. Admin. Code § 355.101** Introduction {#sec-355.101 omnilex-key=us-tx-regs-official--title-1--355.101}

(a) The information in §355.102 of this chapter (relating to General Principles of Allowable and Unallowable Costs), §355.103 of this chapter (relating to Specifications for Allowable and Unallowable Costs), §355.104 of this chapter (relating to Revenues), and §355.105 of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures) applies to Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services, Service Coordination/Targeted Case Management, Rehabilitative Services, School Health and Related Services, and Texas Home Living programs cost reports pertaining to providers' fiscal years ending in calendar year 2004 and subsequent years. For all other programs these sections apply to cost reports pertaining to the providers' fiscal years ending in calendar year 1997 and subsequent years.

(b) The following terms, when used in this subchapter, have the following meanings:

(1) DADS--The Texas Department of Aging and Disability Services, its successor agency, or designee.

(2) DARS--The Texas Department of Assistive and Rehabilitative Services, its successor agency, or designee.

(3) DSHS--The Texas Department of State Health Services, its successor agency, or designee.

(4) HHSC--The Health and Human Services Commission, its successor agency, or designee.

(5) Line item--A specific informational, statistical, revenue, or expense data element in a cost report.

(6) TEA--The Texas Education Agency, its successor agency, or designee.

(c) HHSC reimburses providers for contracted client services through reimbursement amounts determined as described in this chapter and in reimbursement methodologies for each program. Statewide, uniform reimbursements and reimbursement ceilings are approved by HHSC. Where reimbursements are contractor-specific, HHSC approves the reimbursement parameter dollar amounts, e.g., ceilings, floors, or program reimbursement formula limits. In approving reimbursement amounts HHSC takes into consideration staff recommendations based on the application of formulas and procedures described in this chapter and in reimbursement methodologies for each program. However, HHSC may adjust staff recommendations when HHSC deems such adjustments are warranted by particular circumstances likely to affect achievement of program objectives, including economic conditions and budgetary considerations. Methodology rules are developed and recommended for approval to HHSC. HHSC has oversight authority with respect to the state's reimbursement methodology and cost determination rules.

(1) Reimbursement amounts will be determined coincident with the state's biennium.

(2) Objective of cost determination process. The objective of the cost determination process is to define direct and indirect costs that are allowable and, therefore, may be considered for use in the overall reimbursement determination process. The cost determination process seeks to collect accurate financial and other statistical data that constitutes the foundation upon which reimbursements are determined.

(A) Cost-reporting. In order to ensure adequate financial and statistical information upon which to base reimbursement, HHSC requires that each contracted provider submit a periodic cost report or supplemental report. It is the responsibility of the provider to submit accurate and complete information, in accordance with all pertinent HHSC cost reporting rules and cost report instructions, on the cost report and any supplemental reports required by HHSC.

(B) Pro forma costing. When historical costs are unavailable, such as in the case of a new program, reimbursement may be based on a pro forma approach. This approach involves using historical costs of delivering similar services, where appropriate data are available, and estimating the basic types and costs of products and services necessary to deliver services meeting federal and state requirements.

(3) Relationship between cost determination and reimbursement determination processes. The cost determination process seeks to evaluate individual cost items of providers to determine their allowability and to determine whether individual cost reports are of reasonable accuracy for potential use in reimbursement determination. The reimbursement determination process takes the evaluation of allowable costs one step further by comparing allowable costs across providers to identify those levels of cost, either for individual cost items or groups of cost items, which must be incurred by efficient and economic providers of services meeting all state and federal standards. Thus, all costs allowed in the cost determination process may not necessarily be used in the reimbursement determination process. The basic objective of the reimbursement methodologies employed by HHSC is to facilitate and balance the broader objectives of the programs administered by the agencies by:

(A) promoting reasonable access for eligible clients to services that meet federal and state quality standards via contracting with an adequate number of qualified providers; and

(B) expending taxpayer dollars in a reasonable and prudent manner such that eligible clients are served at the lowest cost to taxpayers consistent with state and federal laws, standards and regulations, and with program objectives.

(d) Providers contracted with Managed Care Organizations. To ensure that HHSC has adequate financial and statistical information upon which to base reimbursement, each provider that has contracted with a Managed Care Organization (MCO) to provide Long-Term Services and Supports to State of Texas Medicaid clients must submit to HHSC periodic cost reports and supplemental reports as required by this subchapter. This required cost reporting must follow rules and requirements as set forth in this subchapter. An MCO will be responsible for enforcing the vendor hold and administrative penalties relating to cost reporting violations as described in this subchapter, and §355.403 of this chapter (relating to Vendor Hold), if HHSC notifies the MCO that a violation has occurred.

**History**
- *Source Note: The provisions of this §355.101 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective September 27, 1999, 24 TexReg 7397; amended to be effective September 1, 2000, 25 TexReg 7629; amended to be effective December 1, 2001, 26 TexReg 9565; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective September 1, 2011, 36 TexReg 4795; amended to be effective May 8, 2012, 37 TexReg 3394; amended to be effective September 1, 2014, 39 TexReg 6406.*

##### **1 Tex. Admin. Code § 355.102** General Principles of Allowable and Unallowable Costs {#sec-355.102 omnilex-key=us-tx-regs-official--title-1--355.102}

(a) Allowable and unallowable costs. Allowable and unallowable costs, both direct and indirect, are defined to identify expenses that are reasonable and necessary to provide contracted client care and are consistent with federal and state laws and regulations. When a particular type of expense is classified as unallowable, the classification means only that the expense will not be included in the database for reimbursement determination purposes because the expense is not considered reasonable and/or necessary. The classification does not mean that individual contracted providers may not make the expenditure. The description of allowable and unallowable costs is designed to be a general guide and to clarify certain key expense areas. This description is not comprehensive, and the failure to identify a particular cost does not necessarily mean that the cost is an allowable or unallowable cost.

(b) Cost-reporting process. The primary objective of the cost-reporting process is to provide a basis for determining appropriate reimbursement to contracted providers. To achieve this objective, the reimbursement determination process uses allowable cost information reported on cost reports or other surveys. The cost report collects actual allowable costs and other financial and statistical information, as required. Costs may not be imputed and reported on the cost report when no costs were actually incurred (except as stated in §355.103(b)(19)(A)(i) of this title (relating to Specifications for Allowable and Unallowable Costs) or when documentation does not exist for costs even if they were actually incurred during the reporting period).

(c) Accurate cost reporting. Accurate cost reporting is the responsibility of the contracted provider. The contracted provider is responsible for including in the cost report all costs incurred, based on an accrual method of accounting, which are reasonable and necessary, in accordance with allowable and unallowable cost guidelines in this section and in §355.103 of this title, revenue reporting guidelines in §355.104 of this title (relating to Revenues), cost report instructions, and applicable program rules. Reporting all allowable costs on the cost report is the responsibility of the contracted provider. The Texas Health and Human Services Commission (HHSC) is not responsible for the contracted provider's failure to report allowable costs; however, in an effort to collect reliable, accurate, and verifiable financial and statistical data, HHSC is responsible for providing cost report training, general and/or specific cost report instructions, and technical assistance to providers. Furthermore, if unreported and/or understated allowable costs are discovered during the course of an audit desk review or field audit, those allowable costs will be included on the cost report or brought to the attention of the provider to correct by submitting an amended cost report.

(d) Cost report training. It is the responsibility of the provider to ensure that each cost report preparer has completed the required state-sponsored training. Preparers may be employees of the provider or persons who have been contracted by the provider for the purpose of cost report preparation. Preparers must complete training for each program for which a cost report is submitted, as applicable. Contracted preparer's fees to complete training are considered allowable expenses for cost reporting purposes. Preparers that participate in training may be assessed a convenience fee, which will be determined by HHSC. Convenience fees assessed for training are allowable costs. Applicable federal and state accessibility standards apply to training. Reporting schedules per program are determined by HHSC and are published on the HHSC website.

(1) Training schedules. For all programs. Preparers must complete the state-sponsored training each year a cost report is requested by HHSC and for each program for which a cost report is submitted. Preparers who complete the required state-sponsored training during the year in which a cost report is submitted for a program will not have to complete the training for that program to prepare any other reports required by HHSC during the following calendar year. At HHSC's discretion, HHSC may require a provider's primary entity contact and financial contact of a contracted provider to complete a state-sponsored training to certify and submit a cost or other report required by HHSC. A provider's primary entity contract and financial contact who completes a state-sponsored training to certify and submit a cost report for a program will not have to complete the training for that program during the next calendar year to submit other reports for that program required by HHSC.

(2) Failure to complete the required cost report training.

(A) For nursing facilities, failure to file a completed cost report signed by preparers who have completed the required cost report training may result in vendor hold as specified in §355.403 of this title (relating to Vendor Hold).

(B) For School Health and Related Services (SHARS) providers, failure to complete the required cost report training may result in an administrative contract violation as specified in §355.8443 of this title (relating to Reimbursement Methodology for School Health and Related Services (SHARS)).

(C) For all other programs, failure to file a completed cost report signed by preparers who have completed the required cost report training constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title (relating to Administrative Contract Violations).

(e) Generally accepted accounting principles. Except as otherwise specified by the cost determination process rules of this chapter, cost report instructions, or policy clarifications, cost reports should be prepared consistent with generally accepted accounting principles (GAAP), which are those principles approved by the American Institute of Certified Public Accountants (AICPA). Internal Revenue Service (IRS) laws and regulations do not necessarily apply in the preparation of the cost report. In cases where cost reporting rules differ from GAAP, IRS, or other authorities, HHSC rules take precedence for provider cost-reporting purposes.

(f) Allowable costs. Allowable costs are expenses, both direct and indirect, that are reasonable and necessary, as defined in paragraphs (1) and (2) of this subsection, and which meet the requirements as specified in subsections (i), (j), and (k) of this section, in the normal conduct of operations to provide contracted client services meeting all pertinent state and federal requirements. Only allowable costs are included in the reimbursement determination process.

(1) "Reasonable" refers to the amount expended. The test of reasonableness includes the expectation that the provider seeks to minimize costs and that the amount expended does not exceed what a prudent and cost-conscious buyer pays for a given item or service. In determining the reasonableness of a given cost, the following are considered:

(A) the restraints or requirements imposed by arm's-length bargaining, i.e., transactions with nonowners or other unrelated parties, federal and state laws and regulations, and contract terms and specifications; and

(B) the action that a prudent person would take in similar circumstances, considering his responsibilities to the public, the government, his employees, clients, shareholders, and members, and the fulfillment of the purpose for which the business was organized.

(2) "Necessary" refers to the relationship of the cost, direct or indirect, incurred by a provider to the provision of contracted client care. Necessary costs are direct and indirect costs that are appropriate in developing and maintaining the required standard of operation for providing client care in accordance with the contract and state and federal regulations. In addition, to qualify as a necessary expense, a direct or indirect cost must meet all of the following requirements:

(A) the expenditure was not for personal or other activities not directly or indirectly related to the provision of contracted services;

(B) the cost does not appear as a specific unallowable cost in §355.103 of this title;

(C) if a direct cost, it bears a significant relationship to contracted client care. To qualify as significant, the elimination of the expenditure would have an adverse impact on client health, safety, or general well-being;

(D) the direct or indirect expense was incurred in the purchase of materials, supplies, or services provided to clients or staff in the normal conduct of operations to provide contracted client care;

(E) the direct or indirect costs are not allocable to or included as a cost of any other program in either the current, a prior, or a future cost-reporting period;

(F) the costs are net of all applicable credits;

(G) allocated costs of each program are adequately substantiated; and

(H) the costs are not prohibited under other pertinent federal, state, or local laws or regulations.

(3) Direct costs are those costs incurred by a provider that are definitely attributable to the operation of providing contracted client services. Direct costs include, but are not limited to, salaries and nonlabor costs necessary for the provision of contracted client care. Whether or not a cost is considered a direct cost depends upon the specific contracted client services covered by the program. In programs in which client meals are covered program services, the salaries of cooks and other food service personnel are direct costs, as are food, nonfood supplies, and other such dietary costs. In programs in which client transportation is a covered program service, the salaries of drivers are direct costs, as are vehicle repairs and maintenance, vehicle insurance and depreciation, and other such client transportation costs.

(4) Indirect costs are those costs that benefit, or contribute to, the operation of providing contracted services, other business components, or the overall contracted entity. These costs could include, but are not limited to, administration salaries and nonlabor costs, building costs, insurance expense, and interest expense. Central office or home office administrative expenses are considered indirect costs. As specified in §355.8443 of this title, SHARS providers use an unrestricted indirect cost rate to determine indirect costs.

(g) Unallowable costs. Unallowable costs are expenses that are not reasonable or necessary, according to the criteria specified in subsection (f)(1) - (2) of this section and which do not meet the requirements as specified in subsections (i), (j), and (k) of this section or which are specifically enumerated in §355.103 of this title or program-specific reimbursement methodology. Providers must not report as an allowable cost on a cost report a cost that has been determined to be unallowable. Such reporting may constitute fraud. (Refer to §355.106(a) of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports)).

(1) For nursing facilities, placement as an allowable cost on a cost report of a cost which has been determined to be unallowable may result in vendor hold as specified in §355.403 of this title.

(2) For Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID), Home and Community-based Services (HCS), Service Coordination/Targeted Case Management, Rehabilitative Services, and Texas Home Living (TxHmL) programs, placement as an allowable cost on a cost report a cost, which has been determined to be unallowable, constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(3) For SHARS providers, submission of a cost that has been determined to be unallowable may result in an administrative contract violation as specified in §355.8443 of this title.

(4) For all other programs, submission of a cost, which has been determined to be unallowable, constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(h) Other financial and statistical data. The primary purpose of the cost report is to collect allowable costs to be used as a basis for reimbursement determination. In addition, providers may be required on cost reports to provide information in addition to allowable costs to support allowable costs, such as wage surveys, workers' compensation surveys, or other statistical and financial information. Additional data requested may include, when specified and in the appropriate section or line number specified, costs incurred by the provider which are unallowable costs. All information, including other financial and statistical data, shown on a cost report is subject to the documentation and verification procedures required for an audit desk review and/or field audit.

(1) For nursing facilities, inaccuracy in providing, or failure to provide, required financial and statistical data may result in vendor hold as specified in §355.403 of this title.

(2) For ICF/IID, HCS, Service Coordination/Targeted Case Management, Rehabilitative Services, and TxHmL programs, inaccuracy in providing, or failure to provide, required financial and statistical data constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(3) For SHARS, inaccuracy in providing, or failure to provide, required financial and statistical data may result in an administrative contract violation as specified in §355.8443 of this title.

(4) For all other programs, inaccuracy in providing, or failure to provide, required financial and statistical data constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(i) Related party transactions.

(1) In determining whether a contracted provider organization is related to a supplying organization, the tests of common ownership and control are to be applied separately. Related to a contracted provider means that the contracted provider to a significant extent is associated or affiliated with, has control of, or is controlled by the organization furnishing the services, equipment, facilities, leases, or supplies. Common ownership exists if an individual or individuals possess any ownership or equity in the contracted provider and the institution or organization serving the contracted provider. Control exists if an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution. If the elements of common ownership or control are not present in both organizations, then the organizations are deemed not to be related to each other. The existence of an immediate family relationship will create an irrefutable presumption of relatedness through control or attribution of ownership or equity interests where the significance tests are met. The following persons are considered immediate family for cost-reporting purposes:

(A) husband and wife;

(B) natural parent, child, and sibling;

(C) adopted child and adoptive parent;

(D) stepparent, stepchild, stepsister, and stepbrother;

(E) father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, and daughter-in-law;

(F) grandparent and grandchild;

(G) uncles and aunts by blood or marriage;

(H) nephews and nieces by blood or marriage; and

(I) first cousins.

(2) A determination as to whether an individual (or individuals) or organization possesses ownership or equity in the contracted provider organization and the supplying organization, so as to consider the organizations related by common ownership, will be made on the basis of the facts and circumstances in each case. This rule applies whether the contracted provider organization or supplying organization is a sole proprietorship, partnership, corporation, trust or estate, or any other form of business organization, proprietary or nonprofit. In the case of a nonprofit organization, ownership or equity interest will be determined by reference to the interest in the assets of the organization, e.g., a reversionary interest provided for in the articles of incorporation of a nonprofit corporation.

(3) The term control includes any kind of control, whether or not it is legally enforceable and however it is exercisable or exercised. It is the reality of the control which is decisive, not its form or the mode of its exercise. The facts and circumstances in each case must be examined to ascertain whether legal or effective control exists. Since a determination made in a specific case represents a conclusion based on the entire body of facts and circumstances involved, such determination should not be used as a precedent in other cases unless the facts and circumstances are substantially the same. Organizations, whether proprietary or nonprofit, are considered to be related through control to their directors in common.

(4) Costs applicable to services, equipment, facilities, leases, or supplies furnished to the contracted provider by organizations related to the provider by common ownership or control are includable in the allowable cost of the provider at the cost to the related organization. However, the cost must not exceed the price of comparable services, equipment, facilities, leases, or supplies that could be purchased or leased elsewhere. The purpose of this principle is twofold: to avoid the payment of a profit factor to the contracted provider through the related organization (whether related by common ownership or control), and to avoid payment of artificially inflated costs which may be generated from less than arm's-length bargaining. The related organization's costs include all actual reasonable costs, direct and indirect, incurred in the furnishing of services, equipment, facilities, leases, or supplies to the provider. The intent is to treat the costs incurred by the supplier as if they were incurred by the contracted provider itself. Therefore, if a cost would be unallowable if incurred by the contracted provider itself, it would be similarly unallowable to the related organization. The principles of reimbursement of contracted provider costs described throughout this title will generally be followed in determining the reasonableness and allowability of the related organization's costs, where application of a principle in a nonprovider entity would be clearly inappropriate.

(5) An exception is provided to the general rule applicable to related organizations. The exception applies if the contracted provider demonstrates by convincing evidence to the satisfaction of HHSC that certain criteria have been met. If all of the conditions of this exception are met, then the charges by the supplier to the contracted provider for such services, equipment, facilities, leases, or supplies are allowable costs. If Medicare has made a determination that a related party situation does not exist or that an exception to the related party definition was granted, HHSC will review the determination made by Medicare to determine if it is applicable to the current situation of the contracted provider and in compliance with this subsection (relating to related party transactions). In order to have the Medicare determination considered for approval by HHSC, a copy of the applicable Medicare determination must accompany each written exception request submitted to HHSC, along with evidence supporting the Medicare determination for the current cost-reporting period. If the exception granted by Medicare no longer is applicable due to changes in circumstances of the contracted provider or because the circumstances do not apply to the contracted provider, HHSC may choose not to consider the Medicare determination. Written requests for an exception to the general rule applicable to related organizations must be submitted for approval to the HHSC Provider Finance Department no later than 45 days prior to the due date of the cost report in order to be considered for that year's cost report. Each request must include documentation supporting that the contracted provider meets each of the four criteria listed in subparagraphs (A) - (D) of this paragraph. Requests that do not include the required documentation for each criteria will not be considered for that year's cost report.

(A) The supplying organization is a bona fide separate organization. This means that the supplier is a separate sole proprietorship, partnership, joint venture, association or corporation and not merely an operating division of the contracted provider organization.

(B) A majority of the supplying organization's business activity of the type carried on with the contracted provider is transacted with other organizations not related to the contracted provider and the supplier by common ownership or control and there is an open, competitive market for the type of services, equipment, facilities, leases, or supplies furnished by the organization. In determining whether the activities are of similar type, it is important also to consider the scope of the activity. The requirement that there be an open, competitive market is merely intended to assure that the item supplied has a readily discernible price that is established through arm's-length bargaining by well-informed buyers and sellers.

(C) The services, equipment, facilities, leases, or supplies are those which commonly are obtained by entities such as the contracted provider from other organizations and are not a basic element of contracted client care ordinarily furnished directly to clients by such entities. This requirement means that entities such as the contracted provider typically obtain the services, equipment, facilities, leases, or supplies from outside sources, rather than producing them internally.

(D) The charge to the contracted provider is in line with the charge of such services, equipment, facilities, leases, or supplies in the open, competitive market and no more than the charge made under comparable circumstances to others by the organization for such services, equipment, facilities, leases, or supplies.

(6) Disclosure of all related-party information on the cost report is required for all costs reported by the contracted provider, including related-party transactions occurring at any level in the provider's organization, (e.g., the central office level, and the individual contracted provider level). The contracted provider must make available, upon request, adequate documentation to support the costs incurred by the related party. Such documentation must include an identification of the related person's or organization's total costs, the basis of allocation of direct and indirect costs to the contracted provider, and other business entities served. If a contracted provider fails to provide adequate documentation to substantiate the cost to the related person or organization, then the reported cost is unallowable. For further guidelines regarding adequate documentation, refer to §355.105(b)(2) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(7) When calculating the cost to the related organization, the cost-determination guidelines specified in this section and in §355.103 of this title apply.

(j) Cost allocation. Direct costing must be used whenever reasonably possible. Direct costing means that allowable costs, direct or indirect, (as defined in subsection (f)(3) - (4) of this section) incurred for the benefit of, or directly attributable to, a specific business component must be directly charged to that particular business component. For example, the payroll costs of a direct care employee who works across cost areas within one contracted program would be directly charged to each cost area of that program based upon that employee's continuous daily time sheets and the costs of a direct care employee who works across more than one service delivery area would also be directly charged to each service delivery area based upon that employee's continuous daily time sheets. Health insurance premiums, life insurance premiums, and other employee benefits must be direct costed.

(1) If cost allocation is necessary for cost-reporting purposes, contracted providers must use reasonable methods of allocation and must be consistent in their use of allocation methods for cost-reporting purposes across all program areas and business entities.

(A) The allocation method should be a reasonable reflection of the actual business operations. Allocation methods that do not reasonably reflect the actual business operations and resources expended toward each unique business entity are not acceptable. Allocated costs are adjusted if HHSC considers the allocation method to be unreasonable. An indirect allocation method approved by some other department, program, or governmental entity is not automatically approved by HHSC for cost-reporting purposes.

(B) HHSC reviews each cost-reporting allocation method on a case-by-case basis in order to ensure that the reported costs fairly and reasonably represent the operations of the contracted provider. If in the course of an audit it is determined that an existing or approved allocation method does not fairly and reasonably represent the operations of the contracted provider, then an adjustment to the allocation method will be made consistent with subsection (f)(3) - (4) of this section. A contracted provider may request an informal review, and subsequently an appeal, of a decision concerning its allocation methods in accordance with §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(C) Any allocation method used for cost-reporting purposes must be consistently applied across all contracted programs and business entities in which the contracted provider has an interest.

(D) Providers must use an allocation method approved or required by HHSC. Any change in cost-reporting allocation methods from one year to the next must be fully disclosed by the contracted provider on its cost report and must be accompanied by a written explanation of the reasons and justification for such change. If the provider wishes to use an allocation method that is not in compliance with the cost-reporting allocation methods in paragraphs (3) - (4) of this subsection, the contracted provider must obtain written prior approval from HHSC's Provider Finance Department.

(i) Requests for approval to use an allocation method other than those identified in paragraphs (3) - (4) of this subsection or for approval of a provider's change in cost-reporting allocation method other than those identified in paragraphs (3) - (4) of this subsection must be received by HHSC's Provider Finance Department prior to the end of the contracted provider's fiscal year. Requests for approval of allocation methods will not be acceptable as a basis for the extension of the cost report due date.

(ii) The HHSC Provider Finance Department will forward its written decision to the contracted provider within 45 days of its receipt of the provider's original written request. If sufficient documentation is not provided by the provider to verify the acceptability of the allocation method, then HHSC may extend the decision time frame. However, an extension of the due date of the cost report will not be granted. Written decisions made on or after the due date of the cost report will apply to the next year's cost report. A contracted provider may request an informal review, and subsequently an appeal, of a decision concerning its allocation methods in accordance with §355.110 of this title.

(iii) Failure to use an allocation method approved or required by HHSC or to disclose a change in an allocation to HHSC will result in the following.

(I) For nursing facilities, failure to disclose a change in an allocation method or failure to use the allocation method approved or required by HHSC may result in vendor hold as specified in §355.403 of this title.

(II) For ICF/IID, HCS, Service Coordination/Targeted Case Management, Rehabilitative Services, and TxHmL programs, failure to use the allocation method approved or required by HHSC constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(III) For SHARS, failure to use the allocation method approved or required by HHSC constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.8443 of this title.

(IV) For all other programs, failure to disclose a change in an allocation method or failure to use the allocation method approved or required by HHSC constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(E) For small and large state-operated ICF/IID, designated as Bond Homes and State Supported Living Centers for cost reporting purposes, these facility types may use an allocation method other than those identified in paragraphs (3) - (4) of this subsection in order to represent indirect costs that are a reasonable reflection of the actual business operations. If an allocation method other than those identified in paragraphs (3) - (4) of this subsection is used for indirect costs, the allocation method must adhere to Generally Accepted Accounting Principles.

(2) Cost-reporting methods for allocating costs must be clearly and completely documented in the contracted provider's workpapers, with details as to how pooled costs are allocated to each segment of the business entity, for both contracted and noncontracted programs.

(A) If a contracted provider has questions regarding the reasonableness of an allocation method, that contracted provider should request written approval from the HHSC Provider Finance Department prior to submitting a cost report utilizing the allocation method in question. Requests for approval must be received by the HHSC Provider Finance Department prior to the end of the contracted provider's fiscal year. Requests for approval of allocation methods will not be acceptable as a basis for the extension of the cost report due date.

(B) The HHSC Provider Finance Department will forward its written decision to the contracted provider within 45 days of its receipt of the original written request. If sufficient documentation is not provided by the provider to verify the acceptability of the allocation method, HHSC may extend the decision time frame. However, an extension of the due date of the cost report will not be granted. Written decisions made on or after the due date of the cost report will apply to the next year's cost report. A contracted provider may request an informal review, and subsequently an appeal, of a decision concerning its allocation methods in accordance with §355.110 of this title.

(3) When a building is shared and the building usage is separate and distinct for each entity using the building, the building costs, identified as building and facility cost categories on the cost report, should be allocated based upon square footage and may not be allocated with other indirect costs as a pool of costs. When the same building space is shared by various entities, the shared building costs, identified as building and facility cost categories on the cost report, should be allocated using a reasonable method which reflects the actual usage, such as an allocation based on time in shared activity areas or a functional study of shared dietary costs related to shared dining and kitchen areas.

(4) Where costs are shared, are not directly chargeable and are allocated as a pool of costs, the following allocation methods are acceptable for cost-reporting purposes.

(A) If all the business components of a contracted provider have equivalent units of equivalent service, indirect costs must be allocated based upon each business component's units of service. For example, if a provider had two nursing facilities, indirect costs requiring allocation as a pool of costs must be allocated based upon each nursing facility's units of service, since the units of service are equivalent units and the services are equivalent services. If a provider had a nursing facility and a residential care program, indirect costs requiring allocation as a pool of costs could not be allocated based upon units of service because even though the units of service for a nursing facility and a residential care facility are equivalent units, the services are not equivalent services. If a home health agency has indirect costs requiring allocation as a pool of costs across its Medicare home health services and its Medicaid primary home care services, it could not use units of service to allocate those costs, since neither the units of service nor the services are equivalent.

(B) If all of a contracted provider's business components are labor-intensive without programmatic residential facility or residential building costs, the contracted provider must allocate its indirect costs requiring allocation as a pool of costs based either on each business component's pro rata share of salaries or labor costs or on a cost-to-cost basis.

(i) For cost-reporting cost allocation purposes, the term "salaries" includes wages paid to employees directly charged to the specific business component. The term "salaries" also includes fees paid to contracted individuals, excluding consultants, who perform services routinely performed by employees, which are directly charged to the specific business component. The term "salaries" does not include payroll taxes and employee benefits associated with the wages of employees.

(ii) For cost-reporting cost-allocation purposes, the term "labor costs" includes salaries as defined in clause (i) of this subparagraph, plus the payroll taxes and employee benefits associated with the wages of the employees.

(iii) The cost-to-cost method allocates costs based upon the percentage of each business component's directly-charged costs to the total directly-charged costs of all business components.

(C) If a contracted provider's business components are mixed, with some being labor-intensive and others having a programmatic residential or institutional component, the contracted provider must allocate its indirect costs requiring allocation as a pool of costs either:

(i) based upon the ratio of each business component's total costs less that business component's facility or building costs, as related to the contracted provider's total business component costs less facility or building costs for all the contracted provider's business components, with "facility or building costs" referring to those cost categories as identified on the cost report; or

(ii) based upon the labor costs method stated in subparagraph (B)(ii) of this paragraph.

(D) In order to achieve a more accurate and representative reporting of costs than results from allocating shared indirect costs as a pool of costs, a provider may choose to allocate its indirect shared expenses on an appropriate and reasonable functional basis. If allocating shared direct client care costs, a provider may use an appropriate and reasonable functional method. For example, costs of a central payroll operation could be allocated to all business components based on the number of checks issued; the costs of a central purchasing function could be allocated based on the number of purchases made or requisitions handled; payroll costs for an administrative employee working across business components could be directly charged based upon that employee's time sheets and/or allocated based upon a documented time study; food costs could be allocated based upon a functional study of shared dietary costs; transportation equipment costs could be allocated based upon mileage logs; and shared laundry costs could be allocated based upon a functional study of the number of pounds/loads of laundry processed. Providers choosing to allocate allowable employee-related self-insurance paid claims in accordance with §355.103(b)(13)(B)(ii) of this title should base the allocation on percentage of salaries of employees benefiting from the coverage for fully self-insured situations or on percentage of premiums of covered employees for partially self-insured situations since purchased premiums must be directly charged.

(E) Because the determination of reimbursement is based on cost data, allocation methods based upon revenue streams are inappropriate and unallowable.

(k) Net expenses. Net expenses are gross expenses less any purchase discounts or returns and allowances. Purchase discounts are cash discounts reducing the purchase price as a result of prompt payment, quantity purchases, or for other reasons. Purchase returns and allowances are reductions in expenses resulting from returned merchandise or merchandise which is damaged, lost, or incorrectly billed. Only net expenses may be reported on the cost report. Expenses reported on the cost report must be adjusted for all such purchase discounts or returns and allowances.

**History**
- *Source Note: The provisions of this §355.102 adopted to
be effective September 1, 1996, 21 TexReg 7866; duplicated effective
September 1, 1997, as published in the Texas Register October 17,
1997, 22 TexReg 10311; amended to be effective December 29, 1997,
22 TexReg 12485; amended to be effective June 26, 2000, 25 TexReg
6089; amended to be effective October 1, 2000, 25 TexReg 9924; amended
to be effective August 31, 2004, 29 TexReg 8093; amended to be effective
January 8, 2006, 30 TexReg 8854; amended to be effective October 28,
2007, 32 TexReg 7461; amended to be effective September 1, 2011, 36
TexReg 4795; amended to be effective January 1, 2015, 39 TexReg 9193;
amended to be effective March 1, 2018, 43 TexReg 339; amended to be
effective January 1, 2019, 43 TexReg 8581; amended to be effective
February 22, 2024, 49 TexReg 858; amended to be effective September
11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.103** Specifications for Allowable and Unallowable Costs {#sec-355.103 omnilex-key=us-tx-regs-official--title-1--355.103}

(a) Introduction. The following list of allowable and unallowable costs is not comprehensive but serves as a guide and clarifies certain key expense areas. If a particular type of expense is classified as unallowable for purposes of reporting on a cost report, it does not mean that individual contracted providers may not make such expenditures. Except where specific exceptions are noted, the allowability of all costs is subject to the general principles specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs). In addition, refer to program-specific allowable and unallowable costs, as applicable.

(1) Accounting and audit fees. See subsection (b)(3)(A) of this section.

(2) Advertising and public relations. See subsection (b)(16) of this section.

(3) Amortization expense. See subsection (b)(10) of this section.

(4) Bad debt expense. See subsection (b)(20)(M) of this section.

(5) Boards of directors and trustees. See subsection (b)(5) of this section.

(6) Bonuses. See subsection (b)(1)(A)(i) of this section.

(7) Central office costs. See subsection (b)(7) of this section.

(8) Charity allowance. See subsection (b)(20)(N) of this section.

(9) Compensation of employees. See subsection (b)(1) of this section.

(10) Compensation of owners and related parties. See subsection (b)(2) of this section.

(11) Compensation of outside consultants. See subsection (b)(3) of this section.

(12) Courtesy allowance. See subsection (b)(20)(N) of this section.

(13) Depreciation expense. See subsection (b)(10) of this section.

(14) Donated revenues. See subsection (b)(18) of this section.

(15) Donated services, supplies, and assets. See subsection (b)(19) of this section.

(16) Dues or contributions to organizations. See subsection (b)(14) of this section.

(17) Employee relations expenses. See subsection (b) (20)(A) of this section.

(18) Employment-related taxes. See subsection (b)(12)(B) of this section.

(19) Endowment income. See subsection (b)(18) of this section.

(20) Expenses not related to contracted services. See subsection (b)(20)(H) of this section.

(21) Fines and penalties. See subsection (b)(20)(G) of this section.

(22) Franchise tax. See subsection (b)(12)(C) of this section.

(23) Finance charges. See subsection (b)(11)(E) of this section.

(24) Franchise fees. See subsection (b)(20)(C) of this section.

(25) Fringe benefits. See subsection (b)(1)(A)(iii) of this section.

(26) Fundraising activities. See subsection (b)(17) of this section.

(27) Gains on disposal of assets. See subsection (b)(10)(F) of this section.

(28) Gifts. See subsection (b)(18) of this section.

(29) Goodwill. See subsection (b)(10) and (20)(C)(ii) of this section.

(30) Grants, gifts and income from endowments. See subsection (b)(18) of this section.

(31) In-kind donations. See subsection (b)(19) of this section.

(32) Insurance expense. See subsection (b)(13) of this section.

(33) Interest expense. See subsection (b)(11) of this section.

(34) Legal fees. See subsection (b)(3)(B) of this section.

(35) Life insurance. See subsection (b)(13)(G) of this section.

(36) Litigation expenses and awards. See subsection (b)(20)(I) of this section.

(37) Lobbying costs. See subsection (b)(20)(J) of this section.

(38) Losses on disposal of assets. See subsection (b)(10)(F) of this section.

(39) Losses due to theft or embezzlement. See subsection (b)(20)(L) of this section.

(40) Management fees. See subsection (b)(6) of this section.

(41) Medicaid as payor of last resort. See subsection (b)(21) of this section.

(42) Medical supplies and medical costs. See subsection (b)(20)(F) of this section.

(43) Nonpaid workers. See subsection (b)(4) of this section.

(44) Operating revenue. See subsection (b)(18)(D) of this section.

(45) Organization costs. See subsection (b)(20)(B) of this section.

(46) Payroll taxes and insurance. See subsection (b)(1)(A)(ii) of this section.

(47) Penalties. See subsection (b)(20)(G) of this section.

(48) Planning and evaluation expenses. See subsection (b)(10)(E) of this section.

(49) Promotional activities. See subsection (b)(17) of this section.

(50) Public relations. See subsection (b)(16) of this section.

(51) Repairs and maintenance. See subsection (b)(9) of this section.

(52) Research and development costs. See subsection (b)(20)(E) of this section.

(53) Salaries and wages. See subsection (b)(1) and (2) of this section.

(54) Self-insurance. See subsection (b)(13)(B) of this section.

(55) Staff training costs. See subsection (b)(15)(A) of this section.

(56) Startup costs. See subsection (b)(20)(D) of this section.

(57) Tax expense and credits. See subsection (b)(12) of this section.

(58) Travel costs. See subsection (b)(15)(B) of this section.

(59) Utilities. See subsection (b)(8) of this section.

(60) Volunteers. See subsection (b)(4) of this section.

(61) Voucher-paid expenses. See subsection (b)(20)(K) of this section.

(62) Workers' compensation insurance. See subsection (b)(13) of this section.

(b) Allowable and unallowable costs.

(1) Compensation of employees. Compensation includes both cash and non-cash forms of compensation subject to federal payroll tax regulations. Compensation includes wages and salaries (including bonuses); payroll taxes and insurance; and benefits. Payroll taxes and insurance include Federal Insurance Contributions Act (old age, survivors, and disability insurance (OASDI) and Medicare hospital insurance); Unemployment Compensation Insurance; and Workers' Compensation Insurance.

(A) Allowable compensation of employees is compensation paid to employees in arm's-length transactions as nonowners and non-related parties and is subject to the reasonable and necessary costs which must be incurred by providers in the provision of contracted client services. Guidelines for compensation of owners and related parties are specified in paragraph (2) of this subsection.

(i) A bonus is a type of compensation granted to employees as a wage enhancement. Bonuses paid to employees in arm's-length transactions are allowable costs, subject to the reasonable and necessary costs that must be incurred by providers in the provision of contracted client services. In determining the employee classification type, part-time employees may be considered a different classification type than full-time employees. To be allowable, bonuses to owners and/or related parties:

(I) must not represent any form of profit sharing and must not be determined on the level of profit earned by the contracted provider;

(II) must be clearly defined in a written agreement or employment policy;

(III) must not be made only to related parties, in which case the bonuses are unallowable costs;

(IV) must be based upon the same criteria for all members of the same employee classification type;

(V) must be made available to all employees of the same classification type, unless the employee classification type predominantly consists of related parties, in which case the bonuses are unallowable costs; and

(VI) must not discriminate in favor of certain employees, such as employees who are officers, stockholders, or the highest paid individual(s) of the organization.

(ii) Payroll taxes and insurance are described in paragraph (12) of this subsection, concerning tax expense and credits, and paragraph (13) of this subsection.

(iii) Benefits are amounts paid to or on behalf of an employee, in addition to direct salary or wages, and from which the employee, his dependent, or his beneficiary derives a personal benefit before or after the employee's retirement or death.

(I) Benefits paid to employees in arm's length transactions as nonowners and non-related parties are allowable costs, subject to the reasonable and necessary costs which must be incurred by providers in the provision of contracted client care. To be allowable, benefits paid to owners and/or related parties must not discriminate in favor of certain employees, such as employees who are officers, stockholders, or the highest paid individual(s) of the organization.

(II) Allowable benefits are reported on cost reports either as salaries and/or wages, as employee benefits, or as costs applicable to specific cost report line items, as specified in this subclause and in subclause (III) of this clause. Any benefit subject to payroll taxes is reported as salaries and wages. Allowable benefits that are routinely reported as salaries and wages include paid vacations, paid holidays, sick leave, voting leave, court or jury duty leave, and/or all-inclusive paid days, as specified in subclause (III)(-c-) of this clause. Allowable benefits which are routinely reported as employee benefits include employer contributions to certain deferred compensation plans, as specified in subclause (III)(-a-) of this clause, employer contributions to an employee retirement fund or certain pension plans, as specified in subclause (III)(-b-) of this clause, and costs of certain employer-paid health, life, and disability insurance premiums, as specified in subclause (III)(-f-) of this clause. The contracted provider's unrecovered cost of meals and room and board furnished to direct care employees, uniforms, employee personal vehicle mileage reimbursement in accordance with paragraph (15) of this subsection, job-related training reimbursements in accordance with paragraph (15) of this subsection, and job certification renewal fees in accordance with paragraph (15) of this subsection are not to be reported as benefits but are to be reported as costs applicable to specific cost report line items, unless they are subject to payroll taxes, whereas they are reported as salaries and wages.

(III) Benefits include the following:

(-a-) Employer contributions to certain deferred compensation plans are reported as employee benefits. Deferred compensation is remuneration currently earned by an employee but which is not received until a subsequent period, usually after retirement. For the cost to be allowable, the deferred compensation plan must be formal, established, and maintained by the contracted provider and communicated to all eligible employees. A formal plan is one that is provided for in a written agreement executed between the contracted provider and the participating employees. The plan must:

(-1-) prescribe the method for calculating all contributions to the fund;

(-2-) be funded with contributions made systematically to a funding agency outside the contracted provider's ownership or control, such as a trustee, an insurance company, or a custodial bank account;

(-3-) provide for the protection of the plan's assets;

(-4-) designate the requirements for vested benefits;

(-5-) provide the basis for the computation of the amounts of benefits to be paid;

(-6-) be expected to continue despite normal fluctuations in the contracted provider's economic experience; and

(-7-) use all fund contributions and earnings for the sole benefit of the participating employees. Contributions made during the cost-reporting period to a deferred compensation plan meeting the requirements specified in subitems (-1-) - (-7-) of this item which represent legal obligations of the contracted provider and which are clearly enumerated as to dollar amount are allowable costs and should be reported on cost reports as employee benefits. Reasonable trustee or custodial fees paid by the contracted provider will be allowed as an administrative cost. However, such fees will not be allowable where the deferred compensation plan provides that they will be paid out of the corpus or earnings of the fund. To be allowable, contributions representing the employee's share cannot revert to the contracted provider. However employer-paid contributions can revert back to the contracted provider in the event an employee does not vest if designated in the requirements for vested benefits.

(-b-) Employer contributions to an employee retirement fund or certain pension plans are reported as employee benefits. A pension plan is a type of deferred compensation plan which is established and maintained by the employer to provide systematic payment of definitely determinable benefits to its employees over a period of years, or for life, after retirement. Such a plan may include disability, withdrawal, option for lump-sum payment, or insurance or survivorship benefits incidental and directly related to the pension benefits. A pension plan must meet all the requirements of a deferred compensation plan. All employees' pension fund rights must be nonforfeitable after such time as they vest under the plan. Pension fund rights cannot be contingent on continuance of employment or other factors. Only the amount the contracted provider or employer contributed to the pension fund during the reporting period is allowable and should be reported as an employee benefit. To be allowable, contributions representing the employee's share cannot revert to the contracted provider. However employer-paid contributions can revert to the contracted provider in the event an employee does not vest.

(-c-) Paid leave is reported as salaries or wages. Paid vacations, paid holidays, sick leave, voting leave, court or jury duty leave, and/or all-inclusive paid days, all are reported as employee salaries and/or wages rather than as employee benefits, as follows:

(-1-) A vacation benefit is a right granted by an employer to an employee to be absent from his job for a stipulated period of time without loss of pay or to be paid an additional salary in lieu of taking a vacation. The contracted provider's vacation policy must be consistent among all employees of a specific category. Vacation expense subject to payroll taxes must be reported as salaries and wages. Accrued vacation expense not yet subject to payroll taxes must be reported as employee benefits. Providers must maintain adequate documentation to substantiate that costs reported one year as accrued benefits are not also reported, either the same or another year, as salaries and wages.

(-2-) The cost of sick leave taken, or payment in lieu of sick leave taken, is not to exceed the salary or wage the employee would have earned had they reported for work. Sick leave costs subject to payroll taxes must be reported as salaries and wages. Accrued sick leave costs not yet subject to payroll taxes must be reported as employee benefits. Providers must maintain adequate documentation to substantiate that costs reported one year as accrued benefits are not also reported, either the same or another year, as salaries and wages.

(-3-) A formal plan for all-inclusive paid days off (PDO) is one under which all employees earn accrued vested leave, or payment in lieu of leave taken, for an unallocated combination of occasions such as illness, medical appointments, holidays, vacations, family leave, and care of a sick child, based on actual hours worked. The cost of PDO subject to payroll taxes must be reported as salaries and wages. Accrued costs of PDO not yet subject to payroll taxes must be reported as employee benefits. Providers must maintain adequate documentation to substantiate that costs reported one year as accrued benefits are not also reported, either the same or another year, as salaries and wages.

(-d-) Provider-paid instructional courses benefiting the employer's interest are not to be reported as employee benefits, but are to be reported as costs related to specific cost report line items. Costs related to provider-paid instructional courses for the benefit of the employee only are unallowable costs. Refer to paragraph (15)(A) of this subsection, concerning staff training costs.

(-e-) Contracted provider's unrecovered cost of meals and room and board furnished on-site to direct care employees are not to be reported as employee benefits, but are to be reported as costs related to specific cost report line items. Any reasonable unrecovered cost of meals and/or room and board furnished on-site by a contracted provider to its direct care employees, which are equivalent to the meals and/or room and board provided to clients, are allowable costs since they are related to client care in that such reasonable costs are appropriate and helpful in developing and maintaining the contracted provider's operations to deliver contracted services. Such allowable costs should be reported in the cost area where the costs were incurred, such as meal costs being reported in the cost area associated with food and meal preparation and room and/or board costs being reported in the cost area associated with building costs.

(-f-) Costs of health, disability and life insurance premiums paid or incurred by the contracted provider if the benefits of the policy are payable to the employee or his beneficiary are reported as employee benefits. Report allowable health, disability, and life insurance premium costs as employee benefits. Refer to paragraph (13) of this subsection, concerning insurance expense.

(B) Compensation of employees that is not clearly enumerated as to dollar amount or which represent profit or surplus revenue distributions are unallowable costs. Accrued expenses that are not legal obligations of the contracted provider are unallowable costs, including any form of profit sharing and the accrued liabilities of unfunded deferred compensation plans.

(2) Compensation of owners and related parties. Compensation includes both cash and non-cash forms of compensation subject to federal payroll tax regulations. Compensation includes withdrawals from an owner's capital account; wages and salaries (including bonuses); payroll taxes and insurance; and benefits. Payroll taxes and insurance include Federal Insurance Contributions Act (old age, survivors, and disability insurance (OASDI) and Medicare hospital insurance); Unemployment Compensation Insurance; and Workers' Compensation Insurance. Allowable compensation must be reported as salaries and not as management fees. This paragraph applies to the compensation of owners and related parties unless limits or caps on the compensation of owners and related parties are stated in the program specific rules, then those limits or caps take precedence.

(A) Allowable compensation of owners and related parties.

(i) A person who is a sole proprietor, partner, or corporate stockholder-employee owning any of the outstanding stock of the contracted provider is considered an owner for the purposes of this subparagraph. Allowable compensation for a related party, as defined in §355.102(i) of this title, a sole proprietor-employee, a partner-employee, or a corporate stockholder-employee is governed by the principles that the services rendered are necessary functions and that the remuneration is the reasonable value of the services rendered.

(I) A function is deemed necessary when, if the owner or related party had not performed said function, the contracted provider would have had to employ another person to perform that function. To be necessary, a function must pertain to direct or indirect activities in the provision or supervision of contracted client services. The fact that an owner may have potential supervisory and managerial authority and responsibility is not as important as the manner in which this authority and responsibility is actually exercised. As an example, the right of the owner-administrator to overrule decisions does not solely constitute a basis for recognition of compensation comparable to nonowner-administrators.

(II) The test of reasonableness requires that the compensation of owners or related parties be such an amount as would ordinarily be paid for comparable services performed by nonowners or unrelated parties. Reasonable compensation is limited to the fair market value of services rendered by the owner or related party in connection with contracted client care. Education and experience of the owner are pertinent only as they relate to the job being performed and the services being rendered. For example, where an owner-administrator is also a physician or a nurse or a lawyer, but the services evaluated are administrative in nature rather than the actual practice of medicine or nursing or law, the allowable compensation is based on the compensation nonphysician or nonnurse or nonlawyer administrators receive rather than on the rate physicians or nurses or lawyers receive for their professional services.

(ii) The compensation must be for services performed by the related party, owner, partner, or stockholder that do not duplicate services performed by another employee of the contracted provider.

(iii) Compensation for "full-time" service requires that at least 40 hours per week be devoted to the duties of the position for which compensation is requested. For owners devoting less than 40 hours per week to the position, allowable compensation is limited to the proportion of 40 hours actually devoted to the contract services. Documentation regarding owners and related parties must be kept in accordance with §355.105(b)(2)(B)(xi) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(iv) Compensation must be in accordance with paragraph (1)(A) of this subsection concerning compensation of employees, must be made in regular periodic payments, must be subject to payroll or self-employment taxes, and must be verifiable by adequate documentation maintained by the contracted provider.

(B) Unallowable compensation of owners and related parties.

(i) Forms of compensation that are not clearly enumerated as to dollar amount or that represent profit or surplus revenue distributions are unallowable costs.

(ii) Compensation in the form of salaries, benefits, or any form of perquisite provided to owners, partners, officers, directors, stockholders, employees, or others who do not provide services directly to clients or who do not provide services required in the normal conduct of operations to provide contracted client services, is an unallowable cost. Services which would be required in the normal conduct of operations to provide contracted client services would include expenses such as administration of the program or supervision of direct care staff.

(3) Compensation for outside consultants and fees for services provided by outside vendors. Allowable compensation for outside consultants and contracted services must meet the criteria in §355.102 of this title. Specific criteria for certain types of compensation of outside consultants and contracted services are as follows:

(A) Accounting and audit fees.

(i) Allowable accounting and audit fees. Fees for preparation of business tax reports and returns, financial statements, and cost reports are allowable costs. Audit fees associated with the performance of a financial audit are allowable costs.

(ii) Unallowable accounting and audit fees. Expenses related to the preparation of personal tax returns are unallowable costs as are certain taxes. Refer to paragraph (12) of this subsection, concerning tax expense and credits. Audit fees associated with the performance of a single audit are unallowable costs. The cost attributable to a financial audit that was conducted along with a single audit is allowable if the cost of the financial audit can be identified separately from the cost attributable to the single audit. Accounting fees and related costs associated with litigation between a provider and a governmental entity are unallowable. Accounting costs associated with any other unallowable costs are also unallowable. Fees related to the preparation of annual reports, reports to stockholders or other interested parties, or for investment management are unallowable costs.

(B) Legal fees. Legal retainers are not allowable in and of themselves, but rather must be documented as specified in §355.105(b)(2)(B)(viii) of this title. Legal costs associated with litigation between a provider and a governmental entity are unallowable. Legal costs associated with any other unallowable costs are also unallowable.

(4) Value of services of nonpaid workers. Since the contracted provider incurs no actual costs for nonpaid and/or volunteer workers, the value of the nonpaid work is not an element of cost; and the value of such nonpaid work is an unallowable cost.

(5) Boards of directors and trustees. Fees and expenses related to boards of directors and trustees are unallowable costs except for:

(A) Travel costs incurred by the contracted provider's board members or trustees to attend meetings of the contracted provider's board of directors or trustees are allowable costs in accordance with the travel guidelines as stated in paragraph (15)(B) of this subsection; and

(B) Errors and omissions (liability) insurance for boards of directors or trustees are allowable costs.

(6) Management fees.

(A) Allowable management fees. Reasonable management fees paid to unrelated parties are allowable costs. Allowable management fees paid to related parties are the actual costs to the related party for the materials, supplies, and services provided directly to the individual contracted provider. Any related party compensation or owner compensation included in allowable management fees paid to related parties must follow the guidelines specified in §355.102(i) of this title and in paragraph (2) of this subsection, concerning compensation of owners and related parties. Expenses for management provided by the contracted provider's central office must be reported as central office costs on the cost report. Cash management fees related to minimizing interest costs and banking expenses in the management of operating revenue necessary for contracted services are allowable costs.

(B) Unallowable management fees. Fees for management of personal investments or investments not necessary for the provision of contracted services are unallowable costs.

(7) Central office costs. A chain organization consists of a group of two or more contracted entities which are owned, leased or controlled through any other arrangement by one organization. A chain may also include business organizations which are engaged in other activities and which are not contracted program entities. Central offices of a chain organization vary in the services furnished to the components in the chain. The relationship of the central office to an entity providing contracted services is that of a related party organization to a contracted provider. Central offices usually furnish central management and administrative services such as central accounting, purchasing, personnel services, management direction and control, and other necessary services. To the extent the central office furnishes services related directly or indirectly to contracted client care, the reasonable costs of such services are allowable. Allowable central office costs include costs directly related to those services necessary for the provision of client care for contracted services in Texas and an appropriate share of allowable indirect costs. Where functions of the central office have no direct or indirect bearing on delivering contracted client care, the cost for those functions are not allowable costs. Costs which are unallowable to the contracted provider are also unallowable as central office costs. Where a contracted provider is furnished services, facilities, leases, or supplies from its central office, the costs allowed are subject to the guidelines of related party transactions in §355.102(i) of this title. Owner-employees and related parties receiving compensation for services provided through the central office are allowable to the extent provided in paragraph (2)(A) and (B) of this subsection, concerning compensation of owners and related parties.

(8) Utilities. To be allowable, the utilities must be used directly or indirectly in the provision of contracted services.

(9) Repairs and maintenance. For cost-reporting purposes, repairs and maintenance are categorized as ordinary or extraordinary (major) repairs and should be handled as follows.

(A) Ordinary repairs and maintenance are defined as outlays for parts, labor, and related supplies that are necessary to keep the asset in operating condition, but neither add materially to the use value of the asset nor prolong its life appreciably. Ordinary repairs are recurring and usually involve relatively small expenditures. Ordinary repairs include, but are not limited to, painting, wall papering, copy machine repair, repairing an electrical circuit, or replacing spark plugs. Because maintenance costs and ordinary repairs are similar, they are usually combined for accounting purposes. Ordinary repairs may be expensed.

(B) Extraordinary repairs (major repairs) involve relatively large expenditures, are not normally recurring in nature, and usually increase the use value (efficiency and use utility) or the service life of the asset beyond what it was before the repair. Extraordinary repairs costing $2,500 or more, with a useful life in excess of one year, should be capitalized and depreciated. The cost of the extraordinary repair should be added to the cost of the asset and depreciated over the remaining useful life of the original asset. If the life of the asset has been extended due to the repair, the useful life should be adjusted accordingly. Extraordinary repairs include, but are not limited to, major vehicle overhauls, major improvements in a building's electrical system, carpeting an entire building, replacement of a roof, or strengthening the foundation of a building.

(10) Depreciation and amortization expense. For DHS contracted providers: for purchases made after the beginning of the contracted provider's fiscal year 1997, an asset valued at $1,000 or more and with an estimated useful life of more than one year at the time of purchase must be depreciated or amortized, using the straight line method. For purchases made after the beginning of the contracted provider's fiscal year 2004, an asset valued at $2,500 or more and with an estimated useful life of more than one year at the time of purchase must be depreciated or amortized, using the straight line method. For TDMHMR contracted providers: for purchases made after the beginning of the contracted provider's fiscal year 1997, an asset valued at $2,500 or more and with an estimated useful life of more than one year at the time of purchase must be depreciated or amortized, using the straight line method. For all contracted providers: for purchases made after the beginning of the contracted provider's fiscal year 2015, an asset valued at $5,000 or more and with an estimated useful life of more than one year at the time of purchase must be depreciated or amortized, using the straight line method. In determining whether to expense or depreciate a purchased item, a contracted provider may expense any single item costing less than the capitalization level for that fiscal period as described above or having a useful life of one year or less. Depreciation and amortization expenses for unallowable assets and costs are also unallowable, including amounts in excess of those resulting from the straight line method, capitalized lease expenses in excess of actual lease payments, and goodwill or any excess above the actual value of physical assets at the time of purchase. The minimum useful lives to be assigned to common classes of depreciable property are as follows:

(A) Buildings. A building's life must be reported as a minimum of 30 years, with a minimum salvage value of 10%. All buildings, excluding the value of the land, are uniformly depreciated on a 30-year life basis, regardless of the actual date of construction or original purchase. Exceptions to this policy are permissible when contracted providers choose a useful-life basis in excess of 30 years. An example of depreciation on a 30-year life basis is:

Attached Graphic

(B) Building equipment; buildings and grounds improvements and repairs; durable medical equipment, furniture, and appliances; and power equipment and tools used for buildings and grounds maintenance. Use minimum schedules consistent with the most current version of "Estimated Useful Lives of Depreciable Hospital Assets," published by the American Hospital Association. Copies of this publication may be obtained by contacting the American Hospital Association, 155 North Wacker Drive, Chicago, IL 60606 or at www.aha.org. Leasehold improvements whose estimated useful lives according to the guidelines for depreciable hospital assets are longer than the term of the lease must be depreciated and/or amortized over the life of the leasehold improvement. Building improvements which are not structural in nature and do not extend the depreciable life of the building, but whose estimated useful lives according to the guidelines for depreciable hospital assets are longer than the remaining depreciable life of the building, must be depreciated over the normal useful life of the building improvements. Once the estimated useful life of the leasehold improvement has been established using the guidelines above, subsequent extensions of the lease period do not change the useful life of the leasehold improvement. Any exceptions to this policy shall be stated in each program-specific reimbursement methodology rules.

(C) Transportation equipment used for the transport of clients, staff, or materials and supplies utilized by the contracted provider. Cost reporting must reflect a minimum of three years for automobiles (including minivans); five years for light trucks and vans (up to and including 15-passenger vans); and seven years for buses and airplanes. Depreciation expenses for transportation equipment not generally suited or not commonly used to transport clients, staff, or provider supplies are unallowable costs. This includes motor homes and recreational vehicles; sports automobiles; motorcycles; heavy trucks, tractors and equipment used in farming, ranching, and construction; and transportation equipment used for other activities unrelated to the provision of contracted client care, unless program-specific reimbursement methodology rules provide otherwise. Refer to §355.105(b)(2)(B)(iii) of this title for requirements for the maintenance of mileage logs and other documentation required to substantiate transportation equipment costs.

(i) Luxury automobiles are defined for cost-reporting purposes as passenger vehicles, including automobiles, light trucks, and vans (up to and including 15-passenger vans) and excluding buses, with an historical cost at time of purchase or a market value at execution of the lease exceeding $30,000 when purchased or leased before January 1, 1997. For vehicles leased or purchased on or after January 1, 1997, luxury vehicles are defined as a base value of $30,000 with 2.0% being added (using the compound method) to the base value each January 1 beginning on January 1, 1998. Any amount above the definition of a luxury vehicle stated above is an unallowable cost. When a passenger vehicle's cost exceeds the amount determined by the definition of a luxury vehicle stated above, the historical cost is reduced to the amount determined by the definition of a luxury vehicle. When a passenger vehicle's market value at the execution of the lease exceeds the amount determined by the definition of a luxury vehicle stated above, the allowable lease payment is limited to the lease amount for a vehicle with the base value as determined above, with substantiating documentation as specified in §355.105(b)(2)(B)(iv) of this title. Luxury vehicles must be depreciated according to depreciation guidelines in this paragraph. Expenses for passenger luxury vehicles will be allowable if the contracted provider maintains adequate mileage logs substantiating the use of the luxury vehicles to transport clients, contracted provider staff or provider supplies. Refer to §355.105(b)(2)(B)(iii) of this title for requirements for the maintenance of mileage logs. The base value does not include specialized equipment, such as wheelchair lifts, added to assist clients.

(ii) The estimated life of a previously owned (used) vehicle is the longer of the number of years remaining in the vehicle's depreciable life or three years. For example, if a 2013 van were purchased in 2014, it would have four years remaining in its five-year depreciable life and that would become the depreciable life for the used vehicle. If a 2013 minivan were purchased in 2014, it would have two years remaining in its three-year depreciable life and the depreciable life for the used vehicle would then be three years.

(iii) Specialized equipment added to a vehicle to assist a client should be depreciated separately from the vehicle. Wheelchair lifts have an estimated useful life of five years.

(D) Depreciation for the first reporting period. Depreciation for the first reporting period is based on the length of time from the date of acquisition to the end of the reporting period. Depreciation on disposal is based on the length of time from the beginning of the reporting period in which the asset was disposed to the date of disposal.

(E) Planning and evaluation expenses. Planning and evaluation expenses for the purchase of depreciable assets are allowable costs only where purchases are actually made and the assets are put into service in the provision of care by the provider for contracted services.

(F) Gains and losses. Gains and losses realized from the trade-in or exchange of depreciable assets are included in the determination of allowable cost. When an asset is acquired by trading-in an asset that was being depreciated, the historical cost of the new asset is the sum of the undepreciated cost of the asset traded-in plus any cash or other assets transferred or to be transferred to acquire the new asset. Losses resulting from the involuntary conversion of depreciable assets, such as condemnation, fire, theft, or other casualty, are includable as allowable costs in the year of involuntary conversion, provided the total aggregate allowable losses incurred in any cost-reporting period do not exceed $5,000 and provided the assets are replaced. If the total aggregate allowable losses in any cost-reporting period exceed $5,000, the total amount of the losses over $5,000 is recognized as a deferred charge and treated as follows:

(i) If a depreciable asset is destroyed by an involuntary conversion beyond repair, then the amount of the loss over $5,000 must be capitalized as a deferred charge over the estimated useful life of the asset which replaces it. The allowable loss for a total casualty is the undepreciated cost of the asset, less insurance proceeds, gifts, and grants from any source as a result of the involuntary conversion. If the unrepairable asset is disposed of by scrapping, income received from salvage is treated as a reduction in the amount of the allowable loss. Conversely, where additional expense is incurred in the scrapping operation, such cost would be added to the allowable loss of the destroyed asset.

(ii) If a depreciable asset is partially destroyed or damaged as a result of an involuntary conversion, a reduction in its cost basis is assumed to have taken place. Therefore, the cost basis of the asset must be reduced to reflect the amount of the casualty loss, regardless of whether the loss is covered by insurance.

(I) The amount of the casualty loss is the difference between the fair market value immediately before the casualty and the fair market value immediately after the casualty; however, for cost-reporting purposes, the allowable loss is limited to the percent of loss in fair market value applied to the net book value of the asset at the time the casualty occurred. This method of calculating the allowable loss recognizes the actual reduction in the cost value of the asset rather than the reduction in replacement value.

(II) Any loss over $5,000 must be capitalized as a deferred charge and amortized over the useful life of the restored asset.

(III) The fair market value generally can be ascertained by competent appraisal. If no appraisal is made, the cost of repairs to the damaged property is acceptable as evidence of the loss of value if the repairs restore the property to its condition immediately before the casualty and, as a result of the repairs, the value of the property has not been increased. The amount of the allowable loss is then deducted from the cost basis of the asset before the casualty, to arrive at the adjusted cost basis of the asset. Any insurance proceeds received or recoverable must be deducted from the amount of the casualty loss to determine the gain or the loss.

(IV) Actual costs incurred in the restoration of an asset are added to the adjusted cost basis of the asset to arrive at the revised cost of the restored asset and capitalized over the remaining useful life of the restored asset.

(V) When the repairs materially improve or add to the value or utility of the property or appreciably prolong its useful life, the repairs must be depreciated over the estimated life of the repairs.

(VI) When the contracted provider maintains a self-insurance reserve fund, the amount of the casualty loss recognized as an allowable cost is limited to the lesser of the decrease in fair market value, as adjusted, of the damaged or destroyed asset or the amount of cash, and/or investments, comprising the accumulated balance of the self-insurance reserve account.

(VII) When an asset is sold before the end of its useful life and a gain is realized (the sales price is greater than the remaining allowable depreciation), no additional depreciation or expense is allowed.

(11) Interest expense. Reasonable and necessary interest on current and capital indebtedness is an allowable cost. In the case of allowable interest incurred on a loan, in order to be determined necessary, the loan must have been made to satisfy a financial need for a purpose reasonably related to contracted client care.

(A) For cost-reporting purposes, allowable interest expenses are limited to that net portion of interest accrued which has not been reduced or offset by interest income. Refer to §355.104(5) of this title (relating to Revenues). To be allowable, the following requirements must be met:

(i) the loan must be supported by evidence in writing of an agreement that funds were borrowed and that payment of interest and repayment of the funds are required and systematically made. Refer to §355.105(b)(2)(B)(ii) of this title;

(ii) the loan must be made in the name of the contracted provider entity as maker or comaker of the note; and

(iii) the proceeds of the note or loan must be used for allowable costs.

(B) Interest expense on a demand note is allowable if the loan is the result of an arm's-length transaction.

(C) Where the lender is a related party, allowable interest is limited to the prevailing national average prime interest rate in effect at the time at which the loan contract was finalized, as reported by the United States Department of Commerce, Bureau of Economic Analysis, in the Survey of Current Business.

(D) Interest costs incurred during the period of construction or enlarging of a building must be capitalized as part of the cost of the building.

(E) Reasonable finance charges and service charges, together with interest on indebtedness, are allowable costs.

(F) Other fees associated with obtaining an allowable loan, such as broker's fees to solicit financing, lender's fees, attorney's fees, and due diligence fees, are allowable costs.

(G) Interest expenses on funds borrowed for purposes of investing in operations other than contracted services, on loans pertaining to unallowable items, and on borrowed funds creating excess working capital are unallowable costs.

(12) Tax expense and credits.

(A) Generally, taxes assessed against the contracted provider, in accordance with the levying enactments of Texas and lower levels of government and for which the contracted provider is liable for payment, are allowable costs. Tax expense based on fines and penalties are unallowable costs.

(B) Employment-related taxes such as Federal Insurance Contribution Act (FICA), Workers' Compensation and Unemployment Compensation, are allowable costs. Refer to paragraph (1) and (1)(A) of this subsection.

(C) Franchise taxes are allowable costs. A franchise tax is a periodic assessment, as defined by the Texas Comptroller of Public Accounts and paid to the Texas State Treasurer, levied on the operation of a business in the State of Texas. Franchise taxes do not refer to franchise fees, which are the costs associated with a company's granting the right to sell its products or services in a specified territory.

(D) Unallowable taxes include:

(i) federal income taxes and excess profit or surplus revenue based taxes, including any interest or penalties paid thereon. However, fees for preparation of business tax reports and business returns required by law are allowable;

(ii) state or local income and excess profit or surplus revenue based taxes. However, fees for preparation of business tax reports and/or business returns are allowable;

(iii) taxes in connection with financing, refinancing, or refunding operations, such as taxes on the issuance of bonds, property transfers, issuance or transfer of stocks. Generally, these costs are either amortized over the life of the securities or depreciated over the life of the asset. They are, however, unallowable as tax expense;

(iv) taxes from which exemptions are available to the contracted provider;

(v) special assessments on land which represent capital improvements should be capitalized and depreciated over their estimated useful lives and are not allowable as tax expenses;

(vi) taxes, such as sales taxes, levied against the client and collected and remitted by the contracted provider; and

(vii) self-employment taxes.

(13) Insurance expense. This section covers the following types of insurance: property damage and destruction; fire and casualty; malpractice and comprehensive general liability; errors and omissions insurance covering boards of directors; theft insurance (fidelity bonds and burglary insurance); workers' compensation; transportation equipment insurance; life insurance for owners, officers, and key employees; health; disability; and unemployment compensation.

(A) Purchased and commercial insurance. The reasonable costs of insurance purchased from a commercial carrier or a nonprofit service corporation are allowable if resulting from an arm's-length transaction. The commercial carrier or nonprofit service corporation must meet the standards as set by the Texas Department of Insurance. Costs of insurance purchased from a limited purpose insurer are allowable if they are not in excess of the cost of available comparable commercial insurance premiums and meet the reasonable cost provisions. If comparable insurance premiums are not available, the limited purpose insurer or captive insurance company must obtain an evaluation of the adequacy and reasonableness of its insurance premium by an independent actuary, commercial insurance company, or broker.

(B) Self-insurance. Self-insurance is a means whereby a contracted provider undertakes the risk to protect itself against anticipated liabilities by providing funds in an amount equivalent to liquidate those liabilities. Self-insurance can also be described as being uninsured. To qualify as an allowable self-insurance plan, a contracted provider must enter into an agreement with an unrelated party that does not provide for the shifting of risk to the unrelated party designed to provide only administrative services to liquidate those liabilities and manage risks. Self-insurance costs for contracted providers who have received certificates of authority to self-insure from the Texas Workers' Compensation Commission are allowable costs. Self-insurance costs in excess of costs for similar, comparable coverage by purchased and/or commercial insurance premiums are subject to a cost ceiling in accordance with subparagraph (E)(i) - (iv) of this paragraph. Documentation substantiating the cost of comparable coverage by purchased and/or commercial insurance premiums must be obtained and maintained as specified in §355.105(b)(2)(B)(ix) of this title.

(i) Costs related to self-insurance are allowable on a claims-paid basis. Contributions to the self-insurance fund or reserve which do not represent payments based on current liabilities are not considered actual incurred expenses and are not allowable costs. For cost-reporting purposes, self-insurance costs are reported on a cash basis. For cost-reporting purposes, compensation paid to employees who have been injured on the job is allowable and should be reported as compensation according to the type of compensation expense incurred in accordance with paragraphs (1) and (2) of this subsection.

(ii) For cost-reporting purposes, allowable employee-related paid claims, such as health insurance and workers' compensation costs, may either be directly charged to the business component in which the employee worked or may be allocated across all business components as an administrative expense. The method chosen to report these costs must remain consistent each year. Changes in the method for reporting those costs must be approved in accordance with §355.102(j) of this title.

(C) Determining self-insurance or purchased commercial insurance. There may be situations in which there is a fine line between self-insurance and purchased or commercial insurance. This is particularly true of "cost-plus" type arrangements. As long as there is at least some shifting of risk to the unrelated party, even if limited to situations such as provider bankruptcy or employee termination, the arrangement will not be considered self-insurance. Contributions to a special risk management fund or pool that is operated by a third party that assumes some of the risk and that has an annual actuarial review are allowable costs. Examples of such special risk management funds and pools include the Texas Council Risk Management Fund and the Texas Municipal League Intergovernmental Risk Pool.

(D) Reporting of insurance costs. All allowable insurance premium costs should be reported on cost reports, with amounts accrued for premiums, modifiers, and surcharges during the cost-reporting period being adjusted by any refunds and discounts actually received or settlements paid during the same cost-reporting period.

(E) Losses in excess of coverage. When a contracted provider is not fully insured by a purchased commercial insurance policy, i.e., the provider's coverage includes coinsurance provisions and/or deductibles, the amount of allowable insurance costs reported for each cost-reporting period is subject to a cost ceiling.

(i) The cost ceiling for employee-related insurance, such as health insurance, or workers' compensation coverage, is either the amount that would have been incurred had the provider purchased full coverage for its entire business entity through a commercial insurance policy or an amount equal to 10% of the payroll for employees eligible for such coverage. This cost ceiling is applied separately to employee-related insurance and to workers' compensation coverage.

(ii) The cost ceiling for non-employee-related insurance, such as malpractice insurance, comprehensive general liability insurance, or property insurance, is the amount that would have been incurred had the provider purchased full coverage for its entire business entity through a commercial insurance policy.

(iii) If, during a cost-reporting period, a provider incurs allowable paid claims in excess of the applicable cost ceiling, the provider reports on its current cost report allowable insurance costs up to the amount of the applicable cost ceiling, with the allowable costs in excess of the applicable cost ceiling being carried forward to future cost-reporting periods. When, during a future cost-reporting period, a provider incurs allowable insurance costs in an amount less than the applicable cost ceiling, the provider reports on its cost report the allowable insurance costs (paid claims) incurred during that cost-reporting period plus any allowable carry forward amount up to the amount of the applicable cost ceiling, with any excess carry forward being carried forward to future cost reporting periods.

(iv) Documentation requirements are stated in §355.105(b)(2)(B)(ix) of this title.

(F) Absence of coverage. Where a contracted provider, other than a governmental provider, has no insurance protection, the reporting of the provider's paid claims must follow the guidelines stated in subparagraph (E) of this paragraph. For governmental providers, allowable paid claims for cost-reporting purposes include all claims paid during the cost-reporting period only if the provider demonstrates that it has a claims management and risk management program.

(G) Life insurance costs.

(i) In general, premiums related to insurance on the lives of owners, officers, and key employees where the contracted provider is a direct or indirect beneficiary are unallowable costs.

(ii) Life insurance costs are allowable if:

(I) a contracted provider is required by a lending institution or other lender to purchase such insurance to guarantee the outstanding loan balance;

(II) the lending institution or other lender must be designated as the beneficiary of the insurance policy; and

(III) upon the death of the insured, the proceeds are restricted to paying off the balance of the loan.

(iii) Allowable insurance premiums are limited to premiums equivalent to that of a decreasing term life insurance policy needed to pay off the outstanding loan balance or that portion of the premium which can be equated to the premium for a similar face amount of a decreasing term life policy. In addition, the loan must be reasonable and necessary and must meet the criteria for allowable loans and interest expense as stated in subsection (b)(11) of this section.

(iv) Provider-paid premiums related to insurance on the lives of owners-employees, officers, and key employees where the individual's relatives or his estate are the beneficiary are considered to be employee benefits to the individual and are allowable costs to the extent such employee benefits are allowable. Provider-paid premiums related to insurance on the lives of owners-employees, officers, and key employees where required by a financial institution and the financial institution is the beneficiary is allowable.

(H) Insurance costs pertaining to unallowable costs. Insurance costs pertaining to items of unallowable costs are themselves unallowable costs.

(I) Board of directors' or trustees insurance. Errors and omissions insurance (liability) on members of boards of directors or trustees is an allowable cost.

(14) Dues or contributions to organizations.

(A) Allowable dues and contributions to organizations. Costs are allowable for membership in professional associations directly and primarily concerned with the provision of services for which the provider is contracted. Allowable costs of memberships in such organizations include initiation fees, dues, and subscriptions to related professional periodicals. Allowable costs related to meetings and conferences whose primary purpose is to disseminate information for the advancement of contracted client care or the efficient operation of the contracted program include reasonable travel costs in accordance with paragraph (15)(B) of this subsection and reasonable registration fees and other costs incidental to those functions. Travel costs incurred by members of the board of directors of professional associations that are directly and primarily concerned with the provision of services for which the provider has contracted are allowable in accordance with paragraph (15)(B) of this subsection. Dues or licensing fees related to maintaining the professional accreditation or license of an employee are allowable to the extent that the professional accreditation or license is directly related to and necessary for the performance of that employee's functions.

(B) Unallowable dues and contributions to organizations. Dues to nonprofessional organizations are unallowable. Assessments whose purpose is to fund lawsuits or any legal action against the state or federal government are unallowable. Portions of dues based on revenue or for the purposes of lobbying, or campaign contributions are unallowable costs. Costs of membership in civic organizations whose primary purpose is the promotion and implementation of civic objectives are unallowable. Dues or contributions made to any type of political, social, fraternal, or charitable organization are unallowable. Chamber of Commerce dues are unallowable. Franchise fees are not considered dues or contributions to organizations.

(C) Dues to purchasing organizations or buying clubs. Allowable dues to purchasing organizations or buying clubs are limited to the pro-rata amount representing purchases made for use in providing contracted services.

(15) Training and travel costs.

(A) Staff training costs.

(i) Staff training costs refer to costs associated with educational activities for provider staff. To qualify as an allowable staff training cost, the training must:

(I) have a direct relationship with the employee's job responsibilities, thereby increasing the quality of contracted client care or the efficient operation of the contracted provider. Management training, if it is designed to enhance quality or improve administration and is relevant to the contracted service, is an allowable cost. The following apply to staff training costs.

(-a-) Non-related party staff. Costs of tuition, books, and related fees for courses required to complete the designated degree or certification are allowable. The degree or certification must be necessary to the provision of contracted client services of the contracted provider. An example would be any course required to be taken by a licensed vocational nurse (LVN) working toward a degree as a registered nurse (RN) where RN services are necessary to deliver services as required under the contract.

(-b-) Related party staff. Allowable costs are restricted to specific courses which have a direct relationship with the employee's job responsibilities. Examples of allowable staff training costs include tuition, books, and related fees for an accounting course for a bookkeeper and a management course for a supervisor. However, a history course for a bookkeeper, even though it may be a requirement for a college degree in accounting or business, is unallowable.

(II) be located within the state of Texas unless the purpose of the training is for staff training in contracted client care-related services or quality assurance which is not available in the state of Texas. All costs for training outside the continental United States are unallowable costs. For further guidelines regarding adequate documentation, refer to §355.105(b)(2)(B)(vi) of this title.

(ii) Staff training may be conducted within the provider setting or off-site. It may be operated by the contracted provider, provided by an accredited academic or technical institution, or conducted by a recognized professional organization for the particular training activity. Workshops on particular contracted client services, health applications, on-the-job safety, data processing, accounting, the Texas Health and Human Services Commission (HHSC) programmatic or cost related training, supervisory techniques, and other administrative activities are examples of allowable types of training. Costs of orientation, on-the-job training, and in-service training are recognized as normal operating costs and are allowable training costs.

(iii) For staff training conducted within the provider setting, allowable training costs include, but are not limited to, instructor and consultant fees, training supplies, and visual aids. For off-site training, allowable costs include costs such as allowable travel costs, registration fees, seminar supplies, and classroom costs. For additional guidelines regarding allowable travel costs, please refer to subparagraph (B) of this paragraph.

(iv) Staff training costs must be reported as net costs, having been offset by any reimbursement from grants, tuitions, or donations received for staff educational purposes.

(v) For information regarding nursing facility nurse aide training, refer to paragraph (20)(K) of this subsection and program-specific reimbursement methodology rules.

(vi) For guidelines on allowability for client prevocational, vocational, and educational costs, refer to program-specific reimbursement methodology rules for guidelines on allowability.

(B) Travel costs.

(i) Maximum allowable travel costs for allowable activities are as follows:

(I) 150% of the limits established by the Texas Legislature for non-exempt state employees, with respect to hotel costs and per diem rates; and

(II) the maximum allowable mileage reimbursement amount set by the Texas Legislature for non-exempt state employees.

(ii) Out-of-state travel costs are unallowable, unless the purpose of the travel is for staff training in contracted client-care-related services or in quality assurance which is not available in the state of Texas; the purpose of delivering direct contracted client services within 25 miles of the Texas border with adjoining states or Mexico; or the purpose for the travel is to conduct business related to contracted client services in Texas and the travel is between Texas and the contracted provider's central office. All costs for travel outside the continental United States are unallowable costs, with the singular exception of travel required for the delivery of direct contracted client services within 25 miles of the Texas-Mexico border.

(iii) Expenses for private aircraft are allowable only if:

(I) written documentation supporting the calculations for expenses for private aircraft and commercial alternatives, and flight logs are maintained as specified in §355.105(b)(2)(B)(iii) of this title; and

(II) the documentation demonstrates that the expenses for travel via private aircraft were not greater than those for commercial alternatives at the time the travel took place. If the expenses for private aircraft were greater than the documented costs for commercial alternatives at the time the travel took place, allowable private aircraft costs are limited to the documented costs for commercial alternatives.

(16) Advertising and public relations.

(A) Allowable advertising and public relations include:

(i) costs of advertising to meet statutory or regulatory requirements, such as program standards, rules, or contract requirements;

(ii) informational listings of contracted providers in a telephone directory, including yellow page listings up to one-eighth of a page per telephone directory in the provider's service area or in a directory of similar facilities in a given area are allowable if the listings are consistent with practices that are common and accepted in the industry;

(iii) costs of advertising for the purpose of recruiting necessary personnel are allowable costs. Refer to the definition of necessary in §355.102(f)(2) of this title;

(iv) costs of advertising for procurement of items related to contracted client care, and for sale or disposition of surplus or scrap material are treated as adjustments of the purchase or selling price; and

(v) costs of advertising incurred in connection with obtaining bids for construction or renovation of the contracted provider's facilities should be included in the capitalized cost of the asset. Refer to paragraph (10) of this subsection.

(B) Unallowable advertising and public relations include:

(i) costs of advertising of a general nature designed to invite physicians to utilize a contracted provider's facilities in their capacity as independent practitioners;

(ii) costs of advertising incurred in connection with the issuance of a contracted provider's own stock, or the sale of stock held by the contracted provider in another corporation considered as reductions in the proceeds from the sale;

(iii) costs of advertising to the general public which seeks to increase client utilization of the contracted provider's facilities;

(iv) public relations costs;

(v) any business promotional advertising; and

(vi) costs of the development of logos or other company identification.

(17) Promotional and fundraising activities. Promotional refers to any activity whose intent is to advertise or aid in the development of the business. Expenses relating to fundraising and promotional activities are unallowable, including salaries, benefits, and payroll taxes for staff performing these activities. If a staff member performs these activities along with allowable activities, a portion of that staff member's salary must be allocated to these unallowable activities and as such not be reported on the cost report. Other expenses associated with these activities are also unallowable, including advertising, publicity, travel, and meals.

(18) Grants, gifts, and income from endowments and operating revenue.

(A) Restricted grants, gifts, and income from endowments from private sources used to purchase allowable program costs should not be deducted and offset from allowable costs prior to reporting on the cost report.

(B) Grants and contracts from federal, state or local government, such as transportation grants, United States Department of Agriculture grants, education grants, Housing and Urban Development grants, and Community Service Block Grants, should be offset, prior to reporting on the cost report, against the particular cost or group of costs for which the grant was intended. If federal funds are paid for the care of a specified client, those federal funds should not be offset prior to reporting on the cost report, unless otherwise specified in the program-specific reimbursement methodology rules.

(C) Unrestricted grants, gifts, and income from endowments from private sources used to purchase allowable program items should not be offset by the contracted provider prior to reporting on the cost report. All unrestricted funds which are properly allocable to the cost report should be reported on a contracted provider's cost report, as well as any allowable costs to which the unrestricted funds were applied.

(D) Nonroutine revenues such as income from operations not associated with providing contracted services, including, but not limited to, beauty and barber shops, vending machines, gift shops, canteen stores, and meals sold to employees or guests should be offset or reduced by the related expenses prior to reporting the revenue on the cost report. Expenses related to providing these types of non-contracted operations are unallowable costs. If nonroutine operating expenses, including overhead costs incurred to generate nonroutine operating revenue, exceed nonroutine operating revenues, the net nonroutine operating expenses are unallowable costs. Routine operating revenue received as payments for the contracted services, such as income from private clients, private room and board, or other sources of routine contracted services are not to be offset. Refer to §355.102(k) of this title for further guidelines on reporting net expenses.

(19) In-kind donations.

(A) Allowable in-kind donations.

(i) Depreciation of in-kind donations is limited to donated buildings and donated vehicles used in the direct provision of contracted client services, where title has been transferred to the provider entity by a third party in an arm's-length transaction. Depreciation must be reported in accordance with subsection (b)(10) of this section. The historical cost basis used to depreciate vehicles must be consistent with the retail price of the National Automobile Dealers Association (NADA) listings; or, in the case of a new vehicle, the documented historical cost to the donor or NADA may be used. The historical cost basis used to depreciate donated buildings must be the lower of:

(I) the most recent tax appraisal of the building prior to donation, unless the donor was exempt from tax appraisal, in which case an independent appraisal made by a third-party appraiser at the time of donation may be used in place of the tax appraisal (for donations made prior to the provider's 1997 fiscal year, a current appraisal from an independent third-party appraiser may be used to establish the historical cost); or

(II) the documented historical cost to the donor.

(ii) Expenses actually incurred to maintain a donated asset for use in providing contracted client care to clients are allowable.

(iii) If a provider receives a donation of the use of space owned by another organization and if the provider and the donor organization are both part of a larger organizational entity (such as units of a state or county government), the space is not considered a related-party donation, but rather treated as allowable costs requiring allocation between the provider and the other organization. For example, if a county home health agency is given space to use in the county office building, costs associated with the use of the space (such as depreciation, janitorial services, maintenance, and repairs) must be allocated from the county to the county home health agency. Allocation of costs must be in compliance with §355.102(j) of this title.

(B) Unallowable in-kind donations. The value of unallowable in-kind donations may be collected for specific programs at the discretion of HHSC for statistical purposes only, on a schedule separately identified for such purpose. The value of in-kind donations to a contracted provider, such as produce, supplies, materials, services, equipment, or other items used by the contracted provider which the contracted provider did not purchase, is an unallowable cost. The value of in-kind donations of buildings or vehicles when the title is not transferred to the provider is an unallowable cost. The value of in-kind donations to a contracted provider which are not arm's-length transactions are unallowable costs. The contracted provider may not treat as an allowable cost the imputed value for unallowable in-kind donations.

(20) Miscellaneous costs.

(A) Employee relations expenses. Costs relating to employee relations are different from fringe benefits, as specified in paragraph (1)(A)(iii) of this subsection, in that employee relations expenses incurred are for employees as a group rather than as a fringe benefit for an individual employee. Examples of allowable employee relations costs, which are reported as administrative costs for cost-reporting purposes, include a staff party, an employee outing, or other such staff expenses intended to boost employee morale and in turn increase the efficiency and quality of care provided. Other examples of allowable employee relations expenses are plaques or awards presented to employees for certain achievements or honors. Employee relations cost which discriminates in favor of certain employees, such as employees who are officers, stockholders, related parties, or the highest paid individual(s) in the organization are unallowable. Employee relations costs are limited to a ceiling of $50 per employee eligible to participate per year. If a staff party includes nonemployees, an allocation must be made such that only the portion of costs relating to employees and their families in attendance is reported on the cost report. If a staff party also serves as an open house for promotional purposes, an allocation of costs must be made so that only costs relating to employees and their families in attendance are reported as allowable costs. Entertainment expenses other than those for the benefit of current clients or those for staff employee relations described above are unallowable costs.

(B) Organization costs. Organization costs are those costs directly incident to the creation of a corporation or other form of business necessary to provide contracted services. These costs are intangible assets in that they represent expenditures for rights and privileges which have a value to the business enterprise.

(i) Allowable organization costs include, but are not limited to, legal fees incurred (such as drafting documents) in establishing the corporation or other organization, necessary accounting fees, and fees paid to states for incorporation. Allowable organization costs must be amortized over a period of not less than 60 consecutive months, beginning with the first month in which services are delivered to the first client.

(ii) The following types of costs are considered unallowable organization costs: costs relating to the issuance and sale of shares of capital stock or other securities, reorganization costs, and stockholder servicing costs. If the business or corporation never commences actual operations, the organization costs are unallowable.

(C) Franchise fees.

(i) Allowable franchise fees. Allowable franchise fees include those costs related to actual goods, supplies, and services received in return for fees paid to a company for the right to sell its goods and/or services in a specific territory.

(ii) Unallowable franchise fees. Franchise fees based upon percentages of revenues and/or sales are unallowable costs. Franchise fees based upon goodwill are unallowable, with goodwill being that intangible, salable asset arising from the reputation of a business and its relationship with its customers.

(D) Startup costs. Startup costs are those reasonable and necessary preparation costs incurred by a provider in the period of developing the provider's ability to deliver services. Startup costs can be incurred prior to the beginning of a newly-formed business and/or prior to the beginning of a new contract or program for an existing business. Allowable startup costs include, but are not limited to, employee salaries, utilities, rent, insurance, employee training costs, and any other allowable costs incident to the startup period. Startup costs do not include capital purchases, which are purchased assets meeting the criteria for depreciation in paragraph (10) of this subsection. Any costs that are properly identifiable as organization costs or capitalizable as construction costs must be appropriately classified as such and excluded from startup costs. Allowable startup costs should be amortized over a period of not less than 60 consecutive months. If the business or corporation never commences actual operations or if the new contract/program never delivers services, the startup costs are unallowable.

(i) For a newly-formed business, startup costs should be accumulated up to the time the business begins (that is, when services are delivered to the first client/customer). Amortization of startup costs for a newly-formed business begins the month the business begins. In the event that a newly-formed business is established for the direct purpose of contracting with the state for delivery of client care services, startup costs should be accumulated up to the time the contract is effective or the time the first client receives services, whichever comes first, with amortization of startup costs beginning the same month.

(ii) For a new contract or program implemented by an existing business, startup costs are related only to the development of the provider's ability to furnish services according to the standards of the new contract/program and should be accumulated up to the time the first client receives services according to the contract/program standards or the effective date of the contract, whichever occurs first. Amortization of startup costs for a new contract/program implemented by an existing business begins the month in which the first client receives services according to contract/program standards or the effective date of the contract, whichever occurs first. If a contracted provider intends to prepare all portions of its entire program at the same time, startup costs for all portions of the program should be accumulated in a single account and should be amortized beginning either when the first client is admitted or the effective date of the contract, whichever occurs first. However, if a contracted provider intends to prepare portions of its program on a piecemeal basis, startup costs should be capitalized and amortized separately for the portion(s) of the provider's program prepared during different time periods. For example, a newly-formed corporation opens a senior citizen center for private clients, serving its first client on April 4, 2014. Startup costs would be those costs incurred prior to April 4, 2014, which meet the above definition of startup costs. Amortization of the startup costs for this newly-formed business would begin April 2014. If this same corporation received a contract to provide Day Activity and Health Services (DAHS) effective October 1, 2014 and if the corporation served its first DAHS client on November 5, 2014, startup costs would be those costs incurred to be able to deliver services according to DAHS program standards. If the corporation was in compliance with the DAHS standards from its beginning (April 2014), no new startup costs would be allowable for amortization as a result of the implementation of the new DAHS contract by the existing corporation. On the other hand, if the corporation was required to incur additional costs to bring the operation up to the DAHS program standards, those startup costs incurred prior to October 1, 2014 (since the contract effective date occurred prior to serving the first DAHS client) would be amortized beginning with October 2014.

(E) Research and development costs. Research and development costs, including, but not limited to, telephone costs, travel costs, attorney fees, and staff salaries, must be segregated into separate, individual accounts for each venture in the contracted provider's general ledger. Should such a "venture" result in a contract for a program, the allowable research and development costs would be incorporated as startup costs for that program. Research and development costs related to states other than Texas are not allowable costs for any allocation to any contracted program.

(F) Medical supplies and medical costs. In general, medical supplies and equipment required by the Occupational Safety and Health Administration (OSHA), used for universal health and safety precautions, or otherwise required to meet contracted program requirements are allowable costs. Refer to program-specific reimbursement methodology rules to determine program requirements for medical supplies and medical costs.

(G) Fines and penalties. Fines and penalties for violations of regulations, statutes, and ordinances of all types are unallowable costs. Penalties or charges for late payment of taxes, utilities, mortgages, loans or insufficient banking funds are unallowable costs.

(H) Business expenses not directly related to contracted services. Business expenses not directly related to contracted services, including business investment activities, stockholder and public relations activities, and farm and ranch operations (unless farm and ranch operations are specifically allowed by the contracted program as necessary to the provision of client care), are unallowable costs.

(I) Litigation expenses and awards. Unless explicitly allowed elsewhere in this chapter, no court-ordered award of damages or settlements made in lieu thereof or legal fees associated with litigation which resulted in any court-ordered award of damages or settlements made in lieu thereof, or a criminal conviction, are allowable. For workers' compensation litigation awards and settlements, the part of the award or settlement that reimburses the injured employee for lost wages and medical bills is an allowable cost.

(J) Lobbying costs. Lobbying costs are unallowable.

(i) Lobbying means the influencing or attempting to influence an officer or employee of any governmental agency, an officer or employee of Congress or the state legislature, or an employee of a member of Congress or the state legislature in connection with any of the following actions:

(I) the awarding of any governmental contract;

(II) the making of any governmental grant;

(III) the making of any governmental loan;

(IV) the entering of any cooperative agreement; and

(V) the extension, continuation, renewal, amendment, or modification of any governmental contract, grant, loan or cooperative agreement.

(ii) Costs associated with the following activities are unallowable as lobbying costs:

(I) attempting to influence the outcomes of any governmental election, referendum, initiative, or similar procedure, through in-kind or cash contributions, endorsements, publicity, or similar activity;

(II) establishing, administering, contributing to, or paying the expenses of a political party, campaign, political action committee, or other organization established for the purpose of influencing the outcomes of elections;

(III) attempting to influence the introduction of governmental legislation, the enactment or modification of any pending governmental legislation through communication with any member or employee of the Congress or state legislature (including efforts to influence state or local officials to engage in similar lobbying activity) or any governmental official or employee in connection with a decision to sign or veto enrolled legislation;

(IV) attempting to influence the introduction of governmental legislation, or the enactment or modification of any pending governmental legislation by preparing, distributing or using publicity or propaganda, or by urging members of the general public, or any segment thereof, to contribute to or participate in any mass demonstration, march, rally, fund raising drive, lobbying campaign or letter writing or telephone campaign; and

(V) performing legislative liaison activities, including attendance at legislative sessions or committee hearings, gathering information regarding legislation, and analyzing the effect of legislation, when such activities are carried on in support of or in knowing preparation for an effort to engage in unallowable lobbying.

(iii) The cost to contracted providers or their staff to attend meetings with the staff of state agencies or to attend public hearings or advisory committee meetings held by state agencies that are involved in the regulation of contracted client care in the program with which they are contracting and which meetings do not meet the definition of lobbying stated above, are not considered lobbying and are therefore allowable costs.

(iv) Expenses relating to lobbying are unallowable including salaries, benefits, and payroll taxes for staff performing these activities. If a staff member performs these activities along with allowable activities, a portion of that staff member's salary must be allocated to the unallowable activities and as such not be reported on the cost report.

(K) Direct reimbursements. Unless specifically exempted through program-specific reimbursement methodology rules, HHSC procedures or cost report instructions, any expenses directly reimbursable to the contracted provider that are considered outside the reimbursement payment system are unallowable costs. Such expenses include but are not limited to those associated with Medicare Part A and B ancillary services, HHSC voucher payment systems and vendor drug coverage. For guidelines on allowability of reporting costs in excess of those reimbursable directly through a voucher payment system, refer to program-specific reimbursement methodology rules.

(L) Losses resulting from theft or embezzlement. Losses resulting from theft or embezzlement of property or funds of the contracted provider or clients by the owners or employees of the contracted provider are not allowable costs.

(M) A bad debt. A bad debt allowance is a reduction in revenue resulting from unrecoverable revenue in uncollectible accounts created or acquired in the provision of contracted client care. Bad debt as an expense is unallowable.

(N) A charity or courtesy allowance. A charity allowance is a reduction in normal charges due to the indigence of the client or resident. A courtesy allowance is a reduction in charges granted as a courtesy to certain individuals, such as physicians or clergy. These allowances themselves are not costs since the costs of the services rendered are already included in the contracted provider's costs.

(21) Medicaid as payor of last resort. Medicaid is the payor of last resort. If a recipient has Medicare Part A or B benefits, other third party payor benefits, or any other benefits available those benefits must be accessed before Medicaid.

(22) For any individual eligible for Medicare Part D, the cost of any drug that is in a category that is covered by Medicare Part D is unallowable.

**History**
- *Source Note: The provisions of this §355.103 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective December 29, 1997, 22 TexReg 12485; amended to be effective June 26, 2000, 25 TexReg 6089; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective January 1, 2006, 30 TexReg 7721; amended to be effective September 1, 2011, 36 TexReg 4795; amended to be effective January 1, 2015, 39 TexReg 9193.*

##### **1 Tex. Admin. Code § 355.104** Revenues {#sec-355.104 omnilex-key=us-tx-regs-official--title-1--355.104}

A provider must report in the format specified by the Texas Health and Human Services Commission (HHSC) revenues that reflect the activity of the provider and that are directly related to the provision of contracted client care or services. A provider may not report revenues from other programs or activities in which the contracted provider may be engaged.

(1) Revenues should be reported net of charity allowances and courtesy allowances, and bad debt expense.

(2) Any revenues received directly by the provider through a voucher or from other direct payment systems as described in §355.103(b)(20)(K) of this title (relating to Specifications for Allowable and Unallowable Costs) must not be reported on the cost report unless specifically requested by the program-specific reimbursement methodology rules, HHSC procedures, or cost report instructions.

(3) For guidelines in reporting revenue received as a federal grant, refer to §355.103(b)(18) of this title and to program-specific reimbursement methodology rules.

(4) For guidelines in offsetting revenues against certain expenses, refer to §355.103(b)(18)(D) of this title.

(5) For reporting interest income:

(A) report as interest income, with no offset to interest expense, any interest earned on funded depreciation accounts, qualified pension funds, and debt service reserve funds required by non-related party lenders; and

(B) report as interest income, interest earned from all other sources, after first netting this income against interest expenses in the following sequence:

(i) interest incurred on working capital loans; and

(ii) interest incurred on all other loans except mortgage loans. Mortgage loans are not to be offset.

**History**
- *Source Note: The provisions of this §355.104 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective December 29, 1997, 22 TexReg 12485; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective January 1, 2015, 39 TexReg 9193.*

##### **1 Tex. Admin. Code § 355.105** General Reporting and Documentation Requirements, Methods, and Procedures {#sec-355.105 omnilex-key=us-tx-regs-official--title-1--355.105}

(a) General reporting. Except where otherwise specified under this title, the Texas Health and Human Services Commission (HHSC) follows the requirements, methods, and procedures set forth in this section to determine costs appropriate for use in the reimbursement determination process.

(b) Cost report requirements. Unless specifically stated in program rules or excused as described in paragraph (4)(D) of this subsection, each provider must submit financial and statistical information on cost report forms provided by HHSC, on facsimiles that are formatted according to HHSC specifications and are pre-approved by HHSC staff, or electronically in HHSC-prescribed format in programs where these systems are operational. The cost reports must be submitted to HHSC in a manner prescribed by HHSC. The cost reports must be prepared to reflect the activities of the provider while delivering contracted services during the fiscal year specified by the cost report. Cost reports or other special surveys or reports may be required for other periods at the discretion of HHSC. Each provider is responsible for accurately completing any cost report or other special survey or report submitted to HHSC.

(1) Accounting methods. All financial and statistical information submitted on cost reports must be based upon the accrual method of accounting, except where otherwise specified in §355.102 and §355.103 of this subchapter (relating to General Principles of Allowable and Unallowable Costs and Specifications for Allowable and Unallowable Costs) and in the case of governmental entities operating on a cash or modified accrual basis. For cost-reporting purposes, accrued expenses must be incurred during the cost-reporting period and must be paid within 180 days after the end of that cost-reporting period. In situations where a contracted provider, any of its controlling entities, its parent company/sole member, or its related-party management company has filed for bankruptcy protection, the contracted provider may request an exception to the 180-day requirement for payment of accrued allowable expenses by submitting a written request to the HHSC Provider Finance Department. The written request must be submitted within 60 days of the date of the bankruptcy filing or at least 60 days prior to the due date of the cost report for which the exception is being requested, whichever is later. The contracted provider will then be requested by the HHSC Provider Finance Department to provide certain documentation, which must be provided by the specified due date. Such exceptions due to bankruptcy may be granted for reasonable, necessary, and documented accrued allowable expenses that were not paid within the 180-day requirement. Accrued revenues must be for services performed during the cost-reporting period and do not have to be received within 180 days after the end of that cost reporting period in order to be reported as revenues for cost-reporting purposes. Except as otherwise specified by the cost determination process rules of this chapter, cost report instructions, or policy clarifications, cost reports should be prepared consistent with generally accepted accounting principles (GAAP), which are those principles approved by the American Institute of Certified Public Accountants (AICPA). Internal Revenue Service (IRS) laws and regulations do not necessarily apply in the preparation of the cost report. In cases where cost-reporting rules differ from GAAP, IRS, or other authorities, HHSC rules take precedence for provider cost-reporting purposes.

(2) Recordkeeping and adequate documentation. There is a distinction between noncompliance in recordkeeping, which equates with unauditability of a cost report and constitutes an administrative contract violation or, for the Nursing Facility program, may result in vendor hold, and a provider's inability to provide adequate documentation, which results in disallowance of relevant costs. Each is discussed in the following paragraphs.

(A) Recordkeeping. Providers must ensure that records are accurate and sufficiently detailed to support the legal, financial, and other statistical information contained in the cost report. Providers must maintain all work papers and any other records that support the information submitted on the cost report relating to all allocations, cost centers, cost or statistical line items, surveys, and schedules. HHSC may require supporting documentation other than that contained in the cost report to substantiate reported information.

(i) For contracted providers subject to 26 TAC Chapter 52 (relating to Contracting for Community Services), each provider must maintain records according to the requirements stated in 26 TAC §52.113(relating to Record Retention and Disposition) and according to the HHSC's prescribed chart of accounts, when available.

(ii) If a contractor is terminating business operations, the contractor must ensure that:

(I) records are stored and accessible; and

(II) someone is responsible for adequately maintaining the records.

(iii) For nursing facilities, failure to maintain all work papers and any other records that support the information submitted on the cost report relating to all allocations, cost centers, cost or statistical line items, surveys, and schedules may result in vendor hold as specified in §355.403 of this chapter (relating to Vendor Hold).

(iv) For all other programs, failure to maintain all work papers and any other records that support the information submitted on the cost report relating to all allocations, cost centers, cost or statistical line items, surveys, and schedules constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this subchapter (relating to Administrative Contract Violations).

(B) Adequate documentation. The relationship between reported costs and contracted services must be clearly and adequately documented to be allowable. Adequate documentation consists of all materials necessary to demonstrate the relationship of personnel, supplies, and services to the provision of contracted client care or the relationship of the central office to the individual service delivery entity level. These materials may include but are not limited to, accounting records, invoices, organizational charts, functional job descriptions, other written statements, and direct interviews with staff, as deemed necessary by HHSC auditors to perform required tests of reasonableness, necessity, and allowability.

(i) The minimum allowable statistical duration for a time study upon which to base salary allocations is four weeks per year, with one week being randomly selected from each quarter so as to assure that the time study is representative of the various cycles of business operations. One week is defined as only those days the contracted provider is in operation for seven continuous days. The time study can be performed for one continuous week during a quarter, or it can be performed over five or seven individual days, whichever is applicable, throughout a quarter. The time study must be a 100% time study, accounting for 100% of the time paid to the employee, including vacation and sick leave.

(ii) To support the existence of a loan, the provider must have available a signed copy of the loan contract, which contains the pertinent terms of the loan, such as amount, rate of interest, method of payment, due date, and collateral. The documentation must include an explanation for the purpose of the loan, and an audit trail must be provided showing the use of the loan proceeds. Evidence of systematic interest and principal payments must be available and supported by the payback schedule in the note or amortization schedule supporting the note. Documentation must also include substantiation of any costs associated with the securing of the loan, such as broker's fees, due diligence fees, lender's fees, attorney's fees, etc. To document allowable interest costs associated with related party loans, the provider is required to maintain documentation verifying the prime interest rate in accordance with §355.103(b)(11)(C) of this subchapter for a similar type of loan as of the effective date of the related party loan.

(iii) For ground transportation equipment, a mileage log is not required if the equipment is used solely (100%) for the provision of contracted client services in accordance with program requirements in delivering one type of contracted care. However, the contracted provider must have a written policy that states that the ground transportation equipment is restricted to that use, and that policy must be followed. For ground transportation equipment that is used for several purposes (including for personal use) or multiple programs or across various business components, mileage logs must be maintained. Personal use includes, among other things, driving to and from a personal residence. At a minimum, mileage logs must include for each individual trip the date, the time of day (beginning and ending), driver, persons in the vehicle, trip mileage (beginning, ending, and total), purpose of the trip, and the allocation centers (the departments, programs, and/or business entities to which the trip costs should be allocated). Flight logs must include dates, mileage, passenger lists, and destinations, along with any other information demonstrating the purpose of the trips so that a relationship to contracted client care in Texas can be determined. For the purpose of comparison to the cost of commercial alternatives, documentation of the cost of operating and maintaining a private aircraft includes allowable expenses relating to the lease or depreciation of the aircraft; aircraft fuel and maintenance expenses; aircraft insurance, taxes, and interest; pilot expenses; hangar and other related expenses; mileage, vehicle rental or other ground transportation expense; and airport parking fees. Documentation demonstrating the allowable cost of commercial alternatives includes commercial airfare ticket costs at the lowest fare offered (including all discounts) and associated expenses, including mileage, vehicle rental or other ground transportation expenses; airport parking fees; and any hotel or per diem due to necessary layovers (no scheduled flights at the time of return trip).

(iv) To substantiate the allowable cost of leasing a luxury vehicle as defined in §355.103(b)(10)(C)(i) of this subchapter, the provider must obtain at the time of the lease a separate quotation establishing the monthly lease costs for the base amount allowable for cost-reporting purposes as specified in §355.103(b)(10)(C)(i) of this subchapter. Without adequate documentation to verify the allowable lease costs of the luxury vehicle, the reported costs shall be disallowed.

(v) For adequate documentation purposes, a written description of each cost allocation method must be maintained that includes, at a minimum, a clear and understandable explanation of the numerator and denominator of the allocation ratio described in words and in numbers, as well as a written explanation of how and to which specific business components the remaining percentage of costs were allocated.

(vi) To substantiate the allowable cost for staff training as defined in §355.103(b)(15)(A) of this subchapter, the provider must maintain a description of the training verifying that the training pertained to contracted client care-related services or quality assurance. At a minimum, a program brochure describing the seminar or a conference program with a description of the workshop must be maintained. The documentation must provide a description clearly demonstrating that the seminar or workshop provided training for contracted client care-related services or quality assurance.

(vii) Documentation regarding the allocation of costs related to noncontracted services, as specified in §355.102(j)(2) of this subchapter, must be maintained by the provider. At a minimum, the provider must maintain written records verifying the number of units of noncontracted services provided during the provider's fiscal year, along with adequate documentation supporting the direct and allocated costs associated with those noncontracted services.

(viii) Adequate documentation to substantiate legal, accounting, and auditing fees must include, at a minimum, the amount of time spent on the activity, a written description of the activity performed which clearly explains to which business component the cost should be allocated, the person performing the activity, and the hourly billing amount of the person performing the activity. Other legal, accounting, and auditing costs, such as photocopy costs, telephone costs, court costs, mailing costs, expert witness costs, travel costs, and court reporter costs, must be itemized and clearly denote to which business component the cost should be allocated.

(ix) Providers who self-insure for all or part of their employee-related insurance costs, such as health insurance and workers' compensation costs, must use one of the two following methods for determining and documenting the provider's allowable costs under the cost ceilings and any carry forward as described in §355.103(b)(13)(E) of this subchapter.

(I) Providers may obtain and maintain each fiscal year's documentation to establish what their premium costs would have been had they purchased commercial insurance for total coverage. The documentation should include, at a minimum, bids from two commercial carriers. Bids must be obtained no less frequently than every three years.

(II) If providers choose not to obtain and maintain commercial bids as described in subclause (I) of this clause, providers may claim as an allowable cost the health insurance actual paid claims incurred on behalf of the employees that do not exceed 10% of the payroll for employees eligible for receipt of this benefit. In addition, providers may claim as an allowable cost the workers' compensation actual paid claims incurred on behalf of the employees, an amount in each cost report period that is not to exceed 10% of the payroll for employees eligible for receipt of this benefit.

(III) Providers who self-insure must also maintain documentation that supports the amount of claims paid each year and any allowable costs to be carried forward to future cost-reporting periods.

(x) Providers who self-insure for all or part of their coverage for nonemployee-related insurance, such as malpractice insurance, comprehensive general liability, and property insurance, must maintain documentation for each cost-reporting period to establish what their premium costs would have been had they purchased commercial insurance for total coverage. The documentation should include, at a minimum, bids from two commercial carriers. Bids must be obtained no less frequently than every three years. Providers who self-insure must also maintain documentation that supports the amount of claims paid each year and any allowable costs to be carried forward to future cost-reporting periods. Governmental providers must document the existence of their claims management and risk management programs.

(xi) Regarding compensation of owners and related parties, providers must maintain the following documentation, at a minimum, for each owner or related party: a detailed written description of actual duties, functions, and responsibilities; documentation substantiating that the services performed are not duplicative of services performed by other employees; time sheets or other documentation verifying the hours and days worked; the amount of total compensation paid for these duties, with a breakdown detailing regular salary, overtime, bonuses, benefits, and other payments; documentation of regular, periodic payments and/or accruals of the compensation, documentation that the compensation is subject to payroll or self-employment taxes; and a detailed allocation worksheet indicating how the total compensation was allocated across business components receiving the benefit of these duties.

(I) Regarding bonuses paid to owners and related parties, the provider must maintain clearly defined bonus policies in its written agreements with employees or in its overall employment policy. At a minimum, the bonus policy must include the basis for distributing the bonuses, including qualifications for receiving the bonus and how the amount of each bonus is calculated. Other documentation must specify who received bonuses, whether the persons receiving bonuses are owners, related parties, or arm's-length employees, and the bonus amount received by each individual.

(II) Regarding benefits provided to owners and related parties, the provider must maintain clearly defined benefit policies in its written agreements with employees or in its overall employment policy. At a minimum, the documentation must include the basis for eligibility for each type of benefit available, who is eligible to receive each type of benefit, who actually receives each type of benefit, whether the persons receiving each type of benefit are owners, related parties, or arm's-length employees, and the amount of each benefit received by each individual.

(xii) Regarding all forms of compensation, providers must maintain documentation for each employee which clearly identifies each compensation component, including regular pay, overtime pay, incentive pay, mileage reimbursements, bonuses, sick leave, vacation, other paid leave, deferred compensation, retirement contributions, provider-paid instructional courses, health insurance, disability insurance, life insurance, and any other form of compensation. Types of documentation would include insurance policies; provider benefit policies; records showing paid leave accrued and taken; documentation to support hours (regular and overtime) worked and wages paid; and mileage logs or other documentation to support mileage reimbursements and travel allowances. For accrued benefits, the documentation must clearly identify the period of the accrual. For example, if an employee accrues two weeks of vacation during 20x1 and receives the corresponding vacation pay during 20x3, that employee's compensation documentation for 20x3 should clearly indicate that the vacation pay received had been accrued during 20x1.

(I) For staff required to maintain continuous daily time sheets as per §355.102(j) of this subchapter and subclause (II) of this clause, the daily timesheet must document, for each day, the staff member's start time, stop time, total hours worked, and the actual time worked (in increments of 30 minutes or less) providing direct services for the provider, the actual time worked performing other functions, and paid time off. The employee must sign each timesheet. The employee's supervisor must sign the timesheets each payroll period or at least monthly. Work schedules are unacceptable documentation for staff whose duties include multiple direct service types, both direct and indirect service component types, and both direct hands-on support and first-level supervision of direct care workers.

(II) For the Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID), Home and Community-based Services (HCS), and Texas Home Living (TxHmL) programs, staff required to maintain continuous daily timesheets include staff whose duties include multiple direct service types, both direct and indirect service component types and/or both direct hands-on support and first-level supervision of direct care workers.

(xiii) Management fees paid to related parties must be documented as to the actual costs of the related party for materials, supplies, and services provided to the individual provider and upon which the management fees were based. If the cost to the related party includes owner compensation or compensation to related parties, documentation guidelines for those costs are specified in clause (xi) of this subparagraph. Documentation must be maintained that indicates stated objectives, periodic assessment of those objectives, and evaluation of the progress toward those objectives.

(xiv) For central office and/or home office costs, documentation must be maintained that indicates the organization of the business entity, including position, titles, functions, and compensation. For multi-state organizations, documentation must be maintained that clearly defines the relationship of costs associated with any level of management above the individual Texas contracted entity allocated to the individual Texas contracted entity.

(xv) Documentation regarding depreciable assets includes, at a minimum, historical cost, date of purchase, depreciable basis, estimated useful life, accumulated depreciation, and the calculation of gains and losses upon disposal.

(xvi) Providers must maintain documentation clearly itemizing their employee relations expenditures. For employee entertainment expenses, documentation must show the names of all persons participating, along with a classification of the person attending, such as employee, nonemployee, owner, family of employee, client, or vendor.

(xvii) Adequate documentation substantiating the offsetting of grants and contracts from federal, state, or local governments prior to reporting either the net expenses or net revenue must be maintained by the provider. As specified in §355.103(b)(18) of this subchapter, such offsetting is required prior to reporting on the cost report. The provider must maintain written documentation as to the purpose for which the restricted revenue was received and the offsetting of the restricted revenue against the allowable and unallowable costs for which the restricted revenue was used.

(xviii) During the course of an audit or an audit desk review, the provider must furnish any reasonable documentation requested by HHSC auditors within ten working days of the request or a later date as specified by the auditors. If the provider does not present the requested material within the specified time, the audit or audit desk review is closed, and HHSC automatically disallows the costs in question.

(xix) Any expense that cannot be adequately documented or substantiated is disallowed. HHSC is not responsible for the contracted provider's failure to adequately document and substantiate reported costs.

(xx) Any cost report that is determined to be unauditable through a field audit or that cannot have its costs verified through a desk review will not be used in the reimbursement determination process.

(3) Cost report and methodology certification. Providers must certify the accuracy of cost reports submitted to HHSC in the format specified by HHSC. Providers may be liable for civil and/or criminal penalties if the cost report is not completed according to HHSC requirements or is determined to contain misrepresented or falsified information. Cost report preparers must certify that they read the cost determination process rules, the reimbursement methodology rules, the cost report cover letter, and cost report instructions, and that they understand that the cost report must be prepared in accordance with the cost determination process rules, the reimbursement methodology rules and cost report instructions. Not all persons who contributed to the completion of the cost report must sign the certification page. However, the certification page must be signed by a responsible party with direct knowledge of the preparation of the cost report. A person with supervisory authority over the preparation of the cost report who reviewed the completed cost report may sign a certification page in addition to the actual preparer.

(4) Requirements for cost report completion.

(A) A completed cost report must:

(i) be completed according to the cost determination rules of this chapter, program-specific allowable and unallowable rules, cost report instructions, and policy clarifications;

(ii) contain a signed, notarized, original certification page or an electronic equivalent where such equivalents are specifically allowed under HHSC policies and procedures;

(iii) be legible with entries in sufficiently dark print to be photocopied;

(iv) contain all pages and schedules;

(v) be submitted on the proper cost report form;

(vi) be completed using the correct cost reporting period; and

(vii) contain a copy of the state-issued cost report training certificate except for cost reports submitted through the State of Texas Automated Information and Reporting System (STAIRS).

(B) Providers are required to report amounts on the appropriate line items of the cost report pursuant to guidelines established in the methodology rules, cost report instructions, or policy clarifications. Refer to program-specific reimbursement methodology rules, cost report instructions, or policy clarifications for guidelines used to determine the placement of amounts on cost report line items.

(i) For nursing facilities, placement on the cost report of an amount, which was determined to be inaccurately placed, may result in vendor hold as specified in §355.403 of this chapter.

(ii) For School Health and Related Services (SHARS), placement on the cost report of an amount, which was determined to be inaccurately placed, may result in an administrative contract violation as specified in §355.8443 of this chapter (relating to Reimbursement Methodology for School Health and Related Services (SHARS)).

(iii) For all other programs, placement on the cost report of an amount, which was determined to be inaccurately placed, constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this subchapter.

(C) A completed cost report must be filed by the cost report due date.

(i) For nursing facilities, failure to file a completed cost report by the cost report due date may result in vendor hold as specified in §355.403 of this chapter.

(ii) For SHARS, failure to file a completed cost report by the cost report due date constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.8443 of this chapter.

(iii) For all other programs, failure to file a completed cost report by the cost report due date constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this subchapter.

(D) HHSC may excuse providers from the requirement to submit a cost report if the provider meets one or more of the following conditions.

(i) For all programs, if the provider performed no billable services during the provider's cost-reporting period.

(ii) For all programs, if the cost-reporting period would be less than or equal to 30 calendar days or one entire calendar month.

(iii) For all programs, if circumstances beyond the provider's control, such as the loss of records due to natural disasters or removal of records from the provider's custody by a regulatory agency, make cost-report completion impossible.

(iv) For all programs, if all of the contracts that the provider is required to include in the cost report have been terminated before the cost-report due date.

(v) For the Nursing Facility, ICF/IID, STAR+PLUS Home and Community-Based Services Assisted Living Facilities, and Residential Care (RC) programs, if the total number of days that the provider performed service for recipients during the cost-reporting period is less than the total number of calendar days included in the cost-reporting period.

(vi) For the Day Activity and Health Services (DAHS) program, if the provider's total units of service provided to recipients during the cost-reporting period is less than the total number of calendar days included in the cost-reporting period times 1.5.

(vii) For the Home-Delivered Meals program, if a provider agency served an average of fewer than 500 meals a month for the designated cost report period.

(viii) On or after September 1, 2023, for the Department of Family and Protective Services (DFPS) 24-Hour Residential Child-Care program, if:

(I) the provider has no current contract(s) within the state for 24-Hour Residential Child-Care program;

(II) the total number of DFPS-placed days and Single Source Continuum Contractor (SSCC)-placed days was 10 percent or less of the total days of service provided during the cost-reporting period;

(III) for facilities that provide Emergency Care Services only, the occupancy rate was less than 30 percent during the cost-reporting period; or

(IV) for all other facility types except child-placing agencies and those providing Emergency Care Services, the occupancy rate was less than 50 percent during the cost-reporting period.

(5) Cost report year. For cost reports collected after September 1, 2025, a provider's cost report year must coincide with the state of Texas' fiscal year, which begins September 1 and ends August 31, unless the specific rate methodology or program rules specify a different reporting period.

(6) Failure to report allowable costs. HHSC is not responsible for the contracted provider's failure to report allowable costs; however, any omitted costs identified during the desk review or audit process will be included in the cost report or brought to the attention of the provider to correct by submitting an amended cost report.

(c) Cost report due dates.

(1) Providers must submit cost reports to HHSC Provider Finance Department no later than 90 days following the end of the provider entity's fiscal year or 90 days from the transmittal date of the cost report forms, whichever due date is later. Beginning with the 2018 cost reports, due dates per program are determined by HHSC and are published on the HHSC website.

(2) For SHARS, providers must submit cost reports to HHSC Provider Finance Department as specified in §355.8443 of this title.

(3) HHSC may grant extensions of due dates for good cause. A good cause is defined as a circumstance which the provider could not reasonably be expected to control and for which adequate advance planning and organization would not have been of any assistance. Providers must submit requests for extensions in writing to HHSC Provider Finance Department. Requests for extensions must be received by HHSC Provider Finance Department prior to the cost report due date. HHSC staff will respond in writing to requests within 15 days of receipt.

(4) HHSC may require additional financial and other statistical information, in the form of special surveys or reports, to ensure the fiscal integrity of the program. Providers must submit such additional information and/or special surveys or reports to HHSC Provider Finance Department upon request by the date specified by HHSC Provider Finance Department in its transmittal or cover letter to the special survey, report, or request for additional information.

(d) Amended cost report due dates. HHSC accepts submittal of provider-initiated or HHSC-requested amended cost reports as follows.

(1) Provider-initiated amended cost reports must be received no later than the date in subparagraph (A) or (B) of this paragraph, whichever occurs first. Amended cost reports received after the required date have no effect on the reimbursement determination. Amended cost report information that cannot be verified will not be used in reimbursement determinations. Provider-initiated amended cost reports must be received no later than the earlier of:

(A) 60 days after the original due date of the cost report; or

(B) 30 days prior to the public hearing on proposed reimbursement or reimbursement parameter amounts.

(2) HHSC-required amendments to the cost reports must be received on or before the date specified by HHSC in its request for the amended cost report. Failure to submit the requested amendment to the cost report by the due date is considered a failure to complete a cost report as specified in subsection (b)(4)(C) of this section.

(e) Field audit standards. HHSC performs cost report field audits in a manner consistent with Government Auditing Standards issued by the Comptroller General of the United States.

(f) Cost of out-of-state audits. As specified in §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), HHSC conducts desk reviews of all cost reports not selected for field audit. HHSC also conducts field audits of provider records and cost reports. Although the number of field audits performed each year may vary, HHSC seeks to maximize the number of field audited cost reports available for use in its cost projections. Whenever possible, all the records necessary to verify information submitted to HHSC on cost reports, including related party transactions and other business activities engaged in by the provider, must be accessible to HHSC audit staff within the state of Texas within fifteen working days of field audit or desk review notification. When records are not available to HHSC audit staff within the state of Texas, the provider must pay the actual costs for HHSC staff to travel and review the records out-of-state. HHSC must be reimbursed for these costs within 60 days of the request for payment.

(1) For nursing facilities, failure to reimburse HHSC for these costs within 60 days of the request for payment may result in vendor hold as specified in §355.403 of this title.

(2) For SHARS, failure to reimburse HHSC for these costs within 60 days of the request for payment constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.8443 of this title.

(3) For all other programs, failure to reimburse HHSC for these costs within 60 days of the request for payment constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(g) Public hearings.

(1) Uniform reimbursements. For programs where reimbursements are uniform by class of service and/or provider type, HHSC will hold a public hearing on proposed reimbursements before HHSC approves reimbursements. The purpose of the hearing is to give interested parties an opportunity to comment on the proposed reimbursements. Notice of the hearing will be provided to the public. The notice of the public hearing will identify the name, address, and telephone number to contact for the materials pertinent to the proposed reimbursements. At least ten calendar days before the public hearing takes place, material pertinent to the proposed statewide uniform reimbursements will be made available to the public. This material will include the proposed reimbursements, the inflation adjustments used to determine them, and the impact on reimbursements of the major cost limits. This material will be furnished to anyone who requests it. After the public hearing, if negative comments are received, a summary of the comments made during the public hearing will be presented to HHSC.

(A) Preliminary Rates. To ensure access to care and prompt provider reimbursement, HHSC will establish preliminary reimbursement rates prior to a public hearing for non-discretionary items or services, including but not limited to, new Health Care Common Procedure Coding System updates, federally mandated reimbursement rates (e.g., Indian Health Services or Medical Transportation Program), or physician-administered drugs or biological products.

(B) Duration of Preliminary Rates. Preliminary rates will be in place until HHSC conducts a public hearing on proposed reimbursement rates. Rate hearing procedures for preliminary rates will follow guidelines as outlined in paragraph (1) of this subsection.

(2) Contractor-specific reimbursements. For programs in which reimbursements are contractor-specific, HHSC will hold a public hearing on the reimbursement determination parameter dollar amounts (e.g., ceilings, floors, or program reimbursement formula limits) before HHSC approves parameter dollar amounts. The purpose of the hearing is to give interested parties an opportunity to comment on the proposed reimbursement parameter dollar amounts. Notice of the hearing will be provided to the public. The notice of the public hearing will identify the name, address, and telephone number to contact for the materials pertinent to the proposed reimbursement parameter dollar amounts. At least ten calendar days before the public hearing takes place, material pertinent to the proposed reimbursement parameter dollar amounts will be made available to the public. This material will include the proposed reimbursement parameter dollar amounts, the inflation adjustments used to determine them, and the impact on the reimbursement parameter dollar amounts of the major cost limits. This material will be furnished to anyone who requests it. After the public hearing, if negative comments are received, a summary of the comments made during the public hearing will be presented to HHSC.

(h) Insufficient cost data. If an insufficient number of accurate, full-year cost reports is submitted, as would occur with a new program, or if there are insufficient available data, as would occur in changes in program design, changes in the definition of units of service or changes in regulations or program requirements, reimbursements may be based on a pro-forma analysis by HHSC staff. A pro-forma analysis is defined as an item-by-item, or classes-of-items, calculation of the reasonable and necessary expenses for a provider to operate. The analysis may involve assumptions about the salary of an administrator or program director, staff salaries, employee benefits and payroll taxes, building depreciation, mortgage interest, contracted client care expenses, and other building or administration expenses. To determine the cost per unit of service, HHSC adds all the pro-forma expenses and divides the total by the estimated number of units of service that a fully operational provider is likely to provide. The pro-forma analysis is based on available information that is determined to be sufficient, accurate, and reliable by HHSC, including valid cost report data and survey data. The pro-forma analysis is conducted in a way that ensures that the resultant reimbursements are sufficient to support the requirements of the contracted program. When HHSC staff determine that sufficient and reliable cost report data have become available, the pro-forma reimbursement determination may be replaced with a process based on cost reports.

(i) Limits on related-party compensation. HHSC may place upper limits or caps on related-party compensation as follows.

(1) For related-party administrators and directors, the upper limit for compensation is equal to the 90th percentile in the array of all non-related-party annualized compensation as reported by all contracted providers within a program. In addition, the hourly compensation for related-party administrators and directors is limited to the annualized upper limit for related-party administrators and directors divided by 2,080.

(2) For related-party assistant administrators and assistant directors, the upper limit for compensation is equal to the 90th percentile in the array of all non-related party annualized compensation as reported by all contracted providers within a program. In addition, the hourly compensation for related-party assistant administrators and assistant directors is limited to the annualized upper limit for related-party assistant administrators and assistant directors divided by 2,080.

(3) For owners, partners, and stockholders (when the owner, partner, or stockholder is performing contract level administrative functions but is not the administrator, director, assistant administrator or assistant director), the upper limits for compensation are equal to the upper limits for related-party administrators and directors.

(4) For all other staff types.

(A) For all related party attendant staff in programs specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component), the upper limit for compensation is equal to the 90th percentile in the array of all non-related-party attendant staff annualized compensation as reported by all contracted providers within a program. In addition, the hourly compensation for related-party attendant staff is limited to the annualized upper limit for related-party administrators and directors divided by 2,080.

(B) For all other programs, related-party compensation is limited to reasonable and necessary costs as described in §355.102 of this title.

**History**
- *Source Note: The provisions of this §355.105 adopted
to be effective September 1, 1996, 21 TexReg 7866; duplicated effective
September 1, 1997, as published in the Texas Register October 17,
1997, 22 TexReg 10311; amended to be effective December 29, 1997,
22 TexReg 12485; amended to be effective September 27, 1999, 24 TexReg
7397; amended to be effective June 26, 2000, 25 TexReg 6089; amended
to be effective October 1, 2000, 25 TexReg 9924; amended to be effective
December 1, 2001, 26 TexReg 9565; amended to be effective August 31,
2004, 29 TexReg 8093; amended to be effective November 2, 2008, 33
TexReg 8759; amended to be effective September 1, 2011, 36 TexReg
4795; amended to be effective April 1, 2012, 37 TexReg 2068; amended
to be effective November 25, 2012, 37 TexReg 9086; amended to be effective
August 1, 2013, 38 TexReg 4743; amended to be effective January 1,
2015, 39 TexReg 9193; amended to be effective March 1, 2018, 43 TexReg
339; amended to be effective January 1, 2019, 43 TexReg 8581; amended
to be effective December 20, 2022, 47 TexReg 8253; amended to be effective
September 10, 2023, 48 TexReg 5021; amended to be effective September
11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.106** Basic Objectives and Criteria for Audit and Desk Review of Cost Reports {#sec-355.106 omnilex-key=us-tx-regs-official--title-1--355.106}

(a) The Texas Health and Human Services Commission (HHSC) conducts desk reviews and field audits of provider cost reports in order to ensure that all financial and statistical information reported in the cost reports conforms to all applicable rules and instructions. Cost reports must be completed according to instructions and rules in accordance with §355.105(b)(4) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures). HHSC may require supporting documentation other than that contained in the cost report to substantiate reported information.

(1) For nursing facilities, failure to complete cost reports according to instructions and rules in accordance with §355.105(b)(4) of this title may result in vendor hold as specified in §355.403 of this title (relating to Vendor Hold).

(2) For Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services, Service Coordination/Targeted Case Management, Rehabilitative Services, and Texas Home Living programs, failure to complete cost reports according to instructions and rules constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title (relating to Administrative Contract Violations).

(3) For School and Health Related Services (SHARS), failure to complete cost reports according to instructions and rules described in §355.105(b)(4) of this title may result in an administrative contract violation as specified in §355.8443 of this title (relating to Reimbursement Methodology for School Health and Related Services (SHARS)).

(4) For all other programs, failure to complete cost reports according to instructions and rules in accordance with §355.105(b)(4) of this title constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(b) The basic objective of audits and desk reviews is to verify that each provider's cost report:

(1) displays financial and other statistical information in the format required by HHSC;

(2) reports expenses in conformity with HHSC's lists of allowable and unallowable costs;

(3) follows generally accepted accounting principles, except as otherwise specified in HHSC's lists of allowable and unallowable costs, and other pertinent rules or as otherwise permitted in the case of governmental entities operating on a cash or modified accrual basis; and

(4) is completed in accordance with each program's cost report instructions and rules.

(c) HHSC verifies the information specified in subsection (b) of this section by:

(1) comparing each provider's reported costs to:

(A) past patterns of expenditures for similar services;

(B) the results of previous field audits;

(C) normal operating cost relationships; and

(D) industry average costs, when available;

(2) reviewing each provider's reported costs for:

(A) reported unallowable costs;

(B) omitted allowable costs, if discovered during the course of the audit or desk review; and

(C) understated or overstated allowable costs, if discovered during the course of the audit or desk review;

(3) checking for completion of required information;

(4) checking the format for proper cost classification;

(5) checking for mathematical accuracy; and

(6) adjusting the cost report, or notifying the provider that research and/or corrections are required.

(d) In accordance with methodology rules, cost report instructions or policy clarifications, HHSC may reassign allowable costs to the appropriate line items of a cost report.

(e) HHSC seeks to maximize the number of field audited cost reports available for use in its cost projections. In addition to cost reports selected for field audit based upon risk analysis, other specific criteria and random sampling, HHSC may conduct field audits of cost reports that show unusual fluctuations or trends in costs or other statistics. HHSC may also conduct field audits when desk reviews are insufficient to verify the accuracy of reported costs.

(f) For cost reports pertaining to providers' fiscal years ending in calendar year 1997 and subsequent years, each provider entity or its designated agent(s) must allow access to any and all records necessary to verify information submitted to HHSC on cost reports. This requirement includes records pertaining to related party transactions or other business activities engaged in by the provider.

(1) For nursing facilities, failure to allow access to any and all records necessary to verify information submitted to HHSC on cost reports may result in vendor hold as specified in §355.403 of this title.

(2) For Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services, Service Coordination/Targeted Case Management, Rehabilitative Services, and Texas Home Living programs, failure to allow access to any and all records necessary to verify information submitted to HHSC on cost reports constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(3) For SHARS, failure to allow access to any and all records necessary to verify information submitted to HHSC on cost reports may result in an administrative contract violation as specified in §355.8443 of this title.

(4) For all other programs, failure to allow access to any and all records necessary to verify information submitted to HHSC on cost reports constitutes an administrative contract violation. In the case of an administrative contract violation, procedural guidelines and informal reconsideration and/or appeal processes are specified in §355.111 of this title.

(g) A contracted provider may request an informal review, and subsequently an appeal, of a desk review or field audit disallowance in accordance with §355.110 of this title (relating to Informal Reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.106 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective June 26, 2000, 25 TexReg 6089; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective September 1, 2011, 36 TexReg 4795.*

##### **1 Tex. Admin. Code § 355.107** Notification of Exclusions and Adjustments {#sec-355.107 omnilex-key=us-tx-regs-official--title-1--355.107}

(a) The Texas Health and Human Services Commission (HHSC) notifies providers of exclusions and adjustments to reported expenses made during HHSC's desk reviews and field audits of cost reports. HHSC mails notices of desk-review exclusions and adjustments within 15 working days after finalization of the desk review by HHSC. The notice consists of a letter to the provider and desk-review adjustment sheet(s), or an e-mail notification to the provider and online access to view the cost report adjustments, that specifies:

(1) the line items on the cost report that have been adjusted or excluded;

(2) the amount of each adjustment or exclusion; and

(3) the principal reason for each adjustment or exclusion.

(b) HHSC also furnishes providers with written reports of the results of field audits. HHSC mails each field audit report within 30 days after the final exit interview with the provider. An exit interview is final when HHSC audit staff have received, reviewed, and analyzed all documentation from the provider pertinent to the scope of the audit. The field audit report consists of a professional report prepared by HHSC audit staff to enumerate the results of a field audit. Each field audit report includes a specification of:

(1) cost report line items that have been adjusted or excluded;

(2) the amount of each adjustment or exclusion; and

(3) the principal reason for each adjustment or exclusion.

(c) A provider may also submit a written request for HHSC to provide additional information about exceptions and adjustments to the provider's cost report, including citations of the laws or regulations that constitute the grounds for the exceptions and adjustments. HHSC must comply with such requests in writing within 30 calendar days.

**History**
- *Source Note: The provisions of this §355.107 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective September 1, 2011, 36 TexReg 4795; amended to be effective May 8, 2012, 37 TexReg 3394.*

##### **1 Tex. Admin. Code § 355.108** Determination of Inflation Indices {#sec-355.108 omnilex-key=us-tx-regs-official--title-1--355.108}

(a) Purpose. In conducting reviews for adjustments to reimbursement, the Texas Health and Human Services Commission (HHSC) adjusts allowable costs to account for inflation between the reporting period and the prospective reimbursement period. HHSC retains the discretion to measure and apply inflation adjustments on a program-by-program basis using the options set forth in this section.

(b) Contracting for inflation index development. HHSC may contract with a reputable and experienced independent firm to develop an appropriate inflation index. If HHSC obtains such an index under contract, the agency retains the option, on a program-by-program basis, to use this index and those described in subsection (c) of this section, either separately or in combination, for reimbursement determination purposes.

(c) Inflation indices. Allowable costs are inflated using the general inflation index defined in paragraph (1) of this subsection unless otherwise specified in paragraph (2) of this subsection.

(1) General inflation index. HHSC uses the Personal Consumption Expenditures (PCE) chain-type price index, published by the Bureau of Economic Analysis of the U.S. Department of Commerce, as the index for general inflation.

(2) Item-specific and program-specific inflation indices. HHSC may use a specific inflation index in place of the general inflation index defined in paragraph (1) of this subsection when an item- or program-specific inflation index is developed using data from HHSC cost reports or other surveys or data made available from another source, and HHSC has determined that this specific index is derived from information that adequately represents the program or cost to which the specific index is to be applied. Program-specific inflation indices may be designated in program-specific reimbursement methodology rules. Item-specific inflation indices that HHSC may use include those listed in the subparagraphs of this paragraph.

(A) HHSC uses the employment cost index of wages and salaries for private industry workers in nursing and residential care facilities to measure the inflation of wages and salaries of licensed vocational nurses and nurse aides. This index is published by the U.S. Bureau of Labor Statistics. Periodic reviews of the chosen inflation index are performed based on comparisons to cumulative HHSC cost report data on nursing wages and salaries; HHSC may modify the chosen inflation index and its application based on these periodic reviews.

(B) To adjust costs associated with fixed capital assets, HHSC uses one of two options. HHSC may follow program-specific reimbursement methodology rules to calculate a fixed capital asset component of the overall reimbursement in the form of a use fee. As an alternative to calculating the fixed capital asset use fee, HHSC may use one-half of the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) to measure the inflation of lease expenses and to adjust the base of allowable depreciation for assets that have undergone an ownership change.

(C) Professional and paraprofessional wage and benefit inflation rates for state employees are based on state employee wage and salary increases determined by the Texas Legislature.

(d) Inflation adjustment calculations. When adjusting costs for inflation, HHSC considers economic conditions and regulatory changes that may be reasonably anticipated for the prospective reimbursement period as specified in §355.109 of this subchapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs). For each inflation index specified in subsection (c) of this section:

(1) the inflation index is forecasted using a nationally recognized source available to HHSC at the time proposed payment rates are prepared for public dissemination and comment; and

(2) a rate of inflation over a specific period of time is calculated and applied to the allowable costs appropriate to that index as follows:

(A) costs reported in HHSC cost reports or other surveys are multiplied by the result of the inflation rate at the midpoint of the prospective reimbursement period divided by the inflation rate at the midpoint of the provider's reporting period; or

(B) costs are multiplied by the result of the average inflation rate during the entire prospective reimbursement period divided by the average inflation rate during the entire base period.

**History**
- *Source Note: The provisions of this §355.108 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective November 22, 1998, 23 TexReg 11631; amended to be effective October 1, 2000, 25 TexReg 9924; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective February 27, 2022, 47 TexReg 768.*

##### **1 Tex. Admin. Code § 355.109** Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs {#sec-355.109 omnilex-key=us-tx-regs-official--title-1--355.109}

(a) In conducting reimbursement reviews for adjustments, the Texas Health and Human Services Commission (HHSC) takes into consideration changes in laws, rules, regulations, policies, guidelines, or economic factors which will have a demonstrable material impact on most contracted providers' costs of providing services meeting federal and state standards.

(1) HHSC may recommend adjustments to reimbursement when federal or state laws, rules, regulations, policies, or guidelines are adopted, promulgated, judicially interpreted, or otherwise changed in ways that affect allowable costs. The law, rule, regulation, policy, or guideline change must result in necessary changes in allowable costs that:

(A) affect most, if not all, contracted providers; and

(B) require contracted providers to take definitive action to incur additional allowable costs not included in the cost database used to determine reimbursements and which would not otherwise be covered in reimbursements.

(2) HHSC may recommend adjustments to reimbursement when it can be clearly demonstrated that changes in economic factors will result in changes in allowable costs. The changes in economic factors must result in changes in allowable costs that:

(A) affect most, if not all, providers; and

(B) are allowable cost changes that the providers have little or no control over and are allowable costs that are not included in the cost database used to determine reimbursements and which would not otherwise be covered in reimbursements.

(3) HHSC may recommend adjustments to reimbursement when there is a change to any of the unemployment insurance tax components detailed in subparagraphs (A) - (D) of this paragraph. If unemployment insurance tax rates for the prospective reimbursement period are not available at the time reimbursement is prepared for public comment, the most recent known tax rates are assumed to remain in effect.

(A) The calendar year average Texas Unemployment Compensation Tax Act (TUCA) rate, as calculated by the Texas Workforce Commission (TWC); or

(B) if HHSC has determined that a specific program will have significantly higher or lower average unemployment tax costs than the average industry in Texas, the calendar year average effective TUCA rate for the North American Industry Classification System code or codes pertinent to that specific program, as calculated by TWC; or

(C) the rate of tax set by the Federal Unemployment Tax Act; or

(D) the maximum credits against tax set by the Federal Unemployment Tax Act.

(b) HHSC may recommend adjustments to reimbursement for the reasons stated in subsection (a)(1) of this section at the earliest feasible opportunity in order for the adjustment to become effective on the effective date of the federal or state laws, rules, regulations, policies, or guidelines. In the case of Medicaid state plan program reimbursements, the adjustments will not be effective until after the federal requirements for notice are met.

(c) HHSC may recommend adjustments to reimbursement when federal or state funding is changed in ways that affect the available funding for programs.

**History**
- *Source Note: The provisions of this §355.109 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective February 27, 2022, 47 TexReg 768.*

##### **1 Tex. Admin. Code § 355.110** Informal Reviews and Formal Appeals {#sec-355.110 omnilex-key=us-tx-regs-official--title-1--355.110}

(a) General provisions.

(1) Definitions. The following words or terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.

(A) Formal appeal--An administrative hearing requested by an interested party under subsection (d) of this section and conducted in accordance with procedures described at §§357.481 - 357.498 of this title (relating to Hearings Under the Administrative Procedure Act).

(B) Informal review--The informal reexamination of an action or determination by the Texas Health and Human Services Commission (HHSC) under this chapter requested by an interested party and conducted in accordance with subsection (c) of this section.

(C) Interested party--An HHSC Enterprise contracted or enrolled provider.

(2) Standing to file informal reviews or formal appeals. Only an interested party has standing to file for an informal review or formal appeal under this section.

(3) Subject matter of informal reviews and formal appeals. An interested party may request an informal review or formal appeal regarding an action or determination under §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs), §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs), §355.104 of this title (relating to Revenues), and §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods and Procedures), or program-specific allowable or unallowable costs, taken specifically in regard to the interested party.

(b) Separation of informal reviews and formal appeals from the reimbursement determination process.

(1) The filing of a request for an informal review or formal appeal under this section does not stay or delay implementation of reimbursement adopted by HHSC in accordance with the requirements of this chapter.

(2) Closure of cost report databases used in the reimbursement determination process and application of results of pending review or appeal. To facilitate the timely and efficient calculation of reimbursement amounts, HHSC closes cost report databases used in the reimbursement determination process prior to the proposal of reimbursement amounts.

(A) Impact on database of pending informal review or formal appeal. If an informal review is pending at the time the database is closed, the database shall include the interested party's cost report data including any adjustments made either in the desk review or field audit. If a formal appeal is pending at the time the database is closed, the database shall include the interested party's cost report data including any adjustments required as a result of the informal review.

(B) Uniform reimbursement.

(i) For programs where reimbursement is uniform by class of service and/or provider type, the cost report database used in reimbursement determination is closed six weeks prior to the public hearing on the proposed reimbursement that is based on the cost report database.

(ii) If an informal review or formal appeal is pending at the time the cost report database is closed, the results of the informal review or formal appeal shall be applied during the next reimbursement determination cycle, if applicable.

(C) Contractor-specific reimbursement.

(i) For programs where reimbursement is contractor-specific the cost report database is closed ten weeks prior to the end of the reimbursement determination cycle.

(ii) If an informal review or formal appeal is pending at the time the cost report database is closed, the results of the informal review or formal appeal shall be applied to the interested party's payment retroactively to the beginning of the current reimbursement determination cycle. The results of the informal review or formal appeal shall not be applied to the cost report database as a whole or to any other reimbursement amounts influenced by the cost report database as a whole until the next reimbursement determination cycle, if applicable.

(c) Informal review.

(1) An interested party who disputes an action or determination under this chapter may request an informal review under this section. The purpose of an informal review is to provide for the informal and efficient resolution of the matters in dispute. An informal review is not a formal administrative hearing, but is a prerequisite to obtaining a formal administrative hearing and is conducted according to the following procedures:

(A) HHSC Rate Analysis must receive a written request for an informal review by hand delivery, United States (U.S.) mail, or special mail delivery no later than 30 calendar days from the date on the written notification of the adjustments. If the 30th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 30th calendar day is the final day the receipt of the written request will be accepted. HHSC Rate Analysis will extend this deadline if it receives a written request for the extension by hand delivery, U.S. mail, or special mail delivery no later than 30 calendar days from the date of the written notice of adjustments. The extension gives the requester a total of 45 calendar days from the date of the written notice of adjustment to file a request for an informal review. If the 45th calendar day is a weekend day, national holiday, or state holiday, then the 45th day is considered the next business day following the 45th calendar day. A request for an informal review or extension that is not received by the stated deadline will not be accepted.

(B) An interested party must, with its request for an informal review, submit a concise statement of the specific actions or determinations it disputes, its recommended resolution, and any supporting documentation the interested party deems relevant to the dispute. It is the responsibility of the interested party to render all pertinent information at the time of its request for an informal review. A request for an informal review that does not meet the requirements of this subparagraph will not be accepted.

(C) The written request for the informal review or extension must be signed by an individual legally responsible for the conduct of the interested party, such as the sole proprietor, a partner, a corporate officer, an association officer, a governmental official, a limited liability company member, a person authorized by the applicable HHSC Enterprise or Texas Medicaid and Healthcare Partnership (TMHP) signature authority designation form for the interested party on file at the time of the request, or a legal representative for the interested party. The administrator or director of the facility or program is not authorized to sign the request unless the administrator or director holds one of these positions. A request for an informal review that is not signed by an individual legally responsible for the conduct of the interested party will not be accepted.

(2) On receipt of a request for informal review:

(A) The lead staff member coordinates the review of the information submitted by the interested party. Staff may request additional information from the interested party, which must be received in writing by hand delivery, United States (U.S.) mail, or special mail delivery by the lead staff member no later than 14 calendar days from the date the interested party receives the written request for additional information. If the 14th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 14th calendar day is the final day the receipt of the additional information will be accepted. Information received after 14 calendar days may not be used in the informal review written decision unless the interested party receives written approval of the lead staff member to submit the information after 14 calendar days. A request for an extension to the 14-calendar-day due date must be received by HHSC Rate Analysis prior to the 14th calendar day.

(B) Within 30 calendar days of the date a written request for informal review that complies with paragraphs (1) and (2) of this subsection is received or the date additional requested information is due or received, whichever is later, the lead staff member will send the interested party its written decision by certified mail, return receipt requested. If the 30th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 30th calendar day is the final day by which the written decision must be sent.

(d) Administrative hearings. An interested party who disagrees with the results of an informal review conducted under subsection (c) of this section may file a formal appeal of the review. The HHSC Appeals Division, Mail Code W-613, P.O. Box 149030, Austin, Texas 78714-9030, must receive the written request for a formal appeal from the interested party within 15 calendar days after the interested party receives the written decision as specified in subsection (c) of this section. The written request for a formal appeal must state the basis of the appeal of the adverse action and include a legible copy of the written decision from the informal review referenced in subsection (c)(2)(B) of this section. The formal appeal is limited to the issues that were considered in the informal review process. The information from the interested party is limited to the pertinent information considered in the informal review process. Formal appeals are conducted in accordance with the provisions of §§357.481 - 357.498 of this title. If there is a conflict between the applicable section of Chapter 357 of this title (relating to Hearings) and the provisions of this chapter, the provisions of this chapter prevail.

(e) Lack of standing for formal appeal. Because the formal appeal is limited to issues considered in the informal review process, an informal review request that does not comply with subsection (c)(1)(A) - (C) of this section is not subject to further appeal under §§357.481 - 357.498 of this title.

**History**
- *Source Note: The provisions of this §355.110 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective June 26, 2000, 25 TexReg 6089; amended to be effective November 4, 2002, 27 TexReg 10367; amended to be effective April 1, 2004, 29 TexReg 3173; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective April 1, 2007, 32 TexReg 1719; amended to be effective August 3, 2009, 34 TexReg 5062; amended to be effective September 1, 2011, 36 TexReg 4795.*

##### **1 Tex. Admin. Code § 355.111** Administrative Contract Violations {#sec-355.111 omnilex-key=us-tx-regs-official--title-1--355.111}

The Texas Health and Human Services Commission (HHSC) may take the following actions for administrative contract violations.

(1) HHSC grants the following compliance periods for administrative contract violations:

(A) For failure to submit a cost report by the due date, HHSC grants the provider a compliance period of no more than 15 calendar days.

(B) For all other administrative contract violations, HHSC grants the provider a compliance period of no more than 15 calendar days to correct a contract violation. At the end of the compliance period, if HHSC determines that a contract violation is not corrected, but determines that the provider has made substantial progress toward correcting the contract violation, HHSC may grant an additional one-time extension period of up to 15 calendar days.

(2) If the contract violation is not corrected within the compliance period, HHSC imposes vendor hold on payments to the provider.

(3) If a contract violation is not corrected within 60 days from the date the provider is placed on vendor hold, HHSC may cancel the provider's contract on the 61st day. A provider may request an appeal hearing of the contract cancellation. Formal appeals are conducted in accordance with the provisions of §§357.481 - 357.498 of this title (relating to Hearings Under the Administrative Procedure Act). If there is a conflict between the applicable section of Chapter 357 of this title (relating to Hearings) and the provisions of this chapter, the provisions of this chapter prevail. If the provider appeals the contract cancellation by HHSC and the adverse action is sustained by an administrative law judge or judicial proceeding, the effective date of the contract cancellation is the date specified in the notice of contract cancellation. Unless otherwise specifically provided for, HHSC makes no payment for services provided by the provider after the effective date of the provider's contract cancellation. HHSC may continue payments for no more than 30 calendar days from the date HHSC or its designee cancels or fails to renew a provider's contract if HHSC determines that:

(A) reasonable efforts are being made to transfer clients to another provider or to alternate care; and

(B) additional time is needed to effect an orderly transfer of the clients.

**History**
- *Source Note: The provisions of this §355.111 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective December 29, 1997, 22 TexReg 12485; amended to be effective June 26, 2000, 25 TexReg 6089; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective August 3, 2009, 34 TexReg 5062; amended to be effective January 1, 2015, 39 TexReg 9193.*

##### **1 Tex. Admin. Code § 355.114** Consumer Directed Services Payment Option {#sec-355.114 omnilex-key=us-tx-regs-official--title-1--355.114}

(a) For all programs providing consumer directed services (CDS) except the Home and Community-based Services (HCS) program:

(1) The monthly payment to the contracted CDS agency is determined by modeling the estimated cost to carry out the responsibilities of the CDS agency.

(2) The rates for CDS that provide the funds available to the consumers participating in CDS are modeled and are based on the payment rates paid to contracted agencies for providing services to consumers who do not participate in CDS, and then removing from those rates amounts needed to fund CDS agencies responsibilities.

(3) The sum of the payments to the contracted CDS agencies for a 12-month period and the funds available to the consumers participating in CDS for the same 12-month period will not exceed, in the aggregate, the amount that would have been paid to agencies for the same 12 month period if the consumers were not participating in CDS.

(b) For the HCS program:

(1) The monthly payment to the contracted CDS agency is determined by modeling the estimated cost of carrying out the responsibilities of the CDS agency.

(2) The rates for CDS that provide the funds available to the consumer participating in CDS are modeled and are based on the direct care costs plus a portion of the operating costs included in the HCS rate.

(3) The monthly payment to the contracted CDS agency for a 12-month period and the funds available to the consumer participating in CDS for that same 12-month period will not exceed the amount that would have been paid to an agency for the same 12 month period if the consumer was not participating in CDS.

(c) Support Consultation services. The hourly payment rate for Support Consultation services is determined by modeling the cost of providing this service, as defined by the Department of Aging and Disability Services, using staff costs and other statistics from the most recently audited cost reports from providers for staff whose required qualifications are similar to the qualifications required for individuals delivering Support Consultation services. The requirements for a Support Advisor are found at 40 TAC §41.603 (relating to Support Advisor Qualifications).

**History**
- *Source Note: The provisions of this §355.114 adopted to be effective December 1, 2001, 26 TexReg 9375; amended to be effective June 17, 2003, 28 TexReg 4544; amended to be effective September 1, 2004, 29 TexReg 7667; amended to be effective December 2, 2004, 29 TexReg 10912; amended to be effective February 1, 2007, 32 TexReg 42; amended to be effective September 1, 2007, 32 TexReg 5336; amended to be effective August 17, 2008, 33 TexReg 6361.*

#### **Subchapter B** ESTABLISHMENT AND ADJUSTMENT OF REIMBURSEMENT RATES FOR MEDICAID

##### **1 Tex. Admin. Code § 355.201** Establishment and Adjustment of Reimbursement Rates for Medicaid {#sec-355.201 omnilex-key=us-tx-regs-official--title-1--355.201}

(a) Definitions. Unless the context clearly indicates otherwise, the following words and terms when used in this section are defined as follows:

(1) Centers for Medicare & Medicaid Services (CMS)--The federal agency within the United States Department of Health and Human Services responsible for overseeing and directing Medicare and Medicaid.

(2) HHSC--The Texas Health and Human Services Commission or its designee.

(3) Medical assistance--A medical or health care related service, item, or supply that is delivered to a Medicaid recipient and is approved and authorized for payment or reimbursement by HHSC or CMS pursuant to state and federal law.

(4) Program--A specific component of the Medicaid program for which HHSC establishes either a methodology to reimburse a provider or a specific fee, payment rate, or charge that is paid to a provider for medical assistance in accordance with state and federal law.

(5) Provider--A health care practitioner, institution, or other entity that is enrolled in the medical assistance program and is authorized to submit claims for payment or reimbursement of medical assistance.

(b) Purpose. This section implements Texas Government Code §532.0057, and applies to all programs that provide medical assistance and to all reimbursement methodologies related to medical assistance prescribed under this chapter.

(c) Establishment of fees, rates, and charges. HHSC establishes fees, rates, and charges to be paid for medical assistance in accordance with:

(1) the formulas, procedures, or methodologies prescribed in this chapter;

(2) applicable state or federal law, policies, rules, regulations, or guidelines;

(3) economic conditions that, in HHSC's determination, substantially and materially affect provider participation; or

(4) available levels of appropriated state and federal funds.

(d) Adjustment of fees, rates, and charges. Notwithstanding any other provision of this chapter, HHSC may adjust fees, rates, and charges paid for medical assistance as necessary to achieve the objectives of Medicaid in a manner consistent with the considerations described in subsection (c) of this section.

(e) Notice. If HHSC establishes or adjusts fees, rates, or charges under this section, HHSC will hold a public hearing and provide notice of the hearing in accordance with §355.105(g) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

**History**
- *Source Note: The provisions of this §355.201 adopted to
be effective September 1, 2003, 28 TexReg 7302; amended to be effective
September 1, 2011, 36 TexReg 4652; amended to be effective December
26, 2018, 43 TexReg 8281; amended to be effective April 1, 2025, 50
TexReg 828.*

##### **1 Tex. Admin. Code § 355.205** Rule for Emergency Temporary Reimbursement Rate Increases and Limitations on Use of Emergency Temporary Funds for Medicaid in Response to Novel Coronavirus (COVID-19) {#sec-355.205 omnilex-key=us-tx-regs-official--title-1--355.205}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) uses the methodology described in this section to establish emergency temporary reimbursement rate increases while limiting use of the funds received by the provider through the increases. This section also describes the circumstances in which recoupments will be necessary for certain provider types or services during the COVID-19 federal public health emergency period. Provider types and services that are eligible for increased reimbursement rates under this section include:

(1) all provider types and services for which a reimbursement rate methodology is described in this chapter; and

(2) any other provider or service that is established in response to COVID-19.

(b) Eligibility. To receive and retain emergency temporary reimbursement rate increases from HHSC under this section:

(1) the provider must be enrolled as a Medicaid provider with HHSC;

(2) the provider must be actively providing and billing for services provided to fee-for-service Medicaid clients;

(3) the provider must agree not to use the reimbursement rate increases to increase hourly wages paid to direct care staff on an ongoing basis, and to limit use of the funds to overtime payments, lump sum bonuses, bonuses for hazard pay, or other types of compensation that will not result in future reductions to hourly wages when the emergency temporary reimbursement rate increase is discontinued; and

(4) HHSC must receive approval from Centers for Medicare & Medicaid Services (CMS) for the provider type or specific service to be reimbursed through this section.

(c) Attestation of agreement. The provider must submit an electronic attestation of agreement to comply with subsection (b)(3) of this section either within 90 days of the effective date of the reimbursement rate increase, or by September 30, 2020, whichever date is later.

(d) Reconciliation process. HHSC uses the methodology in this subsection to recoup the temporary emergency payments made under this section if a provider fails to submit the attestation of agreement under subsection (c) of this section.

(1) HHSC will reduce reimbursement rates for any claim for services to the amount that would have been paid to the provider absent the emergency temporary reimbursement rate increase.

(2) The provider's claims will be reprocessed at the lower reimbursement rate under paragraph (1) of this subsection and an accounts receivable will be established.

(3) The provider will be paid on a normal per claim basis after the equivalent amount of the account receivable has been collected by HHSC, or its designee.

(4) After 270 days from the date of the establishment of the account receivable under paragraph (1) of this subsection, HHSC will recoup any overpayments owed under paragraph (1) of this subsection by demanding immediate repayment of any outstanding amount.

(e) Overpayment.

(1) If payments under this section result in an overpayment to a provider, HHSC, or its designee, may recoup an amount equivalent to the overpayment.

(2) Payments made under this section may be subject to any adjustments for payments made in error or due to fraud, including, without limitation, adjustments made under the Texas Administrative Code, the Code of Federal Regulations, and state and federal statutes. HHSC, or its designee, may recoup an amount equal to any such adjustments from the providers in question. This section may not be construed to limit the independent authority of another federal or state agency or organization to recover from the provider for a payment made due to fraud.

(f) Disallowance of federal funds. If payments under this section are disallowed by CMS, HHSC may recoup the amount of the disallowance from providers that participated in the program associated with the disallowance. If the recoupment from a provider for such a disallowance results in a subsequent disallowance, HHSC will recoup the amount of that subsequent disallowance from the same entity.

(g) Termination of emergency temporary rate increases. HHSC will terminate the emergency temporary rate increases at the earlier of either the termination of the federally declared public health emergency, including any extensions, or at the time that HHSC determines rate increases are no longer necessary pursuant to §355.201(c)(3) of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid). However, HHSC will continue to enforce the reconciliation and recoupment processes described in subsections (d), (e), and (f) of this section after the termination of the temporary emergency rate increases.

**History**
- *Source Note: The provisions of this §355.205 adopted to be effective December 31, 2020, 45 TexReg 9407.*

##### **1 Tex. Admin. Code § 355.207** American Rescue Plan Act Home and Community-Based Services Provider Retention Payments {#sec-355.207 omnilex-key=us-tx-regs-official--title-1--355.207}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) uses the methodology described in this section to establish retention payments for Home and Community-Based Services (HCBS) under HHSC's spending plan pursuant to section 9817 of the American Rescue Plan Act.

(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

(1) Direct Care staff--

(A) A provider, or an employer in the consumer directed services (CDS) option, who provides the following services, as described in Title 40 Texas Administrative Code (TAC) §49.101 (relating to Application):

(i) Community Attendant Services program services;

(ii) Primary Home Care program services;

(iii) day activity and health services;

(iv) in the Community Living Assistance and Support Services Program:

(I) community first choice personal assistance services/habilitation (CFC PAS/HAB);

(II) habilitation (transportation);

(III) supported employment;

(IV) in-home respite;

(V) nursing services; or

(VI) specialized nursing services;

(v) in the Deaf-Blind Multiple Disabilities Program:

(I) CFC PAS/HAB;

(II) residential habilitation (transportation);

(III) in-home respite;

(IV) licensed assisted living;

(V) licensed home health assisted living;

(VI) supported employment;

(VII) day habilitation;

(VIII) nursing services; or

(IX) specialized nursing services;

(vi) in the Home and Community-Based Services Program:

(I) CFC PAS/ HAB;

(II) supported home living (transportation);

(III) supervised living;

(IV) residential support services;

(V) day habilitation;

(VI) supported employment;

(VII) in-home respite;

(VIII) nursing services; or

(IX) specialized nursing services; and

(vii) in the Texas Home Living Program:

(I) CFC PAS/HAB;

(II) community support services (transportation);

(III) day habilitation;

(IV) supported employment;

(V) in-home respite;

(VI) nursing services; or

(VII) specialized nursing services.

(B) A provider or employee or subcontractor of a provider who provides the following services in the Home and Community-Based Services--Adult Mental Health (HCBS-AMH) Program, as described in 26 TAC §307.51(relating to Purpose and Application):

(i) supervised living;

(ii) supported home living; or

(iii) nursing services.

(C) An employee or subcontractor of a provider, or an employee of an employer in the CDS option who provides:

(i) personal care services, as described in Chapter 363, Subchapter F of this title (relating to Personal Care Services); or

(ii) CFC habilitation (CFC HAB) or CFC personal assistance services (CFC PAS), as described in Chapter 354, Subchapter A, Division 27 of this title (relating to Community First Choice).

(D) A provider or an employer in the CDS option who provides:

(i) in the STAR+PLUS program and STAR+PLUS HCBS program:

(I) assisted living;

(II) CFC PAS;

(III) CFC HAB;

(IV) day activity and health services;

(V) in-home respite care;

(VI) personal assistance services;

(VII) supported employment;

(VIII) protective supervision;

(IX) nursing services; or

(X) specialized nursing services;

(ii) in the STAR Health program and Medically Dependent Children Program (MDCP):

(I) day activity and health services;

(II) CFC PAS;

(III) CFC HAB;

(IV) flexible family support;

(V) in-home respite;

(VI) personal care services;

(VII) nursing services; or

(VIII) specialized nursing services; and

(iii) in the STAR Kids program and MDCP:

(I) CFC PAS;

(II) CFC HAB;

(III) personal care services;

(IV) day activity and health services;

(V) flexible family support services;

(VI) in-home respite;

(VII) nursing services; or

(VIII) specialized nursing services.

(2) Managed care organization (MCO)--Has the meaning assigned in §353.2 of this title (relating to Definitions).

(3) Provider--Refers to an HHSC contractor as defined in §355.7051(a)(1) of this title (relating to Base Wage for a Personal Attendant) and provider as defined in §353.2 of this title.

(c) Eligibility. To receive and maintain retention payments from HHSC under this section:

(1) A provider must be actively billing Medicaid services.

(2) A provider must agree to use at least 90 percent of payments made under this section for recruitment and retention efforts for direct care staff delivering HCBS services as defined in subsection (b) of this section. Payments made under this section can include financial compensation directed toward direct care staff, including lump-sum bonuses, retention bonuses, and paid time off to receive a COVID-19 vaccination or to isolate after receiving a positive COVID-19 test. Funds under this section can be used to pay payroll and unemployment taxes and workers' compensation necessary to implement the financial compensation for HCBS direct care staff.

(3) A provider must agree not to use the payments made under this section to increase hourly wages paid to direct care staff on an ongoing basis and to limit use of the funds to types of compensation that will not result in future reductions to hourly wages when the payments are discontinued.

(4) A provider must submit two required reports regarding use of funds made under this section in a manner prescribed by HHSC. Required reporting includes furnishing data to document vacancy rates in direct care staff positions and direct care staff retention percentage and other indicators related to a provider's use of the funds made under this section as defined by HHSC.

(5) HHSC must receive approval from Centers for Medicare & Medicaid Services (CMS) for the provider type or specific service to be paid under this section.

(d) Attestation of Agreement. A provider must submit an electronic attestation of agreement to comply with subsection (c)(2) - (c)(3) of this section as specified by HHSC. HHSC will provide notice at least thirty calendar days prior to the attestation deadline.

(e) Required reporting. A provider must submit required reporting to comply with subsection (c)(4) of this section. The required reports will be due on dates specified by HHSC. HHSC will provide at least thirty calendar day notice prior to the required deadline for each report.

(f) Reconciliation process. HHSC uses the methodology in this subsection to recoup the payments made under this section if a provider fails to submit the attestation of agreement under subsection (d) or required reporting under subsection (e) of this section.

(1) HHSC will reduce reimbursement rates for any claim for services to the amount that would have been paid to the provider absent the HCBS retention payment rate increase.

(2) The provider's claims will be reprocessed at the lower reimbursement rate under paragraph (1) of this subsection and an accounts receivable will be established.

(3) The provider will be paid on a normal per claim basis after the equivalent amount of the account receivable has been collected by HHSC, or its designee.

(4) After 270 days from the date of the establishment of the account receivable under paragraph (2) of this subsection, HHSC will recoup any overpayments owed under paragraph (1) of this subsection by demanding immediate repayment of any outstanding amount.

(g) Overpayment.

(1) If payments under this section result in an overpayment to a provider, HHSC, or its designee, may recoup an amount equivalent to the overpayment.

(2) Payments made under this section may be subject to any adjustments for payments made in error or due to fraud, including, without limitation, adjustments made under the Texas Administrative Code, the Code of Federal Regulations, and state and federal statutes. HHSC, or its designee, may recoup an amount equal to any such adjustments from the providers in question. This section may not be construed to limit the independent authority of another federal or state agency or organization to recover from the provider for a payment made due to fraud.

(h) Disallowance of federal funds. If payments under this section are disallowed by CMS, HHSC may recoup the amount of the disallowance from providers that participated in the program associated with the disallowance. If the recoupment from a provider for such a disallowance results in a subsequent disallowance, HHSC will recoup the amount of that subsequent disallowance from the same entity.

(i) Duration. Payments under this section will be made for services delivered between March 1, 2022, and August 31, 2022, or as specified by HHSC.

(j) A provider that has a contract for financial management services (FMS) must ensure that an employer in the CDS option, or designated representative, uses payments made under this section as defined in subsection (c)(2) - (c)(3) of this section.

(k) An MCO must require an MCO contractor, other than an MCO contractor described in subsection (j) of this section, to use payments made under this section as defined in subsection (c) of this section.

(l) An MCO must require that an MCO contractor that has a contract for FMS ensures that an employer in the CDS option or designated representative uses payments made under this section as defined in subsection (c)(2) - (c)(3) of this section.

(m) Payment methodology. HHSC calculates payments made under this section in the following manner:

(1) Total approved funding pool is divided proportionally based on historical claims paid from all HCBS services to calculate an anticipated funding amount for each service.

(2) Anticipated funding amount for each HCBS service is divided by projected utilization for the program period to calculate a per unit payment factor for each service.

(3) Payments under this section will be distributed on claims for services delivered during the duration specified in subsection (i) of this section.

**History**
- *Source Note: The provisions of this §353.207 adopted to be effective May 1, 2022, 47 TexReg 2503.*

#### **Subchapter C** REIMBURSEMENT METHODOLOGY FOR NURSING FACILITIES

##### **1 Tex. Admin. Code § 355.305** Annual Patient Care Expense Ratio for Nursing Facilities {#sec-355.305 omnilex-key=us-tx-regs-official--title-1--355.305}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) establishes the annual patient care expense ratio for nursing facilities (NF) on or after September 1, 2025.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context clearly indicates otherwise.

(1) Annual patient expense ratio--The ratio of patient care expenses as defined in paragraph (2) of this subsection to the NF's patient care revenue as defined in paragraph (3) of this subsection for a rate year as defined in paragraph (4) of this subsection.

(2) Patient care expenses--

(A) Include allowable expenses incurred by an NF in a rate year for the following cost areas:

(i) compensation and benefits for direct care staff and direct care contracted labor for the following staff:

(I) licensed registered nurse;

(II) licensed vocational nurse;

(III) medication aide;

(IV) restorative aide;

(V) nurse aide who provides nursing-related care to residents occupying medical assistance beds;

(VI) licensed social worker;

(VII) social services assistant;

(VIII) additional staff associated with providing care to facility residents with a severe cognitive impairment;

(IX) nonprofessional administrative staff, including medical records staff and accounting or bookkeeping staff;

(X) central supply staff and ancillary facility staff;

(XI) laundry staff;

(XII) housekeeping staff; and

(XIII) food service staff; and

(ii) central supply costs and ancillary costs for facility services and supplies, including:

(I) diagnostic laboratory and radiology costs;

(II) durable medical equipment costs, including costs to purchase, rent, or lease the equipment;

(III) costs for oxygen used to provide oxygen treatment;

(IV) prescription and nonprescription drug costs;

(V) therapy consultant costs; and

(iii) costs for dietary and nutrition services, including costs for food services and related supplies, and nutritionist services; and

(B) exclude the following:

(i) administrative or operational costs, other than administrative or operational costs described in subparagraph (A) of this paragraph; and

(ii) fixed capital assets costs.

(3) Patient care revenue--In a rate year, the medical assistance revenue paid to an NF where the revenue is associated with the following rate components as described in §355.318 of this subchapter (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025):

(A) nursing rate component;

(B) non-therapy ancillary (NTA) rate component;

(C) brief interview for mental status (BIMS) rate component;

(D) dietary rate component; and

(E) operations rate component.

(4) Rate year--The rate year begins on the first day of September and ends on the last day of August of the following year and aligns with the NF's annual cost reporting period.

(c) Reporting requirements. An NF must submit an annual cost report in accordance with §355.102 of this chapter (relating to General Principles of Allowable and Unallowable Costs) and §355.103 of this chapter (relating to Specifications for Allowable and Unallowable Costs). HHSC will examine the cost report in accordance with §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).

(d) Determining the annual patient expense ratio and spending requirement. HHSC will calculate an NF's annual patient expense ratio to ensure the NF's patient expense ratio is at least 80 percent.

(e) Recoupment. An NF that fails to meet the annual patient expense ratio is subject to a spending requirement and recoupment calculated as follows.

(1) HHSC will calculate a spending requirement for the rate year by multiplying the patient care revenues as defined in subsection (b)(3) of this section by 0.80.

(2) HHSC will calculate a total patient care expense amount by summing the allowable patient care expenses as defined in subsection (b)(2) of this section accrued during the rate year.

(3) The estimated recoupment will be calculated by subtracting paragraph (2) of this subsection from paragraph (1) of this subsection. HHSC or its designee will recoup the difference from an NF whose patient care expenses are less than its spending requirement.

(f) Recoupment exclusions. HHSC may not recoup a medical assistance reimbursement amount under this section if the NF meets one of the following conditions during the rate year.

(1) The NF held at least a four-star rating under the Centers for Medicare and Medicaid Services (CMS) five-star quality rating system for nursing facilities in three or more of the following categories:

(A) overall;

(B) health inspections;

(C) staffing; and

(D) long-stay quality measures.

(2) The NF:

(A) maintained an average daily occupancy rate of 75 percent or less; and

(B) spent at least 70 percent of the patient care revenue as defined in subsection (b)(3) of this section on patient care expenses as defined in subsection (b)(2)(A) of this section.

(3) The NF incurred expenses related to a disaster for which the governor issued a disaster declaration under Texas Government Code Chapter 418.

(g) Notification of recoupment based on annual cost reports. HHSC will notify an NF that failed to meet the annual patient care expense ratio of the associated spending requirement and recoupment as specified under §355.107 (relating to Notification of Exclusions and Adjustments).

(h) Appeals. Informal reviews and formal appeals relating to these reporting requirements in subsection (c) of this section are governed by §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).

(i) State-owned facilities. This section does not apply to state-owned facilities.

**History**
- *Source Note: The provisions of this §355.305 adopted to
be effective September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.310** Reimbursement Methodology for Customized Equipment {#sec-355.310 omnilex-key=us-tx-regs-official--title-1--355.310}

(a) Reimbursement rates for customized power wheelchairs (CPWCs) and associated physical or occupational therapy evaluations provided under 40 TAC §19.2614 (relating to Customized Power Wheelchairs) are determined as follows:

(1) For CPWCs, rates are determined in accordance with §355.8023 of this title (relating to Reimbursement Methodology for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)).

(2) For evaluations required for CPWCs under 40 TAC §19.2614(c), rates are determined in accordance with §355.313 of this title (relating to Reimbursement Methodology for Rehabilitative and Specialized Services).

(b) Reimbursement rates for customized adaptive aids and associated physical or occupational therapy evaluations provided under 40 TAC Chapter 17 (relating to Preadmission Screening and Resident Review) are determined as follows:

(1) For customized adaptive aids, rates are determined in accordance with §355.8023 of this title.

(2) For evaluations required for customized adaptive aids, rates are determined in accordance with §355.313 of this title.

(c) Fees for customized equipment are adjusted within available funding as described in §355.201 of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission).

**History**
- *Source Note: The provisions of this §355.310 adopted to be effective May 8, 2008, 33 TexReg 3569; amended to be effective May 24, 2013, 38 TexReg 2976; amended to be effective December 1, 2017, 42 TexReg 5431.*

##### **1 Tex. Admin. Code § 355.311** Medicaid Reimbursement Rates for State Veterans Homes {#sec-355.311 omnilex-key=us-tx-regs-official--title-1--355.311}

(a) The following definitions apply to this section:

(1) Health and Human Services Commission (HHSC)--The state administrative agency authorized to adopt standards and rules to govern reimbursement rates and methodologies for Medicaid nursing facility services pursuant to Government Code §532.0051.

(2) Rate period--The state fiscal year.

(3) State veterans home--A nursing facility as defined in Title 40, Texas Administrative Code (TAC) §176.1 (relating to Definitions) that is contracted with the Department of Aging and Disability Services (DADS) under 40 TAC §19.2322 (relating to Medicaid Bed Allocation Requirements) to provide nursing facility services to eligible Medicaid recipients who reside in a state veterans home.

(4) Department of Aging and Disability Service (DADS)--The state administrative agency authorized to contract for nursing facility services to Medicaid recipients pursuant to Chapter 32, Human Resources Code.

(5) Veterans Land Board (VLB)--The state administrative agency authorized under Chapter 164, Natural Resources Code, to establish and operate state veterans homes.

(b) DADS reimburses the VLB for nursing facility services provided by the VLB to Medicaid clients in state veterans homes.

(c) HHSC determines reimbursement rates for state veterans homes to provide nursing facility services.

(d) Interim reimbursement rates for state veterans homes are determined prospectively for each home based on the state veterans home semi-private basic daily rate in effect on the first day of the rate period. Rates are reconciled retrospectively based on actual cost in accordance with subsection (j) of this section.

(e) The facility-specific payment rate, as determined in subsection (d) of this section, will be paid for all Medicaid eligible residents of a state veterans home regardless of the case mix classification of the resident.

(f) Veterans Administration (VA) per diem payments to the State of Texas VLB for nursing home care as defined in 38 Code of Federal Regulations (CFR) §51.40 (relating to monthly payment) are not offset against per diem payment rates for Medicaid-eligible residents of a state veterans home.

(g) Residents of a state veterans home are not eligible to receive the supplemental reimbursements authorized under §355.307(b)(3)(E) and (F) of this title (relating to Reimbursement Setting Methodology).

(h) State veterans homes are not eligible to participate in §355.308 of this title (relating to Direct Care Staff Rate Component).

(i) The VLB submits financial and statistical information in a format designated by HHSC. The financial and statistical information must be completed in accordance with the provisions of §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs; and Specifications for Allowable and Unallowable Costs). This information may be reviewed or audited in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). Financial and statistical information submitted by the VLB is not included in the cost report databases used in the reimbursement determination process for the Texas Medicaid Nursing Facility program.

(j) For each state veterans home, the interim reimbursement rate is adjusted retrospectively based on actual costs accrued during the rate period.

**History**
- *Source Note: The provisions of this §355.311 adopted to
be effective November 19, 2001, 26 TexReg 9376; amended to be effective
June 1, 2004, 29 TexReg 5337; amended to be effective October 28,
2007, 32 TexReg 7468; amended to be effective August 21, 2008, 33
TexReg 6569; amended to be effective April 1, 2025, 50 TexReg 828.*

##### **1 Tex. Admin. Code § 355.312** Reimbursement Setting Methodology--Liability Insurance Costs {#sec-355.312 omnilex-key=us-tx-regs-official--title-1--355.312}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) uses the methodology described in this section to establish Nursing Facility (NF) Liability Insurance Coverage Rate Add-ons.

(b) Definitions.

(1) Provider--A person who has a written agreement with HHSC to provide Medicaid NF services to an individual or a person who is contracted with a managed care organization as defined in §353.2 of this title (relating to Definitions) to provide Medicaid NF services.

(2) Independently procured insurance--An insurance transaction involving an insurance contract independently procured from an insurance company not licensed in Texas through negotiations occurring entirely outside the state of Texas that is reported and on which premium tax is paid.

(3) Open enrollment period--Open enrollment period begins on the first day of July and ends on the last day of that same July preceding the rate year for which payments are being determined.

(4) Purchased captive insurance--General or professional liability insurance purchased from a non-admitted captive insurance company that insures solely directors and officer's liability insurance for the directors and officers of the company's parent and affiliated companies and the risks of the company's parent and affiliated companies, if applicable.

(5) Purchased commercial liability insurance--Either general or professional liability insurance from a commercial carrier or a non-profit service corporation in an arm's-length transaction that provides for the shifting of risk to the unrelated party. The commercial carrier or non-profit service corporation must meet the requirements as set by the Texas Department of Insurance (TDI) for authorized insurance.

(6) Rate year--The rate year begins on the first day of September and ends on the last day of August of the following year.

(7) Self-insurance--Self-insurance is a means whereby a provider undertakes the risk to protect itself against anticipated liabilities by providing funds equivalent to liquidate those liabilities. If a provider enters into an arrangement with an unrelated party that does not provide for the shifting of risk to the unrelated party, such an agreement shall be considered self-insurance. Self-insurance is not purchased liability insurance.

(c) Eligibility. To be eligible to receive and retain liability insurance coverage rate add-ons from HHSC under this section:

(1) the provider must be enrolled as a Medicaid provider;

(2) the provider must be actively providing and billing for NF services provided to Medicaid clients; and

(3) the provider must maintain acceptable liability insurance coverage as described in this section during the rate year for which the liability insurance add-ons will be paid.

(d) Payment rates. Payment rates for purchased general and professional liability insurance will be determined as follows.

(1) Before September 1, 2025, determine the portion of the general and administration rate component from §355.307 of this subchapter (relating to Reimbursement Setting Methodology before September 1, 2025) attributable to allowable liability insurance costs. After September 1, 2025, determine the portion of the Non-Case-Mix rate component from §355.318 of this subchapter (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025) attributable to allowable liability insurance costs.

(2) Determine the total number of dollars that would be expended if the liability rate component from paragraph (1) of this subsection were paid uniformly to all providers during the rate effective period.

(3) Estimate the number of days of service that will be covered by purchased liability insurance during the rate period.

(4) Divide the total dollars available for liability insurance from paragraph (2) of this subsection by the estimated number of days of service that will be covered by purchased liability insurance during the rate period from paragraph (3) of this subsection.

(5) Payment rates for purchased liability insurance may be adjusted as often as HHSC determines is necessary to ensure that the total dollars expended during the rate period do not exceed the amount appropriated for this purpose.

(6) Since these payment rates are determined through an allocation of available appropriations among estimated units of service covered by purchased liability insurance, a public rate hearing is not required when adjustments are made to the payment rates.

(7) Providers will be notified, in a manner determined by HHSC, of adjustments to the payment rates for purchased general and professional liability insurance.

(8) HHSC will pay the same add-on rate for providers who purchase general liability insurance without professional liability insurance, providers who purchase professional liability insurance without general liability insurance, and providers who purchase both general and professional liability insurance.

(e) Open enrollment. Each rate year, HHSC notifies providers of open enrollment for providers to receive the liability insurance rate add-ons via email sent to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. If open enrollment has been postponed or canceled, HHSC will notify providers by email before the first day of the open enrollment period. Should conditions warrant, HHSC may conduct additional enrollment periods during a rate year. A provider must submit an attestation in accordance with subsection (f) of this section during an open enrollment period to receive the liability rate add-ons for each rate year. The HHSC Provider Finance Department must receive the attestation by the last day of the open enrollment period. If the last day of open enrollment is on a weekend day, state holiday, or national holiday, the HHSC Provider Finance Department must receive the attestation by the next business day. A provider who fails to submit an acceptable attestation of agreement in accordance with this section will not receive the add-on rates during the rate year.

(f) Attestation of agreement. The provider must submit an electronic attestation of agreement to comply with subsection (c)(3) of this section during the open enrollment period prior to the rate year the liability insurance add-ons will be paid. The electronic attestation will include the following.

(1) The provider must indicate that it is carrying general liability and professional liability insurance; general liability insurance without professional liability insurance; or professional liability insurance only.

(2) The provider must attest that it has purchased liability insurance issued through an entity meeting any one of the following criteria. These entities have been determined by the TDI to be authorized to issue liability insurance policies in the State of Texas.

(A) An insurance company identified as an admitted, licensed insurer authorized to write liability insurance in Texas. This type of insurance company is designated as "active" on the TDI website. This designation includes risk retention groups chartered inside the State of Texas.

(B) An insurance company that is an eligible surplus lines insurer which requires that there be a Texas licensed surplus lines agent placing the coverage with the insurance company. This type of insurance company is designated as "eligible" on the TDI website.

(C) The Texas Medical Liability Insurance Underwriting Association (JUA). This insurance arrangement is designated as "active" on the TDI website.

(D) A risk retention group chartered outside the State of Texas that is registered with the TDI and which is designated as "registered" on the TDI website.

(3) The provider must attest that if it purchased independently procured insurance, the coverage was purchased through an independently procured insurance arrangement. The provider must also attest that taxes on the premiums of independently procured insurance were paid to and received by the Texas Comptroller for the calendar year in which the policy was procured, continued or renewed.

(4) The provider must agree that if it purchased insurance through a captive insurance company that taxes on the premiums of captive insurance were paid to and received by the Texas Comptroller for the calendar year in which the policy was procured, continued or renewed.

(5) The provider must attest that it has not obtained insurance from an insurer or person engaged in unauthorized insurance as set forth in Chapter 101 of the Texas Insurance Code, Unauthorized Insurance.

(g) Failure to maintain insurance coverage. It is the provider's responsibility to notify the HHSC Provider Finance Department of any changes to liability insurance coverage during a rate year for which liability insurance rate add-ons are being paid, including cancellation of, or failure to renew or to maintain coverage, within 15 calendar days of the effective date of the change. Failure to notify HHSC Provider Finance Department of cancellation of or failure to renew or maintain coverage could constitute Medicaid fraud and the rate add-on amounts paid for a period during which liability insurance is not maintained will be subject to recoupment under subsection (j) of this section.

(h) New provider contracts. For the purposes of this section, a new provider contract is a contract with an effective date on or after the first day of the open enrollment period for that rate year. To receive the liability insurance add-on rates, a provider with a new provider contract must send a written request to complete the attestation of agreement in subsection (f) of this section to the HHSC Provider Finance Department. The attestation of agreement must be completed according to instructions, signed by an authorized agent of the provider's contract, and received by the HHSC Provider Finance Department within 30 days of the date HHSC sends notification to the provider that the attestation of agreement must be completed. If the 30th day is on a weekend day, state holiday, or national holiday, the HHSC Provider Finance Department must receive the attestation by the next business day. A provider who fails to submit an acceptable attestation of agreement in accordance with this section will not receive the add-on rates during the rate year.

(i) Change of ownership. Payment of liability insurance add-on rate confers to the new owner as defined in 26 TAC §554.2308 (relating to Change of Ownership) when there is a change of ownership. If the change of ownership occurs during an open enrollment period as defined in subsection (b) of this section, then the owner recognized by HHSC, or its designee, may request to modify the enrollment status of the facility by the last day of the enrollment period, in accordance with subsection (e) of this section.

(j) Recoupment. HHSC will recoup add-on rates paid to a provider under the following circumstances.

(1) It is the responsibility of the provider to ensure that liability insurance is authorized. Liability insurance payments will be recouped if made on insurance that is later determined by TDI to be unauthorized insurance under Chapter 101, Texas Insurance Code. The liability insurance payments that were recouped will be returned to the provider if the determination by TDI that the insurance is unauthorized is successfully appealed with TDI and the insurance is determined to be authorized.

(2) It is the responsibility of the provider to ensure that liability insurance coverage is maintained during a rate year for which liability insurance rate add-ons are paid. Failure to maintain coverage will result in recoupment of funds for any period in which add-ons were paid and liability insurance coverage was not maintained.

(3) It is the responsibility of the provider to ensure that its attestation of liability insurance coverage is accurate. False attestations will result in recoupment of funds for the rate year following the open enrollment in which the false attestation was made.

**History**
- *Source Note: The provisions of this §355.312 adopted
to be effective December 1, 2001, 26 TexReg 9565; amended to be effective
November 1, 2003, 28 TexReg 8310; amended to be effective May 1, 2005,
30 TexReg 2383; amended to be effective October 28, 2007, 32 TexReg
7469; amended to be effective May 1, 2022, 47 TexReg 2507; amended
to be effective September 23, 2025, 50 TexReg 6205.*

##### **1 Tex. Admin. Code § 355.313** Reimbursement Methodology for Rehabilitative and Specialized Services {#sec-355.313 omnilex-key=us-tx-regs-official--title-1--355.313}

(a) Providers other than nursing facilities delivering Medicaid specialized and rehabilitative services, defined in 40 TAC §19.1306, (relating to Payment for Specialized and Rehabilitative Services), are reimbursed for physical therapy evaluations, occupational therapy evaluations, speech therapy evaluations, physical therapy sessions, occupational therapy sessions, and speech therapy sessions in accordance with statewide fees determined by the Texas Health and Human Services Commission (HHSC).

(1) The hourly fees for physical therapy and occupational therapy sessions are based on the current Medicare nonfacility Relative Value Units (RVUs) times the current Medicaid conversion factor times four, since the Medicare RVUs for these sessions are based on 15-minute increments.

(2) The hourly fee for a speech therapy session is based on the current Medicare nonfacility RVU times the current Medicaid conversion factor times two, since the Medicare RVUs for a speech therapy session is based on 30-minute increments.

(3) The fees for physical therapy evaluations, occupational therapy evaluations, and speech therapy evaluations are the same as the hourly fees for each type of therapy session, as provided in paragraphs (1) and (2) of this subsection.

(4) The fees for specialized and rehabilitative services delivered by providers other than nursing facilities are reviewed coincident with the biennium, with any fee adjustments made within available funds.

(b) Nursing facilities delivering Medicaid specialized and rehabilitative services are reimbursed for physical therapy evaluations, occupational therapy evaluations, speech therapy evaluations, physical therapy sessions, occupational therapy sessions, and speech therapy sessions in accordance with fees reviewed by the Texas Health and Human Services Commission (HHSC). The fees for specialized and rehabilitative services delivered by nursing facilities are reviewed coincident with the biennium, with any fee adjustments made within available funds.

**History**
- *Source Note: The provisions of this §355.313 adopted to be effective January 20, 2008, 33 TexReg 363.*

##### **1 Tex. Admin. Code § 355.315** Reimbursement Methodology for Preadmission Screening and Resident Review (PASRR) Specialized Services {#sec-355.315 omnilex-key=us-tx-regs-official--title-1--355.315}

(a) Payment rate determination. HHSC develops payment rates for Employment Assistance services, Supported Employment services, Independent Living Skills Training services, Behavioral Support services, Habilitation Coordination services, and Day Habilitation services based on rates HHSC has determined for other programs that provide similar services. If payment rates for other programs that provide similar services are not available, HHSC determines payment rates using a pro forma approach in accordance with §355.105(h) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(b) Related information. Section 355.101 of this title (relating to Introduction) and §355.105(g) of this title also apply.

**History**
- *Source Note: The provisions of this §355.315 adopted to be effective November 15, 2017, 42 TexReg 6369.*

##### **1 Tex. Admin. Code § 355.316** Reimbursement Methodology for Pediatric Care Facilities {#sec-355.316 omnilex-key=us-tx-regs-official--title-1--355.316}

(a) Pediatric Care Facility Class. The purpose of this special class is to recognize, through the adoption of a special payment rate, the cost differences that exist in a pediatric nursing facility or distinct unit of a nursing facility that serves predominantly children.

(b) Definitions. The following terms, when used in this section, have the following meanings, unless otherwise stated.

(1) Children--For the purposes of this pediatric care facility class, children are defined as being at or below 22 years of age.

(A) Only a pediatric care facility that is designated in its entirety as a pediatric care facility may count as children a limited number of adults who were admitted to the facility as children, but who are no longer children (i.e., individuals who have "aged in place"), for purposes of determining if the facility meets the requirements for remaining a pediatric care facility described in paragraph (3) of this subsection. The number of such individuals who may be counted as children for purposes of determining if the facility continues to meet the requirements for remaining a pediatric care facility is limited to 33 percent of the average daily census of the facility.

(B) Individuals who have "aged in place" as described in subparagraph (A) of this paragraph may not be counted toward meeting the requirements for a facility to initially become a pediatric care facility, nor can they be counted toward meeting the requirements for a distinct unit to remain a pediatric care facility.

(2) Distinct unit--A portion of a nursing facility that is physically separate from, and beds are not commingled with, other units of the facility. The distinct unit can be an entire wing, a separate building, an entire floor, or an entire hallway. The distinct unit consists of all beds within the designated area. A distinct unit must consist of 28 or more Medicaid-contracted beds.

(3) Pediatric care facility--Except as provided in paragraph (1) of this subsection, a pediatric care facility is an entire facility that has maintained an average daily census of 80 percent or more children for the six-month period prior to its entry into the pediatric care facility class based on the entire licensed facility. A pediatric care facility can also be a distinct unit of a facility that has maintained an average daily census of 85 percent or more children for the six-month period prior to its entry into the pediatric care facility class based on the distinct unit of the facility. To remain a pediatric care facility, the pediatric care facility must maintain an average daily census of 80 percent or more children if the pediatric care facility is an entire facility, and 85 percent or more children if the pediatric care facility is a distinct unit of the facility. The contracted provider must request in writing by certified mail or by special mail delivery where the delivery can be verified to become a member of the pediatric care facility special reimbursement class. The request must be sent to the Texas Health and Human Services Commission (HHSC) Provider Finance Department.

(c) Payment rate determination. Payment rates will be determined in the following manner.

(1) Cost reports for pediatric care facilities are governed by the requirements specified in Subchapter A of this chapter (relating to Cost Determination Process). A nursing facility that contains a pediatric care facility distinct unit must complete two cost reports: one report for the distinct pediatric care facility unit and one report for the remainder of the facility.

(2) The payment rate methodology for this class of service is based upon the unadjusted federal per diem rate for rural Medicare skilled nursing facilities for the most recent federal fiscal year as published in the Federal Register. Payment rates are based on available funds and are subject to legislative appropriations.

(3) The payment rate described in paragraph (2) of this subsection will be paid for all Medicaid residents of a qualifying pediatric care facility.

(4) A facility will not be eligible to receive the ventilator-dependent or the children-with-tracheostomies supplemental reimbursements.

(5) Pediatric care facilities are not eligible to participate in §355.308 of this subchapter (relating to Direct Care Staff Rate Component).

(d) Disqualification. If HHSC determines that a pediatric care facility that is designated in its entirety as a pediatric care facility no longer qualifies as a member of such class according to subsection (b) of this section, HHSC will notify the facility in writing.

(1) Within 30 calendar days of the date on the written notification, the HHSC Provider Finance Department must receive a written compliance plan from the facility as described in paragraph (2) of this subsection. If the 30th calendar day is a weekend day, national holiday, or state holiday, the first business day following the 30th calendar day is the final day receipt of the plan will be accepted.

(2) The compliance plan must indicate the facility's intent to, within 180 calendar days of the date of HHSC's initial written notification to the facility, come into compliance with subsection (b) of this section by:

(A) managing a sufficient number of admissions and discharges to come into compliance with the requirements of subsections (b)(1) and (b)(3) of this section to remain a member of the pediatric care facility special reimbursement class;

(B) creating a distinct unit of the facility as described under subsection (b)(2) of this section; or

(C) withdrawing the entire facility from the pediatric care facility special class.

(3) HHSC will make a written determination regarding approval or disapproval of the compliance plan. A facility that submits a compliance plan that is subsequently disapproved will no longer be reimbursed as a member of the pediatric facility special class on the first day of the month following HHSC's disapproval of the compliance plan.

(4) A compliance plan that is received after the stated deadline will not be accepted, and the facility will be removed from the pediatric care facility special reimbursement class retroactive to the first day of the month following the date of HHSC's initial written notification to the facility.

(5) A facility that obtains approval of its compliance plan from the HHSC Provider Finance Department will continue to be reimbursed as a member of the pediatric care special class until 180 calendar days from the date of HHSC's initial written notification to the facility. If the facility has not achieved the stated goal of its compliance plan by that time, the facility will be removed from the pediatric care special class effective the first day of the following month.

(6) If, at any time, HHSC determines that a facility that has come into compliance with subsection (b) of this section by managing a sufficient number of admissions and discharges, as described in paragraph (2)(A) of this subsection, no longer qualifies as a member of the pediatric care facility special reimbursement class, that facility will be excluded from the class for 365 days from the date HHSC makes its determination. The facility may request to rejoin the class on the 366th day.

(7) A facility that is removed or withdraws from the pediatric care special reimbursement class will be considered a new facility, as described in §355.308(e) of this title, for purposes of enrollment in the Nursing Facility Direct Care Staff Rate Enhancement.

(8) A facility that is removed or withdraws from the pediatric care special class may not re-enter the class within one year of its removal or withdrawal.

**History**
- *Source Note: The provisions of this §355.316 adopted to be effective October 19, 2021, 46 TexReg 7039.*

##### **1 Tex. Admin. Code § 355.318** Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025 {#sec-355.318 omnilex-key=us-tx-regs-official--title-1--355.318}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) establishes the Patient Driven Payment Model (PDPM) for Long-Term Care (LTC) described in this section to reimburse nursing facilities on or after September 1, 2025. The PDPM LTC methodology will be implemented pending necessary system modifications.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context clearly indicates otherwise.

(1) Brief interview for mental status (BIMS)--BIMS is a mandatory tool used to screen and identify the cognitive condition of residents upon admission into a nursing facility. BIMS is a part of minimum data set (MDS) assessment data. It is used to determine if a resident has a cognitive impairment, which necessitates additional reimbursement under the PDPM LTC classification system.

(2) Case-mix classifiers--These classifiers are codes based on MDS assessment data used to differentiate between case-mix index (CMI)-adjusted groups for the nursing and non-therapy ancillary (NTA) rate components.

(3) Case-mix index (CMI)--CMI is a relative value based on assessment data used to assign nursing facility residents to a diagnosis-related group for CMI-adjusted rate components.

(4) Minimum data set (MDS) assessment data--MDS is clinical assessment data collected by Medicare and Medicaid-certified nursing facilities as a part of a federally mandated process. MDS assessment data provide a comprehensive evaluation of each resident's functional capabilities, comorbidities, and health conditions and are used to determine case-mix classifiers and PDPM LTC groups.

(5) Patient Driven Payment Model (PDPM) Long-Term Care (LTC) classification system--This classification system is used to classify Medicaid recipients who reside in a nursing facility into 1 of 36 PDPM LTC groups based on MDS assessment data. If MDS assessment data is unavailable or invalid, a resident is assigned to 1 of 2 default groups.

(6) Patient Driven Payment Model (PDPM) Long-Term Care (LTC) default group--A default group assigns a temporary classification when MDS assessment data is incomplete or in error or when an MDS assessment is missing.

(7) Patient Driven Payment Model (PDPM) Long-Term Care (LTC) group--Each group represents a unique combination, including a nursing case-mix classifier, an NTA case-mix classifier, and a BIMS classification. PDPM LTC groups are used to calculate total per diem rates under the PDPM LTC classification system.

(c) PDPM LTC classification. HHSC reimbursement rates for nursing facilities vary according to the assessed characteristics of Medicaid recipients based on MDS assessment data.

(1) In each of the PDPM LTC groups, nursing facility residents are classified according to one of six nursing case-mix classifiers; one of three NTA case-mix classifiers; and a BIMS classification, which indicates if a resident has a cognitive impairment. For the case-mix adjusted rate components, the CMI is assigned based on relevant MDS assessment data. The nursing and NTA case-mix classifiers and the BIMS classification are described below.

(A) Nursing case-mix classifiers. A resident is assigned to one of six nursing case-mix classifications based on their level of acuity and the level of nursing care needed to address their health conditions effectively.

(B) NTA case-mix classifiers. A resident is assigned one of three NTA case-mix classifications based on the presence of certain conditions or the need for certain extensive services found to be correlated with increases in NTA costs.

(C) BIMS classification. A resident is assigned as qualifying for additional BIMS reimbursement if MDS assessment data indicates a cognitive impairment.

(2) PDPM LTC default groups are assigned using the lowest CMI among nursing case-mix classifiers, the lowest CMI among NTA case-mix classifiers, and without a BIMS classification of severe cognitive impairment. Both default groups will be reimbursed at the same total rate.

(d) PDPM LTC rate components. Total per diem PDPM LTC rates consist of the following four rate components. Costs used in HHSC's determination of the following rate components are subject to the cost-finding methodology as specified in subsection (g) of this section.

(1) Nursing rate component. This rate component includes compensation costs for employee and contract labor Registered Nurses (RNs), including Directors of Nursing (DONs), Assistant Directors of Nursing (ADONs), and Minimum Data Set (MDS) coordinators; Licensed Vocational Nurses (LVNs), including DONs, ADONs, and MDS coordinators; medication aides; restorative aides; nurse aides performing nursing-related duties for Medicaid contracted beds; and certified social worker and social service assistant wages.

(A) Compensation to be included for these employee staff types is the allowable compensation defined in §355.103(b)(1) of this chapter (relating to Specifications for Allowable and Unallowable Costs) that is reported as either wages (including payroll taxes and workers' compensation) or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of this chapter to be reported as costs applicable to specific cost report line items are not to be included in this cost center.

(B) Nursing staff who also have administrative duties not related to nursing must properly direct charge their compensation to each type of function performed based on daily time sheets maintained throughout the entire reporting period.

(C) Nurse aides must meet the qualifications specified under 26 TAC §556.3 (relating to NATCEP Requirements) to be included in this rate component. Nurse aides include certified nurse aides and nurse aides in training.

(D) Contract labor refers to personnel for whom the contracted provider is not responsible for the payment of payroll taxes (such as federal payroll tax, Medicare, and federal and state unemployment insurance) and who perform tasks routinely performed by employees. Allowable contract labor costs are defined in §355.103(b)(3) of this chapter.

(E) For facilities providing care to children with tracheostomies requiring daily care, staff required by 26 TAC §554.901(15)(C)(iii) (relating to Quality of Care) performing nursing-related duties for Medicaid contracted beds are included in the nursing rate component.

(F) For facilities providing care for qualifying ventilator-dependent residents, Registered Respiratory Therapists and Certified Respiratory Therapy Technicians are included in the nursing rate component.

(G) Nursing facility administrators and assistant administrators are not included in the nursing rate component.

(H) Staff members performing more than one function in a facility without a differential in pay between functions are categorized at the highest level of licensure or certification they possess. If this highest level of licensure or certification is not that of an RN, LVN, medication aide, restorative aide, or certified nurse aide, the staff member is not to be included in the nursing rate component but rather in the rate component where staff members with that licensure or certification status are typically reported.

(I) Paid feeding assistants are not included in the nursing rate component. Paid feeding assistants are intended to supplement certified nurse aides, not to be a substitute for certified or licensed nursing staff.

(2) NTA rate component. This rate component includes costs of providing care to residents with certain comorbidities or the use of certain extensive services. This rate component includes central supply costs, including central supply staff compensation and benefits, and other direct care non-professional staff wages, including medical records staff compensation and benefits; ancillary costs, including ancillary staff compensation and benefits; diagnostic laboratory and radiology costs; durable medical equipment purchase, rent, or lease costs; oxygen costs; drugs and pharmaceuticals; therapy consultant costs; and other ancillary supplies and services purchased by a nursing facility.

(3) BIMS rate component. This rate component includes additional staff costs associated with providing care to residents with a BIMS score between 0 and 7 or a determination of severe or moderate impairment based on the calculation of the PDPM cognitive level for residents without a BIMS score on the MDS.

(4) Dietary rate component. The dietary component includes compensation, payroll taxes, benefits, and worker's compensation claims for the following staff types: food service supervisory and professional staff, other food service staff, and dietician/nutritionist staff. This rate component also includes the following non-staff costs: dietary supplies and contracted dietary services costs.

(5) Operations rate component. The operations component includes the following expenses: compensation, payroll taxes, benefits, and worker's compensation claims for activity director, activity services assistants, laundry and housekeeping staff, and other facility and operations staff, not including transportation and maintenance staff expenses. This rate component also includes the following non-staff costs; including, non-durable equipment and supplies, operations supplies, and other contracted services.

(6) Administration rate component. The administration rate component includes the following expenses: compensation, payroll taxes, benefits, and worker's compensation claims for executive administrator, assistant administrator, administrative assistants, owner, other administrative staff, transportation and maintenance staff, and central office staff. This rate component also reflects the following non-staff costs: utilities; telecommunications; other interest; insurance, excluding liability insurance expenses reimbursed under §355.312 of this subchapter (relating to Reimbursement Setting Methodology--Liability Insurance Costs); staff training and seminars; staff travel costs including personal mileage reimbursement; management contract fees; contracted administrative, professional, consulting and training services; licenses and permits; other taxes excluding non-administrative staff payroll taxes; advertising, allowable dues and membership; transportation costs; and other allowable costs not included in the other rate components.

(7) Fixed capital asset rate component. This rate component includes building and building equipment depreciation and lease expense, mortgage interest, land improvement depreciation, and leasehold improvement amortization.

(e) Reimbursement determination. HHSC calculates methodological PDPM LTC rates for each rate component as defined below.

(1) Calculation of the nursing rate component. HHSC determines a per diem cost for the nursing component by calculating a median of the allowable nursing costs defined in subsection (d)(1) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter (relating to Determination of Inflation Indices) and multiplied by 1.07.

(2) Calculation of the NTA rate component. HHSC determines a per diem cost for the NTA component by calculating a median of allowable NTA costs as defined in subsection (d)(2) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter and multiplied by 1.07.

(3) Calculation of CMI-adjusted rate components. HHSC adjusts the nursing component and the NTA component by the most recent corresponding CMI established for PDPM Medicare available for the rate year, as determined by the Medicare Skilled Nursing Facility (SNF) Prospective Payment System (PPS). The CMI-adjusted rate components are calculated as follows.

(A) Calculation of the total nursing rate component. HHSC will calculate CMI-adjusted nursing rate components for each nursing case-mix classifier by multiplying the result from paragraph (1) of this subsection by a CMI specific to each nursing case-mix classifier. There is one CMI per each nursing case-mix classifier.

(B) Calculation of the total NTA rate component. HHSC will calculate CMI-adjusted NTA rate components for each NTA case-mix classifier by multiplying the result from paragraph (2) of this subsection by a CMI specific to each NTA case-mix classifier. There is one CMI per each NTA case-mix classifier.

(4) Calculation of the BIMS rate component. This rate component is calculated at 5 percent of the nursing rate component established for a nursing case-mix classifier associated with the highest CMI.

(5) Calculation of the dietary rate component. HHSC calculates a median of allowable dietary costs defined in subsection (d)(4) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter and multiplied by 1.07.

(6) Calculation of the operations rate component. HHSC calculates a median of the allowable operations costs defined in subsection (d)(5) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter and multiplied by 1.07.

(7) Calculation of the administration rate component. HHSC calculates a median of the allowable administration costs defined in subsection (d)(6) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter and multiplied by 1.07.

(8) Calculation of the fixed capital assets rate component. HHSC calculates a median of allowable fixed capital costs defined in subsection (d)(7) of this section from the most recently examined cost report database, weighted by the total nursing facility units of service from the same cost report database, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter and multiplied by 1.07.

(9) Total per diem rate determination. For each of the PDPM LTC groups and default groups, the recommended total per diem rate is determined as the sum of the following seven rate components:

(A) Nursing rate component;

(B) NTA rate component;

(C) BIMS rate component;

(D) Dietary rate component;

(E) Operations rate component;

(F) Administration rate component; and

(G) Fixed capital asset rate component.

(10) HIV/AIDS Add-on. According to the Texas Health and Safety Code (THSC) §81.103, it is prohibited to input selected International Classification of Diseases, Tenth Revision (ICD-10) diagnosis codes for human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS) in the MDS assessment data. PDPM LTC methodology establishes a special per diem add-on intended to reimburse nursing facilities for enhanced nursing and NTA costs associated with providing care to a resident with an HIV/AIDS diagnosis. The total HIV/AIDS add-on is a sum of the amounts discussed as follows.

(A) The nursing rate component per PDPM LTC group assigned to a qualifying resident will receive an 18 percent add-on amount.

(B) The NTA rate component amount will receive an add-on amount, which is calculated as the difference between the resident's NTA rate component amount based on their assigned NTA case-mix classifier and the NTA rate component amount associated with the NTA case-mix classifier with the highest CMI.

(f) Reimbursement for Hospice care in a nursing facility. Following 26 TAC §266.305 (relating to General Contracting Requirements), the Medicaid Hospice Program pays the Medicaid hospice provider a hospice-nursing facility rate that is no less than 95 percent of the Medicaid nursing facility rate for each individual in a nursing facility to take into account the room and board furnished by the facility.

(g) Cost finding methodology.

(1) Cost reports. A nursing facility provider must file a cost report unless:

(A) the provider meets one or more of the conditions in §355.105(b)(4)(D) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures); or

(B) the cost report would represent costs accrued during a time period immediately preceding a period of decertification if the decertification period was greater than either 30 calendar days or one entire calendar month.

(2) Communication. When material pertinent to proposed reimbursements is made available to the public, the material will include the number of cost reports eliminated from reimbursement determination for one of the reasons stated in paragraph (1) of this subsection.

(3) Exclusion of and adjustments to certain reported expenses. Providers are responsible for eliminating unallowable expenses from the cost report. HHSC reserves the right to exclude any unallowable costs from the cost report and to exclude entire cost reports from the reimbursement determination database if there is reason to doubt the accuracy or allowability of a significant part of the information reported.

(A) Cost reports included in the database used for reimbursement determination.

(i) Individual cost reports will not be included in the database used for reimbursement determination if:

(I) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(II) an HHSC examiner determines that reported costs are not verifiable.

(ii) If all cost reports submitted for a specific facility are disqualified through the application of subparagraph (A)(i)(I) or (II) of this paragraph, the facility will not be represented in the reimbursement database for the cost report year in question.

(B) Occupancy adjustments. HHSC adjusts the facility and administration costs of providers with occupancy rates below a target occupancy rate. HHSC adjusts the target occupancy rate to the lower of:

(i) 85 percent; or

(ii) the overall average occupancy rate for contracted beds in facilities included in the rate base during the cost reporting periods included in the base.

(4) Cost projections. HHSC projects certain expenses in the reimbursement base to normalize or standardize the reporting period and to account for cost inflation between reporting periods and the period to which the prospective reimbursement applies as specified in §355.108 of this chapter.

(5) In addition to the requirements of §355.102 of this chapter (relating to General Principles of Allowable and Unallowable Costs) and §355.103 of this chapter (relating to Specifications for Allowable and Unallowable costs), the following apply to costs for nursing facilities.

(A) Medical costs. The costs for medical services and items delineated in 26 TAC §554.2601 (relating to Vendor Payment (Items and Services Included)) are allowable. These costs must also comply with the general definition of allowable costs as stated in §355.102 of this chapter.

(B) Chaplaincy or pastoral services. Expenses for chaplaincy or pastoral services are allowable costs.

(C) Voucherable costs. Any expenses directly reimbursable to the provider through a voucher payment and any expenses in excess of the limit for a voucher payment system are unallowable costs.

(D) Preferred items. Costs for preferred items that are billed to the recipient, responsible party, or the recipient's family are not allowable costs.

(E) Preadmission Screening and Annual Resident Review (PASARR) expenses. Any expenses related to the direct delivery of specialized services and treatment required by PASARR for residents are unallowable costs.

(F) Advanced Clinical Practitioner (ACP) or Licensed Professional Counselor (LPC) services. Expenses for services provided by an ACP or LPC are unallowable costs.

(G) Limits on contracted management fees. To ensure that the results of HHSC's cost analyses accurately reflect the costs that an economical and efficient provider must incur, HHSC may place upper limits on contracted management fees and expenses included in the administration rate component. HHSC sets upper limits at the 90th percentile of all costs per unit of service as reported by all contracted facilities using the cost report database immediately preceding the database used to establish reimbursements in subsection (e) of this section.

(h) Special Reimbursement Class. HHSC may define special reimbursement classes, including experimental reimbursement classes of service to be used in research and demonstration projects on new reimbursement methods and reimbursement classes of service, to address the cost differences of a select group of recipients. Special classes may be implemented on a statewide basis, may be limited to a specific region of the state, or may be limited to a selected group of providers. Reimbursement for the Pediatric Care Facility Class is calculated as specified in §355.316 of this chapter (relating to Reimbursement Methodology for Pediatric Care Facilities) and §355.321 of this chapter (relating to Reimbursement Methodology for Intellectual and Developmental Disabilities Nursing Facilities Special Reimbursement Class).

(i) Nurse aide training and competency evaluation costs.

(1) HHSC reimburses nursing facilities for the actual costs of training and testing nurse aides. Payments are based on cost reimbursement vouchers that are to be submitted quarterly. Allowable costs are limited to those costs incurred for training for:

(A) actual training course expenses up to a set amount determined by HHSC per nurse aide;

(B) competency evaluation; or

(C) supplies and materials used in the nurse aide training not already covered by the training course fee.

(2) Nurse aide salaries while in training are factored into the vendor rate and are not to be included in the reimbursement voucher.

(3) Training program costs that exceed the HHSC cost ceiling must have prior approval from HHSC before costs can be reimbursed. A written request to HHSC must include:

(A) name and vendor number of the facility;

(B) description of the training program for which the facility is seeking reimbursement approval, including:

(i) name, telephone number, and address of the NATCEP;

(ii) whether the NATCEP is facility or non-facility-based; and

(iii) name of the NATCEP director;

(C) an explanation of why the cost for the NATCEP exceeds the reimbursement ceiling and the explanation must include:

(i) a completed nurse aide unit cost calculation form for a facility-based NATCEP; or

(ii) a breakdown of the nurse aide unit cost by the instructor fees and training materials for a non-facility-based NATCEP; and

(D) an explanation of why the nursing facility cannot use a training program at or below the reimbursement ceiling and what steps the facility has taken to explore more cost-efficient training courses and the explanation must include:

(i) the availability of NATCEPs, such as the location or the frequency of training offered, in the geographic region of the facility;

(ii) the name and address of each NATCEP that the facility has explored as a provider of nurse aide training; and

(iii) the cost per nurse aide for each NATCEP identified in subparagraph (C)(i) or (ii) of this paragraph.

(4) All prior approval requests, as outlined in paragraph (3) of this subsection, must be submitted to HHSC and HHSC:

(A) may request additional information to evaluate a reimbursement request; and

(B) will make the final decision on a reimbursement request.

(5) All nurse aide training courses must be approved by HHSC before costs associated with them can be reimbursed.

(6) Nursing facilities are responsible for tracking and documenting nurse aide training costs for each nurse aide trained. All documentation is subject to HHSC audits. If substantiating documentation for amounts billed to HHSC cannot be verified, HHSC will immediately recoup funds paid to the facility.

(7) Individuals who have completed a NATCEP may be directly reimbursed for costs incurred in completing a NATCEP. The individual must meet all of the conditions specified in subparagraphs (A) - (E) of this paragraph.

(A) The individual must not have been employed at the time of completing the NATCEP.

(B) The individual must have been employed by or received an offer of employment from a nursing facility no later than 12 months after successfully completing the NATCEP.

(C) The individual must have been employed by the facility for no less than 6 months.

(D) The nursing facility must not have claimed reimbursement for training expenses for the individual.

(E) The individual must be listed on the current Nurse Aide Registry.

(8) Individuals must submit cost reimbursement vouchers to HHSC with proof that the individual has been employed by a facility for no less than 6 months.

(9) Individuals who leave nursing facility employment before accruing the required 6 months of employment, as specified in paragraph (7)(C) of this subsection, may receive 50 percent reimbursement as long as the individual was employed for no less than 3 months.

(10) Reimbursement to individuals may not exceed the HHSC reimbursement limit described in paragraph (1)(A) of this subsection.

(j) Adopted rates are limited to available levels of appropriated state and federal funds.

(k) Medicaid Swing Bed Program for Rural Hospitals. When a rural hospital participating in the Medicaid swing bed program furnishes nursing care to a Medicaid recipient under 26 TAC §554.2326 (relating to Medicaid Swing Bed Program for Rural Hospitals), HHSC or its designee pays the hospital using the same procedures, the same case-mix methodology, and the same PDPM LTC rates that HHSC authorizes for reimbursing nursing facilities under this section.

**History**
- *Source Note: The provisions of this §355.318 adopted to
be effective September 12, 2024, 49 TexReg 6986; amended to be effective
September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.321** Reimbursement Methodology for Intellectual and Developmental Disabilities Nursing Facility Special Reimbursement Class {#sec-355.321 omnilex-key=us-tx-regs-official--title-1--355.321}

(a) Intellectual and Developmental Disabilities (IDD) Facility Class. The purpose of this special class is to recognize, through the adoption of a special payment rate, the cost differences that exist in a nursing facility (NF) that predominately serves individuals with an IDD diagnosis.

(b) Definitions. The following terms, when used in this section, have the following meanings unless otherwise stated.

(1) Intellectual and Developmental Disabilities (IDD)--A range of conditions that can affect a person's ability to learn, communicate, and function independently. These disabilities typically originate before the age of 18 and can continue throughout a person's life.

(2) IDD NF--An IDD NF is an entire facility that has maintained an average daily census in which 90 percent of residents have a Preadmission Screening and Resident Review (PASRR) positive screen for IDD for the six-month period prior to its entry into the IDD care facility class based on the entire licensed facility. To remain an IDD NF, the IDD NF in its entirety must maintain an average daily census in which 90 percent of residents have a PASRR positive screen for IDD.

(c) Payment rate determination. Payment rates will be determined in the following manner.

(1) Cost reports for IDD nursing facilities are governed by the requirements specified in Subchapter A of this chapter (relating to Cost Determination Process).

(2) The payment rate methodology for this class of service equals the nursing and non-therapy ancillary components contained in the federal per diem rate for rural Medicare skilled NFs for the most recent federal fiscal year as published in the *Federal Register* , adjusted by applying the highest case-mix index (CMI). Payment rates are based on available funds and are limited to legislative appropriations.

(3) The payment rate described in paragraph (2) of this subsection will be paid for all Medicaid residents of a qualifying IDD NF.

(d) Qualification for membership. A NF that wishes to be a member of the special reimbursement class must submit a letter to HHSC Provider Finance Department via an email to PFD-LTSS@hhs.texas.gov with a request to be considered for membership. HHSC will verify the NF meets the definition of IDD NF as defined in subsection (b)(2). HHSC will respond in writing to the facility within 30 days of receiving its request for membership. HHSC will review the status of any members within the special reimbursement class on an annual basis to verify that all members meet requirements defined in subsection (b)(2) of this section.

(e) Disqualification for membership. If HHSC determines that an NF no longer qualifies as a member of such class according to subsection (b) of this section, HHSC will notify the facility in writing. A facility that is disqualified as a member of the special reimbursement class, can request to reenter the class by sending a letter to HHSC as specified in subsection (d) of this section after no less than 365 days from its notification of disqualification in the class.

**History**
- *Source Note: The provisions of this §355.321 adopted to
be effective September 11, 2025, 50 TexReg 5931.*

##### **1 Tex. Admin. Code § 355.403** Vendor Hold {#sec-355.403 omnilex-key=us-tx-regs-official--title-1--355.403}

The Texas Health and Human Services Commission (HHSC) or its designee may delay or withhold vendor payment to a provider in order to investigate or correct financial or accounting irregularities or to obtain required documentation.

(1) Vendor payments will be held until the circumstances resulting in vendor hold are corrected.

(2) A provider has the right to appeal a vendor hold as specified in 1 TAC §§357.481 - 357.490 (Right to a Hearing).

**History**
- *Source Note: The provisions of this §355.403 adopted to be effective April 1, 1996, 21 TexReg 1432; amended to be effective September 1, 1996, 21 TexReg 7861; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective January 9, 2005, 29 TexReg 12121.*

#### **Subchapter D** REIMBURSEMENT METHODOLOGY FOR INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS (ICF/IID)

##### **1 Tex. Admin. Code § 355.455** Payments to Non-State Operated Facilities {#sec-355.455 omnilex-key=us-tx-regs-official--title-1--355.455}

(a) HHSC or its designee will pay to non-state-operated facilities modeled rates that will vary by class of facility and a resident's level-of-need.

(b) The non-state operated facility modeled rates include payment for both residential and day program services. Residents receive medical and dental services through the Medicaid identification card. Any medical expenses other than Medicaid-covered services are the responsibility of the ICF/MR provider.

(c) With a limit of $5,000 per resident per year, HHSC or its designee will pay a provider for the actual cost of a resident's durable medical equipment, excluding augmentative communication devices, if:

(1) the cost of the equipment exceeds $1,000;

(2) the facility receives approval from HHSC or its designee to purchase the equipment;

(3) the provider submits a voucher to HHSC or its designee for the cost of the equipment; and

(4) the resident is eligible for Medicare benefits and the provider has submitted a Medicare claim and received a response to the claim prior to requesting payment from HHSC or its designee.

(d) Reimbursement for augmentative communication devices is governed by 40 TAC §9.228, relating to Augmentative Communication Device Systems.

**History**
- *Source Note: The provisions of this §355.455 adopted to be effective March 25, 1997, 22 TexReg 2760; transferred effective September 1, 1997, as published in the Texas Register December 26, 1997, 22 TexReg 12748; amended to be effective March 1, 2001, 26 TexReg 1696; amended to be effective August 13, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 355.456** Reimbursement Methodology {#sec-355.456 omnilex-key=us-tx-regs-official--title-1--355.456}

(a) Types of facilities. There are two types of facilities for purposes of rate setting: state-operated and non-state operated. Facilities are further divided into classes that are determined by the size of the facility.

(b) Classes of non-state operated facilities. There is a separate set of reimbursement rates for each class of non-state operated facilities, which are as follows.

(1) Large facility--A facility with a Medicaid certified capacity of 14 or more as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.

(2) Medium facility--A facility with a Medicaid certified capacity of nine through 13 as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.

(3) Small facility--A facility with a Medicaid certified capacity of eight or fewer as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.

(c) Classes of state-operated facilities. There is a separate interim rate for each class of state-operated facilities, which are as follows:

(1) Large facility--A facility with a Medicaid certified capacity of 17 or more as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.

(2) Small facility--A facility with a Medicaid certified capacity of 16 or less as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.

(d) Reimbursement rate determination for non-state operated facilities. The Texas Health and Human Services Commission (HHSC) will adopt the reimbursement rates for non-state operated facilities in accordance with §355.101 of this title (relating to Introduction) and this subchapter.

(1) Covered services. Reimbursement rates combine residential and day program services, i.e., payment for the full 24 hours of daily service.

(2) Level of need (LON) differentiation. Reimbursement rates are differentiated based on the level of need (LON) of the individual receiving the service. The levels of need are intermittent, limited, extensive, pervasive, and pervasive plus.

(3) Cost components determination. The recommended modeled rates are based on cost components deemed appropriate for economically and efficiently operated services. The determination of these components is based on cost reports submitted by Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) providers.

(4) Direct service workers cost area. This cost area includes direct service workers' salaries, wages, and benefits expenses. The reimbursement rate for this cost area is calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(5) Direct care trainers and job coaches cost area. This cost area includes direct care trainers' and job coaches' salaries, wages, and benefits expenses. The reimbursement rate for this cost area is calculated as specified in §355.7052 of this chapter.

(6) Other resident care cost area. This cost area includes compensation costs for laundry and housekeeping personnel, social workers, medical records personnel, resident care training personnel, therapists, psychologists, and other direct care consultants, as well as costs for medical equipment and supplies, and laundry and housekeeping equipment and supplies.

(7) Dietary costs. This cost area includes compensation costs for dietary personnel as well as costs for food and dietary supplements.

(8) Transportation, facilities and operations costs area. This cost area includes compensation costs for maintenance personnel and drivers, maintenance supplies, departmental equipment and transportation equipment rentals and leases and depreciation, land and leasehold improvement, depreciation and amortization, mortgage interest, property taxes and vehicle insurance, and utilities and telecommunications.

(9) Administration costs. This cost area includes compensation costs for administration personnel such as facility administrator, clerical support and central office staff, administrative staff, general liability insurance, interest expense on working capital, allowable advertising, travel (including mileage reimbursement) and seminars, dues and subscriptions, office supplies, central office costs, and other similar office expenses.

(10) High Medical Needs Add-on reimbursement rate on or after September 1, 2025. This add-on methodology will be implemented pending implementation of the Patient Driven Payment Model (PDPM) for Long-Term Care (LTC), as specified in §355.318 of this chapter (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025).

(A) The add-on is based on the PDPM LTC classification system as described in §355.318 of this chapter.

(B) There are three add-on groupings based on PDPM LTC classification and nursing case-mix classifiers, associated with the assessed nursing score.

(i) Group 1 includes nursing case-mix classifier "E" relating to the Extensive Services category.

(ii) Group 2 includes nursing case-mix classifiers "H" and "L" relating to the Special Care High and Special Care Low categories.

(iii) Group 3 includes nursing case-mix "C" relating to the Clinically Complex category.

(C) An individual must meet the following criteria to be eligible to receive the add-on rate:

(i) be assigned a PDPM LTC nursing case-mix classifier in Group 1, Group 2, or Group 3;

(ii) be a resident of a large state-operated facility for at least six months immediately prior to referral or a resident of a Medicaid-certified nursing facility immediately prior to referral; and

(iii) for residents of a large state-operated facility only, have a LON which includes a medical LON increase as described in 26 TAC §261.241 (relating to Level of Need Criteria), but not be assessed a LON of pervasive plus.

(D) The add-on for each Group is determined based on data and costs from the most recent nursing facility cost reports accepted by HHSC.

(i) Calculate the average number of nursing hours per daily unit of service by dividing total nursing hours by total days of service.

(ii) Calculate the average licensed vocational nurse (LVN) cost per day by multiplying estimated LVN hourly wages by the average number of nursing hours per daily unit of service.

(iii) For each Group, compute the median per diem amount of the nursing care base case-mix adjusted rate component for all facilities as specified in §355.318 of this chapter (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025); and

(iv) Subtract the average nursing daily cost as specified in clause (ii) of this subparagraph from the median per diem amount of the nursing care rate component as specified in clause (iii) of this subparagraph current recommended modeled rates as specified in subsection (d)(3) of this section.

(e) Reimbursement determination for state-operated facilities. Except as provided in paragraph (2) of this subsection and subsection (f) of this section, state-operated facilities are reimbursed an interim rate with a settlement conducted in accordance with paragraph (1)(B) of this subsection. HHSC will adopt the interim reimbursement rates for state-operated facilities in accordance with §355.101 of this title and this subchapter.

(1) State-operated facilities certified prior to January 1, 2001, will be reimbursed using an interim reimbursement rate and settlement process.

(A) Interim reimbursement rates for state-operated facilities are based on the most recent cost report accepted by HHSC.

(B) Settlement is conducted each state fiscal year by class of facility. If there is a difference between allowable costs and the reimbursement paid under the interim rate, including applied income, for a state fiscal year, federal funds to the state will be adjusted based on that difference.

(2) A state-operated facility certified on or after January 1, 2001, will be reimbursed using a pro forma rate determined in accordance with §355.101(c)(2)(B) and §355.105(h) of this title (relating to Introduction and General Reporting and Documentation Requirements, Methods and Procedures). A facility will be reimbursed under the pro forma rate methodology until HHSC receives an acceptable cost report which includes at least 12 months of the facility's cost data and is available to be included in the annual interim rate determination process.

(f) HHSC may define experimental classes of service to be used in research and demonstration projects on new reimbursement methods. Demonstration or pilot projects based on experimental classes may be implemented on a statewide basis or may be limited to a specific region of the state or to a selected group of providers. Reimbursement for an experimental class is not implemented, however, unless HHSC and the Centers for Medicare and Medicaid Services (CMS) approve the experimental methodology.

(g) Cost Reporting.

(1) Providers must follow the cost-reporting guidelines as specified in §355.105 of this title.

(2) Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs).

(3) Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

(h) Adjusting costs. Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §355.108 of this title (relating to Determination of Inflation Indices). HHSC may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(i) Field Audit and Desk Review. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.456 adopted to
be effective March 25, 1997, 22 TexReg 2760; transferred effective
September 1, 1997, as published in the Texas Register December 26,
1997, 22 TexReg 12748; amended to be effective April 5, 1998, 23 TexReg
3251; amended to be effective December 20, 1998, 23 TexReg 12652;
amended to be effective March 1, 2001, 26 TexReg 1696; amended to
be effective August 28, 2001, 26 TexReg 6296; amended to be effective
December 23, 2001, 26 TexReg 10277; amended to be effective August
31, 2004, 29 TexReg 8116; amended to be effective September 1, 2007,
32 TexReg 5337; amended to be effective September 1, 2010, 35 TexReg
5026; amended to be effective January 1, 2015, 39 TexReg 9884; amended
to be effective September 1, 2015, 40 TexReg 5293; amended to be
effective May 24, 2016, 41 TexReg 3689; amended to be effective March
1, 2018, 43 TexReg 339; amended to be effective April 14, 2025, 50
TexReg 2377; amended to be effective September 11, 2025, 50 TexReg
5899.*

##### **1 Tex. Admin. Code § 355.458** Supplemental Payments to Non-State Government-Owned Facilities {#sec-355.458 omnilex-key=us-tx-regs-official--title-1--355.458}

(a) Introduction. Notwithstanding other provisions of this subchapter and subject to the availability of funds, supplemental payments are available under this section for intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID) services provided by eligible non-state government-owned ICFs/IID.

(b) Definitions. When used in this section, the following definitions apply:

(1) Aggregate upper payment limit--A reasonable estimate of the amount that would be paid for the services furnished by non-state government-owned ICFs/IID under Medicare payment principles, as calculated in subsection (f) of this section.

(2) HHSC--The Texas Health and Human Services Commission or its designee.

(3) Intergovernmental transfer (IGT)--A transfer of public funds from a governmental entity to HHSC.

(4) Medicaid supplemental payment limit--The maximum supplemental payment available to a participating non-state government-owned ICF/IID for a specific Medicaid supplemental payment limit calculation period as calculated in subsection (f) of this section.

(5) Medicaid supplemental payment limit calculation period--The federal fiscal quarter determined by HHSC for which supplemental payment amounts are calculated.

(6) Non-state government-owned ICF/IID--An ICF/IID where a non-state governmental entity is party to the facility's Medicaid contract.

(7) Non-state governmental entity--A community center established under Chapter 534, Subchapter A of the Texas Health and Safety Code or a hospital authority, hospital district, healthcare district, city, or county.

(8) Public funds--Funds derived from taxes, assessments, levies, investments, and other public revenues within the sole and unrestricted control of the governmental entity that is party to the Medicaid contract of the ICF/IID identified in subsection (c) of this section. Public funds do not include gifts, grants, trusts, or donations, the use of which is conditioned on supplying a benefit solely to the donor or grantor of the funds.

(c) Eligible ICFs/IID.

(1) Supplemental payments are available under this section to all non-state government-owned ICFs/IID that comply with the requirements described in subsection (d) of this section.

(2) An ICF/IID participating in this supplemental payment program must notify the HHSC Provider Finance Department of changes in ownership that may affect the ICF/IID's continued eligibility within 30 days after such change.

(3) An ICF/IID that has not received a payment under this supplemental payment program for four consecutive quarters is ineligible for future supplemental payments unless the ICF/IID applies again for the supplemental payment program in accordance with subsection (d) of this section.

(d) Required application. Before a non-state government-owned ICF/IID may receive supplemental payments under this section, the appropriate governmental entity must certify certain facts, representations, and assurances regarding program requirements.

(1) The appropriate governmental entity must certify the following facts on a form prescribed by HHSC before the first day of the next scheduled Medicaid supplemental payment limit calculation period in order for the ICF/IID to receive a supplemental payment for that period:

(A) That a non-state governmental entity is party to the ICF/IID's Medicaid contract.

(B) That all funds transferred to HHSC via IGT for use as the state share of supplemental payments are public funds.

(C) That no part of any supplemental payment paid to the ICF/IID under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the ICF/IID's receipt of the supplemental funds.

(D) That the person signing the certification on behalf of the ICF/IID is legally authorized to bind the ICF/IID and to certify the matters described in the application; and

(2) The ICF/IID is eligible for supplemental payments for Medicaid supplemental payment limit calculation periods that begin after HHSC receives completed application forms from the appropriate governmental entity.

(e) Source of funding.

(1) State funding for supplemental payments authorized under this section is limited to and obtained through IGTs of public funds from the governmental entity that is party to the Medicaid contract of the ICF/IID identified in subsection (c) of this section.

(2) An IGT that is not received by the date specified by HHSC may not be accepted. In such a situation, the IGT will be returned to the governmental entity and the ICF/IID will not be eligible to receive a supplemental payment.

(f) Medicaid supplemental payment limits.

(1) The aggregate supplemental payment amount for non-state government-owned ICFs/IID is calculated for each Medicaid supplemental payment limit calculation period by taking the difference between the aggregate upper payment limit from subparagraph (A) of this paragraph and the aggregate Medicaid payment from subparagraph (B) of this paragraph:

(A) The aggregate upper payment limit for non-state government-owned ICFs/IID will be calculated based on Medicare payment principles and in accordance with the Medicaid upper payment limit provisions codified at Title 42 Code of Federal Regulations (CFR) §447.272. The aggregate upper payment limit is equal to the sum of the Medicare-equivalent payments for all non-state government-owned ICFs/IID. The Medicare-equivalent payment for each non-state government-owned ICF/IID is calculated as follows based on data from the most recent reliable Medicaid cost report:

(i) Determine the Medicare adjusted cost by subtracting ancillary and fixed capital costs from total Medicaid allowable costs and multiplying the remaining costs by 1.12.

(ii) Determine the Medicare adjusted cost per day of service by dividing the value from clause (i) of this subparagraph by the total days of service.

(iii) Determine the Medicare-equivalent payment by multiplying the dividend from clause (ii) of this subparagraph by the total Medicaid days of service.

(B) The aggregate Medicaid payment for non-state government-owned ICFs/IID prior to the supplemental payment will be the sum of Medicaid Level of Need (LON) payments for all non-state government-owned ICFs/IID as captured on the most recent reliable Medicaid cost report.

(2) The Medicaid supplemental payment limit for each participating non-state government-owned ICF/IID for each Medicaid supplemental payment limit calculation period will be determined by dividing that facility's Medicaid units of service during the Medicaid supplemental payment limit calculation period by the total Medicaid units of service during the Medicaid supplemental payment limit calculation period for all non-state government-owned ICFs/IID, multiplying the resulting percentage by the aggregate supplemental payment amount from paragraph (1) of this subsection, and dividing the resulting product by four.

(g) Payment frequency. HHSC will distribute supplemental payments to participating non-state government-owned ICFs/IID on a quarterly basis subsequent to the Medicaid supplemental payment limit calculation period.

(h) Supplemental payment methodology.

(1) HHSC will give notice of the non-state government-owned ICF/IID Medicaid supplemental payment limits determined in subsection (f) of this section, the maximum IGT amount that can be provided for each participating ICF/IID based on the Federal Medical Assistance Percentage (FMAP) in place at the time notice is given, and the deadline for completing the transfer.

(2) The amount of the supplemental payment to the ICF/IID will be calculated in proportion to the amount transferred by the governmental entity.

(A) For governmental entities that own a single ICF/IID:

(i) If the governmental entity transfers the maximum IGT described in paragraph (1) of this subsection, the ICF/IID will receive the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section.

(ii) If the governmental entity transfers less than the maximum IGT described in paragraph (1) of this subsection, the ICF/IID will receive a supplemental payment that is proportionate to the percentage of the maximum IGT that was actually transferred.

(B) For governmental entities that own multiple ICFs/IID:

(i) If the governmental entity transfers the maximum IGT described in paragraph (1) of this subsection for all of the ICFs/IID it owns, each of the ICFs/IID will receive the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section.

(ii) If the governmental entity transfers less than the maximum IGT described in paragraph (1) of this subsection for all of the ICFs/IID it owns, each of the ICFs/IID will receive a proportion of the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section based on the proportion of the total maximum IGT for all of the ICFs/IID owned by the governmental entity that was actually transferred.

(C) Supplemental payments to remaining non-state government-owned ICFs/IID will not be increased due to the failure of a governmental entity to transfer the maximum IGT described in paragraph (1) of this subsection.

(3) A governmental entity that did not transfer the maximum IGT described in paragraph (1) of this subsection in one or more of the first three quarters in a federal fiscal year will be allowed to fund the remaining Medicaid supplemental payment limit during the fourth quarter of that fiscal year, subject to the following:

(A) HHSC will give notice of the remaining Medicaid supplemental payment limits and the maximum IGT that can be provided for each non-state government-owned ICF/IID. Such notice will also contain instructions and deadlines for governmental entities to notify HHSC of the fourth-quarter transfer amount.

(B) Following the deadline for notification described in subparagraph (A) of this paragraph, if HHSC determines that the supplemental payments for the federal fiscal year will exceed the applicable aggregate supplemental payment amount for non-state government-owned ICFs/IID, HHSC will reduce the amount of the transfer for the fourth-quarter payment under this clause proportionately for each participating ICF/IID in an amount sufficient to ensure compliance with the applicable aggregate supplemental payment amount.

(4) The amount of the payment to the ICF/IID will be calculated using the FMAP in place when HHSC gave notice as described in paragraph (1) or (3) of this subsection, as applicable.

(i) Recoupment.

(1) If payments under this section result in overpayment to an ICF/IID, or in the event of a disallowance by the federal Centers for Medicare and Medicaid Services (CMS) of federal participation related to an ICF/IID's receipt or use of supplemental payments authorized under this section, HHSC may recoup an amount equivalent to the amount of supplemental payments overpaid or disallowed.

(2) Supplemental payments under this section may be subject to any adjustments for payments made in error, including, without limitation, adjustments made under the Texas Administrative Code, the Code of Federal Regulations and state and federal statutes. HHSC may recoup an amount equivalent to any such adjustment.

(3) HHSC may recoup from any current or future Medicaid payments as follows:

(A) HHSC will recoup from the ICF/IID to which an overpayment was made or against which any disallowance was directed.

(B) If, within 30 days of the ICF/IID's receipt of HHSC's written notice of recoupment, the ICF/IID has not paid the full amount of the recoupment or entered into a written agreement with HHSC to do so, HHSC may withhold any or all Medicaid payments from the ICF/IID until HHSC has recovered an amount equal to the amount overpaid or disallowed. If funds identified for recoupment cannot be repaid from the ICF/IID's Medicaid payments, the governmental entity that owns the ICF/IID will be liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other Medicaid contracts controlled by the governmental entity and will bar the governmental entity from receiving any new contracts with HHSC or its designees until repayment is made in full.

**History**
- *Source Note: The provisions of this §355.458 adopted to be effective September 1, 2012, 37 TexReg 6296; amended to be effective February 22, 2024, 49 TexReg 858.*

#### **Subchapter E** COMMUNITY CARE FOR AGED AND DISABLED

##### **1 Tex. Admin. Code § 355.501** Reimbursement Methodology for Program for All-Inclusive Care for the Elderly (PACE) {#sec-355.501 omnilex-key=us-tx-regs-official--title-1--355.501}

(a) General specifications. The Texas Health and Human Services Commission (HHSC) determines the upper payment limits and reimbursement rates for each PACE contractor. HHSC applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(b) Frequency of reimbursement determination. The upper payment limits and reimbursement rates are determined coincident with the state's biennium.

(c) Upper payment limit determination. There are three upper payment limits calculated for each PACE contract: one for clients eligible only for Medicaid services (Medicaid-only clients), one for clients eligible for both Medicare and Medicaid services (dual-eligible clients), and one for clients eligible for only Medicare services as Qualified Medicare Beneficiaries (QMBs). An average monthly historical cost per client receiving nursing facility services and Home and Community Based Services (HCBS) under either the fee-for-service payment system or the managed care program is calculated for the counties served by each PACE contract for the upper payment limits for Medicaid-only clients and for dual-eligible clients.

(1) The upper payment limits for Medicaid-only and for dual-eligible clients for the biennium are calculated for the base period using historical claims and encounter data and member-month data from the most recent state fiscal year of complete claims available prior to the state's biennium.

(2) The historical costs are derived from claims data for clients age 55 and older receiving nursing facility services or HCBS in the counties served by each PACE contract.

(3) The historical costs include:

(A) acute care services, including inpatient, outpatient, professional, and other acute care services;

(B) prescriptions;

(C) medical transportation;

(D) nursing facility services;

(E) hospice services;

(F) long-term care specialized services, such as physical therapy, occupational therapy, and speech therapy;

(G) HCBS;

(H) Primary Home Care (including Family Care) services; and

(I) Day Activity and Health Services.

(4) Effective on and after January 1, 2006, the historical prescription costs from paragraph (3)(B) of this subsection that are used in the calculation of the upper payment limit, and as such the associated payment rate, for dual-eligible clients for each PACE contract will exclude the costs of any drug that is in a category covered by Medicare Part D.

(5) To determine an average monthly historical cost for the counties served by each PACE contract, the total historical claims data for the counties served by each PACE contract are divided by the number of member months for the counties served by each PACE contract.

(6) An adjustment for administrative costs is added to the average monthly historical cost per client. The per member month amount is added for:

(A) processing claims, based on the state's cost to process claims under the managed care payment system; and

(B) case management, based on the state's cost to provide case management under the managed care payment system for HCBS clients.

(7) The sum of the average monthly historical cost per client for each PACE contract and the amounts from paragraph (5) of this subsection are projected from the claims data base period identified in paragraph (1) of this subsection to the rate period to account for anticipated changes in costs for each PACE contract. The methodology used for trending historical costs for calculating PACE Upper Payment Limits (UPLs) and rates is comparable to that used for trending costs in the managed care program.

(8) The PACE Upper Payment Limit (UPL) method may be adjusted to account for statistical outliers, small populations, programmatic changes, catastrophic events, or other economic changes, as determined by HHSC to be actuarially appropriate. Data from sources other than those described in paragraphs (1) and (2) of this subsection may be used, if deemed by HHSC necessary to calculate an appropriate UPL. For example, HHSC may consider comparable data from other time periods.

(d) HHSC determines the UPL for Qualified Medicaid Beneficiaries (QMBs) on a statewide basis using the average cost incurred by Medicaid for Medicare co-insurance and deductibles.

(e) Payment rate determination. HHSC calculates three reimbursement rates for each PACE contract: one for clients eligible for Medicaid services (Medicaid Only rate), one for clients eligible for both Medicare and Medicaid services (Dual Eligible rate), and one for clients eligible for only Medicare services as QMBs. The payment rates for the three client categories for each PACE contract are determined by multiplying the UPLs calculated for each PACE contract by a factor less than 1.0. HHSC may reduce the factor as necessary to establish a rate consistent with available funds.

(1) In setting the reimbursement rates under the PACE program, HHSC complies with Texas Human Resources Code §32.0532(b).

(2) The PACE payment rate is less than the amount that would otherwise have been paid under the Texas State Plan if the participants were not enrolled under the PACE program.

(f) Reporting of cost. HHSC may require the PACE contractor to submit financial and statistical information on a cost report or in a survey format designated by HHSC. Cost report completion is governed by the requirements specified in Subchapter A of this chapter (relating to Cost Determination Process). HHSC may also require the PACE contractor to submit audited financial statements.

**History**
- *Source Note: The provisions of this §355.501 adopted to be effective August 14, 2003, 28 TexReg 6265; amended to be effective April 15, 2004, 29 TexReg 3611; amended to be effective January 1, 2006, 30 TexReg 8657; amended to be effective March 1, 2011, 36 TexReg 232; amended to be effective October 27, 2016, 41 TexReg 8283.*

##### **1 Tex. Admin. Code § 355.502** Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers {#sec-355.502 omnilex-key=us-tx-regs-official--title-1--355.502}

(a) General requirements. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this chapter (relating to Introduction). Common services are those services that are available in multiple home and community-based services (HCBS) waivers.

(b) Professional services. Professional services include in-home and out-of-home nursing services provided by a registered nurse (RN) or a licensed vocational nurse (LVN) (including Adjunct Support and Respite in the Medically Dependent Children Program), in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, cognitive rehabilitative therapy, nutrition/dietary services, audiology services, and behavioral support services.

(c) Employment services. Employment services include employment assistance and supported employment.

(d) Rates for professional services, employment services, and in-home respite. The rates for these services are calculated in the following manner.

(1) If there is sufficient reliable cost report data from which to determine reimbursements, rates are calculated in the following manner.

(A) An allowable cost per unit of service for each cost report is calculated in accordance with the specific methodology for each HCBS waiver.

(B) The allowable cost per unit of service for each cost report for all HCBS waivers is combined into an array.

(C) The array of allowable costs per unit of service for all HCBS waivers is weighted by the number of units of service, and the median cost per unit of service is calculated.

(2) If there is not sufficient, reliable cost report data from which to determine reimbursements, reimbursements will be developed by using pro forma costing. This approach involves using historical costs of delivering similar services, where appropriate data are available, and estimating the basic types and costs of products and services necessary to deliver services meeting federal and state requirements.

(3) In-home and out-of-home specialized nursing rates will be determined for both RN and LVN services by multiplying the RN and LVN rates by 1.15. The specialized nursing rate is paid when a client requires, as determined by a physician, daily skilled nursing to cleanse, dress, and suction a tracheostomy or daily skilled nursing assistance with ventilator or respirator care. The client must be unable to do self-care and require the assistance of a nurse for the ventilator, respirator, or tracheostomy care.

(e) Transition assistance services. The reimbursement for transition assistance services will be determined as a one-time rate per client based on modeled costs of compensation and other support costs using data from surveys, cost reports, consultation with other professionals in delivering contracted services, or other sources determined appropriate by HHSC.

**History**
- *Source Note: The provisions of this §355.502 adopted to
be effective September 1, 2009, 34 TexReg 5654; amended to be effective
June 20, 2011, 36 TexReg 3707; amended to be effective April 1, 2014,
39 TexReg 2062; amended to be effective June 26, 2025, 50 TexReg 3631.*

##### **1 Tex. Admin. Code § 355.503** Reimbursement Methodology for Long-Term Services and Supports State Plan and Home and Community-Based Services Waiver Program Services Delivered through the STAR+PLUS Managed Care Program {#sec-355.503 omnilex-key=us-tx-regs-official--title-1--355.503}

(a) General requirements. The Texas Health and Human Services Commission (HHSC) establishes the rate methodology for long-term services and supports (LTSS) state plan and Home and Community-Based Services (HCBS) waiver program services delivered through STAR+PLUS managed care.

(1) HHSC applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(2) For HCBS waiver program services, providers are reimbursed for services provided to individuals who meet the criteria for alternatives to nursing facility care. Additionally, providers are reimbursed a one-time administrative expense fee for a pre-enrollment assessment of potential waiver participants. The pre-enrollment assessment covers care planning for the participant.

(3) If HHSC has determined that there is not sufficient reliable cost report data from which to determine reimbursements and reimbursement ceilings for waiver services, reimbursements and reimbursement ceilings will be developed by using data from surveys, cost report data from other similar programs, consultation with other service providers or professionals experienced in delivering contracted services, and other sources.

(b) State plan services reimbursement determination. For LTSS state plan services delivered through STAR+PLUS, Community First Choice (CFC) personal assistance services (PAS) and habilitation services are calculated as specified in §355.9090 of this title (relating to Reimbursement Methodology for Community First Choice); non-CFC PAS is calculated as specified in §355.5902 of this title (relating to Reimbursement Methodology for Primary Home Care); day activity and health services (DAHS) are calculated as specified in §355.6907 of this title (relating to Reimbursement Methodology for Day Activity and Health Services); emergency response services (ERS) are calculated as specified in §355.510 of this subchapter (relating to Reimbursement Methodology for Emergency Response Services (ERS)); financial management services agency (FMSA) fees are calculated as specified in §355.114 of this title (relating to Consumer Directed Services Payment Option).

(c) STAR+PLUS HCBS Waiver reimbursement determination. Recommended reimbursements are determined in the following manner.

(1) Unit of service reimbursement. Reimbursement for non-CFC PAS and in-home respite care services, and cost per unit of service for nursing services provided by a registered nurse (RN), nursing services provided by a licensed vocational nurse (LVN), physical therapy, occupational therapy, speech/language therapy, supported employment, employment assistance, and day activity and health services (DAHS) is determined in the following manner.

(A) Total allowable costs for each provider are determined by analyzing the allowable historical costs reported on the cost report.

(B) Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §355.108 of this title (relating to Determination of Inflation Indices). The prospective reimbursement period is the period of time that the reimbursement is expected to be in effect.

(C) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or Social Security, Medicare Contributions, Workers' Compensation Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).

(D) Allowable administrative and facility costs are allocated or spread to each waiver service cost component on a pro rata basis based on the portion of each waiver service's units of service to the amount of total waiver units of service.

(E) For in-home and out-of-home nursing services provided by an RN, in-home and out-of-home nursing services provided by an LVN, in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech/language therapy, supported employment, employment assistance, and in-home respite care services, an allowable cost per unit of service is calculated for each contracted provider cost report for each service. The allowable cost per unit of service for each contracted provider cost report is multiplied by 1.044. This adjusted allowable cost per unit of service may be combined into an array with the allowable cost per unit of service of similar services provided by other programs in determining rates for these services in accordance with §355.502 of this subchapter (relating to Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers).

(F) For non-CFC PAS, two cost areas are created.

(i) The attendant cost area includes salaries, wages, and benefits calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(ii) The administration and facility cost area includes attendants and field supervisors' mileage reimbursement expenses; building, building equipment, and operation and maintenance costs; administration costs; and other service costs. An allowable cost per unit of service is determined for each contracted provider cost report for the administration and facility cost area. The allowable cost per unit of service for each contracted provider cost report are arrayed. The units of service for each contracted provider cost report in the array are summed until the median unit of service is reached. The corresponding expense to the median unit of service is determined and multiplied by 1.044.

(iii) The attendant cost area and the administration and facility cost area are summed to determine the PAS cost per unit of service.

(G) CFC PAS and habilitation services are calculated as specified in §355.9090 of this title (relating to Reimbursement Methodology for Community First Choice).

(2) Per day reimbursement.

(A) The reimbursement for Adult Foster Care (AFC) and out-of-home respite care in an AFC home is determined as a per day reimbursement using a method based on modeled projected expenses, which are developed using data from surveys, cost report data from other similar programs, consultation with other service providers or professionals experienced in delivering contracted services, and other sources. The room and board payments for AFC Services are not covered in these reimbursements and will be paid to providers from the client's Supplemental Security Income (SSI), less a personal needs allowance.

(B) The reimbursement for assisted living (AL) services is determined as a per day reimbursement in accordance with §355.509(c)(2) of this subchapter (relating to Reimbursement Methodology for Residential Care).

(i) The per day reimbursement for attendant care for each of the levels of care is determined based on client need for attendant care.

(ii) A total reimbursement amount is calculated and the proposed reimbursement is equal to the total reimbursement less the client's room and board payments.

(iii) The room and board payment is paid to the provider by the client from the client's SSI, less a personal needs allowance.

(iv) The reimbursement for out-of-home respite in an AL facility is determined using the same methodology as the reimbursement for AL except that the out-of-home respite rates:

(I) are set at the rate for providers who choose not to participate in the attendant compensation rate enhancement; and

(II) include room and board costs equal to the client's SSI, less a personal needs allowance.

(C) The reimbursement for out-of-home respite care provided in a Nursing Facility is based on the amount determined for the Nursing Facility case mix class into which the participant is classified.

(D) The reimbursement for Personal Care 3 is composed of two rate components, one for the direct care cost center and one for the non-direct care cost center.

(i) Direct care costs. The rate component for the direct care cost center is determined by modeling the cost of the minimum required staffing for the Personal Care 3 setting, as specified by HHSC, and using staff costs and other statistics from the most recently audited cost reports from providers delivering similar care.

(ii) Non-direct care costs. The rate component for the non-direct care cost center is equal to the non-attendant portion of the non-apartment assisted living rate per day for non-participants in the Attendant Compensation Rate Enhancement. Providers receiving the Personal Care 3 rate are not eligible to participate in the Attendant Compensation Rate Enhancement and receive direct care add-ons to the Personal Care 3 rates.

(3) ERS. The reimbursement for ERS is determined as a monthly reimbursement ceiling, based on the ceiling amount determined in accordance with §355.510 of this subchapter (relating to Reimbursement Methodology for Emergency Response Services (ERS)).

(4) Requisition fees. Requisition fees are reimbursements paid to home and community support services contracted providers for their efforts in acquiring adaptive aids, medical supplies, dental services, and minor home modifications for participants. Reimbursement for requisition fees for adaptive aids, medical supplies, dental services, and minor home modifications will vary based on the actual cost of the adaptive aids, medical supplies, dental services, and minor home modifications. Reimbursements are determined using a method based on modeled projected expenses, which are developed by using data from surveys, cost report data from similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services, and/or other sources.

(5) Pre-enrollment expense fee. Reimbursement for pre-enrollment assessment is determined using a method based on modeled projected expenses that are developed by using data from surveys, cost report data from other similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services, and other sources.

(6) Home-Delivered Meals. The reimbursement for Home-Delivered Meals is determined on a per meal basis, based on the ceiling amount determined in accordance with §355.511 of this subchapter (relating to Reimbursement Methodology for Home-Delivered Meals).

(7) Exceptions to the reimbursement determination methodology. HHSC may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(d) Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this title.

(e) Reporting of cost.

(1) Cost reporting guidelines. If HHSC requires a cost report for any LTSS program or service delivered through STAR+PLUS, providers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(2) Excused from submission of cost reports. If required by HHSC, a contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(3) Reporting and verification of allowable cost.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers; the purpose is to ensure that the database reflects costs and other information that are necessary for the provision of services and are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported, or

(ii) an auditor determines that reported costs are not verifiable.

(4) Allowable and unallowable costs. Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs), in addition to the following.

(A) Client room and board expenses are not allowable, except for those related to respite care.

(B) The actual cost of adaptive aids, medical supplies, dental services, and home modifications are not allowable for cost reporting purposes. Allowable labor costs associated with acquiring adaptive aids, medical supplies, dental services, and home modifications should be reported in the cost report. Any item purchased for participants in this program and reimbursed through a voucher payment system is unallowable for cost reporting purposes. Refer to §355.103(b)(20)(K) of this title.

(f) Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

(g) Reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.503 adopted to
be effective September 1, 1996, 21 TexReg 7890; transferred effective
September 1, 1997, as published in the Texas Register October 17,
1997, 22 TexReg 10311; amended to be effective June 21, 1998, 23 TexReg
6197; amended to be effective June 25, 2000, 25 TexReg 5867; amended
to be effective October 9, 2000, 25 TexReg 10131; amended to be effective
September 1, 2001, 26 TexReg 6297; amended to be effective July 1,
2002, 27 TexReg 5164; amended to be effective April 13, 2003, 28 TexReg
3047; amended to be effective August 16, 2004, 29 TexReg 7965; amended
to be effective January 19, 2006, 31 TexReg 286; amended to be effective
October 28, 2007, 32 TexReg 7461; amended to be effective February
3, 2008, 33 TexReg 667; amended to be effective September 3, 2008,
33 TexReg 7153; amended to be effective September 1, 2009, 34 TexReg
5654; amended to be effective June 20, 2011, 36 TexReg 3707; amended
to be effective April 1, 2012, 37 TexReg 2068; amended to be effective
November 25, 2012, 37 TexReg 9086; amended to be effective September
1, 2013, 38 TexReg 5435; amended to be effective January 1, 2015,
39 TexReg 9193; amended to be effective April 14, 2025, 50 TexReg
2378; amended to be effective September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.505** Reimbursement Methodology for the Community Living Assistance and Support Services Waiver Program {#sec-355.505 omnilex-key=us-tx-regs-official--title-1--355.505}

(a) General requirements. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this chapter (relating to Introduction). Providers are reimbursed for waiver services provided to Medicaid-enrolled persons with related conditions. Additionally, providers will be reimbursed a one-time administrative expense fee for a pre-enrollment assessment of potential waiver participants. The pre-enrollment assessment covers care planning for the participant.

(b) Reporting of cost.

(1) Reporting guidelines. Providers must follow the cost reporting guidelines as specified in §355.105 of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(2) Number of cost reports to be submitted. All legal entities must submit a cost report unless the number of days between the date the legal entity's first Texas Health and Human Services Commission (HHSC) client received services and the legal entity's fiscal year end is 30 days or fewer.

(3) Excused from submission of cost reports. If required by HHSC, a contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this chapter.

(c) Waiver reimbursement determination methodology.

(1) Unit of service reimbursement or reimbursement ceiling by unit of service. Reimbursement or reimbursement ceilings for related-conditions waiver services, habilitation, nursing services provided by a registered nurse (RN), nursing services provided by a licensed vocational nurse (LVN), physical therapy, occupational therapy, speech and language pathology, behavioral support, auditory integration training/auditory enhancement training (audiology services), nutritional services, employment assistance, supported employment, day activity and health services, and in-home and out-of-home respite care services will be determined on a fee-for-service basis. These services are provided under §1915(c) of the Social Security Act Medicaid waiver for persons with related conditions.

(2) Monthly reimbursement. The reimbursement for case management waiver service will be determined as a monthly reimbursement. This service is provided under the §1915(c) of the Social Security Act Medicaid waiver for persons with related conditions.

(3) Reporting and verification of allowable cost.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers; the purpose is to ensure that the database reflects costs and other information that are necessary for the provision of services and are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(4) Reimbursement determination. Recommended unit of service reimbursements and reimbursement ceilings by unit of service are determined in the following manner.

(A) Unit of service reimbursement for habilitation, and cost per unit of service for in-home and out-of-home nursing services provided by an RN, in-home and out-of-home nursing services provided by an LVN, in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, behavioral support services, auditory integration training/auditory enhancement training (audiology services), nutritional services, employment assistance, supported employment, and in-home and out-of-home respite care are determined in the following manner.

(i) The total allowable cost for each contracted provider cost report will be determined by analyzing the allowable historical costs reported on the cost report and other pertinent cost survey information.

(ii) The total allowable cost is reduced by the amount of the administrative expense fee and requisition fee revenues accrued for the reporting period.

(iii) Each provider's total allowable cost, excluding depreciation and mortgage interest, is projected from the historical cost reporting period to the prospective reimbursement period as described in §355.108 of this chapter (relating to Determination of Inflation Indices).

(iv) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or social security, Medicare contributions, Workers' compensation Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).

(v) Allowable administrative and facility costs are allocated or spread to each waiver service cost component on a pro rata basis based on the portion of each waiver service's units of service to the amount of total waiver units of service.

(vi) Each provider's projected total allowable cost is divided by the number of units of service to determine the projected cost per unit of service.

(vii) For in-home and out-of-home nursing services provided by an RN, in-home and out-of-home nursing services provided by an LVN, in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, in-home respite care, behavioral support services, auditory integration training/auditory enhancement training (audiology services), nutritional services, employment assistance, and supported employment, the projected cost per unit of service, for each provider is multiplied by 1.044. This adjusted allowable cost per unit of service may be combined into an array with the allowable cost per unit of service of similar services provided by other programs in determining rates for these services in accordance with §355.502 of this subchapter (relating to Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers).

(viii) For habilitation services two cost areas are created.

(I) The attendant cost area includes salaries, wages, and benefits calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(II) Another attendant cost area is created which includes the other habilitation services costs not included in subclause (I) of this clause as determined in clauses (i) - (v) of this subparagraph to create another attendant cost area. An allowable cost per unit of service is calculated for the other habilitation cost area. The allowable costs per unit of service for each contracted provider cost report are arrayed and weighted by the number of units of service, and the median cost per unit of service is calculated. The median cost per unit of service is multiplied by 1.044.

(III) The attendant cost area and the other attendant cost area are summed to determine the habilitation attendant cost per unit of service.

(ix) For out-of-home respite care, the allowable costs per unit of service are calculated as determined in clauses (i) - (vi) of this subparagraph. The allowable costs per unit of service for each contracted provider cost report are multiplied by 1.044. The costs per unit of service are then arrayed and weighted by the number of units of service, and the median cost per unit of service is calculated.

(B) The monthly reimbursement for case management services is determined in the following manner.

(i) Total allowable costs for each provider will be determined by analyzing the allowable historical costs reported on the cost report and other pertinent cost survey information.

(ii) Total allowable costs are reduced by the amount of administrative expense fee revenues reported.

(iii) Each provider's total allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost reporting period to the prospective reimbursement period as described in §355.108 of this chapter (relating to Determination of Inflation Indices).

(iv) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or social security, Medicare contributions, Workers' compensation Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).

(v) Each provider's projected total allowable costs are divided by the number of monthly units of service to determine the projected cost per client month of service.

(vi) Each provider's projected cost per client month of service is arrayed from low to high and weighted by the number of units of service and the median cost per client month of service is calculated.

(vii) The median projected cost per client month of service is multiplied by 1.044.

(C) The unit of service reimbursement for day activity and health services is determined in accordance with §355.6907 of this chapter (relating to Reimbursement Methodology for Day Activity and Health Services).

(D) HHSC also adjusts reimbursement according to §355.109 of this chapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs) if new legislation, regulations, or economic factors affect costs.

(5) Reimbursement determination for support family services and continued family services. The reimbursement for support family services and continued family services will be determined as a per day rate using a method based on modeled costs which are developed by using data from surveys, cost report data from other similar programs, payment rates from other similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services, or other sources as determined appropriate by HHSC. The per day rate will have two parts, one part for the child placing agency and one part for the support family.

(d) Administrative expense fee determination methodology.

(1) One-time administrative expense fee. Reimbursement for the pre-enrollment assessment and care planning process required to determine eligibility for the waiver program will be provided as a one-time administrative expense fee.

(2) Administrative expense fee determination process. The recommended administrative expense fee is determined using a method based on modeled projected expenses which are developed using data from surveys, cost report data from other similar programs or services, professionals' experience in delivering similar services, and other relevant sources.

(e) Requisition fees. Requisition fees are reimbursements paid to the CLASS direct service agency contracted providers for their efforts in acquiring adaptive aids, medical supplies, dental services, specialized therapies, and minor home modifications for CLASS participants. Reimbursement for requisition fees for adaptive aids, medical supplies, dental services, specialized therapies, and minor home modifications will vary based on the actual cost of the adaptive aids, medical supplies, dental services, specialized therapies, and minor home modifications. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources.

(f) Allowable and unallowable costs.

(1) Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this chapter (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs) as well as the following provisions.

(2) Participant room and board expenses are not allowable, except for those related to respite care.

(3) The actual cost of adaptive aids, medical supplies, dental services, and home modifications is not allowable for cost reporting purposes. Allowable labor costs associated with acquiring adaptive aids, medical supplies, dental services, and home modifications should be reported in the cost report. Any item purchased for participants in this program and reimbursed through a voucher payment system is unallowable. Refer to §355.103(b)(20)(K) of this chapter (relating to Specifications for Allowable and Unallowable Costs).

(g) Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this chapter (relating to Introduction).

(h) Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this chapter (relating to Revenues).

(i) Reviews and field audits of cost reports. Desk reviews or field audits are performed on all contracted providers' cost reports. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this chapter (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).

(j) Reporting requirements. The program director's full salary is to be reported on the line item of the cost report designated for the director.

**History**
- *Source Note: The provisions of this §355.505 adopted to
be effective September 1, 1996, 21 TexReg 7890; transferred effective
September 1, 1997, as published in the Texas Register October 17,
1997, 22 TexReg 10311; amended to be effective June 21, 1998, 23 TexReg
6197; amended to be effective June 25, 2000, 25 TexReg 5867; amended
to be effective September 1, 2001, 26 TexReg 6297; amended to be effective
April 13, 2003, 28 TexReg 3047; amended to be effective September
1, 2004, 29 TexReg 7667; amended to be effective February 3, 2008,
33 TexReg 667; amended to be effective September 1, 2009, 34 TexReg
5654; amended to be effective June 20, 2011, 36 TexReg 3707; amended
to be effective April 1, 2012, 37 TexReg 2068; amended to be effective
November 25, 2012, 37 TexReg 9086; amended to be effective April
1, 2014, 39 TexReg 2062; amended to be effective January 1, 2015,
39 TexReg 9193; amended to be effective June 26, 2025, 50 TexReg 3631;
amended to be effective September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.507** Reimbursement Methodology for Long-Term Services and Supports State Plan and Medically Dependent Children Waiver Program Services Delivered through the STAR Kids and STAR Health Managed Care Programs {#sec-355.507 omnilex-key=us-tx-regs-official--title-1--355.507}

(a) General Requirements. The Texas Health and Human Services Commission (HHSC) determines payment rates for qualified contracted providers for the provision of long-term services and supports (LTSS) state plan and Medically Dependent Children Waiver Program (MDCP) services delivered through the STAR Kids and STAR Heath managed care programs. HHSC applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(b) State plan services reimbursement determination. For LTSS state plan services delivered through STAR Kids and STAR Health, adult day care services are calculated as specified in §355.6907 of this title (relating to Reimbursement Methodology for Day Activity and Health Services); personal care services, nurse delegation and supervision services, and private duty nursing are calculated as specified in §355.8441 of this title (relating to Reimbursement Methodologies for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services); Community First Choice (CFC) attendant and habilitation and personal assistance services (PAS) are calculated as specified in §355.9090 of this title (relating to Reimbursement Methodology for Community First Choice); emergency response services are calculated as specified in §355.510 of this subchapter (relating to Reimbursement Methodology for Emergency Response Services (ERS)); prescribed pediatric extended care services are calculated as specified in §355.9080 of this title (relating to Reimbursement Methodology for Prescribed Pediatric Extended Care Centers); financial management services agency (FMSA) fees are calculated as specified in §355.114 of this title (relating to Consumer Directed Services Payment Option).

(c) MDCP reimbursement determination. Recommended payment rates are developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures). Recommended payment rates for MDCP services are determined as follows.

(1) Reimbursement for nursing services. The rates for in-home respite and flexible family supports nursing services provided by a registered nurse (RN) or licensed vocational nurse (LVN) are determined in accordance with §355.502 of this subchapter (relating to Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers).

(2) Reimbursement for in-home respite and flexible family supports attendant services. The rates for in-home respite and flexible family supports provided by an attendant without delegation of the service by an RN are based on the STAR+PLUS Home and Community-Based Services (HCBS) waiver rate methodology for PAS in accordance with §355.503 of this subchapter (relating to Reimbursement Methodology for Long-Term Services and Supports State Plan and Home and Community-Based Services Waiver Program Services Delivered through the STAR+PLUS Managed Care Program) and §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component). The rates for in-home respite and flexible family supports provided by an attendant with delegation of the service by an RN are based on the STAR+PLUS HCBS waiver rate methodology for PAS in accordance with §355.503 of this subchapter and are modeled to account for additional requirements of this service.

(3) The rate ceiling for respite care. Camp setting services is equivalent to the Community Living Assistance and Support Services direct service agency (CLASS DSA) out-of-home respite rate. Actual payments for this service are the lesser of the rate ceiling or the actual cost of the camp.

(4) Reimbursement for facility-based respite care. Facility-based respite care rates are determined on a 24-hour basis. The rates for facility-based respite care are calculated at 77 percent of the daily nursing facility rate methodology in accordance with §355.307 of this title (relating to Reimbursement Setting Methodology before September 1, 2025). After September 1, 2025, the rates for facility-based respite care are calculated at 77 percent of the daily nursing facility rate methodology in accordance with §355.318 of this title (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025). The base rates used in this calculation do not include nursing facility rate add-ons.

(5) Reimbursement for supported employment and employment assistance. The rates for supported employment and employment assistance are based on the rate methodology for supported employment and employment assistance in accordance with §355.503 of this subchapter.

(6) Reimbursement for transition assistance services. Transition assistance services rates are determined in accordance with §355.502 of this subchapter.

(d) Cost reports. If HHSC deems it appropriate to require providers contracted with managed care organizations to deliver LTSS services in STAR Kids and STAR Health to submit a cost report, the following sections of this title will apply: §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs), §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs), §355.104 of this title (relating to Revenues), §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures), §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), §355.107 of this title (relating to Notification of Exclusions and Adjustments), §355.108 of this title (relating to Determination of Inflation Indices), §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs), §355.110 of this title (relating to Informal Reviews and Formal Appeals), and §355.111 of this title (relating to Administrative Contract Violations).

**History**
- *Source Note: The provisions of this §355.507 adopted to
be effective December 10, 2002, 27 TexReg 11527; amended to be effective
September 1, 2007, 32 TexReg 5340; amended to be effective September
1, 2009, 34 TexReg 5654; amended to be effective June 20, 2011, 36
TexReg 3707; amended to be effective September 1, 2013, 38 TexReg
5435; amended to be effective April 14, 2025, 50 TexReg 2378; amended
to be effective September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.509** Reimbursement Methodology for Residential Care {#sec-355.509 omnilex-key=us-tx-regs-official--title-1--355.509}

(a) General requirements. The Texas Health and Human Services Commission (HHSC), or its designee, applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(b) Cost reporting.

(1) Providers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(2) Excused from submission of cost reports. If required by HHSC, a contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(c) Reimbursement determination.

(1) Reporting and verification of allowable costs.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. HHSC or its designee excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. The purpose is to ensure that the database reflects costs and other information that are necessary for the provision of services and that are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(2) Residential care reimbursement. Recommended per diem reimbursement for residential care is determined as follows.

(A) Reported allowable expenses are combined into four cost areas:

(i) attendant;

(ii) other direct care;

(iii) facility; and

(iv) administration and transportation.

(B) Facility, transportation (vehicle), and administration expenses are lowered to reflect expenses for a provider at the lower of:

(i) 85% occupancy rate; or

(ii) the overall average occupancy rate for licensed beds in facilities included in the database during the cost-reporting periods included in the base. The occupancy adjustment is applied if the provider's occupancy rate is below 85% or the overall average, whichever is lower. The occupancy adjustment is determined by the individual provider occupancy rate being divided by .85 or the average occupancy rate of all providers in the database.

(C) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes and employee benefits are Federal Insurance Contributions Act or Social Security, Medicare contributions, Workers' Compensation Insurance, the Federal Unemployment Tax Act, and the Texas Unemployment Compensation Act.

(D) The attendant cost area from subparagraph (A)(i) of this paragraph will be calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(E) The following applies to the cost areas from subparagraph (A)(ii) - (iv) of this paragraph.

(i) Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §355.108 of this title (relating to Determination of Inflation Indices). The prospective reimbursement period is the period of time that the reimbursement is expected to be in effect.

(ii) Cost area per diem expenses are calculated by dividing total reported allowable costs for each cost area by the total days of service. Cost area per diem expenses are rank ordered from low to high to produce projected per diem expense arrays.

(iii) Reimbursement is determined by selecting from each cost area the median day of service and the corresponding per diem expense times 1.07. The resulting cost area amounts are totaled to determine the per diem reimbursement.

(iv) The client is required to pay for their room and board portion of the per diem reimbursement. HHSC will pay the services portion of the per diem reimbursement. The room and board payments will be paid to providers by the client from the client's Supplemental Security Income (SSI). When SSI is increased or decreased by the Federal Social Security Administration, the per diem reimbursement will be adjusted in amounts equal to the increase or decrease in SSI received by clients.

(3) Exceptions to the reimbursement determination methodology. Reimbursement may be adjusted in accordance with §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs) when new legislation, regulations, or economic factors affect costs.

(d) Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this title.

(e) Allowable and unallowable costs. In determining whether a cost is allowable or unallowable, providers must follow the guidelines as specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs) and §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs). In addition to these sections, the following allowable and unallowable costs are applicable in the Community Care for Aged and Disabled Residential Care program.

(1) Allowable costs. Medical supplies required to provide residential care services are allowable. Allowable medical costs include supply costs associated with the administration of medications, such as medication cups, syringes for insulin injections, stethoscopes, blood pressure cuffs, and thermometers.

(2) Unallowable costs. Unallowable costs include prescription drugs; non-legend drugs; medical records costs; and compensation for physicians, pharmacists, and medical directors.

(f) Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

(g) Reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports of all contracted providers. The frequency and nature of the field audit are determined by HHSC or its designee to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this title (relating to Informal reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.509 adopted to
be effective September 1, 2003, 28 TexReg 6941; transferred effective
September 1, 2004, as published in the Texas Register September 17,
2004, 29 TexReg 9013; amended to be effective January 19, 2006, 31
TexReg 286; amended to be effective January 25, 2009, 34 TexReg 336;
amended to be effective November 25, 2012, 37 TexReg 9086; amended
to be effective September 11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.510** Reimbursement Methodology for Emergency Response Services (ERS) {#sec-355.510 omnilex-key=us-tx-regs-official--title-1--355.510}

(a) General requirements. The Texas Health and Human Services Commission (HHSC) or its designee applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction). Whenever the term "HHSC" occurs, it means the Texas Health and Human Services Commission or its designee.

(b) General reporting guidelines. Providers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(c) Reimbursement ceiling determination. When HHSC does not require a cost report, HHSC may adjust the rate ceiling as appropriate based upon cost data collected in the form of special surveys or reports submitted by all contracted providers, or other appropriate cost data related to the Emergency Response Services program.

(d) Reimbursement ceiling determination based on a cost-reporting process. If HHSC deems it appropriate to require cost reporting, cost reports will be governed by the information in this subsection.

(1) Reimbursement ceiling. The reimbursement ceiling is determined for a per-month unit of service. The ceiling applies to all provider agencies uniformly, regardless of geographic location or other factors.

(2) Excused from submission of cost reports. If required by HHSC, a contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(3) Exclusion of cost reports.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursement. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. The purpose is to ensure that the data base reflects costs and other information which are necessary for the provision of services and are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the data base used for reimbursement determination if:

(i) there is a reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(4) Recommended reimbursement ceiling. HHSC determines a recommended reimbursement ceiling in the following manner. The reimbursement ceiling is determined by the analysis of financial and statistical data submitted by provider agencies on cost reports and, as deemed appropriate, a market survey analysis of emergency response equipment suppliers.

(A) HHSC allocates payroll taxes and employee benefits to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense. The employee benefits for administrative staff are allocated directly to the corresponding salaries for those positions. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or social security, Workers' Compensation Insurance (WCI), the Federal Unemployment Tax Act, and Texas Unemployment Compensation Act.

(B) Allowable expenses, excluding depreciation and mortgage interest, are projected from the provider agency's reporting period to the next ensuing reimbursement period. HHSC determines reasonable and appropriate economic inflators or adjusters as described in §355.108 of this title (relating to Determination of Inflation Indices) to calculate a prospective expense. HHSC also adjusts reimbursement if new legislation, regulations, or economic factors affect costs as specified in §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(C) Allowable reported expenses are combined into three cost areas: responder, program operations, and facility. To determine the projected cost per unit of service, a contracted provider's projected expenses in each cost area are divided by its total units of service for the reporting period.

(D) The contracted providers' projected costs per unit of service are ranked from low to high in each cost area, with corresponding units of service.

(E) The 80th percentile cost, weighted by units of service, is determined for each cost area. The recommended reimbursement ceiling is the sum of the 80th percentile costs of the three cost areas.

(F) The reimbursement determination authority for this reimbursement ceiling is specified in §355.101 of this title (relating to Introduction).

(e) Contract-specific unit reimbursement. The actual reimbursement for each contract is negotiated between DADS staff and the provider agency. The contract-specific reimbursement DADS pays the provider agency is the full cost for emergency response services. The provider agency must not bill the client for any additional charges. In no instance may the negotiated unit reimbursement exceed the per-month reimbursement ceiling.

(f) Reviews and field audits of cost reports. HHSC staff perform either desk reviews or field audits on all contracted providers. The frequency and nature of the field audits are determined by HHSC staff to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal and, if necessary, an administrative hearing to dispute an action taken by HHSC under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(g) Factors affecting allowable costs. In determining whether a cost is allowable or unallowable, providers must follow the guidelines specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs). Providers must follow the guidelines for allowable and unallowable costs as specified in §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs) and follow the guidelines for unallowable costs specific to the ERS program as specified in this subsection.

(h) Unallowable cost. The unallowable cost specific to the ERS program is the expense of base station equipment at the response center.

(i) Reporting revenue. Revenue must be reported on the cost report according to §355.104 of this title (relating to Revenue).

**History**
- *Source Note: The provisions of this §355.510 adopted to be effective September 1, 1996, 21 TexReg 7896; amended to be effective January 1, 2002, 26 TexReg 10391; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective December 13, 2010, 35 TexReg 10944; amended to be effective November 25, 2012, 37 TexReg 9086.*

##### **1 Tex. Admin. Code § 355.511** Reimbursement Methodology for Home-Delivered Meals {#sec-355.511 omnilex-key=us-tx-regs-official--title-1--355.511}

(a) Reimbursement ceiling determination. When the Texas Health and Human Services Commission (HHSC) does not require a cost report, HHSC may adjust the rate ceiling as appropriate, based on cost data collected through the budget worksheets or other appropriate cost data related to the program in accordance with §355.105(h) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures). For the purposes of this section, HHSC means the Texas Health and Human Services Commission or its designee.

(b) Reimbursement ceiling determination based on a cost-reporting process. If HHSC deems it appropriate to require cost reporting, cost reports will be governed by the information in this subsection. HHSC applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction). The cost-reporting process is as follows:

(1) Documentation requirements. Provider agencies must follow the cost-reporting guidelines specified in §355.105 of this title.

(2) Excused from submission of cost reports. If required by HHSC, a contracted provider agency must submit a cost report unless the agency meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(3) Exclusion of cost reports.

(A) Provider agencies are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursement. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by provider agencies. The purpose is to ensure that the database reflects costs and other information that are necessary for the provision of services and are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(4) Allowable and unallowable costs. Provider agencies must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs). Provider agencies must follow the guidelines for allowable and unallowable costs as specified in §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs).

(5) Revenue. Revenue must be reported on the cost report according to §355.104 of this title (relating to Revenues).

(6) Review of cost reports. HHSC staff perform either desk reviews or field audits on all contracted provider agencies. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and provider agencies will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Provider agencies may request an informal and, if necessary, an administrative hearing to dispute an action taken by HHSC under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(c) Reimbursement ceiling. This subsection applies when a cost report is required. HHSC staff determine the recommended reimbursement ceiling as follows.

(1) HHSC staff allocate payroll taxes and employee benefits to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense. The employee benefits for administrative staff are allocated directly to the corresponding salaries for those positions. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or social security, Workers' Compensation Insurance (WCI), Federal Unemployment Tax Act (FUTA), and Texas Unemployment Compensation Act (TUCA).

(2) HHSC staff project allowable expenses, excluding depreciation and mortgage interest, from each provider agency's reporting period to the next ensuing reimbursement period. HHSC determines reasonable and appropriate economic adjusters as described in §355.108 of this title (relating to Determination of Inflation Indices) to calculate the projected expenses. HHSC staff also adjust reimbursement if new legislation, regulations, or economic factors affect costs as specified in §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(3) HHSC staff combine allowable reported costs into four cost areas.

(A) The administrative cost area includes administrative salaries, wages, and other administrative expenses.

(B) The facility cost area includes building and equipment expenses, and operation and maintenance expenses.

(C) The food preparation cost area includes raw food costs, salaries and wages of food service staff, and subcontracted costs when food preparation is purchased.

(D) The meal delivery cost area includes meal delivery expenses, including mileage paid; meal container expenses; and vehicle rental, lease, use, and/or depreciation costs.

(4) A contracted provider agency's projected expenses in each cost area are divided by its total units of service for the reporting period to determine the projected cost per unit of service.

(5) The contracted provider agency's projected costs per unit of service are ranked from low to high in each cost area.

(6) The 80th percentile cost is determined for each cost area. The recommended reimbursement ceiling is the sum of the 80th percentile costs of the four cost areas.

(d) Reimbursement determination authority. The reimbursement determination authority for this reimbursement ceiling is specified in §355.101 of this title.

(e) Contract-specific reimbursement. DADS determines the actual reimbursement for each contract through negotiations between DADS staff and the provider agency. In no instance may the negotiated unit reimbursement exceed the unit reimbursement ceiling.

**History**
- *Source Note: The provisions of this §355.511 adopted to be effective March 1, 2004, 29 TexReg 1672; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective December 13, 2010, 35 TexReg 10944; amended to be effective November 25, 2012, 37 TexReg 9086.*

##### **1 Tex. Admin. Code § 355.513** Reimbursement Methodology for the Deaf-Blind with Multiple Disabilities Waiver Program {#sec-355.513 omnilex-key=us-tx-regs-official--title-1--355.513}

(a) General information. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this chapter (relating to Introduction). Providers are reimbursed for waiver services provided to individuals who are deaf-blind with multiple disabilities.

(b) Other sources of cost information. If HHSC has determined that there is not sufficient reliable cost report data from which to set reimbursements and reimbursement ceilings for waiver services, reimbursements and reimbursement ceilings will be developed by using rates for similar services from other Medicaid programs; data from surveys; cost report data from other similar programs; consultation with other service providers or professionals experienced in delivering contracted services; and other sources.

(c) Waiver rate determination methodology. If HHSC deems it appropriate to require contracted providers to submit a cost report, recommended reimbursements for waiver services will be determined on a fee-for-service basis in the following manner for each of the services provided.

(1) Total allowable costs for each provider will be determined by analyzing the allowable historical costs reported on the cost report.

(2) Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §355.108 of this chapter (relating to Determination of Inflation Indices). The prospective reimbursement period is the period of time that the reimbursement is expected to be in effect.

(3) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or Social Security, Medicare Contributions, Workers' Compensation Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).

(4) Allowable administrative and overall facility/operations costs are allocated or spread to each waiver service cost component on a pro rata basis based on the portion of each waiver service's service units reported to the amount of total waiver service units reported. Service-specific facility and operations costs for out-of-home respite, and individualized skills and socialization services will be directly charged to the specific waiver service.

(5) For in-home and out-of-home nursing services provided by a registered nurse (RN), in-home and out-of-home nursing services provided by a licensed vocational nurse (LVN), in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, behavioral support services, audiology services, dietary services, employment assistance, and supported employment, an allowable cost per unit of service is calculated for each contracted provider cost report in accordance with paragraphs (1) - (4) of this subsection. The allowable costs per unit of service for each contracted provider cost report is multiplied by 1.044. This adjusted allowable costs per unit of service may be combined into an array with the allowable cost per unit of service of similar services provided by other programs in determining rates for these services in accordance with §355.502 of this subchapter (relating to Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers).

(6) Requisition fees are reimbursements paid to the Deaf-Blind with Multiple Disabilities (DBMD) Waiver contracted providers for their efforts in acquiring adaptive aids, medical supplies, dental services, and minor home modifications for DBMD participants. Reimbursement for adaptive aids, medical supplies, dental services, and minor home modifications will vary based on the actual cost of the adaptive aid, medical supply, dental service, and minor home modification. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys, cost report data from similar programs, consultation with other service providers or professionals experienced in delivering contracted services, or other sources.

(7) For residential habilitation transportation, chore, and intervener (excluding Interveners I, II, and III), services, two cost areas are created:

(A) The attendant cost area, which includes salaries, wages, and benefits calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(B) An administration and facility cost area, which includes costs for services not included in subparagraph (A) of this paragraph as determined in paragraphs (1) - (4) of this subsection. An allowable cost per unit of service is determined for each contracted provider cost report for the administration and facility cost area. The allowable costs per unit of service for each contracted provider cost report are arrayed. The units of service for each contracted provider cost report in the array are summed until the median unit of service is reached. The corresponding expense to the median unit of service is determined and is multiplied by 1.044.

(C) The attendant cost area, and the administration and facility cost area are summed to determine the cost per unit of service.

(8) For Interveners I, II, and III, payment rates are developed based on rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma approach in accordance with §355.105(h) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(9) Assisted living services payment rates are determined using a pro forma approach in accordance with §355.105(h) of this chapter. The rates are adjusted periodically for inflation. The room and board payments for waiver clients receiving assisted living services are covered in the reimbursement for these services and will be paid to providers from the client's Supplemental Security Income, less a personal needs allowance.

(10) Pre-enrollment assessment services and case management services payment rates are determined by modeling the salary for a Case Manager staff position. This rate is periodically updated for inflation.

(11) The orientation and mobility services payment rate is determined by modeling the salary for an Orientation and Mobility Specialist staff position. This rate is updated periodically for inflation.

(12) The employment readiness payment rates will initially be determined using a pro forma approach in accordance with §355.105(h) of this chapter. Once cost report data for this service are available, HHSC will calculate the methodological rate for employment readiness as a weighted median cost of the service from the most recently examined Medicaid cost report, adjusted for anticipated programmatic and staffing requirements, and inflated from the cost reporting year to the prospective rate year. The employment readiness rates will be rebased every biennium from the most recent projected cost report data. Adopted rates will be limited within available appropriations.

(13) HHSC may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to §355.109 of this chapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(d) The individualized skills and socialization services payment rate is equal to the individualized skills and socialization services payment rate for an individual with a Level of Need 9 in the Home and Community-based Services waiver program as specified in §355.723 of this chapter (relating to Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs).

(e) Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this chapter.

(f) Reporting of cost.

(1) Cost-reporting guidelines. If HHSC requires a cost report for any waiver service in this program, providers must follow the cost-reporting guidelines as specified in §355.105 of this chapter.

(2) Excused from submission of cost reports. If required by HHSC, a contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this chapter.

(3) Reporting and verification of allowable cost.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost-report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers to ensure the database reflects costs and other information necessary for the provision of services and is consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(4) Allowable and unallowable costs. Providers must follow the guidelines specified in §355.102 and §355.103 of this chapter (relating to General Principles of Allowable and Unallowable Costs and Specifications for Allowable and Unallowable Costs) in determining whether a cost is allowable or unallowable. In addition, providers must adhere to the following principles:

(A) Client room and board expenses are not allowable, except for those related to respite care.

(B) The actual cost of adaptive aids, medical supplies, dental services, and minor home modifications is not allowable for cost-reporting purposes. Allowable labor costs associated with acquiring adaptive aids, medical supplies, dental services, and home modifications should be reported in the cost report. Any item purchased for participants in this program and reimbursed through a voucher payment system is unallowable. Refer to §355.103(b)(20)(K) of this chapter.

(g) Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this chapter (relating to Revenues).

(h) Reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of field audits are determined by HHSC staff to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this chapter (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.513 adopted to
be effective September 1, 2009, 34 TexReg 5654; amended to be effective
December 13, 2010, 35 TexReg 10944; amended to be effective June 20,
2011, 36 TexReg 3707; amended to be effective November 25, 2012, 37
TexReg 9086; amended to be effective January 1, 2015, 39 TexReg 9193;
amended to be effective September 1, 2023, 48 TexReg 4631; amended
to be effective June 26, 2025, 50 TexReg 3631; amended to be effective
September 11, 2025, 50 TexReg 5899.*

#### **Subchapter F** REIMBURSEMENT METHODOLOGY FOR PROGRAMS SERVING PERSONS WITH AN INTELLECTUAL OR DEVELOPMENTAL DISABILITY

##### **1 Tex. Admin. Code § 355.723** Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs {#sec-355.723 omnilex-key=us-tx-regs-official--title-1--355.723}

(a) Prospective payment rates. The Texas Health and Human Services Commission (HHSC) sets payment rates to be paid prospectively to Home and Community-based Services (HCS) and Texas Home Living (TxHmL) providers.

(b) Levels of need.

(1) Variable rates. Rates vary by level of need (LON) for the following services:

(A) employment readiness;

(B) host home/companion care (HH/CC);

(C) individualized skills and socialization;

(D) residential support services (RSS); and

(E) supervised living (SL).

(2) Non-variable rates. Rates do not vary by LON for the following services:

(A) audiology;

(B) behavioral support;

(C) cognitive rehabilitative therapy (CRT);

(D) community first choice personal assistance services/habilitation (CFC PAS/HAB);

(E) community support services transportation (CSS);

(F) dietary;

(G) employment assistance (EA);

(H) in-home respite;

(I) in-home and out-of-home licensed vocational nurse (LVN);

(J) in-home and out-of-home occupational therapy (OT);

(K) out-of-home respite (OHR);

(L) in-home and out-of-home physical therapy (PT);

(M) in-home and out-of-home registered nurse (RN);

(N) social work;

(O) speech and language pathology;

(P) supported employment (SE); and

(Q) supported home living transportation (SHL).

(c) Recommended rates. The recommended payment rates are determined for each HCS and TxHmL service listed in subsections (b)(1) and (2) of this section by type and, for services listed in subsection (b)(1) of this section, by LON to include the following cost areas.

(1) Attendant compensation cost area. The determination of the attendant compensation cost area is calculated as specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component). The attendant compensation cost area includes personal attendant staffing costs (wages, benefits, modeled staffing ratios for attendant staff, direct care trainers, job coaches, and attendant and direct care supervisors).

(2) Other direct care cost area. The other direct care cost area includes other direct service staffing costs not included under the attendant cost area. The other direct care cost area is determined by calculating a median from allowable other direct care costs for each service, weighed by units of service for the applicable service from the most recently examined HCS/TxHmL cost report adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter (relating to Determination of Inflation Indices).

(A) For the following services, multiply the other direct care cost area as specified in this paragraph by 1.044:

(i) EA;

(ii) in-home respite;

(iii) OHR in a camp;

(iv) OHR in a respite facility;

(v) OHR in a setting where HH/CC is provided;

(vi) OHR in a setting that is not listed; and

(vii) SE.

(B) For the following services, multiply the other direct care cost area as specified in this paragraph by 1.07:

(i) employment readiness;

(ii) individualized skills and socialization;

(iii) in-home and out-of-home individualized skills and socialization;

(iv) OHR in an individualized skills and socialization facility;

(v) OHR in a setting with SL or RSS is provided;

(vi) RSS; and

(vii) SL.

(3) Administration and operations cost area. The administration and operation cost area includes:

(A) administration and operation costs; and

(B) professional consultation and program support costs, including:

(i) allowable costs for required case management and service coordination activities; and

(ii) service-specific transportation costs (including mileage reimbursement).

(4) Projected costs. Projected costs are determined by allowable administrative and operations costs from the most recently audited cost report adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter. The steps to determine projected costs are as follows.

(A) Step 1. Determine total projected administration and operation costs and projected units of service by service type using cost reports submitted by HCS and TxHmL providers in accordance with §355.102 of this chapter (relating to General Principles of Allowable and Unallowable Costs).

(B) Step 2. Determine the HH/CC coordinator component of the HH/CC rate as follows: This component is determined by summing total reported HH/CC coordinator wages and allocated payroll taxes and benefits from the most recently available audited HCS cost report, inflating those costs to the rate period, and dividing the resulting product by the total number of host home units of service reported on that cost report.

(C) Step 3. Determine total HH/CC coordinator dollars as follows. Multiply the HH/CC coordinator component of the HH/CC rate from subparagraph (B) of this paragraph by the total number of HH/CC units of service reported on the most recently available, reliable audited HCS cost report database.

(D) Step 4. Determine total projected administration and operation costs after offsetting total HH/CC coordinator dollars as follows. Subtract the total HH/CC coordinator dollars from subparagraph (C) of this paragraph from the total projected administration and operation costs from subparagraph (A) of this paragraph.

(E) Step 5. Determine projected weighted units of service for each HCS and TxHmL service type as follows.

(i) SL and RSS in HCS. Projected weighted units of service for SL and RSS equal projected SL and RSS units of service times a weight of 1.00.

(ii) Individualized skills and socialization and employment readiness in HCS and TxHmL. Projected weighted units of service for individualized skills and socialization and employment readiness equal projected individualized skills and socialization and employment readiness units of service times a weight of 0.25.

(iii) HH/CC in HCS. Projected weighted units of service for HH/CC equal projected HH/CC units of service times a weight of 0.50.

(iv) SHL in HCS, high medical needs support in HCS, and CSS in TxHmL. For each service, projected weighted units of service equal projected units of service times a weight of 0.30.

(v) Respite in HCS and TxHmL. Projected weighted units of service for respite equal projected respite units of service times a weight of 0.20.

(vi) SE in HCS and TxHmL. Projected weighted units of service for SE equal projected units of service times a weight of 0.25.

(vii) Behavioral support in HCS and TxHmL. Projected weighted units of service for behavioral support equal projected behavioral support units of service times a weight of 0.18.

(viii) Audiology, CRT, OT, PT, and speech and language pathology in HCS and TxHmL. Projected weighted units of service for audiology, CRT, OT, PT, and speech and language pathology equal projected audiology, CRT, OT, PT, and speech and language pathology units of service times a weight of 0.18.

(ix) Social work in HCS. Projected weighted units of service for social work equal projected social work units of service times a weight of 0.18.

(x) In-home and out-of-home nursing in HCS and TxHmL and high medical needs nursing in HCS. Projected weighted units of service for nursing and high medical needs nursing equal projected nursing and high medical needs nursing units of service times a weight of 0.25.

(xi) EA in HCS and TxHmL. Projected weighted units of service for EA equal projected EA units of service times a weight of 0.25.

(xii) Dietary in HCS and TxHmL. Projected weighted units of service for dietary equal projected dietary units of service times a weight of 0.18.

(F) Step 6. Calculate the total projected weighted units of service by summing the projected weighted units of service from subparagraph (E) of this paragraph.

(G) Step 7. Calculate the percent of total administration and operation costs to be allocated to the service type by dividing the projected weighted units for the service type from subparagraph (E) of this paragraph by the total projected weighted units of service from subparagraph (F) of this paragraph.

(H) Step 8. Calculate the total administration and operation cost to be allocated to the service type by multiplying the percent of total administration and operation costs allocated to the service type from subparagraph (G) of this paragraph by the total administration and operation costs after offsetting total HH/CC coordinator dollars from subparagraph (D) of this paragraph.

(I) Step 9. Calculate the administration and operation cost component per unit of service for each HCS and TxHmL service type by dividing the total administration and operation cost to be allocated to that service type from subparagraph (H) of this paragraph by the projected units of service for that service type from subparagraph (A) of this paragraph.

(J) Step 10. The final recommended administration and operation cost area per unit of service for each HCS and TxHmL service type is calculated as follows.

(i) For the following services, multiply the administration and operation cost area from this subparagraph by 1.044:

(I) CFC PAS/HAB;

(II) CSS;

(III) EA;

(IV) in-home individualized skills and socialization;

(V) in-home respite;

(VI) OHR in a camp;

(VII) OHR in a respite facility;

(VIII) OHR in a setting where HH/CC is provided;

(IX) OHR in a setting that is not listed;

(X) SE; and

(XI) SHL.

(ii) For the following services, multiply the administration and operation cost area from this subparagraph by 1.07:

(I) employment readiness;

(II) individualized skills and socialization;

(III) in-home and out-of-home individualized skills and socialization;

(IV) OHR in an individualized skills and socialization facility;

(V) RSS; and

(VI) SL.

(5) The facility cost area. The facility cost area includes the following:

(A) room and board costs, including rent, mortgage interest, depreciation expenses, property taxes, property insurance, and food costs as defined in §355.103 of this chapter (relating to Specifications for Allowable and Unallowable Costs), unless excluded if unallowable under Federal Medicaid rules; and

(B) non-room and board costs not already reimbursed through the monthly amount collected from the individual receiving services as defined in 26 TAC §565.27(a) (relating to Finances and Rent).

(6) The facility cost area is determined by calculating a median cost for each service using allowable facility costs, weighted by units of service for the applicable service from the most recently audited cost report, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108.

(A) For the following services, multiply the facility cost component by 1.044:

(i) HH/CC;

(ii) OHR in a camp;

(iii) OHR in a respite facility; and

(iv) OHR in a setting where HH/CC is provided.

(B) For the following services, multiply the facility cost component by 1.07:

(i) employment readiness;

(ii) individualized skills and socialization;

(iii) in-home and out-of-home DH;

(iv) OHR in a DH or individualized skills and socialization facility;

(v) OHR in a setting where SL or RSS are provided;

(vi) RSS; and

(vii) SL.

(d) Recommended payment rates are determined for each service by the following.

(1) CFC PAS/HAB. The recommended payment rate is calculated by summing the attendant compensation cost area and the administration and operations cost area as defined in subsection (c) of this section. The recommended rate for CFC PAS/HAB does not include a cost component for other direct care staffing costs.

(2) CRT. The recommended payment rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(3) Employment readiness. The recommended rates will initially be determined using a pro forma approach in accordance with §355.105(h) of this chapter. Once cost report data for this service are available, the recommended rates will be calculated by summing the attendant compensation cost area, other direct care cost area, the administration and operations component, and the facility cost component as defined in subsection (c) of this section. Rates are adjusted for anticipated programmatic and staffing requirements for each level of need and inflated from the cost reporting year to the prospective rate year. Adopted rates will be limited within available appropriations.

(4) HH/CC. The recommended payment rate is determined by summing the direct care worker component, HH/CC coordinator cost area, administration and operations component, and facility cost area. The direct care worker component is calculated using the median of allowable direct care worker costs, weighted by HH/CC units of service from the most recently examined cost report database. The result is adjusted for each LON. The HH/CC coordinator cost area and administration and operations components are calculated as determined in subsection (c) of this section. The facility cost area is calculated as determined in subsection (c) of this section but does not include room and board costs as defined in subsection (c)(5)(A) of this section. If HHSC lacks reliable cost report data, the rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.

(5) In-home respite. The recommended payment rate is calculated by summing the attendant compensation cost area and the administration and operations component as defined in subsection (c) of this section.

(6) Individualized skills and socialization. The recommended payment cost areas are adjusted using modeled staffing ratios to establish recommended rates for on-site and off-site rates by LON. The recommended rates are calculated by summing the attendant compensation cost area, other direct care cost area, the administration and operations component, and the facility cost component as defined in subsection (c) of this section. Transportation costs are calculated as a standalone component separate from the administration and operations component for off-site services. The enhanced staffing level one rate is equal to the LON 8 individualized skills and socialization off-site recommended rate. The enhanced staffing level two rate is modeled and assumes a one-staff-to-one-individual staffing ratio.

(7) In-home and out-of-home nursing services provided by an RN, in-home and out-of-home nursing services provided by an LVN, in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, behavioral support services, audiology services, dietary services, EA, SE, and transition assistance services are determined based on §355.725 of this subchapter (relating to Reimbursement Methodology for Common Waiver Services in Home and Community-based Services (HCS) and Texas Home Living (TxHmL)).

(8) OHR. The recommended payment cost areas may be adjusted using modeled direct care worker hour-per-unit ratios for similar services to calculate OHR rates that vary by setting where the service is provided. The recommended payment rates are calculated by summing the attendant compensation cost area, other direct care cost area, the administration and operations component, and the facility cost component as defined in subsection (c) of this section.

(9) SHL and CSS. The recommended payment rates for SHL and CSS are calculated by summing the attendant compensation cost area and the administration and operations cost area as defined in subsection (c) of this section.

(10) SL and RSS. The recommended payment cost areas are adjusted using modeled direct care worker hour-per-unit ratios updated by actual hours reported on the most recently audited cost report to calculate variable rates by LON. The recommended rates are calculated by summing the attendant compensation cost area, other direct care cost area, and the administration and operations component as defined in subsection (c) of this section. The facility cost area is calculated as determined in subsection (c) of this section but does not include room and board costs defined in subsection (c)(5)(A) of this section.

(11) Social work. The recommended payment rate is calculated using the weighted median social worker hourly cost from the most recently audited cost report, and the administration and operations cost component as determined in subsection (c) of this section. If HHSC lacks reliable cost report data, the rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.

(e) Other sources of cost information. If HHSC has determined that there is not sufficient reliable cost report data from which to set reimbursements and reimbursement ceilings for waiver services, reimbursements and reimbursement ceilings will be developed by using rates for similar services from other Medicaid programs, data from surveys, cost report data from other similar programs, consultation with other service providers or professionals experienced in delivering contracted services, and similar sources. If HHSC has insufficient cost data, the recommended payment rate for each service is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.

(f) Refinement and adjustment. Refinement and adjustment of the rate components and model assumptions will be considered, as appropriate, by HHSC. All adopted rates are limited to available levels of appropriated state and federal funds as defined in §355.201 of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid).

**History**
- *Source Note: The provisions of this §355.723 adopted to
be effective March 25, 1997, 22 TexReg 2772; transferred effective
September 1, 1997, as published in the Texas Register December 26,
1997, 22 TexReg 12748; amended to be effective April 5, 1998, 23 TexReg
3255; amended to be effective March 1, 2000, 25 TexReg 1592; amended
to be effective March 1, 2001, 26 TexReg 1696; amended to be effective
September 1, 2007, 32 TexReg 5341; amended to be effective September
20, 2009, 34 TexReg 6317; amended to be effective September 1, 2010,
35 TexReg 5030; amended to be effective June 20, 2011, 36 TexReg 3709;
amended to be effective September 1, 2011, 36 TexReg 5331; amended
to be effective April 1, 2014, 39 TexReg 2062; amended to be effective
September 1, 2015, 40 TexReg 5297; amended to be effective August
1, 2017, 42 TexReg 3359; amended to be effective March 1, 2018, 43
TexReg 339; amended to be effective September 2, 2019, 44 TexReg 4691;
amended to be effective January 10, 2021, 46 TexReg 299; amended to
be effective September 1, 2023, 48 TexReg 4632; amended to be effective
June 26, 2025, 50 TexReg 3631; amended to be effective September 11,
2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.725** Reimbursement Methodology for Common Waiver Services in Home and Community-based Services (HCS) and Texas Home Living (TxHmL) {#sec-355.725 omnilex-key=us-tx-regs-official--title-1--355.725}

(a) Common waiver services. For in-home and out-of-home nursing services provided by a registered nurse (RN), in-home and out-of-home nursing services provided by a licensed vocational nurse (LVN), in-home and out-of-home physical therapy, in-home and out-of-home occupational therapy, speech and language pathology, behavioral support services, audiology services, dietary services, employment assistance, and supported employment, an allowable cost per unit of service is calculated for each contracted provider in accordance with §355.723 of this subchapter (relating to Reimbursement Methodology for Home and Community-Based Services (HCS) and Texas Home Living (TxHmL) Programs). This adjusted allowable cost per unit of service may be combined into an array with the allowable cost per unit of service of similar services provided by other programs in determining rates for these services in accordance with §355.502 of this chapter (relating to Reimbursement Methodology for Common Services in Home and Community-Based Services Waivers).

(b) Requisition fees. Requisition fees are reimbursements paid to the HCS and TxHmL contracted providers for their efforts in acquiring adaptive aids, medical supplies, dental services, and minor home modifications for HCS and TxHmL participants. Requisition fee reimbursement for adaptive aids, medical supplies, dental services, and minor home modifications will vary based on the actual cost of the adaptive aid, medical supply, dental service, and minor home modification. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources.

(c) Requisition fees unallowable costs. The actual cost of adaptive aids, medical supplies, dental services, and home modifications is not allowable for cost reporting purposes. Allowable labor costs associated with acquiring adaptive aids, medical supplies, dental services, and home modifications should be reported in the cost report. Any item purchased for participants in this program and reimbursed through a voucher payment system is unallowable. Refer to §355.103(b)(20)(K) of this chapter (relating to Specifications for Allowable and Unallowable Costs).

(d) Transition assistance services. The reimbursement for transition assistance services will be determined in accordance with §355.502(e) of this chapter.

**History**
- *Source Note: The provisions of this §355.725 adopted to
be effective September 1, 2009, 34 TexReg 5658; amended to be effective
June 20, 2011, 36 TexReg 3707; amended to be effective December 1,
2014, 39 TexReg 8960; amended to be effective June 26, 2025, 50 TexReg
3631.*

##### **1 Tex. Admin. Code § 355.743** Reimbursement Methodology for Mental Health Case Management {#sec-355.743 omnilex-key=us-tx-regs-official--title-1--355.743}

(a) Authority. Payments are made to qualified providers delivering Mental Health Case Management (CM) to Medicaid-enrolled individuals who are eligible for CM according to program rules established by the Department of State Health Services (DSHS). The reimbursement determination authority is specified in §355.101 of this title (relating to Introduction).

(b) Reimbursement rates. Separate rates are set for services based on the following:

(1) Site-based setting. Routine CM is a face-to-face contact with the client at the provider's place of business (e.g., clinic, outpatient office).

(2) Community-based setting. Intensive CM is a face-to-face contact with the client at the client's home, work place, school, or other location that best meets the need of the client.

(c) Qualified providers are reimbursed based on a 15-minute face-to-face unit of service that is prospective and uniform statewide.

(d) Rate methodology.

(1) Initial rates. The initial rates effective September 1, 2011, will be determined by summing the total agency expenditures for each type of case management service for the most recent cost-settled fiscal year, and dividing by the total number of units of each type of service provided during that fiscal year. The total agency expenditures to provide case management services include both the interim rates paid and any adjustments made to the interim rates, such as additional payments or recoupments.

(2) Cost report-based rates. After the Health and Human Services Commission (HHSC) determines that cost data collected as described in subsection (e) of this section is reliable and sufficient to support development of a cost report-based rate, HHSC will develop statewide reimbursement rates using the data that replaced the initial rates as follows:

(A) Project each provider's total allowable cost per type of service from the historical cost reporting period to the prospective reimbursement period using inflation factors according to §355.108 of this title (relating to Determination of Inflation Indices);

(B) For each provider, divide the projected cost per type of service, determined in subparagraph (A) of this paragraph, by the provider's total units of service per type of service delivered during the historical cost reporting period, to arrive at the provider's projected cost per unit of service for each type of service; and

(C) For each type of service:

(i) Arrange all providers' projected cost per unit of service in an array from low to high, with the corresponding total number of units of service for each provider;

(ii) Sum the total number of units of service for each provider in the array progressively, from the lowest projected cost per unit to the highest, to create a running total;

(iii) Divide the total number of units of service by two;

(iv) Identify the value, from the running total sums calculated in clause (ii) of this subparagraph, that is closest to the result in clause (iii) of this subparagraph; and

(v) Identify the cost per unit of service that corresponds to the value identified in clause (iv) of this subparagraph, to arrive at the recommended rate for that service.

(e) Reporting of costs. CM providers must submit cost report data according to HHSC's specifications.

(1) All CM providers must submit a cost report unless the number of days between the date the first client received services and the fiscal year end is 30 days or fewer. The provider may be excused from submitting a cost report if circumstances beyond the control of the provider make cost-report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any governmental entity. Requests to be excused from submitting a cost report must be received by the HHSC Rate Analysis Department before the due date of the cost report.

(2) CM service providers must submit cost report data according to HHSC's specifications. In addition to the requirements of this section, the following cost reporting guidelines apply: §355.101 of this title (relating to Introduction); §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs); §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs); §355.104 of this title (relating to Revenues); §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures); §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports); §355.107 of this title (relating to Notification of Exclusions and Adjustments); §355.108 of this title (relating to Determination of Inflation Indices); §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs); §355.110 of this title (relating to Informal Reviews and Formal Appeals); and §355.111 of this title (relating to Administrative Contract Violation).

(3) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended rates. To ensure that the database reflects costs and other information that are necessary for the provision of services and is consistent with federal and state regulations, HHSC excludes from rate determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers.

(4) Individual provider cost reports may not be included in the database used for reimbursement determination if:

(A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(B) an auditor determines that reported costs are not verifiable.

**History**
- *Source Note: The provisions of this §355.743 adopted to be effective October 13, 2002, 27 TexReg 9308; amended to be effective August 31, 2004, 29 TexReg 8263; amended to be effective September 1, 2011, 36 TexReg 4653.*

##### **1 Tex. Admin. Code § 355.746** Reimbursement Methodology for Mental Retardation Service Coordination {#sec-355.746 omnilex-key=us-tx-regs-official--title-1--355.746}

(a) Definitions. The following words and terms, when used in this section have the following meanings, unless the context clearly indicates otherwise.

(1) Allowable costs--Those expenses that are reasonable and necessary costs in the normal conduct of operations relating to case management services as defined in §355.102(f)(1) and (2) of this title (relating to General Principles of Allowable and Unallowable Costs).

(2) Provider--An entity delivering service coordination to Medicaid-enrolled individuals according to program rules established by Department of Aging and Disability Services (DADS).

(3) Collateral--An actively involved person as defined in 40 TAC §2.553(1) (relating to Definitions).

(4) Unit of Service--Two statewide encounter rates are established for Mental Retardation Service Coordination services. The encounter unit of service is established as follows:

(A) Comprehensive encounter (Encounter Type A) is a face-to-face contact with the client based on an average time of 45 minutes per contact. The comprehensive encounter is limited to one billable encounter per client per calendar month.

(B) Follow-up encounter (Encounter Type B) is a face-to-face, telephone, or telemedicine contact that involves interface with the client or collateral and is based on an average time of 15 minutes per contact. The follow-up encounter is limited to three follow-up encounters per provider per calendar month for each comprehensive encounter that has occurred within the calendar month. The follow-up encounter does not have to be provided to the client for whom the comprehensive encounter was provided.

(b) Rate methodology.

(1) Initial rates effective September 1, 2011. The initial rates will be determined by summing the total agency expenditures for each type of service coordination service for the most recent cost-settled fiscal year, and dividing that sum by the estimated total number of units of service by type of service for the fiscal year. The total cost to provide service coordination services includes both the interim rates paid and any adjustments made to the interim rates such as additional payments or recoupments.

(2) Cost-report based rates. After the Health and Human Services Commission (HHSC) determines that cost data collected as described in subsection (c) of this section is reliable and sufficient to support development of a cost-report based rate, HHSC will develop statewide reimbursement rates using that data to replace the initial rates as follows:

(A) Project each provider's total allowable costs per type of service from the historical cost reporting period to the prospective reimbursement period using inflation factors according to §355.108 of this title (relating to Determination of Inflation Indices) to arrive at the projected cost per type of service.

(B) For each provider, divide the projected cost per type of service, determined in subparagraph (A) of this paragraph, by the provider's total units of service per type of service delivered during the historical cost reporting period, to arrive at the provider's projected cost per unit of service for each type of service; and

(C) For each type of service:

(i) Arrange all providers' projected cost per unit of service in an array from low to high, with the corresponding total number of units of service for each provider;

(ii) Sum the total number of units of service for each provider in the array progressively, from the lowest projected cost per unit to the highest, to create a running total;

(iii) Divide the total number of units of service by two;

(iv) Identify the value, from the running total sums calculated in clause (ii) of this subparagraph, that is closest to the result in clause (iii) of this subparagraph; and

(v) Identify the cost per unit of service that corresponds to the value identified in clause (iv) of this subparagraph, to arrive at the recommended rate for that service.

(c) Reporting of costs. Service Coordination providers must submit cost report data according to HHSC's specifications.

(1) Exceptions. All Service Coordination providers must submit a cost report unless:

(A) the number of days between the date the first client received services and the fiscal year end is 30 days or fewer; or

(B) if circumstances beyond the control of the provider make cost report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any governmental entity. To be excused from submitting a cost report under this subparagraph, the HHSC Rate Analysis Department must receive the request before the due date of the cost report.

(2) Additional requirements. In addition to following the requirements of this section, the provider must follow the cost reporting guidelines described in: §355.101 of this title (relating to Introduction); §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs); §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs); §355.104 of this title (relating to Revenues); §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures); §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports); §355.107 of this title (relating to Notification of Exclusions and Adjustments); §355.108 of this title (relating to Determination of Inflation Indices); §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs); §355.110 of this title (relating to Informal Reviews and Formal Appeals); and §355.11 of this title (relating to Administrative Contract Violation).

(3) Allowable costs. Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended rates.

(4) Unallowable costs. To ensure that the database reflects costs and other information that are necessary for the provision of services and is consistent with federal and state regulations, HHSC excludes from rate determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. Individual provider cost reports may not be included in the database used for reimbursement determination if:

(A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(B) an auditor determines that reported costs are not verifiable.

**History**
- *Source Note: The provisions of this §355.746 adopted to be effective June 1, 2010, 35 TexReg 4373; amended to be effective September 1, 2011, 36 TexReg 4654.*

##### **1 Tex. Admin. Code § 355.748** Reimbursement Methodology for Preadmission Screening and Resident Review (PASRR) Level II Evaluations {#sec-355.748 omnilex-key=us-tx-regs-official--title-1--355.748}

(a) Qualified providers. Payments are made to qualified providers delivering a Level II evaluation to determine if a person believed to have a mental illness (MI) or an intellectual or developmental disability (IDD) requires the level of care provided by a nursing facility (NF) and, if so, whether the person needs specialized services for their MI or IDD according to the program rules as defined in 40 TAC Chapter 17 (relating to Preadmission Screening and Resident Review).

(b) Unit of service. Qualified providers are reimbursed based on a 15-minute unit of service for a PASRR Level II evaluation.

(c) Reimbursement methodology.

(1) The Health and Human Services Commission determines the PASRR Level II evaluation rate based on the salary cost for a qualified provider and other statistical data on providers delivering similar services.

(2) The reimbursement methodology for a PASRR Level II evaluation is also governed by: §355.108 of this chapter (relating to Determination of Inflation Indices); §355.109 of this chapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs); and §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).

**History**
- *Source Note: The provisions of this §355.748 adopted to be effective May 24, 2013, 38 TexReg 2976.*

##### **1 Tex. Admin. Code § 355.761** Reimbursement Methodology for Institutions for Mental Diseases (IMD) {#sec-355.761 omnilex-key=us-tx-regs-official--title-1--355.761}

(a) The Health and Human Services Commission (HHSC) determines IMD reimbursement biennially. A statewide prospective reimbursement will be available to all eligible IMD providers for reimbursable IMD services. This reimbursement is inclusive of all costs allowable under Medicare payment principles.

(b) Initial reimbursement period. The initial reimbursement period is defined as November 16, 1994-April 30, 1996. The reimbursement for this period is determined from Medicare cost reports for state-operated hospitals, which provided IMD services between September 1, 1993, and August 31, 1994. The Medicare cost reports are reviewed by HHSC to assure that the costs used for calculating each hospital's average per diem cost for IMD services are allowable under Medicare payment principles and are only those costs incurred by the hospital for care and treatment provided to persons 65 years and older and occupying a Medicare-certified bed. Using these Medicare cost reports, each hospital's average per diem cost for IMD services is calculated. HHSC adjusts each hospital's average per diem cost for IMD services to the initial reimbursement period by applying a cost-of-living index. The cost-of-living index used is the Centers for Medicare and Medicaid Services (CMS) Market Basket Forecast Excluded Hospital Input Price Index (as reported in the Dallas Regional Medical Services Letter Number 95-015). Due to the length of the initial reimbursement period, the percentages by which the average per diem costs are adjusted are prorated by taking 1/12 of the forecast for calendar year 1994 plus 2/12 of the forecast for calendar year 1995 plus 4/12 of the forecast for calendar year 1996. After adjusting the average per diem cost for each hospital, the average per diem costs for all of the hospitals are arrayed from high to low. The median (50th percentile) average per diem cost is selected as the prospective reimbursement for the initial reimbursement period. If the 50th percentile falls between IMD providers, then the immediately higher average per diem cost will be selected as the reimbursement.

(c) The reimbursement period begins on September 1 and ends on August 31 of the following year.

(1) Annually, each IMD provider is required to submit to HHSC a copy of its Medicare cost report for its most recent fiscal year ending prior to September 1. Cost reports must be received by HHSC no later than 90 days following the end of the IMD provider's fiscal year. Each IMD provider is required to identify in its cost report as a subunit (IMD unit) those Medicare-certified units on which reimbursable IMD services were provided. The Medicare cost reports are reviewed by HHSC to assure that the costs to be used for calculating each IMD provider's average per diem cost for IMD services are allowable under Medicare payment principles and are only those costs incurred for care and treatment provided to persons 65 years of age and older and occupying a Medicare-certified bed.

(2) Upon completion of the reviews of cost reports, and prior to calculating average per diem costs for each IMD provider, cost reports and prior payment histories are reviewed. To ensure the integrity of the data and avoid bias in the resulting reimbursement due to low volume and other inefficiencies, cost reports of IMD providers will be eliminated from the database for any one of the following reasons:

(A) being in operation fewer than 90 calendar days during the previous cost reporting period;

(B) having an occupancy rate on its IMD units of less than 90% for 50% or more of the days covered during the previous cost reporting period; or

(C) individually accounting for fewer than 5.0% of the total days of care reimbursed by Medicaid as IMD services during the previous cost reporting period.

(3) Using the Medicare cost reports in the database, HHSC calculates for each IMD provider an average per diem cost for IMD services. Each IMD provider's average per diem cost is adjusted to the future reimbursement period by applying a cost-of-living index. The cost-of-living index used is the Centers for Medicare and Medicaid Services (CMS) Market Basket Forecast Excluded Hospital Input Price Index (as reported to the States in the Dallas Regional Medical Services Letter for the federal fiscal quarter ending in December of the year preceding the next reimbursement period). The percentage used for adjustments to each IMD provider's average per diem cost is prorated, using 1/3 of the forecast for the calendar year in which the reimbursement period begins (September through December) plus 2/3 of the forecast for the next calendar year (January through August).

(4) After adjusting the average per diem cost for each IMD provider, the average per diem costs of all IMD providers remaining in the database are arrayed from high to low. The median (50th percentile) average per diem cost is selected as the prospective reimbursement for the future reimbursement period. If the 50th percentile falls between IMD providers, then the immediately higher average per diem cost will be selected as the reimbursement. The prospective reimbursement rate is compared to the Support, Maintenance and Treatment (SMT) rate. All IMD providers will be paid the lower of the prospective rate or SMT rate for each day during the next reimbursement period that IMD services are provided to an eligible individual.

(d) Financial Audits. Financial audits are performed periodically on all IMD providers. IMD providers have the right to appeal exclusions and adjustments to cost reports according to TDMHMR's informal reviews and administrative hearings process.

**History**
- *Source Note: The provisions of this §355.761 adopted to be effective October 13, 1995, 20 TexReg 7990; transferred effective September 1, 1997, as published in the Texas Register December 26, 1997, 22 TexReg 12748; amended to be effective March 1, 2001, 26 TexReg 1696; amended to be effective September 1, 2004, 29 TexReg 6255.*

##### **1 Tex. Admin. Code § 355.781** Rehabilitative Services Reimbursement Methodology {#sec-355.781 omnilex-key=us-tx-regs-official--title-1--355.781}

(a) Authority. Payments are made to qualified providers delivering rehabilitative services to Medicaid-eligible individuals who are eligible for rehabilitative services according to the program rules established by the Department of State Health Services (DSHS). The reimbursement determination authority is specified in §355.101 of this title (relating to Introduction).

(b) Reimbursement rates. Prospective and uniform statewide rates for rehabilitative services are determined for rehabilitative services specified in the Mental Health Services program rules in 25 TAC Chapter 419, Subchapter L (relating to Mental Health Rehabilitative Services) for the following:

(1) Day programs for acute needs--adult;

(2) Crisis intervention services--individual-child/adolescent and adult;

(3) Medication training and support--individual-child/adolescent and adult;

(4) Medication training and support--group-adult;

(5) Medication training and support--group-child/adolescent;

(6) Psychosocial rehabilitative services--individual-adult;

(7) Psychosocial rehabilitative services--group-adult;

(8) Skills training and development--individual-child/adolescent and adult;

(9) Skills training and development--group-adult; and

(10) Skills training and development-group-child/adolescent.

(c) Units of service. Qualified providers are reimbursed based on the following face-to-face units of service:

(1) Day programs for acute needs--45-60 continuous minutes;

(2) Crisis intervention services--15 continuous minutes;

(3) Medication training and support--15 continuous minutes;

(4) Psychosocial rehabilitative services--15 continuous minutes; and

(5) Skills training and development--15 continuous minutes.

(d) Rate methodology.

(1) Initial rates. Initial statewide rates effective September 1, 2011, will be determined by summing the total agency expenditures to provide rehabilitative services for each type of service for the most recent cost-settled fiscal year, and dividing by the total number of units of each type of service provided during that fiscal year. The total agency expenditure to provide rehabilitative services includes both the interim rates paid and any adjustments made to the interim rates, such as additional payments or recoupments.

(2) Cost report-based rates. After the Texas Health and Human Services Commission (HHSC) determines that cost data collected as described in subsection (e) of this section are reliable and sufficient to support development of a cost report-based rate, HHSC will develop statewide reimbursement rates using that data to replace the initial rates as follows:

(A) Project each provider's total allowable cost for each type of service from the historical cost reporting period to the prospective reimbursement period using inflation factors set out in §355.108 of this title (relating to Determination of Inflation Indices) to arrive at the projected cost for each type of service.

(B) For each provider, divide the projected cost for each type of service, determined in subparagraph (A) of this paragraph, by the provider's total units of service for each type of service delivered during the historical cost-reporting period, to arrive at the provider's projected cost for each unit of service for each type of service.

(C) For each type of service:

(i) Arrange all providers' projected cost for each unit of service in an array from low to high, with the corresponding total number of units of service for each provider;

(ii) Sum the total number of units of service for each provider in the array progressively from low to high to create a running total;

(iii) Divide the total number of units of service by two;

(iv) Identify the value, from the running total sums calculated in clause (ii) of this subparagraph, that is closest to the result in clause (iii) of this subparagraph; and

(v) Identify the cost for each unit of service that corresponds to the value identified in clause (iv) of this subparagraph to arrive at the recommended rate for that service.

(e) Reporting of costs.

(1) All rehabilitative services providers must submit a cost report unless the number of days between the date the first client received services and the fiscal year end is 30 days or fewer. The provider may be excused from submitting a cost report if circumstances beyond the control of the provider make cost-report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any governmental entity. Requests to be excused from submitting a cost report must be received by the HHSC Rate Analysis Department before the due date of the cost report.

(2) Cost reporting. Rehabilitative services providers must submit cost report data according to HHSC's specifications. In addition to the requirements of this section, the cost reporting guidelines will be governed by the information in §355.101 of this title (relating to Introduction), §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs), §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs), §355.104 of this title (relating to Revenues), §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures), §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), §355.107 of this title (relating to Notification of Exclusions and Adjustments), §355.108 of this title (relating to Determination of Inflation Indices), §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs), §355.110 of this title (relating to Informal Reviews and Formal Appeals), and §355.11 of this title (relating to Administrative Contract Violation).

(3) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended rates. To ensure that the database reflects costs and other information that are necessary for the provision of services and is consistent with federal and state regulations, HHSC excludes from rate determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers.

(4) Individual provider cost reports may not be included in the database used for reimbursement determination if:

(A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(B) an auditor determines that reported costs are not verifiable.

**History**
- *Source Note: The provisions of this §355.781 adopted to be effective January 1, 1997, 21 TexReg 8933; duplicated effective September 1, 1997, as published in the Texas Register December 11, 1998, 23 TexReg 12660; amended to be effective November 14, 1999, 24 TexReg 9825; amended to be effective March 1, 2001, 26 TexReg 1696; amended to be effective October 4, 2001, 26 TexReg 7525; amended to be effective September 18, 2003, 28 TexReg 7975; amended to be effective August 31, 2004, 29 TexReg 8268; amended to be effective September 1, 2006, 31 TexReg 5453; amended to be effective September 1, 2011, 36 TexReg 4655.*

#### **Subchapter G** ADVANCED TELECOMMUNICATIONS SERVICES AND OTHER COMMUNITY-BASED SERVICES

##### **1 Tex. Admin. Code § 355.5902** Reimbursement Methodology for Primary Home Care {#sec-355.5902 omnilex-key=us-tx-regs-official--title-1--355.5902}

(a) General requirements. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(b) Cost reporting. Provider agencies must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods and Procedures).

(1) Number of cost reports to be submitted. Every legal entity must submit a cost report unless the entity meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(A) Contracted providers participating in the attendant compensation rate enhancement.

(i) At the same level of enhancement. If all the contracts under the legal entity participate in the enhancement at the same level of enhancement, the contracted provider must submit one cost report for the legal entity.

(ii) At different levels of enhancement. If all the contracts under the legal entity participate in the enhancement but they participate at more than one enhancement level, the contracted provider must submit one cost report for each level of enhancement.

(B) Contracted providers not participating in the attendant compensation rate enhancement. If all the contracts under the legal entity do not participate in the enhancement, the contracted provider must submit one cost report for the legal entity.

(C) Contractors participating and not participating in attendant compensation rate enhancement.

(i) At the same level of enhancement. If some of the contracts under the legal entity do not participate in the enhancement and the rest of the contracts under the legal entity participate at the same level of enhancement, the contracted provider must submit:

(I) one cost report for the contracts that do not participate; and

(II) one cost report for the contracts that do participate.

(ii) At different levels of enhancement. If some of the contracts under the legal entity do not participate in the enhancement and the rest of the contracts under the legal entity participate in the enhancement but they participate at more than one enhancement level, the contracted provider must submit:

(I) one cost report for the contracts that do not participate; and

(II) one cost report for each level of enhancement.

(2) Provider agencies are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursement. HHSC excludes from reimbursement determination unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by provider agencies. The purpose is to ensure that the database reflects costs and other information which are necessary for the provision of services and are consistent with federal and state regulations. Individual cost reports may not be included in the database used for reimbursement determination if:

(A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(B) an auditor determines that reported costs are not verifiable.

(c) Reimbursement determination. Reimbursement is determined in the following manner.

(1) Cost determination by cost area. Allowable costs are combined into three cost areas, after allocating payroll taxes to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense and after applying employee benefits directly to the corresponding salary line item.

(A) Service support cost area. This includes attendants and field supervisors' mileage reimbursement expenses. This also includes building, building equipment, and operation and maintenance costs; administration costs; and other service costs. Administration expenses equal to $0.18 per priority unit of service are allocated to priority. The administration costs remaining after this allocation are summed with the other service support costs.

(B) Non-priority attendants cost area. This includes non-priority attendants' salaries, wages, and benefits expenses. This cost area is specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(C) Priority attendants cost area. This includes priority attendants' salaries, wages, and benefits expenses. This cost area is specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(2) Recommended reimbursement by cost area. For the service support cost area described in paragraph (1)(A) of this subsection the following is calculated.

(A) Projected costs. Each contract's total allowable costs, excluding depreciation and mortgage interest, per unit of service are projected from each contract's reporting period to the next ensuing reimbursement period, as described in §355.108 of this title (relating to Determination of Inflation Indices) to calculate the projected expenses. Reimbursement may be adjusted where new legislation, regulations, or economic factors affect costs as specified in §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(B) Projected cost per unit of service. To determine the projected cost per unit of service for each contract, the total projected allowable costs for the service support cost area are divided by total units of service, including non-priority services, priority services, and STAR+PLUS services, in order to calculate the projected cost per unit of service.

(C) Projected cost arrays. Each contract's projected allowable costs per unit of service are rank ordered from low to high, along with each contract's corresponding units of service for each cost area.

(D) Recommended reimbursement for the service support cost area. The total units of service for each contract are summed until the median hour of service is reached. The corresponding projected expense is the weighted median cost component. The weighted median cost component is multiplied by 1.044 to calculate the recommended reimbursement for the service support cost area. The service support cost area recommended reimbursement is limited, if necessary, to available appropriations.

(3) Total recommended reimbursement.

(A) For non-priority clients. The recommended reimbursement is determined by summing the recommended reimbursement described in paragraph (2) of this subsection and the cost area component from paragraph (1)(B) of this subsection.

(B) For priority clients. The recommended reimbursement is determined by summing the recommended reimbursement described in paragraph (2) of this subsection and the cost area component from paragraph (1)(C) of this subsection.

(d) Reimbursement determination authority. The reimbursement determination authority is specified in §355.101 of this title.

(e) Desk reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports for all provider agencies. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and provider agencies will be notified of the results of a desk review or an audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Provider agencies may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(f) Factors affecting allowable costs. Provider agencies must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs) and §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs).

(g) Reporting revenues. Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

**History**
- *Source Note: The provisions of this §355.5902 adopted to
be effective September 1, 1996, 21 TexReg 7890; amended to be effective
September 1, 1997, 22 TexReg 6461; duplicated effective September
1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg
10311; amended to be effective June 25, 2000, 25 TexReg 5867; amended
to be effective July 1, 2002, 27 TexReg 5164; amended to be effective
May 7, 2003, 28 TexReg 3711; amended to be effective December 25,
2003, 28 TexReg 11253; amended to be effective June 1, 2004, 29 TexReg
5055; amended to be effective February 3, 2008, 33 TexReg 667; amended
to be effective April 1, 2012, 37 TexReg 2068; amended to be effective
November 25, 2012, 37 TexReg 9086; amended to be effective September
11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.6907** Reimbursement Methodology for Day Activity and Health Services {#sec-355.6907 omnilex-key=us-tx-regs-official--title-1--355.6907}

(a) Day Activity and Health Care Services. Day activity and health care facilities provide noninstitutional care to clients residing in the community through rehabilitative nursing and social services. The Texas Health and Human Services Commission (HHSC) reimburses Day Activity and Health Services (DAHS) provider agencies for the services they provide to clients.

(b) General requirements. For the completion and submittal of cost reports pertaining to providers' fiscal years ending in calendar year 1997 and subsequent years, providers must apply the information in this section. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).

(c) Cost-reporting guidelines. Providers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(d) Exclusion of cost reports.

(1) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursement. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. The purpose is to ensure that the database reflects costs and other information which are necessary for the provision of services and are consistent with federal and state regulations.

(2) Individual cost reports may not be included in the database used for reimbursement determination if:

(A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(B) an auditor determines that reported costs are not verifiable.

(e) Review of cost reports. HHSC may perform desk reviews or field audits on cost reports for all contracted providers. HHSC determines the frequency and nature of the desk reviews and field audits to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal and, if necessary, an administrative hearing to dispute an action taken by HHSC under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(f) Reimbursement determination. HHSC determines reimbursement in the following manner.

(1) A contracted provider must submit a cost report unless the provider meets one or more of the conditions in §355.105(b)(4)(D) of this title.

(2) HHSC staff allocate payroll taxes and employee benefits to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense. The employee benefits for administrative staff are allocated directly to the corresponding salaries for those positions. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or Social Security, Workers' Compensation Insurance (WCI), Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).

(3) HHSC staff project all allowable expenses, excluding depreciation and mortgage interest, for the period from each provider's reporting period to the next ensuing reimbursement period. HHSC staff determine reasonable and appropriate economic adjusters as described in §355.108 of this title (relating to Determination of Inflation Indices) to calculate the projected expenses. HHSC staff also adjust reimbursement if new legislation, regulations, or economic factors affect costs as specified in §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(4) HHSC staff combine allowable reported costs into the following four cost areas.

(A) Attendant cost area. This cost area is specified in §355.7052 of this chapter (relating to Reimbursement Methodology for Determining Attendant Cost Component).

(B) Other direct care costs. This cost area includes other direct care staff; food and food service costs; activity costs; and other direct service costs.

(C) Facility cost area. This cost area includes building, maintenance staff, and utility costs.

(D) Administration and transportation cost area. This cost area includes transportation, administrative staff, and other administrative costs.

(5) For the cost areas described in paragraph (4)(B) - (D) of this subsection, allowable costs are totaled by cost area and then divided by the total units of service for the reporting period to determine the cost per unit of service. HHSC staff rank from low to high all provider agencies' projected costs per unit of service in each cost area. The median projected unit of service cost from each cost area is then determined. Those median projected unit of service costs from each cost area are totaled. That resulting total is multiplied by 1.07 and becomes the recommended reimbursement.

(6) The reimbursement determination authority is specified in §355.101 of this title (relating to Introduction).

(g) Allowable and unallowable costs. Providers must follow the guidelines specified in §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs) in determining whether a cost is allowable or unallowable. Providers must follow the guidelines for allowable and unallowable costs specified in §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs).

(h) DAHS-specific allowable costs. Allowable costs specific to the DAHS program are:

(1) certain medical equipment and supplies, if they are related to the services for which HHSC has contracted. This may include, but is not limited to, supplies and equipment considered necessary to perform client assessments, medication administration, and nursing treatment.

(2) transportation costs if they are related to the services for which HHSC has contracted. This includes the costs of garaging a vehicle that is primarily used to transport clients to and from the DAHS center. The vehicle may be garaged off-site of the center for security reasons or for route efficiency management. In these cases of off-site vehicle garaging, a mileage log is not required if the vehicle is not used for personal use and is used solely (100 percent) for the delivery of DAHS services.

(i) DAHS-specific unallowable costs. Unallowable costs specific to the DAHS program are:

(1) physician's fees for completion of physician orders; and

(2) costs for which the provider received federal funds which should have been offset as specified in §355.103(b)(18)(B) of this title (relating to Specification for Allowable and Unallowable Costs).

(j) Reporting revenue. Revenue must be reported on the cost report according to §355.104 of this title (relating to Revenue).

**History**
- *Source Note: The provisions of this §355.6907 adopted to
be effective September 1, 1996, 21 TexReg 7892; duplicated effective
September 1, 1997, as published in the Texas Register October 17,
1997, 22 TexReg 10311; amended to be effective November 22, 1998,
23 TexReg 11631; amended to be effective June 25, 2000, 25 TexReg
5867; amended to be effective November 25, 2012, 37 TexReg 9086; amended
to be effective January 1, 2015, 39 TexReg 9193; amended to be effective
September 2, 2019, 44 TexReg 4691; amended to be effective September
11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.7001** Reimbursement Methodology for Telemedicine, Telehealth, and Home Telemonitoring Services {#sec-355.7001 omnilex-key=us-tx-regs-official--title-1--355.7001}

(a) Eligible providers performing telemedicine medical, telehealth, or home telemonitoring services are defined in §354.1430 of this title (relating to Definitions), §354.1432 of this title (relating to Telemedicine and Telehealth Benefits and Limitations), and §354.1434 of this title (relating to Home Telemonitoring Benefits and Limitations).

(b) The Health and Human Services Commission (HHSC) reimburses eligible distant site professionals providing telemedicine medical services as follows:

(1) Physicians are reimbursed for their Medicaid telemedicine medical services in the same manner as their other professional services in accordance with §355.8085 of this title (relating to Reimbursement Methodology for Physicians and Other Practitioners).

(2) Physician assistants are reimbursed for their Medicaid telemedicine medical services in the same manner as their other professional services in accordance with §355.8093 of this title (relating to Reimbursement Methodology for Physician Assistants).

(3) Advanced Practice Registered Nurses (APRNs) are reimbursed for their Medicaid telemedicine medical services in the same manner as their other professional services in accordance with §355.8281 of this title (relating to Reimbursement Methodology for Nurse Practitioners and Clinical Nurse Specialists).

(4) Certified nurse midwives are reimbursed for their Medicaid telemedicine medical services in the same manner as their other professional services in accordance with §355.8161 of this title (relating to Reimbursement Methodology for Midwife Services).

(c) HHSC reimburses eligible distant site professionals providing telehealth services as follows:

(1) Licensed professional counselors, including licensed marriage and family therapists, and licensed clinical social workers (including Comprehensive Care Program social workers) are reimbursed for their Medicaid telehealth services in the same manner as their other professional services in accordance with §355.8091 of this title (relating to Reimbursement to Licensed Professional Counselors, Licensed Clinical Social Workers, and Licensed Marriage and Family Therapists).

(2) Licensed psychologists (including licensed psychological associates) and psychology groups are reimbursed for their Medicaid telehealth services in the same manner as their other professional services in accordance with §355.8085 of this title.

(3) Durable medical equipment suppliers are reimbursed for their Medicaid telehealth services in the same manner as their other professional services in accordance with §355.8023 of this title (relating to Reimbursement Methodology for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)).

(d) Telemedicine and telehealth patient site locations, as defined in §354.1430 and §354.1432 of this title, are reimbursed a facility fee determined by HHSC.

(e) HHSC reimburses eligible providers performing home telemonitoring services in the same manner as their other professional services described in §355.8021 of this title (relating to Reimbursement Methodology for Home Health Services).

(f) Telemedicine medical services provided in a school-based setting by a physician, even if the physician is not the patient's primary care physician, will be reimbursed in accordance with the applicable methodologies described in subsection (b)(1) of this section and §355.8443 of this title (relating to Reimbursement Methodology for School Health and Related Services (SHARS)) if the following conditions are met:

(1) the physician is an authorized health care provider under Medicaid;

(2) the patient is a child who receives the service in a primary or secondary school-based setting;

(3) the parent or legal guardian of the patient provides consent before the service is provided; and

(4) a health professional as defined by Texas Government Code §548.0101 is present with the patient during the treatment.

(g) Fees for telemedicine, telehealth, and home telemonitoring services are adjusted within available funding as described in §355.201 of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission).

**History**
- *Source Note: The provisions of this §355.7001 adopted to
be effective May 14, 2009, 34 TexReg 2765; amended to be effective
May 1, 2013, 38 TexReg 1872; amended to be effective October 1, 2013,
38 TexReg 6580; amended to be effective June 29, 2014, 39 TexReg 4741;
amended to be effective September 1, 2015, 40 TexReg 5302; amended
to be effective March 15, 2017, 42 TexReg 1120; amended to be effective
December 1, 2017, 42 TexReg 5431; amended to be effective April 1,
2025, 50 TexReg 828.*

#### **Subchapter H** BASE WAGE REQUIREMENTS FOR PERSONAL ATTENDANTS

##### **1 Tex. Admin. Code § 355.7051** Base Wage for a Personal Attendant before September 1, 2025 {#sec-355.7051 omnilex-key=us-tx-regs-official--title-1--355.7051}

(a) The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) HHSC contractor--A person who has a written agreement with the Texas Health and Human Services Commission (HHSC) to provide a service to an individual in exchange for payment from HHSC.

(2) Managed care organization or MCO--Has the meaning assigned in §353.2 of this title (relating to Definitions).

(3) Personal attendant--

(A) An employee or subcontractor of an HHSC contractor, or an employee of an employer in the consumer directed services (CDS) option, who provides the following services, as described in 40 TAC §49.101 (relating to Application):

(i) services in the Community Attendant Services program;

(ii) services in the Family Care program;

(iii) services in the Primary Home Care program;

(iv) day activity and health services;

(v) residential care;

(vi) in the Community Living Assistance and Support Services Program:

(I) community first choice personal assistance services/habilitation (CFC PAS/HAB);

(II) habilitation (transportation); or

(III) in-home respite;

(vii) in the Deaf-Blind Multiple Disabilities Program:

(I) CFC PAS/HAB;

(II) residential habilitation (transportation);

(III) in-home respite;

(IV) licensed assisted living;

(V) licensed home health assisted living; or

(VI) individualized skills and socialization services;

(viii) in the Home and Community-based Services Program:

(I) CFC PAS/HAB;

(II) supported home living (transportation);

(III) in-home respite; and

(IV) individualized skills and socialization services;

(ix) in the Texas Home Living Program:

(I) CFC PAS/HAB;

(II) community support services (transportation);

(III) in-home respite; or

(IV) individualized skills and socialization services.

(B) An employee or subcontractor of an HHSC contractor who provides the following services in the Home and Community-Based Services--Adult Mental Health program, as described in 26 TAC §307.51 (relating to Purpose and Application):

(i) assisted living services;

(ii) in-home respite; and

(iii) supported home living services.

(C) An employee or subcontractor of an HHSC contractor or an employee of an employer in the CDS option who provides:

(i) personal care services, as described in Chapter 363, Subchapter F of this title (relating to Personal Care Services); or

(ii) CFC habilitation (CFC HAB) or CFC personal assistance services (CFC PAS), as described in Chapter 354, Subchapter A, Division 27 (relating to Community First Choice).

(D) An employee or subcontractor of an HHSC contractor, or an employee of an employer in the CDS option or in the block grant option, who provides consumer managed personal attendant services as described in 26 TAC Chapter 275 (relating to Consumer Managed Personal Attendant Services (CMPAS) Program).

(E) A provider or an employee of an employer in the CDS option who provides:

(i) in the STAR+PLUS program and STAR+PLUS Home and Community-based Services (HCBS) program:

(I) assisted living;

(II) CFC PAS;

(III) CFC HAB;

(IV) day activity and health services;

(V) in-home respite care;

(VI) personal assistance services; or

(VII) protective supervision;

(ii) in the STAR Health program and Medically Dependent Children Program (MDCP):

(I) day activity and health services;

(II) CFC PAS;

(III) CFC HAB;

(IV) flexible family support;

(V) in-home respite; or

(VI) personal care services; or

(iii) in the STAR Kids program and MDCP:

(I) CFC PAS;

(II) CFC HAB;

(III) personal care services;

(IV) day activity and health services;

(V) flexible family support services; or

(VI) in-home respite.

(4) Provider--Has the meaning assigned in §353.2 of this title.

(b) An HHSC contractor, other than an HHSC contractor described in subsection (c) or (d) of this section, must pay a personal attendant a base wage of at least $10.60 per hour.

(c) An HHSC contractor that has a contract for financial management services (FMS) must ensure that an employer in the CDS option, or designated representative, pays a personal attendant a base wage of at least $10.60 per hour.

(d) An HHSC contractor that has a CMPAS contract must:

(1) pay a personal attendant who is an employee or subcontractor of the contractor in the traditional service option or block grant option a base wage of at least $10.60 per hour; and

(2) ensure that an individual employer of a personal attendant under the block grant option or CDS option, or the individual's representative, pays a personal attendant a base wage of at least $10.60 per hour.

(e) An MCO must require an MCO contractor, other than an MCO contractor described in subsection (f) of this section, to pay a personal attendant a base wage of at least $10.60 per hour.

(f) An MCO must require that an MCO contractor that has a contract for FMS ensures that an employer in the CDS option or designated representative pays a personal attendant a base wage of at least $10.60 per hour.

**History**
- *Source Note: The provisions of this §355.7051 adopted to
be effective May 10, 2020, 45 TexReg 2826; amended to be effective
September 1, 2023, 48 TexReg 4636; amended to be effective September
11, 2025, 50 TexReg 5899.*

##### **1 Tex. Admin. Code § 355.7052** Reimbursement Methodology for Determining Attendant Cost Component {#sec-355.7052 omnilex-key=us-tx-regs-official--title-1--355.7052}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) establishes the rate methodology for the attendant cost rate component used in the rate methodologies of long-term services and supports (LTSS) state plan and 1915(c), 1915(i) and 1115 waiver programs with personal attendant and attendant-like services.

(b) Meaning of attendant. An attendant is an unlicensed caregiver providing direct assistance to individuals with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL). The following parameters apply to the attendant cost rate component.

(1) An attendant includes the following:

(A) a driver who is transporting individuals in the day activity and health services (DAHS), Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID), and residential care (RC) and STAR+PLUS Home and Community-Based Services (STAR+PLUS HCBS) Assisted Living Facilities (ALF) programs and the Home and Community-Based Services supervised living and residential support services (HCS SL/RSS) and HCS and Texas Home Living (TxHmL) individualized skills and socialization settings;

(B) a medication aide in the HCS SL/RSS setting, ICF/IID, and RC and ALF programs; and

(C) direct care workers, direct care trainers, job coaches, employment assistance direct care workers, attendant supervisors, direct care worker supervisors, direct care trainer supervisors, job coach supervisors and supported employment direct care workers.

(2) Attendants do not include the director; administrator; assistant director; assistant administrator; clerical and secretarial staff; professional staff; other administrative staff; licensed staff; cooks and kitchen staff; maintenance and groundskeeping staff; activity director; Deaf-Blind with Multiple Disabilities (DBMD) Interveners I, II, or III; Qualified Intellectual Disability Professionals (QIDPs) or assistant QIDPs; foster care providers; and laundry and housekeeping staff.

(3) Staff other than attendants may deliver attendant services and be considered an attendant if they must perform attendant services that cannot be delivered by another attendant to prevent a break in service.

(c) Attendant cost center. This cost center will include employee compensation, contract labor costs, for attendants as defined in subsection (b) of this section.

(1) Attendant compensation is the allowable compensation for attendants defined in §355.103(b)(1) of this chapter (relating to Specifications for Allowable and Unallowable Costs) and required to be reported as either salaries and/or wages, including payroll taxes and workers' compensation, or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of this chapter to be reported as costs applicable to specific cost report line items, except as noted in paragraph (3) of this subsection, are not to be included in this cost center.

(2) Contract labor refers to personnel for whom the contracted provider is not responsible for the payment of payroll taxes, such as Federal Insurance Contributions Act, Medicare, and federal and state unemployment insurance, and who perform tasks routinely performed by employees where allowed by program rules.

(3) The following costs are not included in the calculation of the attendant cost center.

(A) Costs of required trainings for direct care or personal attendant workers.

(B) Travel costs for direct care or personal attendant workers including mileage reimbursement or public transportation subsidies.

(C) Costs of personal protective equipment for direct care or personal attendant workers.

(4) For staff who provide attendant functions part time as specified in subsection (b)(3) of this section, the cost center includes only the proportion of staff compensation associated with the hours allowable attendant functions were performed.

(d) Programs with personal attendant services. The reimbursement methodology outlined in this section applies to services provided by personal attendants that meet the following parameters.

(1) An employee or subcontractor of an HHSC contractor, or an employee of an employer in the Consumer Directed Services (CDS) option, who provides the following services, as described in 26 TAC §52.1 (relating to Application):

(A) services in the Community Attendant Services program;

(B) services in the Family Care program;

(C) services in the Primary Home Care program;

(D) DAHS;

(E) RC;

(F) services in the Community Living Assistance and Support Services Program:

(i) community first choice personal assistance services/habilitation (CFC PAS/HAB);

(ii) employment assistance;

(iii) habilitation (transportation) and prevocational services;

(iv) in-home respite;

(v) service planning team meeting; or

(vi) supported employment;

(G) in the DBMD Program:

(i) CFC PAS/HAB;

(ii) chore services;

(iii) employment assistance;

(iv) individualized skills and socialization services;

(v) in-home respite;

(vi) intervener (excluding intervener I, II, and III);

(vii) licensed assisted living;

(viii) licensed home health assisted living;

(ix) residential habilitation (transportation); or

(x) service planning team meeting;

(H) in the HCS Program:

(i) CFC PAS/HAB;

(ii) employment assistance;

(iii) employment readiness;

(iv) individualized skills and socialization services;

(v) in-home and out-of-home respite;

(vi) supported employment;

(vii) supported home living (transportation); or

(viii) SL/RSS; and

(I) in the Texas Home Living Program:

(i) CFC PAS/HAB;

(ii) community support services (transportation);

(iii) employment assistance;

(iv) employment readiness;

(v) individualized skills and socialization services;

(vi) in-home and out-of-home respite; or

(vii) supported employment.

(2) An employee or subcontractor of an HHSC contractor who provides the following services in the Home and Community-Based Services--Adult Mental Health (HCBS-AMH) program, as described in 26 TAC §307.51 (relating to Purpose and Application):

(A) assisted living services;

(B) employment assistance;

(C) in-home respite;

(D) supported employment;

(E) supported home living services; or

(F) supervised living services.

(3) An employee or subcontractor of an HHSC contractor or an employee of an employer in the CDS option who provides:

(A) personal care services, as described in Chapter 363, Subchapter F of this title (relating to Personal Care Services); or

(B) CFC habilitation (CFC HAB) or CFC personal assistance services (CFC PAS), as described in Chapter 354, Subchapter A, Division 27 of this title (relating to Community First Choice).

(4) A provider, which has the meaning assigned in §353.2 of this title (relating to Definitions), or an employee of an employer in the CDS option who provides:

(A) in the STAR+PLUS program and STAR+PLUS Home and Community-based Services (HCBS) program:

(i) assisted living;

(ii) CFC PAS;

(iii) CFC HAB;

(iv) employment assistance;

(v) DAHS;

(vi) in-home respite care;

(vii) personal assistance services;

(viii) protective supervision; or

(ix) supported employment;

(B) in the STAR Health program and Medically Dependent Children Program (MDCP):

(i) CFC PAS;

(ii) CFC HAB;

(iii) employment assistance;

(iv) DAHS;

(v) flexible family support;

(vi) in-home respite;

(vii) personal care services; or

(viii) supported employment; and

(C) in the STAR Kids program and MDCP:

(i) CFC PAS;

(ii) CFC HAB;

(iii) employment assistance;

(iv) DAHS;

(v) flexible family support;

(vi) in-home respite;

(vii) personal care services; or

(viii) supported employment.

(5) An employee or subcontractor of an HHSC contractor, who provides ICF/IID program services, as described in 26 TAC §261.203 (relating to Definitions).

(e) Determination of attendant cost component. The attendant cost component is calculated as follows.

(1) For all programs with services as specified in subsection (d) of this section, except for DBMD, HCBS-AMH, HCS, ICF/IID, and TxHmL programs, HHSC will calculate an attendant cost rate component by calculating a median of attendant cost center data for each applicable attendant service, weighted by the applicable attendant service's units of service from the most recently examined cost report database for each program, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter (related to Determination of Inflation Indices).

(A) The weighted median cost component is multiplied by 1.044 for all attendant services specified in subsection (d) except for DAHS, RC, and STAR+PLUS ALF services. For these services, the weighted median cost component is multiplied by 1.07. The result is the attendant cost rate component.

(B) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing approach as defined in §355.105(h) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(C) For DBMD and HCBS-AMH, the attendant cost component is modeled according to subparagraph (B) of this paragraph unless HHSC collects a cost report for the applicable program.

(2) For ICF/IID program services, HHSC will calculate an attendant cost rate component for day habilitation (DH) and residential services by calculating a median of attendant cost center data as defined in subsection (b) of this section for each DH and Residential services, weighted by ICF/IID units of service from the most recently examined ICF/IID cost report database, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter.

(A) The weighted median attendant cost component is adjusted by modeled direct care hours to unit ratios to determine attendant compensation rate components for each level of need (LON).

(B) The weighted median cost component is multiplied by 1.07 for both ICF/IID DH and residential services.

(C) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing analysis as defined in §355.105(h) of this chapter.

(3) For HCS and TxHmL programs, HHSC will calculate an attendant compensation rate component for each service by calculating a median of attendant cost center data as defined in subsection (b) of this section for each applicable attendant service, weighted by the applicable attendant service's units of service from the most recently examined HCS/TxHmL cost report database, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter.

(A) The weighted median cost component is multiplied by 1.044 for the following services:

(i) CFC PAS/HAB;

(ii) employment assistance;

(iii) in-home respite;

(iv) out-of-home respite in a camp;

(v) out-of-home respite in a respite facility;

(vi) out-of-home respite in a setting where host home / companion care (HH/CC) is provided;

(vii) out-of-home respite in a setting that is not listed;

(viii) supported employment; and

(ix) supported home living (transportation).

(B) The weighted median cost component is multiplied by 1.07 for the following services:

(i) individualized skills and socialization services;

(ii) out-of-home respite in an individualized skills and socialization facility;

(iii) out-of-home respite in a setting with SL or RSS is provided; and

(iv) SL/RSS.

(C) For services with rates that are variable by LON as specified in §355.723(b) of this chapter (relating to Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs), the weighted median attendant cost component is adjusted by modeled direct care hours to unit or direct care staff to individual ratios to determine attendant compensation rate components for each LON.

(D) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing analysis as defined in §355.105(h) of this chapter.

(E) The attendant cost component for employment readiness is calculated as a blend of the cost component for individualized skills and socialization services.

(f) Determination of attendant cost component for CDS option services. Attendant services delivered through the CDS option as specified in subsection (d) of this section have an attendant cost component that is equal to the attendant cost component of the same service delivered through the provider agency option as specified in §355.114 of this chapter (relating to Consumer Directed Services Payment Option).

(g) The adopted attendant cost rate component is limited to available levels of appropriated state and federal funds as specified in §355.201 of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid).

**History**
- *Source Note: The provisions of this §355.7052 adopted to
be effective September 11, 2025, 50 TexReg 5899.*

#### **Subchapter I** REPORTING

##### **1 Tex. Admin. Code § 355.7201** Novel Coronavirus (COVID-19) Fund Reporting {#sec-355.7201 omnilex-key=us-tx-regs-official--title-1--355.7201}

(a) Introduction. The Texas Health and Human Services Commission (HHSC) collects semi-annual reports from hospitals and nursing facilities to compile legislatively-mandated reports. This section outlines the reporting requirements related to novel coronavirus (COVID-19) federal fund reporting. This section also describes the circumstances in which penalties and recoupments will be necessary for certain provider types for failure to submit required semi-annual reports.

(b) Definitions. Unless the context clearly indicates otherwise, the following words and terms, when used in this section, are defined as follows.

(1) Authorized representative--An organization or person authorized to report on behalf of a hospital or nursing facility.

(2) HHSC--The Texas Health and Human Services Commission, or its designee.

(3) Hospital--A licensed public or private institution as defined in Chapter 241 of the Texas Health and Safety Code or licensed under Chapter 577 of the Texas Health and Safety Code.

(4) Nursing facility--A licensed public or private institution to which Chapter 242, Texas Health and Safety Code, applies.

(c) Reporting requirements. Hospitals and nursing facilities are required to report COVID-19 related Federal Funds received, including funds under the Coronavirus Aid, Relief, and Economic Security Act (15 U.S.C. §9001 et seq.), the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260), and the American Rescue Plan Act of 2021 (Pub. L. No. 117-2). HHSC may also request additional information related to direct or indirect costs associated with COVID that have impacted the provider's business operation and any other information HHSC deems necessary to appropriately contextualize the moneys received as described in this subsection. HHSC will collect information based on legislative direction.

(d) Designation of authorized representative. A hospital or nursing facility may designate an authorized representative to report on behalf of that hospital or nursing facility. A document, which may take the format of a consolidated list such as a spreadsheet, must be submitted to HHSC and must:

(1) identify that the institution has designated the authorized representative;

(2) identify all institutions that have designated the authorized representative to serve in that capacity; and

(3) contain the name of the representative of the institution that designated the authorized representative.

(e) Report submission and consolidation options. An authorized representative for a hospital or nursing facility may submit the required reports to HHSC in the following manner.

(1) For institutions that received no COVID-19 related Federal Funds during the reporting period, the authorized representative must submit a consolidated report for all institutions reflecting $0 received; or

(2) For institutions that received COVID-19 related Federal Funds during the reporting period, the authorized representative must submit an individual report for each institution that received funding.

(f) Frequency of reporting.

(1) Submission of data will be required on a semi-annual basis.

(2) The first semi-annual report is due by March 1, 2024, and will be for the period of September 1, 2023, through January 31, 2024.

(3) Subsequent semi-annual reports will be due on September 1, 2024, and March 1, 2025.

(g) HHSC legislatively-mandated reports. HHSC will compile reports based on submitted data and submit the reports on a semi-annual basis to the Governor, Legislative Budget Board, and any appropriate standing committee in the Legislature. Semi-annual reports will be submitted June 1, 2024; December 1, 2024; and June 1, 2025.

(h) Penalties for failure to report. Specified providers are required to report information as requested on a semi-annual basis to HHSC.

(1) A hospital or nursing facility that does not report the requested information will be identified by name, including a unique identifying number, such as a National Provider Identification number, Facility Identification Number, or License Number, in HHSC's legislatively-mandated reports.

(2) Appropriations in the 2024-25 General Appropriations Act, House Bill 1, 88th Legislature, Regular Session, 2023 (Article II, HHSC, Rider 150), Strategy A.2.4, Nursing Facility Payments, for fiscal year 2025 are contingent on the submission of the report due June 1, 2024. If HHSC is unable to utilize appropriations for nursing facilities from Strategy A.2.4 as a result of insufficient reporting from nursing facilities, HHSC will suspend all payments to nursing facilities until such a time as HHSC is authorized to continue making expenditures under Strategy A.2.4.

(i) Duration. This reporting requirement ends on August 31, 2025, or as specified by HHSC.

**History**
- *Source Note: The provisions of this §355.7201 adopted to be effective November 8, 2021, 46 TexReg 7571; amended to be effective February 22, 2024, 49 TexReg 861.*

#### **Subchapter L** LOCAL FUNDS MONITORING

##### **1 Tex. Admin. Code § 355.8701** Purpose {#sec-355.8701 omnilex-key=us-tx-regs-official--title-1--355.8701}

(a) As part of the oversight required by federal and state law, the Texas Health and Human Services Commission (HHSC) requires all non-federal share funds that are provided by governmental entities as the non-federal share of Medicaid supplemental and directed payments, to report the source of such funds.

(b) HHSC will use the information reported under this subchapter along with information already collected by HHS to comply with state and federal law and associated reporting requirements. HHSC may publish the information on the HHSC website at HHSC's discretion.

**History**
- *Source Note: The provisions of this §355.8701 adopted to be effective May 19, 2022, 47 TexReg 2849; amended to be effective November 6, 2024, 49 TexReg 8704.*

##### **1 Tex. Admin. Code § 355.8702** Definitions {#sec-355.8702 omnilex-key=us-tx-regs-official--title-1--355.8702}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Centers for Medicare & Medicaid Services (CMS)--The federal agency within the United States Department of Health and Human Services responsible for overseeing and directing Medicare and Medicaid.

(2) Certified Public Expenditure (CPE)--An expenditure certified by a governmental entity to represent its contribution of public funds in providing services that are eligible for federal matching Medicaid funds.

(3) Federal Fiscal Year (FFY)--A 12-month period beginning October 1 and ending September 30.

(4) Governmental entity--A governmental entity is defined as:

(A) a state agency; or

(B) a political subdivision of the state, including a hospital authority, hospital district, health district, city, county, local education agency (as defined in paragraph (10) of this section), or other unit of local government as established by Texas statute; may also be referred to as a Local Governmental Entity (LGE).

(5) Health care provider--The individual or entity that receives a Medicaid payment or payments for health care items or services provided or an entity related to such a health care provider.

(6) HHS--The Texas Health and Human Services system. For the purposes of this subchapter, unless specifically stated otherwise, the HHS system includes HHSC and the Texas Department of State Health Services.

(7) HHSC--The Texas Health and Human Services Commission.

(8) Interested party--A governmental entity that has non-federal share funds under review, as contemplated by this chapter.

(9) Intergovernmental Transfer (IGT)--A transfer of public funds from a governmental entity to HHSC.

(10) Local Education Agency (LEA)--A Texas independent school district or public charter school.

(11) Non-federal share--The portion of Medicaid program expenditures that is not federal funds. The non-federal share is equal to 100 percent minus the federal medical assistance percentage (FMAP) for Texas for the state fiscal year corresponding to the program year and for the population served.

(12) Post-determination review--The informal verification of an action or determination by HHSC under this chapter requested by an interested party.

**History**
- *Source Note: The provisions of this §355.8702 adopted to be effective May 19, 2022, 47 TexReg 2849; amended to be effective November 6, 2024, 49 TexReg 8704.*

##### **1 Tex. Admin. Code § 355.8703** Applicability {#sec-355.8703 omnilex-key=us-tx-regs-official--title-1--355.8703}

(a) This subchapter applies to local funding provided to HHSC by a governmental entity for use as the non-federal share of Medicaid payments through intergovernmental transfer (IGT) or Certified Public Expenditure (CPE).

(b) To the extent that an electronic annual survey, detailed in §355.8704 of this subchapter (relating to Reporting and Monitoring), is not open for reporting at the applicable start date of the reporting period, governmental entities will be contacted by HHSC and given 30 days from the date of the notice to provide any requested information or documentation in a format prescribed by HHSC.

**History**
- *Source Note: The provisions of this §355.8703 adopted to be effective May 19, 2022, 47 TexReg 2849; amended to be effective November 6, 2024, 49 TexReg 8704.*

##### **1 Tex. Admin. Code § 355.8704** Reporting and Monitoring {#sec-355.8704 omnilex-key=us-tx-regs-official--title-1--355.8704}

(a) A governmental entity that provides funds for use as the non-federal share in the Medicaid program must report information to the Texas Health and Human Services Commission (HHSC) in a form and format to be determined by HHSC.

(b) The information must be reported at least annually, no later than October 31, or upon request by HHSC.

(c) HHSC will review reported information based on governmental entity funding sources, including:

(1) local provider participation funds (LPPFs) authorized by the Texas Health and Safety Code Chapter 288 *et seq.* or other provider tax structures;

(2) non-LPPF provider taxes;

(3) ad valorem tax revenue;

(4) patient revenue;

(5) donations; and

(6) other local funding sources.

(d) HHSC will use the information from the report to monitor each governmental entity's funding sources and determine the likelihood that the funds are permissible for use in the Medicaid program. The monitoring will include the following:

(1) Survey. An electronic annual survey that will request the following:

(A) a list of all Medicaid programs and health care providers (including name, type, and ownership status) for which the governmental entity transferred or certified funds as the non-federal share;

(B) the relationship between the governmental entity and each health care provider, including a copy of any formal or informal agreements between the governmental entity and the health care provider;

(C) the source of the funds used as the non-federal share transferred by the governmental entity;

(D) information on any debt instruments (i.e., bonds, loans, etc.) that a governmental entity utilizes and the relationship of the instrument to any transferred funds;

(E) to the extent patient revenue is used, a description of payor mix (i.e., Medicaid, Medicare, commercial, uninsured, self-pay, etc.) during the federal fiscal year (FFY) and any anticipated changes;

(F) any transfer of funds or provision of services from a health care provider or entity related to a health care provider to the governmental entity, including in-cash or in-kind donations, or any other transfer of value;

(G) overview of funds received from all sources available to the governmental entity during the FFY;

(H) other information as determined necessary and appropriate to determine compliance with federal or state statutes and regulations, including attestations of compliance from the local government; and

(I) any publicly available information, such as:

(i) recordings of discussions or written minutes from public meetings to set assessment rates or gather feedback from health care providers or their representatives;

(ii) correspondence describing the governmental entity's funding transferred to HHSC for use in the Medicaid program;

(iii) links to websites that describe the funds used as the non-federal share or any agreement between the governmental entity and a health care provider or entity related to a health care provider; and

(iv) copies of any public notices, local orders, announcements, or other related documentation.

(2) Risk Assessment.

(A) The risk assessment will include:

(i) a risk assessment score based on self-reported annual survey responses; and

(ii) any adjustments made at HHSC's discretion based on supplemental documentation and discussion with the impacted governmental entity and review of additional documentation requests as may be needed, in HHSC's sole discretion, to confirm, audit, or modify self-reported data and qualitative descriptions.

(B) The funds used as the non-federal share will be categorized as likely permissible, further review required, or likely impermissible based on a review of a governmental entity's funding sources. HHSC may elect to contact entities whose funding sources are categorized as further review required or likely impermissible to obtain additional information. The entity must furnish the requested information to HHSC within 10 business days of the date of the request.

(i) Likely permissible. Funding source appears to comply with federal and state statutes and regulations.

(ii) Further review required. Funding source compliance with federal and state statutes and regulations is unclear.

(iii) Likely impermissible. Funding source does not appear to comply with federal or state regulations.

(3) In-depth Review. HHSC will select a sample of survey respondents for an in-depth review in which HHSC may examine supporting documentation, either on-site or electronically, at HHSC's discretion. HHSC will select a sample of survey respondents sufficient to result in a 95 percent confidence level with a 5 percent margin of error. HHSC will select entities based on an initial risk assessment, and if additional entities are necessary to complete the required sample size, they will be randomly selected. HHSC will notify a governmental entity if an on-site review will occur at least 10 calendar days prior to the visit.

(4) Determination. HHSC will notify the governmental entity upon determination of the following:

(A) reporting compliance;

(B) risk assessment score;

(C) funding source category pursuant to paragraph (2)(B) of this subsection.

(5) Post-Determination Review. Post-determination review will be conducted as outlined in §355.8705 of this subchapter (relating to Post-Determination Review).

(6) Federal Reporting.

(e) If a governmental entity fails to submit the required information or supplemental documentation as requested by HHSC by the deadline specified in this section, HHSC may refuse further transfer of funds for any Medicaid program from the governmental entity until the reporting requirement is satisfied and may process recoupments for any payments resulting from funds transferred determined to be non-compliant.

(f) Prior to the applicable deadline, a governmental entity may request an extension of up to 10 business days for any deadline contained in this subchapter. HHSC may grant or reject such request at its sole discretion.

(g) After review of any additional information provided, HHSC may also seek input on the likely permissibility of the funds from the Centers for Medicare & Medicaid Services (CMS). In the event HHSC elects to request input from CMS regarding the compliance of a specific funding source as contemplated by this subchapter, HHSC will notify the governmental entity prior to requesting such review. HHSC may, at its discretion, accept or reject local funds from any governmental entity; however, HHSC will reject funding and recoup all Medicaid payments supported by a governmental entity's funding source that CMS deems impermissible if CMS requires HHSC to do so.

(h) If a governmental entity is determined not to have met the reporting requirements, or to have falsified any data in its reporting, HHSC may refuse transfers from the governmental entity, and payments to health care providers resulting from prior transfers may be recouped.

**History**
- *Source Note: The provisions of this §355.8704 adopted to be effective May 19, 2022, 47 TexReg 2849; amended to be effective November 6, 2024, 49 TexReg 8704.*

##### **1 Tex. Admin. Code § 355.8705** Post-Determination Review {#sec-355.8705 omnilex-key=us-tx-regs-official--title-1--355.8705}

(a) An interested party who disputes a determination under §355.8704(d)(4) of this subchapter (relating to Reporting and Monitoring) may request post-determination review under this section.

(b) The purpose of a post-determination review is to provide for the informal and efficient resolution of the matter(s) in dispute. A post-determination review is not a formal administrative hearing and is conducted according to the following procedures:

(1) The Texas Health and Human Services Commission (HHSC) must receive a request for a post-determination review electronically to PFD_LFM@hhs.texas.gov no later than 30 calendar days from the date of a notification under §355.8704(d)(4) of this subchapter. If the 30th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 30th calendar day is the final day the receipt of the written request will be accepted. HHSC will extend this deadline for an additional 15 days if it receives a request for the extension prior to the initial 30-day deadline. A request for a post-determination review or extension that is not received by the stated deadline will not be accepted.

(2) An interested party must, with its request for a post-determination review, submit a concise statement of the specific determinations it disputes, its recommended resolution, and any supporting documentation the interested party deems relevant to the dispute. It is the responsibility of the interested party to render all pertinent information at the time it submits its request for a post-determination review. A request for a post-determination review that does not meet the requirements of this subparagraph will not be accepted.

(3) The written request for the post-determination review or extension must be requested by an employee, board member, or elected official of the Local Governmental Entity (LGE). A request for a post-determination review or extension that is not requested by an employee, board member, or elected official of the LGE will not be accepted.

(4) On receipt of a request for post-determination review that meets the requirements of this section, HHSC will:

(A) acknowledge receipt of the request to the requestor; and

(B) coordinate the review of the information submitted by the interested party and may request additional information from the interested party, which must be received no later than 14 calendar days from the date of the written request for additional information.

(i) If the 14th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 14th calendar day is the final day the receipt of the additional information will be accepted.

(ii) Information received after 14 calendar days may not be used in the post-determination review decision unless the interested party requests an extension and receives written approval from HHSC staff to submit the information after 14 calendar days. HHSC must receive a request for an extension to the 14-calendar-day due date prior to the 14th calendar day.

(iii) HHSC may make subsequent requests for additional information. If HHSC makes a subsequent request for additional information, the timeframes for submission and receipt of the information apply just as they applied to the initial request for additional information.

(5) Upon receipt and review of all requested supplemental information, HHSC will provide a final decision no later than 180 days after receipt of the request or receipt of supplemental information, whichever is later. An interested party may request an update on the status of the post-determination review at any time.

**History**
- *Source Note: The provisions of this §355.8705 adopted to be effective May 19, 2022, 47 TexReg 2849; amended to be effective November 6, 2024, 49 TexReg 8704.*

##### **1 Tex. Admin. Code § 355.8706** State and Federal Reporting {#sec-355.8706 omnilex-key=us-tx-regs-official--title-1--355.8706}

The Texas Health and Human Services Commission (HHSC) may adjust the frequency and content of reports requested by HHSC related to local funds monitoring efforts in this subchapter as necessary to comply with any state or federal reporting requirements.

**History**
- *Source Note: The provisions of this §355.8706 adopted to be effective May 19, 2022, 47 TexReg 2849.*

##### **1 Tex. Admin. Code § 355.8707** Notification Requirements for the Creation of a Local Provider Participation Fund (LPPF) {#sec-355.8707 omnilex-key=us-tx-regs-official--title-1--355.8707}

(a) A local government, as defined in Texas Health and Safety Code Chapter 300, or a district, as defined in Texas Health and Safety Code Chapter 300A, that creates a new local provider participation fund (LPPF) as authorized by those chapters must send HHSC notice of the creation of a new LPPF according to the following procedures.

(1) HHSC must receive notice of a newly created LPPF electronically to PFD_LFM@hhs.texas.gov no later than 10 business days from the date of the local government or district's creation of the LPPF.

(2) The notice must contain the following.

(A) Contact information for at least two employees, board members, or elected officials of the local government or district authorized to implement an LPPF, as well as any individuals the local government or district authorizes to receive informational updates related to LPPF formation and reporting. Contact information shall include:

(i) full names;

(ii) titles and description of involvement with the LPPF (if not an employee, board member, or elected official of the local government or district);

(iii) email addresses; and

(iv) phone numbers.

(B) Audio recordings of discussions or written minutes from public meetings, such as commissioner's court meetings or hospital district board meetings, that document the approval of LPPF formation and any associated rate setting.

(C) Resolution approving rules and procedures for LPPF mandatory assessment payments.

(D) Resolution authorizing the formation of the LPPF, collection of a mandatory assessment payment, and use of funds from the mandatory assessment payments.

(E) Public notices from a hardcopy or digital source, such as a newspaper article, notifying providers in the jurisdiction of the intent to create an LPPF and set associated rates.

(F) Copies of written notice provided to the chief operating officer of each provider that will be required to pay a mandatory assessment.

(G) Invoices or other records of LPPF mandatory assessments and payments received from providers, if any, have been made at the time notice is provided to HHSC.

(H) Any agreements between the local government or district implementing the LPPF (including a local government that created the district under Texas Health and Safety Code §300A.0021) and a health care provider or entity related to a health care provider that is required to pay a mandatory assessment, if applicable.

(3) On receipt of a notice for the creation of an LPPF, HHSC:

(A) acknowledges receipt of the notice to the local government or district; and

(B) reviews the information submitted by the local government or district.

(i) HHSC may request additional information from the local government or district. The additional information must be received by HHSC no later than 10 business days from the date of the written request for additional information.

(ii) HHSC will extend this deadline for an additional 10 business days if it receives a request for the extension prior to the initial 10 business day due date. A request for an extension that is not received by the stated deadline will not be accepted.

(4) No local government or district may transfer local funds generated by an LPPF to HHSC via intergovernmental transfer (IGT) until it has completed the following steps.

(A) Notify HHSC of the creation of the LPPF in accordance with this section and receive acknowledgment of receipt from HHSC.

(B) Provide HHSC documentation that the governmental entity has completed the following:

(i) Established a distinct bank account for the LPPF that is not commingled with other funds of the governmental entity.

(ii) Established a unique TEXNET account for the LPPF through the Texas Comptroller of Public Accounts that allows transfers from only the distinct bank account identified in clause (i) of this subparagraph.

(iii) Emailed PFD_Payments@hhs.texas.gov to confirm that the bank account HHSC has on file for issuing LPPF account refunds matches the distinct bank account identified in clause (i) of this subparagraph.

(C) Provide HHSC with any additional information requested by HHSC as provided in this section.

(b) Any local government or district that creates an LPPF is subject to annual reporting requirements under 1 TAC Chapter 355, Subchapter L (relating to Local Funds Monitoring).

**History**
- *Source Note: The provisions of this §355.8707 adopted to be effective July 26, 2023, 48 TexReg 3987; amended to be effective November 6, 2024, 49 TexReg 8704.*

### **Chapter 356** MEDICAID AND CHIP ELECTRONIC HEALTH INFORMATION

#### **Subchapter A** MEDICAID ELECTRONIC HEALTH RECORD

##### **1 Tex. Admin. Code § 356.101** Data for the Medicaid Eligibility and Health Information System {#sec-356.101 omnilex-key=us-tx-regs-official--title-1--356.101}

(a) The Medicaid Eligibility and Health Information System (MEHIS) is a statewide system designed to improve the quality, safety, and efficiency of health-care services provided under the Medicaid program. The Texas Health and Human Services Commission (HHSC) will utilize the system to replace the paper Medicaid identification form with a permanent plastic card, automate eligibility verification, provide an electronic health record (EHR) for Medicaid recipients, offer electronic prescribing functionality, and establish a foundation for future health information exchange for improved efficiency, continuity of care, and health outcomes.

(b) The MEHIS EHR includes the following key data elements as they become available electronically to HHSC:

(1) Eligibility data to include the same data found on the former paper Medicaid identification form, which is described by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) 270/271 eligibility transaction;

(2) Claims and encounter data for Medicaid-enrolled clients;

(3) Immunization data;

(4) Prescription drug history;

(5) Texas Health Steps (THSteps) information, including completed, pending, and past due THSteps services;

(6) Laboratory data; and

(7) Other health history information.

(c) The MEHIS maintains the confidentiality of patient health records in compliance with all applicable state and federal laws.

**History**
- *Source Note: The provisions of this §356.101 adopted to be effective February 1, 2011, 35 TexReg 11848.*

#### **Subchapter B** MEDICAID ELECTRONIC HEALTH RECORD INCENTIVE PAYMENT PROGRAM

##### **1 Tex. Admin. Code § 356.201** General Provisions {#sec-356.201 omnilex-key=us-tx-regs-official--title-1--356.201}

The American Reinvestment and Recovery Act of 2009 (Pub.L. 111-5), Division B, title IV, section 4201, Medicaid Providers Health Information Technology (HIT) Adoption and Operation Payments, authorizes states, at their option, to provide incentive payments to Medicaid providers for the meaningful use of certified electronic health record (EHR) technology. On or after January 1, 2011, the Texas Health and Human Services Commission will implement a Medicaid EHR incentive payment program in accordance with the applicable provisions in 42 Code of Federal Regulations Part 495. The purpose of the incentive program is to promote the adoption and meaningful use of interoperable health information technology and qualified electronic health records. Detailed information on how to qualify for this program and receive EHR incentive payments will be found in the *Texas Medicaid Provider Procedures Manual.*

**History**
- *Source Note: The provisions of this §356.201 adopted to be effective February 1, 2011, 35 TexReg 11849.*

##### **1 Tex. Admin. Code § 356.202** Audit Review and Recoupment {#sec-356.202 omnilex-key=us-tx-regs-official--title-1--356.202}

(a) Introduction. This section describes the policies HHSC will follow related to the review of audit findings and recoupment of overpayments in the Texas Medicaid Electronic Health Record (EHR) Incentive Program.

(b) Review of audit findings. A review of audit findings is limited to the reviews provided for in §354.1450 of this title (relating to Audits of Medicaid Providers).

(c) Recoupment. HHSC will recoup an EHR incentive payment if it was paid in excess of what a Medicaid provider is eligible to receive under the Texas Medicaid EHR Incentive Program, including a payment resulting from HHSC error or a payment that is identified as part of an audit.

**History**
- *Source Note: The provisions of this §356.202 adopted to be effective April 20, 2014, 39 TexReg 2833.*

### **Chapter 357** HEARINGS

#### **Subchapter A** UNIFORM FAIR HEARING RULES

##### **1 Tex. Admin. Code § 357.1** Definitions {#sec-357.1 omnilex-key=us-tx-regs-official--title-1--357.1}

The following words and phrases, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise:

(1) Across the Board Reduction of Services--The agency need not grant a hearing if the sole issue is a Federal or State law requiring an automatic change adversely affecting some or all recipients.

(2) Action Effective Date--The date the agency action becomes effective.

(3) Adequate Notice--Notice in accordance with applicable law, rules, and regulations of the programs.

(4) Agency--Any one of the agencies listed under the Health and Human Services Agencies.

(5) Agency Action--The agency's decision to:

(A) reduce, suspend, terminate or deny benefits or eligibility;

(B) deny certification of a household; or

(C) grant a benefit in an amount less than requested.

(6) Agency Representative--An individual from an agency or its designee who is authorized to represent the agency or its designee in a fair hearing.

(7) Appeal--A request for a review of an agency action or failure to act that may result in a fair hearing.

(8) Appellant--A client who requests a fair hearing.

(9) Authorized Representative--A person designated by the appellant in writing or designated by statute, regulation, or rule or named by the appellant on the record who may act on behalf of the appellant at the fair hearing.

(10) Benefit--A service administered or assistance provided by the agencies or their designees, including determining eligibility for services in the SNAP, TANF, and Medicaid-funded programs, and other agency programs in which state or federal law or rules provide a client the right to a fair hearing.

(11) Certified Spanish/English Interpreter--An interpreter who is certified by one of the following entities:

(A) American Translators Association;

(B) Federally Certified Court Interpreter through the Federal Court Interpreter Certification Examination;

(C) Interpreter Certification offered through a four-year college or university;

(D) State Certification Programs;

(E) United States Department of State (Escort, Seminar, or Conference level); or

(F) Any other nationally recognized certification program.

(12) CFR--Code of Federal Regulations.

(13) Client--A person who applies for or receives benefits from one of the HHS Agencies.

(14) Date of Appeal Request--The date on which the appellant or the appellant's authorized representative clearly expresses, in writing or orally as required, a desire to appeal.

(15) Date of Decision--The date of the hearings officer's decision, as noted on the decision document.

(16) Date of Notice of Agency Action--The date on the written notice informing the client of the agency action.

(17) Day--Calendar day, unless otherwise specified.

(18) Designee--A contractor, employee, or other agent designated to act for an agency.

(19) Fair Hearing--An informal proceeding held before an impartial HHSC hearings officer in which a client appeals an agency action. These hearings are not open to the public.

(20) Health and Human Services (HHS) Agencies:

(A) Health and Human Services Commission (HHSC);

(B) Department of Aging and Disability Services (DADS);

(C) Department of Assistive and Rehabilitative Services (DARS);

(D) Department of Family and Protective Services (DFPS);

(E) Department of State Health Services (DSHS); and

(F) A reference to an agency includes a designee.

(21) Health Plan--Includes managed care organizations.

(22) Hearings Administrator--The administrator for fair and fraud hearings in the HHSC Appeals Division who oversees daily operations and staff conducting fair hearings.

(23) Hearings Officer--An HHSC employee designated by the Director of the Appeals Division who is responsible for conducting fair hearings and issuing decisions.

(24) Language Services--Any services that ensure effective communication for full participation of all parties in a hearing.

(25) Managed Care Organization (MCO)--Has the meaning defined in §353.2 of this title (relating to Definitions).

(26) Nursing Home Action--The nursing home's decision to transfer or discharge a client.

(27) Party--An appellant or his authorized representative or an agency or its representative.

(28) PASARR--Pre-Admission Screening and Resident Review Determination.

(29) Preponderance--The greater weight of the evidence required in a civil lawsuit for the trier of fact to decide in favor of one side or the other. This preponderance is based on the more convincing evidence and its probable truth or accuracy, and not on the amount of evidence.

(30) Person with Limited English Language Proficiency (LEP)--Person who does not speak English as a primary language and who has a limited ability to read, speak, write, or understand English.

(31) Prior Authorization Request--A request for services that is reimbursable only if authorization or approval for the services is obtained before services are rendered.

(32) SNAP--Supplemental Nutrition Assistance Program, formerly known as Food Stamps.

(33) TANF--Temporary Assistance for Needy Families.

(34) Texas Health Steps (THSteps)--A program under Medicaid that provides medical and dental check-ups, diagnosis, and treatment to eligible clients from birth through age 20. THSteps was formerly known as EPSDT.

**History**
- *Source Note: The provisions of this §357.1 adopted to be effective June 29, 2009, 34 TexReg 4292; amended to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 357.3** Authority and Right to Appeal {#sec-357.3 omnilex-key=us-tx-regs-official--title-1--357.3}

(a) Health and Human Services (HHS) System Authority and Responsibilities.

(1) The Health and Human Services Commission (HHSC) is authorized by law to adopt and implement rules to administer the programs it oversees. These uniform fair hearing rules apply to the TANF program, the Supplemental Nutrition Assistance Program (formerly the Food Stamp Program), all Medicaid-funded services, and all other agency programs that are required by state or federal law or rules to provide the right to a fair hearing. HHSC delegates to the Appeals Division the authority to appoint hearings officers and to hear fair hearings.

(2) HHSC Appeals Division is responsible for:

(A) publishing fair hearing rules;

(B) receiving fair hearings appeal requests;

(C) conducting fair hearings; and

(D) issuing decisions.

(b) Right to Fair Hearing.

(1) Clients of Medicaid-funded services, TANF, the Supplemental Nutrition Assistance Program, and other agency programs in which state or federal law or rules provides a right to a fair hearing, are entitled to appeal the following actions:

(A) an action to reduce, suspend, terminate, or deny benefits or eligibility;

(B) a failure to act with reasonable promptness on a client's claim for benefits or services;

(C) a decision to transfer or discharge a resident from a skilled nursing facility or nursing facility;

(D) an adverse determination made regarding preadmission screening and resident review (PASARR);

(E) the denial of a prior authorization request; and

(F) the failure to reach a service authorization decision within the time period specified by federal law.

(2) Time for Fair Hearing. The client has the right to appeal:

(A) the current level of SNAP benefits anytime within SNAP certification period; and

(B) in all other actions, within 90 days from, the date on the notice of agency action, or the effective date of the agency action, whichever is later.

(3) Manner of Requesting Fair Hearing. The client may appeal more than one action at the same time and, unless otherwise provided in program rules or notices, in writing or orally.

(4) The Right to a Fair Hearing--Exceptions:

(A) Under the Supplemental Nutrition Assistance Program the household may request a fair hearing when it is aggrieved by a mass change in benefits.

(B) Under all other programs, the agency is not required to grant a hearing if the sole issue is a federal or state law requiring an automatic change adversely affecting some or all clients. This may be determined at a preliminary hearings conference.

(C) The client can appeal the application to him of an across-the-board reduction in benefits or services on the ground that he is not in the class affected by the automatic change.

**History**
- *Source Note: The provisions of this §357.3 adopted to be effective June 29, 2009, 34 TexReg 4292; amended to be effective June 14, 2010, 35 TexReg 5033.*

##### **1 Tex. Admin. Code § 357.5** Hearings Officer Responsibilities {#sec-357.5 omnilex-key=us-tx-regs-official--title-1--357.5}

(a) Fair hearings are conducted by an impartial hearings officer who:

(1) does not have a personal involvement in the case;

(2) was not involved in the initial determination of the action that is being contested; and

(3) was not the agency representative who took the action or the immediate supervisor of that representative.

(b) The hearings officer's supervisor may reassign the fair hearing to another officer.

(c) Responsibilities. The hearings officer conducts the fair hearing as an informal proceeding, not as a formal court hearing, and is not required to follow the Texas Rules of Evidence or the Texas Rules of Civil Procedure.

(1) General duties. The hearings officer:

(A) determines whether a client requested a fair hearing in a timely manner, or had good cause for failing to do so;

(B) schedules a pre-hearing conference to resolve issues of procedure, jurisdiction, or representation, if necessary;

(C) requires the attendance of agency representatives, or witnesses, if necessary;

(D) is prohibited from engaging in ex parte communication, whether oral or written, with a party or the party's representative or witness relating to matters to be adjudicated; and

(E) arranges for reasonable accommodations for disclosed disabilities.

(2) During the hearing, the hearings officer:

(A) makes the official recording of the hearing;

(B) ensures that the appellant's and agency's rights are protected;

(C) determines whether there is a need for an interpreter;

(D) limits the number of persons in attendance at the hearing if space is limited;

(E) controls the use by others of cameras, videos, or other recording devices;

(F) administers oaths and affirmations;

(G) ensures consideration of all relevant points at issue and facts pertinent to the appellant's situation at the time the action was taken;

(H) considers the appellant's changed circumstances, when appropriate and possible;

(I) requests, receives, and makes part of the record all relevant evidence;

(J) regulates the conduct and course of the fair hearing to ensure due process and an orderly hearing;

(K) conducts the hearing in a way that makes the appellant feel most at ease; and

(L) orders, if determined to be necessary, an independent medical assessment or professional evaluation to be paid for by the agency or the agency's designee.

(3) After the hearing, the hearings officer:

(A) makes a decision based on the evidence presented at the hearing;

(B) determines if the agency's or its designee's action is in compliance with statutes, policies, or procedures;

(C) allows the appellant to request and receive a copy of the recording at no charge;

(D) except as provided in subparagraph (E) of this paragraph, issues a timely written decision, and includes findings of fact, conclusions of law, pertinent statutes, and a final order;

(E) issues a decision in THSteps cases containing the purpose of the hearing, the legal authority, procedural history, summary of the evidence, findings of fact, conclusions of law, and relevant authorities; and

(F) to ensure compliance, orders the agency, its representative or designee to implement the order within the time limits specified in the relevant federal regulation, monitors compliance with the order, and notifies program management if the order is not implemented.

**History**
- *Source Note: The provisions of this §357.5 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.7** Agency and Designee Responsibilities {#sec-357.7 omnilex-key=us-tx-regs-official--title-1--357.7}

(a) The agency must:

(1) accept a request for a fair hearing submitted within 90 days from the date on the notice of agency action, or, under the Supplemental Nutrition Assistance Program, at any time during the SNAP certification period;

(2) notify the HHSC Appeals Division within five days of the date the client expresses a desire to appeal; and

(3) allow the client to appeal more than one action at the same time.

(b) The agency or the agency's representative or designee must:

(1) allow the appellant to review the appeal procedures in HHSC's policies;

(2) provide to the hearings officer and the appellant, at no cost, copies of all documentation and evidence to be used in the fair hearing;

(3) appear at the scheduled hearing;

(4) be prepared to explain and defend the decision or action taken against the appellant; and

(5) implement the hearings officer's final order within the time limit specified in the relevant federal regulation.

**History**
- *Source Note: The provisions of this §357.7 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.9** Burden of Proof in a Fair Hearing {#sec-357.9 omnilex-key=us-tx-regs-official--title-1--357.9}

The burden of proof in a fair hearing regarding a specific issue is proof by a preponderance of the evidence. The party that bears the burden of proof meets the burden if the stronger evidence, on the whole, favors that party, as determined by the hearings officer. Depending on the type of hearing, the following apply:

(1) The agency or its designee bears the burden of proof.

(2) The nursing facility bears the burden of proof in transfer and discharge hearings.

**History**
- *Source Note: The provisions of this §357.9 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.11** Notice and Continued Benefits {#sec-357.11 omnilex-key=us-tx-regs-official--title-1--357.11}

(a) The agency must:

(1) follow the notice requirements set forth in the appropriate state or federal law or regulation for the affected program;

(2) give clients timely and adequate notice, as appropriate, of the right to a fair hearing;

(3) explain the right of appeal;

(4) explain the procedures for requesting an appeal;

(5) explain the right to be represented by others, including legal counsel;

(6) provide information about legal services available in the community;

(7) continue benefits if required to do so by state or federal law or regulations of the affected program; and

(8) not reinstate or continue SNAP benefits if a client requests a fair hearing after the date his certification period has ended.

(b) In Medicaid cases, except as specifically provided in federal regulations, the following apply:

(1) The written notice to an individual of the individual's right to a hearing must:

(A) contain an explanation of the circumstances under which Medicaid is continued if a hearing is requested; and

(B) be mailed at least 10 days before the date the individual's Medicaid eligibility or service is scheduled to be terminated, suspended, or reduced, except as provided by federal rules.

(2) If a hearing is requested before the date a Medicaid recipient's service, including a service that requires prior authorization, is scheduled to be terminated, suspended, or reduced, the agency may not take that proposed action before a decision is rendered after the hearing unless:

(A) it is determined at the hearing that the sole issue is one of federal or state law or policy; and

(B) the agency promptly informs the recipient in writing that services are to be terminated, suspended, or reduced pending the hearing decision.

**History**
- *Source Note: The provisions of this §357.11 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.13** Appellant Rights and Responsibilities {#sec-357.13 omnilex-key=us-tx-regs-official--title-1--357.13}

(a) Requesting an Appeal. Only the appellant or the appellant's authorized representative has the right to appeal an action by an agency.

(b) During the appeal process, the appellant has the right to:

(1) reapply for assistance;

(2) receive continued benefits if required by state or federal regulation or statute;

(3) confer with supervisory staff within the appropriate agency about the case prior to the hearing;

(4) continue with the fair hearing after a case adjustment or correction is made;

(5) request that reasonable accommodations due to disability or language comprehension be provided at the hearing at no cost;

(6) make an audio recording of the fair hearing;

(7) examine at a reasonable time before the date of the hearing and during the hearing:

(A) the content of the appellant's case file; and

(B) all documents and records to be used by the agency or the skilled nursing facility or nursing facility at the hearing;

(8) review the appeal procedures outlined in agency policy; and

(9) request a copy of the official recording at no charge after the decision is issued.

(c) An appellant or an authorized representative or legal counsel may send written interrogatories or request a pre-hearing conference to get additional information. The written interrogatories must be clear and concise, contain no more than 30 questions, and be submitted no less than 20 days prior to the hearing.

(d) Procedural Rights. The appellant has the right to:

(1) present the case personally or with the aid of others, including but not limited to the appellant's representative or legal counsel;

(2) bring witnesses;

(3) present information about all pertinent facts and circumstances;

(4) present arguments or address anything about the case without undue interference;

(5) confront and cross-examine adverse witnesses; and

(6) submit documentary evidence to the hearings officer before, during, or after the hearing as allowed by the hearings officer. Evidence submitted after the hearing, if accepted, must be entered into the record and shared with all parties.

(e) Appellant's Responsibilities. The appellant or the appellant's authorized representative is responsible for:

(1) participating in the fair hearing; and

(2) informing the hearings officer prior to the fair hearing that the appellant needs an interpreter or other accommodation due to a disability.

**History**
- *Source Note: The provisions of this §357.13 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.15** Scheduling Hearings and Notice Requirements {#sec-357.15 omnilex-key=us-tx-regs-official--title-1--357.15}

(a) Scheduling:

(1) Except as provided by paragraph (2) of this subsection, the hearings officer schedules fair hearings in the order in which the requests are received and determines a reasonable date, time, and place for the fair hearing.

(2) For good cause, the hearings officer may schedule fair hearings other than in the order in which the requests were received.

(3) The hearings officer must expedite hearing requests as provided in §357.17(b) of this subchapter (relating to Types of Hearings).

(b) Notice Requirements. No less than 14 days prior to the fair hearing, the fair hearings office sends all parties notice of the date, time, and place of the scheduled hearing. The notice informs the appellant:

(1) of the basis for the action or intended action taken by the agency or its designee;

(2) of the fair hearing procedures;

(3) of the name, address, and telephone number of the person to notify in the event the appellant cannot attend the hearing;

(4) of legal services that may be available to provide representation at the hearing;

(5) of the requirement to contact the hearings officer before the scheduled hearing to request reasonable accommodations due to disability or language comprehension;

(6) that the fair hearing will be dismissed for failure to appear without good cause;

(7) that documents to be used in the fair hearing are available for appellant's examination at a reasonable time before, during, and after the hearing; and

(8) that the case file is available for review upon request.

**History**
- *Source Note: The provisions of this §357.15 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.17** Types of Hearings {#sec-357.17 omnilex-key=us-tx-regs-official--title-1--357.17}

(a) Telephone and In-Person Hearings.

(1) The hearings officer conducts fair hearings by telephone ensuring that all parties are able to hear and respond to each other;

(2) An appellant may request that a hearing be conducted in person; and

(3) The hearings officer determines whether good cause for an in-person hearing exists.

(b) Expedited Appeals. The following hearings are expedited:

(1) Hearings for Transients--Transient appeals are SNAP and/or TANF appeals submitted by an appellant who plans to move from the jurisdiction of the hearings officer before the hearing decision would normally be issued. An example of a transient appeal is an appeal filed by a household that includes migrant farm workers. The hearing must be held and a decision made within 15 working days from the date the hearings officer receives the hearing request if:

(A) the appellant agrees to the reduced notice of the time, date, and place of the hearing; and

(B) the hearings officer has sufficient information available to make a decision without requesting additional information.

(2) Hearings for Individuals Whose Health Is Jeopardized--Any individual who believes and can demonstrate that a delay in his Medicaid hearing could seriously jeopardize his life or health may request an expedited fair hearing. Except as provided in subparagraph (A) of this paragraph, an individual receiving Medicaid services through a managed care organization (MCO) must exhaust the MCO's expedited appeals process before requesting an expedited fair hearing from the Health and Human Services Commission (HHSC). An individual does not need to exhaust the MCO's expedited appeals process before requesting a fair hearing that follows HHSC's standard fair hearing processes.

(A) An MCO must send an individual who has requested an expedited appeal a written notice of the outcome of the appeal, or a written notice denying the request. The individual may request an expedited fair hearing if the MCO has not sent a notice by the following deadlines:

(i) for requests relating to ongoing medical or dental emergencies or denials of continued hospitalization, no later than one business day after the MCO received the request; or

(ii) for all other requests, no later than three business days after the MCO received the request.

(B) During the expedited appeals process, an MCO must comply with the requirements of 42 C.F.R. §438.420, regarding the continuation of benefits.

(c) Group Hearings--The hearings officer may consolidate hearings, upon request of multiple appellants, if the sole issue involved in the cases is one of Federal or State law or policy. In all cases except SNAP cases, the request must be in writing, signed by each appellant, and state the common issue(s). Requests for group hearings in SNAP cases may be made orally or in writing. An appellant may also withdraw from a group hearing at any time before a final decision is issued. If an appellant wishes to withdraw, he must submit a signed request in writing. Group hearings follow the same procedures as individual hearings.

**History**
- *Source Note: The provisions of this §357.17 adopted to be effective June 29, 2009, 34 TexReg 4292; amended to be effective January 27, 2013, 38 TexReg 291.*

##### **1 Tex. Admin. Code § 357.19** Other Procedures {#sec-357.19 omnilex-key=us-tx-regs-official--title-1--357.19}

(a) Postponement. The hearings officer considers a postponement for a hearing only if the appellant or his authorized representative contacts the appropriate appeals office before the scheduled hearing is to occur.

(1) SNAP Fair Hearings--The appellant is entitled to receive one postponement of up to 30 days. Additional postponements may be approved if the hearings officer determines that there is good cause.

(2) All other Fair Hearings--The hearings officer may postpone a fair hearing if the hearings officer determines that good cause exists.

(3) The hearings officer must state in writing the decision on the request to postpone and send it to the appellant and agency.

(b) Dismissals.

(1) The hearings officer dismisses the fair hearing if the appellant fails to appear at the scheduled hearing.

(2) The appellant will have 30 days to submit in writing a request to re-open the hearing and the reasons that he failed to appear at the scheduled fair hearing.

(3) The hearings officer will consider the request and determine whether the appellant had good cause for missing the scheduled hearing. If the hearings officer determines the appellant had good cause for failing to appear, the hearings officer will re-open the hearing and set a new hearing date.

(4) The hearings officer documents the dismissal in writing and sends the decision to the parties.

(c) Withdrawals.

(1) Only the appellant or his or her authorized representative can withdraw the request for appeal.

(2) The appellant or his or her authorized representative must make the request to withdraw in writing to the hearings officer, an agency representative, or designee.

(3) If the appellant or his authorized representative orally requests to withdraw the appeal, he must confirm the request in writing. If a written request is not submitted, the hearings officer must notify the appellant in writing that if the written request is not received within 10 days, the appeal will be withdrawn based upon the original oral request.

(4) An oral request to withdraw during a hearing will be accepted in lieu of a written withdrawal.

(5) If an appellant dies during the appeal process, the hearings officer considers the appeal withdrawn unless the hearings officer is notified that the authorized representative or the appellant's executor intends to pursue the appeal.

(d) Recessed Fair Hearings. Once the hearing has begun, the hearings officer may recess the hearings proceedings if the hearings officer finds good cause for the recess. Following notice to both sides, the hearings officer may reconvene the hearing, if necessary.

(e) Administrative Review. An administrative review of a hearings decision is provided as set forth in §§357.701 - 357.703 of this chapter (relating to Purpose and Application, Definitions and Process and Timeframes).

(f) Procedural Review. A procedural review is available to clients and applicants for hearings decisions relating to programs not covered under Chapter 31 (TANF), Chapter 32 (Medicaid), or Chapter 33 (Nutrition Assistance Programs) Human Resources Code.

(1) An appellant or his or her authorized representative may make a timely request for a review of the decision.

(2) A request for a review of the decision must be postmarked within 30 days of the date of notice of the hearings officer's decision, and must be addressed to the hearings administrator.

(3) The scope of the review is limited to determining whether the hearings officer followed laws, procedures, and program rules introduced in the hearing.

**History**
- *Source Note: The provisions of this §357.19 adopted to be effective June 29, 2009, 34 TexReg 4292; amended to be effective June 14, 2010, 35 TexReg 5033.*

##### **1 Tex. Admin. Code § 357.21** Interpreters in Fair Hearings {#sec-357.21 omnilex-key=us-tx-regs-official--title-1--357.21}

(a) Determining the Need for Interpreters.

(1) The hearings officer informs the appellant on the record that he will be provided an interpreter at no cost if the appellant can show that the appellant or required participants are not able to participate in the hearing due to a communication barrier.

(2) No interpreter is required if the hearings officer determines that all participants are sufficiently able to communicate so that no barrier is present.

(3) The basis of the hearings officer's decision will be stated on the record.

(b) Types of Interpreters.

(1) Spanish/English--HHSC Appeals Division uses a certified interpreter;

(2) Other Spoken languages--HHSC Appeals Division makes every effort to use the most qualified interpreter for a person with limited English proficiency whose native language is not English or Spanish;

(3) Sign Language--HHSC Appeals Division provides a qualified sign language interpreter for a person who is hearing impaired and requests the service; and

(4) Other Methods of Interpretation--If required by the circumstances, the HHSC Appeals Division will arrange to provide other assistance in accordance with Commission policy.

(c) Effectiveness of Interpretation. If a party or authorized representative, during a fair hearing, makes a legitimate objection concerning the interpretation by an interpreter, the hearings officer:

(1) informs the authorized representative and the appellant of the right to request that the case be reheard;

(2) addresses the objection or complaint concerning the quality of the interpretation, including a request to rehear the case;

(3) finishes the hearing with the original interpreter; or

(4) provides a new interpreter at a later date.

**History**
- *Source Note: The provisions of this §357.21 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.23** Hearings Officer Decision and Actions {#sec-357.23 omnilex-key=us-tx-regs-official--title-1--357.23}

(a) Time Limits for Issuing Decisions.

(1) SNAP hearings--60 days from the date the appeal request is received by the agency or designee.

(2) Non-SNAP hearings--90 days from the date the appeal request is received by the agency or designee.

(3) The time limit for issuing a decision may be extended by as many days as the fair hearing is postponed or recessed at the request of the appellant.

(b) Decisions by Hearings Officer. The hearings officer issues a decision based exclusively on testimony and evidence introduced at the hearing. The hearings officer must:

(1) issue a written decision in English;

(2) provide the appellant with a copy of the decision; and

(3) provide a translated cover letter in Spanish for hearing decisions where a Spanish interpreter was used. The cover letter instructs the appellant to call the hearings officer if he needs assistance to understand the decision. An appellant who indicates by telephone, in person, or in writing that assistance is needed to understand the decision must receive an explanation of the hearing decision from bilingual personnel within a reasonable period.

(c) Sustained Decisions in THSteps Appeals--If the decision sustains the agency action reducing, suspending, denying, or terminating a requested service:

(1) on the basis that there is no federal financial participation, the decision must contain an explanation of the basis for the hearings officer's decision, applying the state and federal law to the individual's particular request; or

(2) on the basis that the service is not medically necessary, the decision must contain an explanation of the medical basis for the hearings officer's decision, applying the agency's policy or the accepted standards of medical practice to the individual's particular medical circumstances; and

(3) All THSteps decisions must contain legal authority, purpose of the hearing, procedural history, summary of evidence, relevant authorities, findings of fact, and conclusions of law.

(d) Decisions that are Reversed. The hearings officer reverses a decision of the agency or designee if the action or inaction is not supported by the evidence introduced at the hearing, and is not supported by statutes, policies, or procedures applicable at the time the action or inaction occurred. The agency may be instructed to issue retroactive payments or restored benefits in accordance with applicable rules, regulations, and statutes.

(e) Decisions that are Upheld. The hearings officer upholds a decision of the agency or its designee if the action is in accordance with statutes, policies, and procedures introduced at the hearing.

(f) Reopened Hearings--Appellant. The hearings officer may reopen an appeal and reconsider the decision if, within 12 months of the decision date, the appellant presents evidence that:

(1) the hearings officer has determined the information would have affected the outcome of the original decision;

(2) shows the original decision was not valid; and

(3) was not presented at the hearing by the appellant.

(g) Authority of the Hearing Officer to Re-issue a Decision. The hearings officer has the authority to withdraw, revise, and re-issue a decision. The hearings officer may re-issue the decision within 20 days of the date of the original decision if the hearings officer becomes aware of an error of law or fact that would have affected the outcome of the decision.

**History**
- *Source Note: The provisions of this §357.23 adopted to be effective June 29, 2009, 34 TexReg 4292.*

##### **1 Tex. Admin. Code § 357.25** Records and Confidential Information {#sec-357.25 omnilex-key=us-tx-regs-official--title-1--357.25}

(a) Record Maintenance. The official record of the hearing includes the exhibits offered to the hearings officer, the exhibits admitted, the recording of the hearing, any briefs or memoranda filed in connection with the hearing, the hearings officer's decision, and any items filed in connection with administrative review and the decision on administrative review.

(b) Hearing Record Retention. The official record of a hearing is retained by the HHSC Appeals Division according to the HHSC Records/Retention Schedule.

(c) Public Access.

(1) HHSC Appeals Division records and decisions are available for public inspection and copying, but are also subject to federal and state rules and statutes regarding confidentiality.

(2) Names, addresses, and other identifying information about household members and other individuals who provide information about the household, medical information, and the status of pending criminal prosecutions are confidential.

(3) An appellant or authorized representative may record the hearing or request a copy of the recording, at no cost, from the hearings officer.

(4) All other public access to hearings records and decisions is subject to the Texas Public Information Act.

(5) The agency will redact all confidential information from the hearings decision and make the decision available to the public, without cost, within 30 days of the date of the hearing decision in Texas Health Step appeals.

(d) Confidential Information. Confidential information that can not be shared with hearing participants may not be considered by the hearings officer.

(e) Privileged Communication. No party to a fair hearing is required to disclose at the hearing information that is privileged from discovery by federal or state law, including communications between a lawyer and an appellant, a husband and a wife, a member of the clergy and a person seeking spiritual advice, or the name of an informant whose identity is protected from compelled disclosure.

**History**
- *Source Note: The provisions of this §357.25 adopted to be effective June 29, 2009, 34 TexReg 4292.*

#### **Subchapter I** HEARINGS UNDER THE ADMINISTRATIVE PROCEDURE ACT

##### **1 Tex. Admin. Code § 357.481** Application of this Subchapter {#sec-357.481 omnilex-key=us-tx-regs-official--title-1--357.481}

(a) Hearings under this subchapter shall be conducted in accordance with the Texas Administrative Procedure Act (APA), Chapter 2001 of the Texas Government Code.

(b) Unless otherwise required by subsection (a) of this section, the rules of this subchapter govern the procedures of hearings under this subchapter, except the judge may:

(1) apply a procedural hearing rule of the referring agency when the matter at issue is not addressed in this subchapter;

(2) apply the Texas Rules of Civil Procedure when the matter at issue:

(A) is not addressed in this subchapter; and

(B) is not addressed in a procedural hearing rule of the referring agency; or

(3) determine that the matter at issue is governed by other law.

**History**
- *Source Note: The provisions of this §357.481 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.482** Definitions {#sec-357.482 omnilex-key=us-tx-regs-official--title-1--357.482}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) APA--the Administrative Procedure Act, Chapter 2001 of the Texas Government Code.

(2) Adverse action--an action for which the right to a hearing under the Administrative Procedure Act is granted by the statute, rules or policy of a referring agency.

(3) HHSC--the Texas Health and Human Services Commission.

(4) Judge--a licensed attorney appointed by the director of the HHSC Appeals Division to preside over the case.

(5) Referring agency--the HHSC agency taking the action and that issues the notice of adverse action, or the state agency that otherwise refers the matter to the HHSC Appeals Division for a hearing under this subchapter. HHSC agency includes the Texas Health and Human Services Commission, the Texas Department of Aging and Disability Services, the Texas Department of Assistive and Rehabilitative Services, the Texas Department of Family and Protective Services, and the Texas Department of State Health Services.

(6) SOAH--the Texas State Office of Administrative Hearings.

**History**
- *Source Note: The provisions of this §357.482 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.483** Powers and Duties of the Judge {#sec-357.483 omnilex-key=us-tx-regs-official--title-1--357.483}

(a) The judge is a designee of the HHSC Executive Commissioner for purposes of:

(1) issuing default, final, and other orders, and

(2) ruling on any motions for rehearing.

(b) The judge shall have the authority and the duty to:

(1) regulate pre-hearing matters and the hearing;

(2) conduct a full, fair, and impartial hearing;

(3) take action to avoid unnecessary delay in the disposition of the proceeding; and

(4) maintain order, including regulating the conduct of the parties, authorized representatives, witnesses, observers, and other participants.

(c) The judge may issue any order in the interest of justice that is necessary to protect the person or party seeking relief from undue burden, unnecessary expense, harassment, or invasion of personal, constitutional, or property rights.

(d) The judge has no authority to declare state statutes or rules, or federal statutes or regulations, invalid.

**History**
- *Source Note: The provisions of this §357.483 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.484** Request for a Hearing {#sec-357.484 omnilex-key=us-tx-regs-official--title-1--357.484}

(a) Who may file. Any person who has received notice of adverse action may file a request for a hearing.

(b) Time for filing. A person must file a written request for a hearing with the HHSC Appeals Division so that it is received within 15 days from the date the person receives the referring agency's notice of adverse action. If a person does not file the hearing request in accordance with this section, the judge may deny the request.

(c) Form of request. The request for hearing must:

(1) be in writing, in the form of a petition or letter;

(2) state the basis for the appeal of the adverse action; and

(3) include a legible copy of the notice of adverse action. If a person does not provide a copy of the notice of adverse action within 15 days from the date the hearing request is filed, the judge may deny the hearing request.

(d) Referral to SOAH. Upon receipt of a request to set a hearing at SOAH, the director of the HHSC Appeals Division will transfer the case to SOAH for a hearing and a proposal for decision within a reasonable time for disposition. In order for a case to be eligible for such a transfer, the director of the HHSC Appeals Division must determine that such transfer is required by the referring agency's rules, statute or policies. Transferring a case to SOAH does not waive the referring agency's right to assert any claims or defenses, including lack of jurisdiction or failure of the petitioner to comply with a statutory requirement.

**History**
- *Source Note: The provisions of this §357.484 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.485** Venue {#sec-357.485 omnilex-key=us-tx-regs-official--title-1--357.485}

(a) General venue. The judge shall conduct the hearing in Austin, Texas unless the judge grants a change of venue in accordance with subsection (b) of this section.

(b) Change of venue. A party may file a motion to transfer venue. The judge may grant the motion to change venue upon consent of the parties or upon a showing of good cause. Good cause includes, but is not limited to, the following:

(1) the case arose at a location closer to an HHSC office outside Austin, Texas;

(2) a majority of the witnesses reside more than 100 miles from Austin, Texas; or

(3) judicial and party resources will be conserved by the change of venue.

**History**
- *Source Note: The provisions of this §357.485 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.486** Computation of Time {#sec-357.486 omnilex-key=us-tx-regs-official--title-1--357.486}

In computing any period of time under this subchapter, the period begins on the day after the act or event in question and concludes either:

(1) on the last day of the period; or

(2) if the last day of the period is a Saturday, Sunday, or official State holiday, on the next day that is not a Saturday, Sunday, or official State holiday.

**History**
- *Source Note: The provisions of this §357.486 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.487** Representation of Parties {#sec-357.487 omnilex-key=us-tx-regs-official--title-1--357.487}

(a) Respondent. A licensed attorney for the referring agency represents the referring agency.

(b) Petitioner. Any of the following persons may represent the petitioner:

(1) the petitioner;

(2) an attorney for the petitioner, upon filing of a notice of representation with the judge and service on the other party; or

(3) a person designated by the petitioner in writing to the judge.

(c) Attorney not required. A petitioner is not required to have an attorney to appear and participate at a hearing. Neither HHSC nor a referring agency will provide an attorney to represent a petitioner.

(d) Change in representation. A party wishing to change its representative must file a written notice of substitution of representative with the judge. An attorney wishing to withdraw from representing a party must do so in accordance with the Texas Rules of Civil Procedure.

**History**
- *Source Note: The provisions of this §357.487 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.488** Filing and Service of Documents {#sec-357.488 omnilex-key=us-tx-regs-official--title-1--357.488}

(a) Filing of documents. A party must file with the judge all documents relating to any pending proceeding and must serve a copy on the other party. If the HHSC Appeals Division has transferred the case to SOAH, the party must also file the documents with SOAH.

(b) Documents are considered filed only when received by the HHSC Appeals Division by 5:00 p.m. on a business day. A document received after 5:00 p.m. on a business day is considered filed on the next business day.

(c) Service. Every document required to be served under these rules, the APA, or an agency's statute or rules, may be served by any of the following methods to a party or its representative:

(1) hand-delivery;

(2) courier-receipted delivery;

(3) certified or registered mail; or

(4) facsimile transmission. Service to the petitioner or its representative shall be made to the petitioner or representative's last known address or facsimile number as shown by the referring agency's records.

(d) Parties and their representatives shall immediately notify the judge of any change in mailing address, telephone number, or facsimile number.

(e) When service is by mail, three days shall be added to any time period in which service is to be accomplished.

**History**
- *Source Note: The provisions of this §357.488 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.489** Notice of Hearing {#sec-357.489 omnilex-key=us-tx-regs-official--title-1--357.489}

(a) The referring agency must give the petitioner written notice of hearing in accordance with 2001.052, Texas Government Code.

(b) The referring agency must serve the notice of hearing on the petitioner or petitioner's representative by any of the following methods using the petitioner's or representative's last known address or facsimile number as shown by the referring agency's records:

(1) hand-delivery;

(2) courier-receipted delivery;

(3) certified or registered mail; or

(4) facsimile transmission.

(c) The notice of hearing shall include a disclosure, in at least twelve-point, bold-face type, that the factual allegations listed in the notice of adverse action could be deemed admitted, and the relief sought might be granted by default against a party that fails to appear.

**History**
- *Source Note: The provisions of this §357.489 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.490** Pre-hearing Conference {#sec-357.490 omnilex-key=us-tx-regs-official--title-1--357.490}

(a) On the motion of a party or on the judge's own motion, the judge may direct the parties to appear in person, by telephone, or by video conference for a pre-hearing conference.

(b) A pre-hearing conference under this subchapter shall be conducted in accordance with Rule 166, Texas Rules of Civil Procedure.

**History**
- *Source Note: The provisions of this §357.490 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.491** Motions {#sec-357.491 omnilex-key=us-tx-regs-official--title-1--357.491}

(a) Unless the request for relief is made on the record at a pre-hearing conference or hearing, a party must file a motion to change a setting, obtain a ruling or order, or obtain any other procedural relief under this subchapter.

(b) A party must file all motions in writing no later than seven days before the date of the hearing or setting. For good cause shown, the judge may consider a motion filed after this deadline.

(c) A party must file any responses to a motion in writing and no later than the earlier of:

(1) five days after receipt of the motion; or

(2) the date and time of the hearing.

**History**
- *Source Note: The provisions of this §357.491 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.492** Discovery and Subpoenas {#sec-357.492 omnilex-key=us-tx-regs-official--title-1--357.492}

(a) Parties may begin discovery under the APA and, to the extent not inconsistent with the APA, the Texas Rules of Civil Procedure, immediately after the filing of a request for hearing. The judge may establish deadlines for discovery requests and responses.

(b) For good cause shown, the judge may issue a subpoena at the written request of a party. The party requesting the subpoena is responsible for preparation and service of the subpoena. The judge may prepare the subpoena for a party if an attorney does not represent the party. The subpoena may require the attendance of witnesses and the production of books, records, papers, or other objects that are necessary and proper for the purposes of the proceedings.

(c) If a person fails to comply with a subpoena issued under subsection (b) of this section, the requesting party may bring suit to enforce the subpoena in a district court in Travis County or the county in which the hearing is conducted.

**History**
- *Source Note: The provisions of this §357.492 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.493** Conduct of Hearing {#sec-357.493 omnilex-key=us-tx-regs-official--title-1--357.493}

(a) Unless otherwise required by law, all contested case proceedings are open to the public, except the judge may take necessary steps to limit attendance due to any physical limitations of the hearing facility.

(b) The referring agency has the burden of proof unless otherwise specified by statute or rule. The party with the burden of proof presents evidence first, unless the judge orders otherwise. The burden of proof is by a preponderance of the evidence unless otherwise provided by statute or rule.

(c) The referring agency is normally responsible for providing reasonable accommodation for an individual with limited English proficiency or for disclosed disabilities. The party requesting reasonable accommodation shall do so in writing to the judge at least seven days before the hearing or setting. For good cause shown, the judge may consider a request filed after this deadline. The judge determines when an agency shall provide a reasonable accommodation.

(d) The judge may issue an order permitting a party or witness to appear by telephone. The party seeking to participate by telephone must file a motion no later than seven days before the hearing. The motion must state the reason for the request and contain the telephone number where the party or witness can be reached. The non-moving party must file a response to the motion no later than two days after receipt of the motion. Based on a consideration of good cause, the judge issues an order granting or denying the request no later than two days before the hearing.

(e) The judge may issue an order permitting a party or witness to appear by video conference. The party seeking to participate by video conference must file a motion no later than 14 days before the hearing or setting. The motion must state the reason for the request and the city of residence of the party or witness. The non-moving party must file a response to the motion no later than two days after receipt of the motion. In deciding whether to grant the request, the judge may consider any relevant matter including the availability of video conferencing facilities or equipment.

(f) When the judge grants a motion under subsection (d) or (e) of this section, a party must file with the judge and serve the other party with all documentary evidence to be offered at the hearing or setting, at least three days before the hearing or setting. The judge may amend this filing deadline by written order.

(g) When the judge grants a motion under subsection (d) or (e) of this section, the judge may rule that any of the following is a failure to appear and grounds for default, if it occurs for more than ten minutes after the scheduled hearing time:

(1) failure to answer the telephone or video conference line;

(2) failure to free the telephone or video conference line for the proceeding; or

(3) failure to be ready to proceed with the hearing or pre-hearing conference as scheduled.

(h) Participants and observers shall conduct themselves with dignity, shall show courtesy and respect for one another and for the judge, and shall follow any additional guidelines of decorum prescribed by the judge. The judge may take appropriate action to maintain and enforce proper conduct and decorum, including:

(1) issuing a warning;

(2) excluding a person from the proceeding; or

(3) recessing the proceeding.

(i) The judge shall make a record of all proceedings, except the judge may waive the making of a record of a pre-hearing conference and may reflect the actions taken in a written order.

(j) On the written request by a party, or at the request of the judge, a court reporter shall prepare a transcript of all or part of the proceedings. The party requesting the transcript shall pay the costs unless the parties agree to share the costs. When only the judge requests a transcript, the referring agency shall pay the costs unless the parties agree to share the costs.

**History**
- *Source Note: The provisions of this §357.493 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.494** Evidence {#sec-357.494 omnilex-key=us-tx-regs-official--title-1--357.494}

(a) The provisions of Texas Government Code §§2001.081-2001.086 shall govern the admission or exclusion of evidence.

(b) Exclusion of witnesses. At the request of a party, or on the judge's motion, the judge may order witnesses excluded from the hearing so they cannot hear the testimony of other witnesses. This subsection does not authorize exclusion of a party, a party's spouse, or a person who a party shows to be essential to the presentation of its case.

(c) Stipulations. Subject to the judge's approval, the parties may stipulate to any factual, legal, or procedural matters, subject to the following requirements:

(1) The parties must state in a written motion any agreements that would modify a schedule or procedure previously ordered by the judge.

(2) The parties may file a stipulation in writing or enter it on the record. The judge may require additional development or clarification of a stipulation.

(3) The judge may choose not to enforce an agreement between the parties either for good cause, or if the agreement is not in writing, signed, and filed with the judge, or entered on the record.

**History**
- *Source Note: The provisions of this §357.494 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.495** Default and dismissal {#sec-357.495 omnilex-key=us-tx-regs-official--title-1--357.495}

(a) Default. The judge may proceed on a default basis if a party without the burden of proof fails to appear. The factual allegations listed in the notice of hearing may be deemed admitted. The party with the burden of proof must show that:

(1) proper notice under §357.489 of this title (relating to Notice of Hearing) was provided to the defaulting party; or

(2) a statute or rule authorizes service of the notice by sending it to the party's last known address as shown by the agency's records, and there is credible evidence that the notice was sent by first class mail to that address.

(b) Reopening. A party may file a motion to set aside a default and reopen the record no later than ten days after the hearing, if a final order has not been issued. The judge may grant the motion for good cause shown.

(c) Dismissal. In response to a party's motion or after a judge notifies the parties of an intent to dismiss a case, the judge may dismiss a case, or a portion of the case, for:

(1) lack of jurisdiction;

(2) failure of a party to appear within ten minutes of the scheduled hearing time;

(3) failure by a party to prosecute the case in accordance with a requirement of statute, rule, or order of the judge;

(4) the cause of action being moot;

(5) failure to state a claim for which relief can be granted;

(6) failure to request the hearing in a timely manner according to §357.484 of this title (Relating to Request for Hearing); or

(7) unnecessary duplication of proceedings.

**History**
- *Source Note: The provisions of this §357.495 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.496** Summary disposition {#sec-357.496 omnilex-key=us-tx-regs-official--title-1--357.496}

(a) The judge may issue a proposal for decision or final order without an evidentiary hearing if the judge determines that:

(1) there is no genuine issue as to any material fact; and

(2) a party is entitled to a decision in its favor as a matter of law.

(b) A party seeking summary disposition shall file a motion in accordance with §357.491 of this title (relating to Motions). The motion shall contain the specific grounds, including:

(1) the applicable law; and

(2) the material facts that the moving party contends are undisputed, with specific reference to the supporting evidence.

(c) A party opposing a motion for summary disposition shall file a response in accordance with §357.491 of this title. The response shall contain the specific grounds, including:

(1) a statement of each material fact claimed by the opposing party to be disputed;

(2) a specific reference to the supporting evidence; and

(3) any dispute regarding the movant's assertion of what is the applicable law.

**History**
- *Source Note: The provisions of this §357.496 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.497** Proposals for Decision, Exceptions, and Replies {#sec-357.497 omnilex-key=us-tx-regs-official--title-1--357.497}

(a) Proposals for Decision. For cases referred by an agency other than HHSC, the judge issues a proposal for decision unless the law governing the case provides for a final order to be issued by the judge. The judge shall submit the proposal for decision to the final decision maker and furnish a copy to each party.

(b) Exceptions. A party must file exceptions to the proposal for decision within 15 days of the issuance of the proposal for decision, in accordance with section §357.488 of this title (relating to Filing and Service of Documents).

(c) Replies. A party must file a reply to exceptions within 15 days of the filing of the exception, in accordance with section §357.488 of this title.

(d) Amendments. The judge shall make any amendments to the proposal for decision within 15 days of the deadline under subsection (c) of this section.

(e) Final Orders and Motions for Rehearing. When the judge issues a proposal for decision, the referring agency's rules govern final orders and motions for rehearing.

**History**
- *Source Note: The provisions of this §357.497 adopted to be effective June 20, 2007, 32 TexReg 3544.*

##### **1 Tex. Admin. Code § 357.498** Final Orders and Rehearing {#sec-357.498 omnilex-key=us-tx-regs-official--title-1--357.498}

(a) Final Orders. The judge issues a final order for a case:

(1) referred by HHSC; or

(2) when the law governing the case provides for a final order to be issued by the judge.

(b) Notice of Final Order. Final orders are mailed by first class mail to the most recent address on file with the HHSC Appeals Division, and are presumed received on the third day after mailing. Final orders are mailed:

(1) to each party's representative, or

(2) if a party is not represented, to the party.

(c) Rehearing. A party must file any motion for rehearing in accordance with §357.488 of this title (relating to Filing and Service of Documents) on or before the 20th day after the final order is presumed received.

(d) Reply. A party must file any written reply to a motion for rehearing on or before the 30th day after the final order is presumed received.

(e) Order on motion. The judge shall rule on a motion for rehearing no later than the 45th day after the date the final order was mailed. Otherwise, the motion for rehearing is overruled by operation of law.

**History**
- *Source Note: The provisions of this §357.498 adopted to be effective June 20, 2007, 32 TexReg 3544.*

#### **Subchapter J** MEDICAID THIRD-PARTY RECOVERY

##### **1 Tex. Admin. Code § 357.501** Basis and Purpose {#sec-357.501 omnilex-key=us-tx-regs-official--title-1--357.501}

(a) This section implements the obligation of the Texas Department of Human Services (DHS) under federal and state law to:

(1) set forth the requirements of Medicaid applicants and recipients, and representatives of applicants and recipients, regarding assignment of causes of action against third parties, or their insurer(s), responsible for injury to the applicant or recipient that requires medical care and/or services for which the third party or the third party's insurer is legally obligated to pay; and

(2) establish the priority of distributions of third-party recoveries among DHS, the federal government, and the recipient.

(b) This chapter does not address DHS's right of recovery under:

(1) §1917(d)(4) of the Social Security Act (codified at 42 U.S.C. §1396p(d)(4)); or

(2) third-party contracts with insurers obligated to pay for health care for the recipient.

**History**
- *Source Note: The provisions of this §357.501 adopted to be effective August 1, 2000, 25 TexReg 6779; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.502** Definitions {#sec-357.502 omnilex-key=us-tx-regs-official--title-1--357.502}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Applicant--An individual, or the parent or legal guardian of an individual, who has applied to the Texas Department of Human Services (DHS) or another agency of the state for medical assistance from the Medicaid program.

(2) Commissioner--The Commissioner of the Texas Department of Human Services;

(3) Department or DHS--The Texas Department of Human Services and its designee.

(4) Recipient--A person who has been certified as eligible to receive medical assistance from the Medicaid program by DHS or other agency of the state.

(5) State Plan--The comprehensive written statement submitted by the single state agency describing the nature and scope of the Medicaid program and giving assurances that the Medicaid program will be administered in compliance with Title XIX requirements and federal regulations.

(6) Third party--Any person, or the insurer of a person, who is or may be liable to pay all or part of the expenditures for medical assistance furnished under the State Plan.

**History**
- *Source Note: The provisions of this §357.502 adopted to be effective August 1, 2000, 25 TexReg 6779; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.503** Distribution of Recoveries {#sec-357.503 omnilex-key=us-tx-regs-official--title-1--357.503}

(a) The Texas Department of Human Services (DHS) will distribute third-party recoveries as follows:

(1) DHS will receive an amount equal to DHS's Medicaid expenditures for the recipient or for another individual eligible for Medicaid benefits under the State Plan for whom the recipient can legally make an assignment to medical support and payment;

(2) the federal government will receive the federal share of the Medicaid expenditures, minus any incentive payment authorized by federal law; and

(3) the recipient will receive any remaining amount. Any amount distributed to the recipient is income or resources for purposes of establishing eligibility for Medicaid benefits.

(b) DHS may pay reasonable and necessary attorney fees of 15% of the entire amount recovered on behalf of DHS, and reasonable expenses, to a person authorized to recover amounts from third parties, other than a person contracted by DHS to recover on behalf of DHS, if the recovery is made in compliance with this subchapter.

(c) DHS may pay prorated expenses, not to exceed 10% of the entire amount recovered on behalf of DHS, if attorney fees are allowed under subsection (b) of this section.

(d) No attorney fees will be paid if the recovery made on behalf of the Medicaid program is waived in whole or in part by the commissioner under the provisions of §32.033(f) of the Human Resources Code and §79.1704 of this title (relating to Waiver Authority of the Commissioner).

(e) The amount recovered on behalf of DHS for which attorney fees are authorized under this section must be deducted from the total amount of the recovery before attorney fees and expenses are deducted under the terms of the recipient's contract.

(f) DHS may pay reasonable and necessary attorney fees and expenses to a person contracted by DHS to recover amounts from third parties on behalf of the Medicaid program.

**History**
- *Source Note: The provisions of this §357.503 adopted to be effective August 1, 2000, 25 TexReg 6779; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.504** Waiver Authority of the Commissioner {#sec-357.504 omnilex-key=us-tx-regs-official--title-1--357.504}

The commissioner of the Texas Department of Human Services (DHS) has the authority to waive all or part of DHS's right to recover from liable third parties when:

(1) the commissioner finds that enforcement of DHS's right of recovery would tend to defeat the purpose of public assistance; or

(2) the cost of recovery exceeds the amount that could be recovered.

**History**
- *Source Note: The provisions of this §357.504 adopted to be effective August 1, 2000, 25 TexReg 6779; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter K** ADMINISTRATIVE FRAUD DISQUALIFICATION HEARINGS

##### **1 Tex. Admin. Code § 357.521** Introduction and Legal Basis {#sec-357.521 omnilex-key=us-tx-regs-official--title-1--357.521}

A household member becomes ineligible to participate in the Food Stamp program and/or Temporary Assistance for Needy Families (TANF) program if a state or federal court or administrative agency determines he has committed an intentional program violation, in Food Stamps/Aid to Families with Dependent Children (AFDC)/TANF.

**History**
- *Source Note: The provisions of this §357.521 adopted to be effective February 1, 1994, 18 TexReg 9857; amended to be effective September 14, 1998, 23 TexReg 9410; amended to be effective September 14, 1998, 23 TexReg 9410; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.522** Designation of Hearing Officer {#sec-357.522 omnilex-key=us-tx-regs-official--title-1--357.522}

Hearings are conducted by an impartial official.

**History**
- *Source Note: The provisions of this §357.522 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.523** Disqualification of Hearing Officer {#sec-357.523 omnilex-key=us-tx-regs-official--title-1--357.523}

(a) A hearing officer is disqualified if he participates in the decision to:

(1) refer the case to the investigation unit; or

(2) recommend disqualification for intentional program violation.

(b) A hearing officer may be disqualified if:

(1) the hearing officer participated in a case conference with the worker, investigator, or the supervisor to make a referral for an intentional program violation decision. The hearing officer may not have discussed or evaluated a case or any major points at issue;

(2) the hearing officer reviewed the entire record or a comprehensive summary of the record to make a referral for disqualification;

(3) the hearing officer has a personal interest in the outcome of the hearing decision or has some other conflict of interest;

(4) a household member requests that a certain hearing officer not hold the hearing or makes allegations against the fairness of the hearing officer; and/or

(5) the hearing officer has supervised the worker or investigator although he may not have been involved in the decision.

(c) The Texas Department of Human Services (DHS) does not disqualify a hearing officer because he answers a question about DHS policy concerning the case, if the question and answer are stated in broad terms.

**History**
- *Source Note: The provisions of this §357.523 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.524** Hearing Officer's Powers and Duties {#sec-357.524 omnilex-key=us-tx-regs-official--title-1--357.524}

The hearing officer:

(1) administers oaths or affirmations;

(2) ensures that all relevant issues are considered;

(3) requests, receives, and includes in the record all evidence determined necessary to resolve the issues;

(4) ensures an orderly hearing by regulating the conduct and course of the hearing;

(5) orders an independent medical assessment or professional evaluation, if relevant and useful, from a source mutually satisfactory to the household and the Texas Department of Human Services (DHS);

(6) makes the final administrative decision concerning the hearing in the name of DHS; and

(7) requires the attendance of an agency representative, if necessary and appropriate.

**History**
- *Source Note: The provisions of this §357.524 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.525** Scheduling the Hearing {#sec-357.525 omnilex-key=us-tx-regs-official--title-1--357.525}

(a) The hearing must be held and a written decision issued no later than 90 calendar days from the date the household member is notified of the hearing.

(b) The hearing officer schedules the hearing at a reasonable time and place. He considers the household member's physical condition, location, and access to transportation. The hearing may be held in the field office where the file is located.

**History**
- *Source Note: The provisions of this §357.525 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.526** Advance Notice of Hearing {#sec-357.526 omnilex-key=us-tx-regs-official--title-1--357.526}

(a) The hearing officer sends the household member an advance notice of the hearing in sufficient time to allow receipt at least 30 calendar days before the scheduled hearing date. The notice is sent first class and certified mail, return-receipt requested, and marked "return service requested" to the address where the household member last received benefits. Delivery is not restricted to the addressee. The notice specifies the charges against the household member and a summary of the evidence (including how and where it may be examined). If the notice is returned showing a new address, it will be resent and the normal due process rules will be reapplied.

(b) Advance notice requirements are met when the notice is mailed to the most current mailing address available to any division within the department whether or not the certified or first class mail is returned. The hearing will be conducted.

(1) If the returned notice shows a new address, another notice is mailed following the procedures in subsection (a) of this section, and the 90-day time requirement for issuing a decision begins again with the date that the second notice is mailed.

(2) If the household member claims non-receipt of notice of the hearing, he has 30 days after the date of the written notice of the hearing decision to claim good cause for not appearing at the hearing. In all other instances, the household member has ten days to claim good cause for not appearing. If the household member is found to have committed an intentional program violation but a hearing officer later determines that good cause existed for not appearing, the previous decision shall no longer be valid and a new hearing will be conducted.

**History**
- *Source Note: The provisions of this §357.526 adopted to be effective February 1, 1994, 18 TexReg 9857; amended to be effective September 14, 1998, 23 TexReg 9410; amended to be effective September 14, 1998, 23 TexReg 9410; amended to be effective December 8, 1999, 24 TexReg 10894; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.527** Participation While Hearing is Pending {#sec-357.527 omnilex-key=us-tx-regs-official--title-1--357.527}

(a) The Texas Department of Human Services (DHS) may not disqualify a household member for an intentional program violation until the hearing officer determines the person committed an intentional program violation. A pending hearing does not affect the household member's or the household's right to be certified and participate in the program.

(b) DHS reduces or terminates benefits if:

(1) DHS has documentation substantiating the household is ineligible or eligible for fewer benefits (even if these facts suggest an intentional program violation and lead to an administrative disqualification hearing); or

(2) the household fails to request a fair hearing and continued benefits pending the hearing.

(c) DHS may adjust benefits if it has facts substantiating the household's failure to report a change in its circumstances. DHS does not yet have to demonstrate that the failure to report was an intentional program violation.

(d) Pending the hearing, DHS determines the eligibility and benefit level of the household according to usual procedures. If the suspected action does not affect the household's current circumstances, the household:

(1) continues to receive its allotment based on the latest certification action; or

(2) is recertified based on a new application and current circumstances.

(e) DHS terminates benefits, however, if:

(1) the certification period has expired; and

(2) the household fails to reapply after receiving an expiration notice.

**History**
- *Source Note: The provisions of this §357.527 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.528** Conduct of Hearing {#sec-357.528 omnilex-key=us-tx-regs-official--title-1--357.528}

(a) The hearing officer conducts the administrative disqualification hearing as an informal proceeding, not as a formal court hearing. The participants are placed under oath, but the technical rules of evidence are not required.

(b) At the hearing, the hearing officer must advise the household member or his representative that he may refuse to answer questions during the hearing.

**History**
- *Source Note: The provisions of this §357.528 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.529** Attendance at Hearing {#sec-357.529 omnilex-key=us-tx-regs-official--title-1--357.529}

The hearing is not open to the public; however, at the household member's request, friends and relatives may attend. If space is limited, the hearing officer may limit the number of people attending the hearing.

**History**
- *Source Note: The provisions of this §357.529 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.530** Household Member's Rights during Hearing {#sec-357.530 omnilex-key=us-tx-regs-official--title-1--357.530}

The hearing officer must give the household member or his representative an adequate opportunity to:

(1) examine all relevant documents and records at a reasonable time before and during the hearing. The case record is also available, including the application form and documents of verification used to establish the household's ineligibility or eligibility and allotment amount. If the household member or his representative requests a copy, the Texas Department of Human Services provides a free copy of the portions of the case record that are relevant to the hearing. Confidential information is protected from release. It may include the names of people who have disclosed information about the household without its knowledge. Information that identifies the nature or status of pending criminal prosecutions is also confidential. Confidential information and other documents or records that the household may not otherwise have an opportunity to contest or challenge are not introduced at the hearing. They do not affect the hearing officer's decision;

(2) present the case or have it presented by a legal counsel or another person;

(3) present witnesses;

(4) present arguments without undue interference;

(5) question or refute any testimony or evidence, including an opportunity to confront and cross-examine adverse witnesses; and

(6) submit evidence to establish all pertinent facts and circumstances in the case.

**History**
- *Source Note: The provisions of this §357.530 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.531** Consideration of the Case by the Hearing Officer {#sec-357.531 omnilex-key=us-tx-regs-official--title-1--357.531}

The hearing officer must base his determination on clear and convincing evidence that the household member committed an intentional program violation, as defined in §79.2001 of this title (relating to Terms and General Policy).

**History**
- *Source Note: The provisions of this §357.531 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.532** Failure of Household Member To Appear {#sec-357.532 omnilex-key=us-tx-regs-official--title-1--357.532}

(a) If advance notice requirements, as outlined in §79.1906 of this title (relating to Advance Notice of Hearing) are met and the household member or his representative fails to attend a hearing without good cause, the hearing is conducted without him. The household member has 10 calendar days from the date of the hearing to present good cause for failing to appear.

(b) If the hearing officer finds the household member committed an intentional program violation but later determines that the household member or his representative did not receive notice of the hearing or had good cause for not appearing, the Texas Department of Human Services (DHS) conducts a new hearing. The previous decision is no longer valid. There is no time limitation for the household member to show good cause for failure to appear because he did not receive notice of the hearing.

(c) If advance notice requirements are not met, the hearing officer:

(1) checks the administrative disqualification record for any contacts from the household member before the hearing date;

(2) phones the client once if the client's current telephone number is listed on the Office of Inspector General's case report form. The purpose of the call is to determine whether the correct household member received the notice. The hearing officer must talk to the household member to confirm that the notice was received;

(3) sends another notice if:

(A) the household member has moved; and

(B) an address correction is provided by the postal service; and

(4) dismisses the case without prejudice if:

(A) the household member has moved;

(B) no address correction is provided by the post office; and

(C) the hearing officer is unable to determine that the household member received the notice.

**History**
- *Source Note: The provisions of this §357.532 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.533** Postponements {#sec-357.533 omnilex-key=us-tx-regs-official--title-1--357.533}

Until 10 calendar days before the scheduled hearing, the household member or his representative may request one postponement of up to 30 calendar days. The 90-calendar-day limit for issuing a written decision is extended by the number of days that the hearing is postponed.

**History**
- *Source Note: The provisions of this §357.533 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.534** Recessing the Hearing {#sec-357.534 omnilex-key=us-tx-regs-official--title-1--357.534}

(a) If the household member, the investigator, or the hearing officer requests to have the Food Stamp or Temporary Assistance for Needy Families (TANF) record at the hearing, the hearing may be recessed to obtain the record. The household member may question or refute any additional testimony or evidence after a recess.

(b) The hearing officer may order a recess to request and receive additional testimony or evidence. He advises the household member or his representative of the reason for the recess and the nature of the additional requested information. The household member may question or refute any additional testimony or evidence after a recess.

**History**
- *Source Note: The provisions of this §357.534 adopted to be effective February 1, 1994, 18 TexReg 9857; amended to be effective September 14, 1998, 23 TexReg 9410; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.535** Findings of the Hearing Officer {#sec-357.535 omnilex-key=us-tx-regs-official--title-1--357.535}

(a) The hearing officer normally makes a determination at the close of the hearing whether or not the household member committed an intentional program violation, as defined in this chapter. The decision of the hearing officer must comply with Texas Department of Human Services (DHS) policy and federal law and regulations, and must be based exclusively on the hearing record.

(b) The hearing officer may not find that the household member committed an intentional program violation unless there is clear and convincing evidence in the record to support a determination that the household member knowingly, willfully, and with deceitful intent committed an act described in §79.1901 of this title (relating to Introduction and Legal Basis). The decision by the hearing officer is DHS's final administrative action concerning a determination of intentional program violation for purposes of administrative disqualification.

**History**
- *Source Note: The provisions of this §357.535 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.536** The Hearing Record and Decision {#sec-357.536 omnilex-key=us-tx-regs-official--title-1--357.536}

(a) Household members or the representative may inspect the hearing record during work hours. They may also copy it at their own expense.

(b) The hearing officer sends written notification of the decision to the household or to the appropriate Texas Department of Human Services (DHS) staff as indicated in §79.1918 of this title (relating to Notification of Hearing Decision and Effect on Remaining Household Members). The hearing officer's decision:

(1) specifies the reasons for the decision. If the case is dismissed because advance notice requirements were not met, the hearing officer specifies that the case is dismissed without prejudice;

(2) identifies the supporting evidence and regulations;

(3) responds to reasoned arguments of the household member or his representative.

(c) The hearing record consists of the official report of the hearing. It also includes all papers and requests filed in the proceeding.

**History**
- *Source Note: The provisions of this §357.536 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.537** Effect of an Administrative Determination of Intentional Program Violation {#sec-357.537 omnilex-key=us-tx-regs-official--title-1--357.537}

(a) If a hearing officer finds that a household member committed an intentional program violation, the household member is disqualified from the Food Stamp and/or Temporary Assistance for Needy Families (TANF) programs for the following periods.

(1) TANF. If the intentional program violation occurred on or after September 1, 2003, the person is disqualified:

(A) 12 months for the first intentional program violation determination; and

(B) permanently for the second intentional program violation determination.

(2) Food Stamps. The person is disqualified:

(A) for a period of one year upon the first occasion of any such determination;

(B) for a period of two years upon:

(i) the second occasion of any such determination; or

(ii) the first occasion of a finding by a federal, state, or local court of the trading of a controlled substance (as defined in Title 21, United States Code (USC), §802) for coupons; and

(C) permanently upon:

(i) the third occasion of any such determination; or

(ii) the second occasion of a finding by a Federal, state, or local court of the trading of a controlled substance (as defined in Title 21, USC, §802) for coupons; or

(iii) the first occasion of a finding by a federal, state, or local court of the trading of firearms, ammunition, or explosives for coupons; or

(iv) conviction of the offense of knowingly receiving, transferring, acquiring, altering, or possessing coupons, authorization cards, or access devices in any manner contrary to the Food Stamp Act of 1977 involving an aggregate amount of $500 or more.

(D) for a period of ten years if a person is convicted in a state or federal court or is found by a state administrative hearing to have made a fraudulent statement or representation with respect to the identification or place of residence of the individual, in order to receive multiple benefits simultaneously under the Food Stamp Program.

(b) The disqualification period does not depend upon the amount of benefits involved. The disqualification period set at the time of the hearing is applicable regardless of current eligibility.

(c) The decision of the hearing officer in the Administrative Disqualification Hearing is final. The household member:

(1) may not have this decision reversed by a subsequent Administrative Disqualification Hearing; and

(2) for purposes of TANF decisions, may appeal that determination by filing a petition in the district court in the county in which the violation occurred not later than the 30th day after the date the hearing officer made the determination.

(d) If one hearing is held for several offenses, the Texas Department of Human Services may impose only one disqualification period.

(e) If the hearing officer imposes a one year disqualification for an initial violation, no further disqualifications may be imposed for violations occurring before the hearing decision that are later discovered. These violations may be brought to the hearing officer and, if appropriate, an intentional program violation may be found.

(f) Although the hearing officer's decision regarding the intentional program violation is final, the appellant may appeal the investigator's computation of the amount of overpayment.

**History**
- *Source Note: The provisions of this §357.537 adopted to be effective February 1, 1994, 18 TexReg 9857; amended to be effective September 22, 1996, 22 TexReg 2624; amended to be effective July 1, 1997, 22 TexReg 5845; amended to be effective September 14, 1998, 23 TexReg 9410; amended to be effective November 18, 2002, 27 TexReg 10753; amended to be effective September 1, 2003, 28 TexReg 6951; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.538** Notification of Hearing Decision and the Effect on Remaining Household Members {#sec-357.538 omnilex-key=us-tx-regs-official--title-1--357.538}

(a) The hearing officer notifies the household member of his decision in writing.

(b) Within 15 calendar days of a hearing officer's written decision to disqualify the household member, the Texas Department of Human Services' (DHS's) Central Disqualification Unit notifies the household member of the effect of the hearing officer's decision. In dismissed or nondetermination of intentional program violation cases, the hearing decision is the final notification sent to the household member. If the hearing officer dismisses the case, he sends copies of the decision to the investigator only.

**History**
- *Source Note: The provisions of this §357.538 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.539** Court Actions in Relation to Administrative Disqualification {#sec-357.539 omnilex-key=us-tx-regs-official--title-1--357.539}

(a) The temporary assistance for needy families (TANF) and food stamp federal regulations provide for a court of appropriate jurisdiction to order an individual disqualified from participating in the program for the time periods described in §79.1917 of this title (relating to Effect of an Administrative Determination of Intentional Program Violation).

(b) The state, a political subdivision of the state, or the United States may serve as prosecutor or plaintiff.

(c) If the court fails to impose a disqualification period on a household member who committed an intentional program violation, the Texas Department of Human Services (DHS) imposes one of the penalties described in §79.1917 of this title (relating to Effect of an Administrative Determination of Intentional Program Violation). DHS imposes the appropriate penalty unless the court order prohibits the penalty.

**History**
- *Source Note: The provisions of §357.539 adopted to be effective February 1, 1994, 18 TexReg 9857; amended to be effective September 14, 1998, 23 TexReg 9410; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.540** Presentation of the Texas Department of Human Services' (DHS's) Case {#sec-357.540 omnilex-key=us-tx-regs-official--title-1--357.540}

The DHS representative is responsible for presenting the department's case in the administrative disqualification hearing. The DHS representative may choose to present the case in person or by the use of teleconference equipment. If either the hearing officer or the household member requests, the DHS representative must attend the hearing in person. Such a request, however, must be made 10 days before the hearing.

**History**
- *Source Note: The provisions of this §357.540 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.541** Effect of Nondetermination of Intentional Program Violation {#sec-357.541 omnilex-key=us-tx-regs-official--title-1--357.541}

If a hearing officer finds that the household member did not commit an intentional program violation, the hearing officer determines whether or not there was an overissuance and determines that the case involved either:

(1) client error or misunderstanding; or

(2) agency error.

**History**
- *Source Note: The provisions of this §357.541 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.542** Consolidation of Administrative Disqualification Hearings and Fair Hearings {#sec-357.542 omnilex-key=us-tx-regs-official--title-1--357.542}

(a) The hearing officer may combine a fair hearing and an administrative disqualification hearing to settle the amount of the claim at the same time as determining whether or not an intentional program violation has occurred. To do this, the following conditions must exist:

(1) the factual issues arise out of the same, or related, circumstances and the household receives advance notice that the hearings will be combined; and

(2) disqualification hearing procedures are adhered to.

(b) At the household's request, the hearing officer must allow the household to waive the 30-day advance notice period required when a disqualification hearing and fair hearing are combined. If the household does not receive advance notice that the hearings will be combined, but decides to waive the advance notice requirement, the hearing officer obtains the household member's signature on a waiver of notice. The hearing officer then proceeds with a fair hearing on the claim.

(c) When the disqualification hearings and fair hearings are combined and the household does not waive the advance notice requirements, the hearing officer follows the time frames for conducting disqualification hearings.

(d) When the hearings are combined to settle the amount of the claim while determining whether or not intentional program violation has occurred, the household loses its right to a subsequent fair hearing on the amount of the claim.

**History**
- *Source Note: The provisions of this §357.542 adopted to be effective February 1, 1994, 18 TexReg 9857; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter L** FRAUD INVOLVING RECIPIENTS

##### **1 Tex. Admin. Code § 357.561** Terms and General Policy {#sec-357.561 omnilex-key=us-tx-regs-official--title-1--357.561}

(a) Food stamp, medical assistance, and financial assistance are indicated when the term "assistance" is used in this subchapter. Medical assistance, Temporary Assistance for Needy Families (TANF), and food stamp intentional program violations are not given special treatment except if specific procedural distinctions are noted.

(b) A household member has committed a food stamp intentional program violation if he has intentionally:

(1) made a false and misleading statement;

(2) misrepresented, concealed, or withheld facts; or

(3) violated any provision of the Food Stamp Act, the Food Stamp Program regulations, or related state statutes in order to use, present, transfer, acquire, receive, or possess food stamp coupons or food stamp authorizations to participate (ATPs).

(c) A TANF intentional program violation occurs when a person, for the purpose of establishing or maintaining the eligibility of a person and the person's family for financial assistance under the Human Resources Code, Chapter 31, or for the purpose of increasing or preventing a reduction in the amount of that assistance, intentionally:

(1) makes a statement that the person knows is false or misleading;

(2) misrepresents, conceals, or withholds a fact; or

(3) knowingly misrepresents a statement as being true.

(d) A household member may be charged with an intentional program violation even if he has not actually received benefits to which he is not entitled.

(e) The Texas Department of Human Services does not include as part of a claim any overissuance made prior to six years before the overissuance is discovered.

(f) In food stamp and TANF intentional violation proceedings against individuals, actions under either the food stamp or TANF programs will be coordinated with the actions under the other, to the extent possible.

**History**
- *Source Note: The provisions of this §357.561 adopted to be effective June 15, 1987, 12 TexReg 1394; amended to be effective July 1, 1992, 17 TexReg 3477; amended to be effective September 1, 2003, 28 TexReg 6951; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.562** Determination and Disposition of Intentional Program Violations {#sec-357.562 omnilex-key=us-tx-regs-official--title-1--357.562}

(a) The Texas Department of Human Services (DHS) determines the existence of intentional program violations; refers cases for investigation, administrative hearings, and prosecution; takes collection action and ensures clients' rights according to applicable Texas criminal statutes and the following:

(1) Temporary Assistance for Needy Families (TANF)--as provided in:

(A) Personal Responsibility and Work Opportunity Act (42 U.S.C. §601 et. seq.);

(B) Human Resources Code, Chapter 31; and

(C) Texas Government Code Chapter 544, Subchapter I;

(2) Food Stamp Program--7 Code of Federal Regulations, §§273.16 - 273.18; and

(3) Medicaid Program--42 Code of Federal Regulations, §455.2 and §455.16.

(b) Individuals found to have committed an intentional program violation in the food stamp and/or TANF programs through an administrative disqualification hearing or who have signed a waiver of right to an administrative disqualification hearing are subject to the disqualification periods outlined in §79.1917 of this title (relating to Effect of an Administrative Determination of Intentional Program Violation).

(c) If a person is convicted of a state or federal offense for conduct, as described in §79.2001(c) of this title (relating to Terms and General Policy), and such conduct is committed on or after September 1, 2003, or if the person is granted deferred adjudication or placed on community supervision for that conduct, the person is permanently disqualified from receiving financial assistance.

(d) Individuals found to have committed an intentional program violation in the Food Stamp Program by a court of appropriate jurisdiction, or on the basis of a plea of nolo contendere or otherwise in cases referred for prosecution in state or federal court, are subject to the disqualification periods outlined in §79.1917(a) of this title.

(e) In TANF cases, DHS does not take the needs of the disqualified individual into account during the period he is disqualified when determining the assistance unit's need and amount of assistance. DHS considers any resources and income of the disqualified individual as available to the assistance unit. DHS does not disqualify an individual from the TANF program unless the overissuance of benefits resulting from the intentional violation occurred in the month of October 1988 or later.

(f) Disqualified individuals are ineligible for TANF Medicaid benefits during the disqualification period. However, they may qualify for and receive benefits under provisions of Chapter 2 of this title (relating to Medically Needy and Children and Pregnant Women Programs).

(g) A household member may be charged with an intentional program violation even if he has not actually received benefits to which he is not entitled.

(h) The amount of the intentional program violation claim must be calculated back to the month the act of intentional program violation occurred, regardless of the length of time that elapsed until the determination of intentional program violation was made. However, DHS must not include in its calculation any amount of the overissuance that occurred in a month more than six years from the date the overissuance was discovered for food stamp cases.

**History**
- *Source Note: The provisions of this §357.562 adopted to
be effective June 15, 1987, 12 TexReg 1394; amended to be effective
July 1, 1992, 17 TexReg 3477; amended to be effective September 14,
1998, 23 TexReg 9410; amended to be effective September 1, 2003, 28
TexReg 6951; transferred effective September 1, 2004, as published
in the Texas Register September 17, 2004, 29 TexReg 9013; amended
to be effective April 1, 2025, 50 TexReg 830.*

##### **1 Tex. Admin. Code § 357.563** Eligibility during Investigation {#sec-357.563 omnilex-key=us-tx-regs-official--title-1--357.563}

Investigation for potential intentional program violation is not to be used as a punitive action to deprive the recipient of assistance or services. Food stamps, assistance, or services are continued if current eligibility is established during the time that the alleged fraudulent acts are under review and during any period of prosecution or appeal.

**History**
- *Source Note: The provisions of this §357.563 adopted to be effective June 15, 1987, 12 TexReg 1394; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.564** Appeals {#sec-357.564 omnilex-key=us-tx-regs-official--title-1--357.564}

The right to appeal and all applicable procedures for appeal are described in Subchapter L of this chapter (relating to Fair Hearings), Subchapter M of this chapter (relating to Appeals Process), and Subchapter N of this chapter (relating to Hearing Procedure). Administrative decisions to investigate a recipient's case for fraud and to refer such a case to local law enforcement officials are not subject to appeal.

**History**
- *Source Note: The provisions of this §357.564 adopted to be effective June 15, 1987, 12 TexReg 1394; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.565** Referral of Food Stamp and Temporary Assistance for Needy Families (TANF) Intentional Program Violation Claims to Administrative Disqualification Hearing Officer {#sec-357.565 omnilex-key=us-tx-regs-official--title-1--357.565}

(a) If the investigator has documented evidence to substantiate that an individual in a food stamp or TANF household has committed an intentional program violation, an administrative disqualification hearing may be held.

(b) The Texas Department of Human Services (DHS) may refer to the hearing officer only three types of cases that have first been referred to the prosecutor:

(1) cases that were forwarded to the prosecutor but that he declined to prosecute; or

(2) cases that were forwarded to the prosecutor in which no action was taken within a reasonable amount of time and the cases were formally withdrawn by DHS; or

(3) cases dismissed by the prosecutor after charges were filed that do not reflect a lack of evidence to prosecute.

(c) DHS may not refer the following cases to the hearing officer:

(1) cases that were no-billed by a grand jury;

(2) cases that were brought to trial and later dismissed for any reason; and

(3) cases dismissed before trial in which the prosecutor has in some manner expressed the opinion that there was insufficient evidence to prosecute.

(d) DHS gives individuals who are alleged to have committed an intentional program violation an opportunity to waive their right to an administrative disqualification hearing. By waiving this right, individuals acknowledge that they understand their rights and responsibilities, that disqualification will occur, and that they understand the disqualification period that applies to their case; and they agree to repay the overissuance without having a hearing.

**History**
- *Source Note: The provisions of this §357.565 adopted to be effective June 15, 1987, 12 TexReg 1394; amended to be effective March 1, 1992, 17 TexReg 694; amended to be effective July 1, 1992, 17 TexReg 3477; amended to be effective September 14, 1998, 23 TexReg 9410; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.566** Collection Action on Food Stamp and Temporary Assistance for Needy Families (TANF) Intentional Program Violation Claims {#sec-357.566 omnilex-key=us-tx-regs-official--title-1--357.566}

(a) The investigator must send the person determined to have committed an intentional program violation a repayment agreement. The investigator must send a repayment agreement even if the household already received a nonintentional program violation demand letter.

(b) The Texas Department of Human Services (DHS) must begin collection action on intentional program violation claims, unless:

(1) the household has already repaid the overissuance because of a nonintentional program violation claim; or

(2) the investigator documents that the household cannot be located.

(c) The person who committed the intentional program violation, or the remaining household members, may begin making cash repayments before the disqualification period is imposed upon the guilty person. Benefits the household lost because of disqualification do not constitute repayment. DHS suspends collection action only on documented determination that the household cannot be located. Claims against a nonparticipating household may be suspended after the appropriate number of demand letters and it is determined the cost of further collection action is likely to exceed the amount that can be recovered. A claim may be determined uncollectible after three years. DHS must use suspended fraud claims to offset restored benefits.

(d) If the investigator interviews the person suspected of committing an intentional program violation and the person expresses that he does not want to attend an administrative disqualification hearing and is willing to repay the overissuance, the investigator obtains his signature on a repayment agreement form and on an acknowledgment of administrative disqualification hearing form.

(1) The hearing officer will not send a notice of the hearing to the person since the hearing is already scheduled on the acknowledgment of hearing form.

(2) The hearing officer will conduct the hearing without the person being present. The hearing officer will notify the person of the determination. The 10-day waiting period usually allowed to give the person an opportunity to explain his failure to appear at the hearing does not apply if the waiver of attendance has been signed.

(e) If the household against which collection action has been initiated for repayment of an intentional program violation claim is currently participating in the program and does not respond to the written demand letter within 10 days of the date the notice is mailed, DHS will reduce the household's food stamp allotment and/or TANF grant. If a nonparticipating household against which collection action has been initiated fails to respond to the first demand letter, DHS sends additional demand letters at reasonable intervals, until:

(1) the household responds by paying or agreeing to pay the claim;

(2) the criteria for suspending collection action have been met; or

(3) DHS initiates other collection action.

(f) The investigator must establish a claim against the household the guilty person lives with.

(g) Intentional program violation claims are collected in one of the following ways.

(1) Cash repayment--The investigator must attempt to collect the amount due in one lump-sum payment.

(2) Installment payments--If the household is unable to pay the claim in one payment, the investigator may establish a schedule of regular monthly payments. Payments should be set at a level which will result in repayment as soon as possible but not to exceed three years. The household must repay an amount equal to at least the allowable recoupment amount.

(3) Reduction of food stamp allotment--Before recoupment, the investigator must discuss with the household the amount of food stamps to be recouped. The recoupment amount is 20% of the household's monthly entitlement or $10 per month, whichever is greater.

(h) If the guilty person fails to make an agreed cash payment, DHS may recoup the amount owed, suspend collection action, or refer the case to a collection agency.

(i) If the investigator interviews the person suspected of committing an intentional program violation and the person expresses that he does not want to have an administrative disqualification hearing and is willing to repay the overissuance, the following policies and procedures apply.

(1) The investigator obtains the individual's signature on a repayment agreement form and on an administrative disqualification hearing waiver form.

(2) By signing the waiver of hearing and repayment agreement forms, the recipient agrees that he does not want a hearing, that he will repay the overissuance, and that he understands that he will be disqualified from receiving food stamps and/or TANF/Aid to Families with Dependent Children (AFDC) for a period of time determined by whether it is the first, second, or third offense. In some cases, the client may be given an opportunity to waive his right to a hearing through direct mail contact.

(3) The investigator will not send the case to the hearing officer, but will initiate repayment and disqualification actions.

(4) During the interview with the client, the investigator gives the client an opportunity to retract the waiver within seven workdays of signing the waiver form. If DHS receives a written retraction of waiver by the seventh day from the date the recipient signed the waiver, an administrative hearing will be scheduled and conducted. If DHS does not receive a written retraction of the waiver by the end of the seventh day, the waiver and repayment agreement remain valid, and no further appeals will be authorized.

**History**
- *Source Note: The provisions of this §357.566 adopted to be effective June 15, 1987, 12 TexReg 1394; amended to be effective March 1, 1992, 17 TexReg 694; amended to be effective July 1, 1992, 17 TexReg 3477; amended to be effective September 14, 1998, 23 TexReg 9410; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter M** FRAUD OR ABUSE INVOLVING MEDICAL PROVIDERS

##### **1 Tex. Admin. Code § 357.581** Department Responsibility {#sec-357.581 omnilex-key=us-tx-regs-official--title-1--357.581}

(a) The Texas Department of Human Services is responsible for minimizing the opportunity for provider fraud and abuse as well as recipient fraud and abuse and for protecting recipients of federally funded health care programs from unsafe practitioners. The department takes appropriate action to protect recipients and the program when providers of services are suspected of committing fraud or abuse.

(b) All actions resulting in overpayment to a provider are not necessarily fraudulent. Some circumstances could result in the referral of a provider to the Medicaid Fraud Control Unit in the attorney general's office. Other circumstances would result in administrative action rather than referral for judicial action or criminal prosecution. These actions, or sanctions, range from a notice to the provider explaining his error to exclusion from the Medicaid Program.

**History**
- *Source Note: The provisions of this §357.581 adopted to be effective January 1, 1976; amended to be effective February 29, 1980, 5 TexReg 556; amended to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.582** Confidentiality of Fraud or Abuse Investigation Records {#sec-357.582 omnilex-key=us-tx-regs-official--title-1--357.582}

Requests for disclosure or copies of information regarding fraud or abuse investigations are treated as confidential, and records may not be disclosed under the Open Records Act or otherwise without first coordinating the requests with the office of the general counsel and the fraud and abuse division.

**History**
- *Source Note: The provisions of this §357.582 adopted to be effective July 1, 1986, 11 TexReg 2825; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.583** Statutory Bases {#sec-357.583 omnilex-key=us-tx-regs-official--title-1--357.583}

The statutory bases for Medicaid fraud and abuse investigation and prosecution are Texas Human Resources Code, Chapter 32, and 42 United States Code §§1396b(q) and 1396h. State and federal officials may also act under other statutes, including, but not limited to, the Deceptive Trade Practices and Consumer Protection Act, the Texas Penal Code, the Civil Monetary Penalties Law, and Public Law 100-93.

**History**
- *Source Note: The provisions of this §357.583 adopted to be effective February 29, 1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.584** Department Responsibilities in Relation to Provider Fraud and Abuse {#sec-357.584 omnilex-key=us-tx-regs-official--title-1--357.584}

The department's responsibilities in relation to provider fraud and abuse include the following:

(1) establishing criteria for identifying cases of possible fraud or abuse;

(2) establishing the methods for referring suspected fraud cases for investigation;

(3) cooperating with the Medicaid Fraud Control Unit, Office of the Attorney General, by furnishing information and data and serving as witnesses, when requested;

(4) recouping all overpayments and taking other administrative sanctions and actions; and

(5) investigating cases of possible abuse.

**History**
- *Source Note: The provisions of this §357.584 adopted to be effective February 29, 1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.585** Grounds for Fraud Referral and Administrative Sanction {#sec-357.585 omnilex-key=us-tx-regs-official--title-1--357.585}

The department may impose sanctions against a provider or a provider's employee who permits, does, or causes any of the following or for any other reason provided by law or duly-issued regulation. This list is not all inclusive:

(1) submitting a false statement or misrepresentation, or omitting pertinent facts when claiming payment under Medicaid or when supplying information used to determine the right to payment under Medicaid;

(2) submitting a false statement, information, or misrepresentation, or omitting pertinent facts to obtain greater compensation than the provider is legally entitled to;

(3) submitting a false statement, information, or misrepresentation, or omitting pertinent facts to meet prior authorization requirements;

(4) failing to disclose or make available upon request to the department or its authorized agents, representatives of the Department of Health and Human Services, or the Attorney General's Medicaid Fraud Control unit any records the provider is required to maintain or any records necessary to verify items or services furnished under Title XVII or Title XX to determine whether payment for those items or services is due or was properly made. This includes providing documentation or allowing examination of records or both. This also includes records of services provided to Medicaid recipients and payments made for those services, including but not limited to, documents related to diagnosis, treatment, service, lab results, and x-rays. Accessible information must include information that is necessary for the agencies specified in this paragraph to perform statutory functions;

(5) failing to provide and maintain quality services to Medicaid recipients within accepted medical community standards or standards required by statute, regulation, or contract;

(6) failing to comply with the terms of the Medicaid contract or provider agreement, assignment agreement, the provider certification on the Medicaid claim form, or regulations published by the department;

(7) furnishing or ordering services to patients (whether or not eligible for benefits) under Title XVIII or a state health care program that substantially exceed the recipient's needs, are not medically necessary, are not provided economically or are of a quality that fails to meet professionally recognized standards of health care;

(8) rebating or accepting a fee or a part of a fee or charge for a Medicaid patient referral;

(9) violating any provision of the Human Resources Code, Chapter 32, or any rule or regulation issued under the Code;

(10) submitting a false statement or misrepresentation or omitting pertinent facts on any application or any documents requested as a prerequisite for Medicaid participation;

(11) failing to meet standards required for licensure or required by state or federal law, department rule, provider agreement, or provider manuals for participation in the Medicaid Program;

(12) charging recipients for allowable services that exceed the amount the department or its agents pay for except when specifically allowed by the department;

(13) refusing to execute or comply with a provider agreement or amendments when requested;

(14) failing to correct deficiencies in provider operations after receiving written notice of them from the department or its authorized agents;

(15) engaging in any negligent practice resulting in death, injury, or substantial probability of death or injury to the provider's patients and to persons who receive or benefit from the provider's services;

(16) pleading guilty or nolo contendere, agreeing to an order of probation without adjudication of guilt under deferred adjudication, or being a defendant in a court judgment or finding of guilt for a violation relating to performance of a provider agreement or program violation of Medicare, the Texas Medicaid Program, or any other state's Medicaid Program;

(17) failing to repay or make arrangements that are satisfactory to the department to repay identified overpayments or other erroneous payments;

(18) failing to abide by applicable statutes regarding handicapped individuals or civil rights;

(19) being terminated, suspended, or excluded from participation in any federal program having an unpaid debt under any federal program, or being otherwise sanctioned under any federal program involving the provision of health care, including the Department of Defense, the Veterans Administration, and any state health care program for actions or failure to act that would be considered abusive or fraudulent. This includes any reasons related to the person's professional competence or performance or financial integrity. Any appeal by the provider for an action taken against him under this item does not consider the validity of a sanction or action taken by Medicare or any other state's Medicaid Program;

(20) submitting or causing to be submitted under Title XVIII or a state health care program claims or requests for payment containing unjustified charges or costs for items or services that substantially exceed the person's usual and customary charges or costs for those items or services to the public or the private pay patients;

(21) failing to comply with Medicaid policies, published Medicaid bulletins, policy notification letters, provider policy or procedure manuals, contracts, statutes, rules, regulations, or previously sent interpretations to the provider of any of the items listed;

(22) submitting claims with a pattern of inappropriate coding or billing that results in excessive costs to the Medicaid Program;

(23) billing for services or merchandise that was not provided to the recipient;

(24) submitting to the Medicaid Program a cost report containing costs not associated with the Medicaid Program or not permitted by Medicaid program policies;

(25) submitting a false statement or misrepresentation that, if used, has the potential of increasing any individual or state provider payment rate or fee;

(26) charging recipients for services when payment for the services was recouped by Medicaid because of any of the reasons stated in §79.2303 of this title (relating to Recovery From Providers);

(27) failing to notify and reimburse the department or its agents for services paid by Medicaid if the provider also receives reimbursement from a liable third party;

(28) misapplying, misusing, embezzling, failing to promptly release upon a valid request, or failing to keep detailed receipts of expenditures relating to any funds or other property in trust for a Medicaid recipient;

(29) pleading guilty or being convicted of a violation of state or federal statutes relating to dangerous drugs, controlled substances, or any other drug-related offense;

(30) pleading guilty of, being convicted of, or engaging in conduct involving moral turpitude;

(31) having a voluntary or involuntary action taken by a licensing agency or board to require the provider or employee to comply with professional practice requirements of the board after the board receives evidence of noncompliance with licensing requirements;

(32) pleading guilty or being convicted of a violation of state or federal statutes relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct relating to the delivery of a health care item or service or relating to any act or omission in a program operated or financed by any federal, state, or local government agency;

(33) being convicted in connection with the interference with or obstruction of any investigation into any criminal offense described in §79.2112(f) of this title (relating to Administrative Sanctions or Actions) or paragraphs (16), (29), (30), or (32) of this subsection.

(34) having its license to provide health care revoked or suspended by any state licensing authority, or losing this license because of action based on assessment of the person's professional competence, professional performance, or financial integrity, or surrendering this license while a formal disciplinary proceeding is pending before licensing authorities when the proceeding concerns the person's professional competence, professional performance, or financial integrity;

(35) substantially failing, as a health maintenance organization under Title XIX or any entity furnishing services under waiver granted by the United States Department of Health and Human Services (HHS) under that title, to provide medically necessary items or services that are required under law or under contract, if the failure has adversely affected or is substantially likely to adversely affect the medicaid recipient of these items or services;

(36) substantially failing, as an eligible organization under a risk sharing contract as defined in 42 USCA §1395mm, to provide medically necessary items or services that are required under law or contract, if the failure has adversely affected or has the potential to adversely affect the patient;

(37) committing an act described in the Social Security Act, §1128A or §1128B.

(38) meeting any of the conditions specified in §79.2112(f) or (g) of this title (relating to Administrative Sanctions or Actions);

(39) failing to fully and accurately make any disclosure required by the Social Security Act, §1124 or §1126.

(40) failing to disclose information about the ownership of a subcontractor with whom the person has had business transactions in an amount exceeding $25,000 during the previous 12 months or about any significant business transactions (as defined by HHS) with any wholly-owned supplier or subcontractor during the previous five years;

(41) failing, as a hospital, to comply substantially with a corrective action required under the Social Security Act, §1886(f)(2)(B);

(42) defaulting on repayments of scholarship obligations or items relating to health profession education made or secured, in whole or in part, by HHS when HHS has taken all reasonable steps available to HHS to secure repayment.

(43) developing false source documents or failing to sign source documents, to retain supporting documentation, or to comply with the provisions or requirements of the department pertaining to electronic claims submittal.

**History**
- *Source Note: The provisions of this §357.585 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.586** Administrative Sanctions/Actions, Restitution, and Recoupment {#sec-357.586 omnilex-key=us-tx-regs-official--title-1--357.586}

The department exercises authority for recoupment and restitution of overpayments to providers in all medical programs. The department, its agents can collect the money involved. The department also has the authority to impose administrative sanctions and actions against a provider when violations, as listed in this subchapter, and other applicable sections have occurred. For purposes of the sections in this subchapter and in §§79.2301-79.2305 of this title (relating Recovery of Benefits Wrongfully Received), the provider is responsible for his own actions as well as the actions of the provider's agents.

**History**
- *Source Note: The provisions of this §357.586 adopted to be effective February 29, 1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.587** Definitions {#sec-357.587 omnilex-key=us-tx-regs-official--title-1--357.587}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Abuse--Provider practices that are inconsistent with sound fiscal, business, or medical practices and that result in unnecessary program cost or in reimbursement for services that are not medically necessary; do not meet professionally recognized standards for health care; or do not meet standards required by contract, statute, regulation, or previously sent interpretations to the provider of any of the items listed.

(2) Act--The Medicare and Medicaid Patient and Program Protection Act of 1987 (Public Law 100-93).

(3) Affiliates--Persons associated with one another so that any one of them directly or indirectly controls or has the power to control another in whole or in part.

(4) Agent--Any person, company, firm, corporation, employee, independent contractor, or other entity or association acting for or in the place of the department or a provider under authority of the department or a provider.

(5) Civil Monetary Penalty Law--Any state or federal law permitting or requiring assessment of penalties and/or damages against individuals or entities or both for conduct that includes a claim or request for payment under Titles XVIII, XIX, or XX; and that violates the federal and/or state statutes and regulations enacted pursuant to these titles.

(6) Closed-end provider agreement--An agreement for a specific period of time. It must be renewed for the provider to continue to participate in the Medicaid Program.

(7) Controlled substances--"Controlled substance" as defined by the Texas Controlled Substances Act (Texas Civil Statutes, Article 4476-15) or its successor and the Federal Controlled Substances Act (21 USCA §8.01 et seq.) or its successor.

(8) Conviction or convicted--A person is considered to have been convicted of a criminal offense when:

(A) a judgment of conviction has been entered against him by a federal, state, or local court, regardless of whether an appeal is pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(B) he has been found guilty by a federal, state, or local court;

(C) he has entered a plea of guilty or nolo contendere that has been accepted by a federal, state, or local court; or

(D) he has entered a first offender or other program and judgement of conviction has been withheld.

(9) Department--The Texas Department of Human Services (DHS).

(10) Division administrator--The administrator for a division of the department administering a Title XIX or XX service.

(11) Exclusion--The temporary barring or permanent exclusion of a person from participation in the Titles XIX and XX programs, which includes barring the person from providing, ordering or prescribing items or services for Titles XIX and XX recipients. This includes the termination of the provider contract/agreement with the excluded person.

(12) False statement or misrepresentation--Any statement or representation that is inaccurate, incomplete, or not true.

(13) Federal financial participation (FFP)--Federal dollar used for the administration of benefit programs.

(14) Fraud--Any act that constitutes fraud under applicable federal or state law, including any intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to him or some other person.

(15) Fraud and Abuse Division--The division within the department charged with completing integrity reviews on potential Medicaid provider fraud or abuse cases and full investigations on provider abuse cases.

(16) Inpatient institutional services--Inpatient services provided by hospitals and long term care facilities.

(17) Licensing authority adverse action--Action by a state or federal licensing entity (including other similar authority) against conduct that adversely affects the status of the license. Action includes revocation or suspension of a license, reprimand, censure, or probation.

(18) Open-end provider agreement--An agreement that has no specific termination date and continues in force as long as both parties agree.

(19) Overpayment--The amount paid to a provider that exceeds the amount to which the provider is entitled for a particular service. Overpayments may result from any of the following, which are not intended to be all inclusive: a false statement or misrepresentation, an omission of pertinent information, or the lack of sufficient supporting documentation for the service. This does not include claims processing errors made by the department or its agents, although these are subject to recoupment.

(20) Person--An individual, association, partnership, corporation, or other organization or legal entity that has or has had a contract or provider agreement with the department or has been or is an employee of a Title XVIII or any state's Title XIX, XX, or V provider.

(21) Practitioner--A physician or other individual licensed under state law to practice his profession.

(22) Provider--A person, firm, partnership, corporation, agency, association, institution, or other entity that was or is approved by the department to provide medical assistance under contract or provider agreement with the department.

(23) Recipient--A person eligible for and covered by the Texas Medical Assistance program.

(24) Recoupment of overpayment--A reduction or an adjustment of the amounts paid to a provider or collection of funds on previously submitted pending and subsequently submitted bills to offset overpayments previously made to the provider.

(25) Restricted reimbursement--Denial of payment for specific procedures for a specified time period for services that the provider has abused or has billed inappropriately.

(26) State Health Care program--Any program that has a state plan approved under Title XIX or any program that receives funds or allotments in any state under Title V or XX of the Social Security Act.

(27) Suspension of payments (payment hold)--The withholding of all or any portion of payments due a provider until the matter in dispute between the provider and the department or agent is resolved.

(28) Title XVIII--Title XVIII (Medicare) of the Social Security Act.

(29) Title XIX--Title XIX (Medicaid) of the Social Security Act.

(30) Title XX--Social Services Block Grant of the Social Security Act.

(31) Unit--The Medicaid Fraud Control Unit within the attorney general's office that is responsible for investigating all potential Medicaid provider fraud cases and cases involving physical abuse of patients in institutional settings.

**History**
- *Source Note: The provisions of this §357.587 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.588** Administrative Sanctions and Actions {#sec-357.588 omnilex-key=us-tx-regs-official--title-1--357.588}

(a) The following sanctions may be imposed against providers for any reason specified in §79.2105 of this title (relating to Grounds for Fraud Referral and Administrative Sanction):

(1) exclusion from participation in the Titles XIX and XX programs for a specified period of time;

(2) suspension of payments (payment hold) to a provider;

(3) recoupment of overpayments;

(4) recoupment of overpayments projected from a sampling process; and

(5) restricted reimbursement from the Titles XIX and XX programs for a specified period of time.

(b) A sanction may be imposed even if none of the administrative actions listed in subsection (c) of this section has been imposed.

(c) Administrative actions may include but are not limited to the following:

(1) referral to peer review outside the department;

(2) transfer to a closed-end provider agreement for a specified period of time;

(3) attendance at provider education sessions;

(4) prior authorization of selected services;

(5) review of all services before payment;

(6) review of all services after payment;

(7) referral to the appropriate state licensing board;

(8) referral to the department of health and human services, including referral for action under the Civil Monetary Penalties Law (the Social Security Act, §1128);

(9) attendance in informal or formal provider corrective action meetings;

(10) submittal of additional justification that is not normally required to accompany submitted claims;

(11) oral, written, or personal educational contact with the provider;

(12) posting of a surety bond; and

(13) referral for recovery through judicial means of all overpayments.

(d) The department must exclude providers from participation in the Titles XIX and XX programs for at least the period of time directed by the Department of Health and Human Services. Additionally, the department excludes from participation in the Titles XIX and XX programs, for a minimum period of one year beyond the exclusion, commensurate with the severity of the offense, any person excluded for fraud or abuse or under the provisions allows in the Act.

(e) Providers are afforded all administrative and judicial due process remedies applicable to administrative actions and sanctions as specified in Subchapter Q of this chapter (relating to Contract Appeals).

(f) The department must exclude from participation in Titles XIX and XX programs for a minimum of five years any person who has been convicted under federal or state law of a criminal offense related to:

(1) delivery of an item or service under Title XVIII (medicare) or under any state health care program; or

(2) neglect or abuse of patients in connection with the delivery of a health care item or service.

(g) The department may exclude a partnership, corporation, association, or other legal entity in which an individual, who has an ownership or controlling interest in that entity as defined in the Social Security Act, §1124(a) (3) or is an officer, director, agent, or managing employee in that entity as defined in the Social Security Act, §1126(b), has been:

(1) convicted of any offense described in subsection (f) of this section, or §79.2105(16), (29), (30) or (32) of this title (relating to Grounds for Fraud Referral and Administrative Sanction);

(2) assessed with a civil monetary penalty under the Social Security Act, §1128A; or

(3) excluded from participation under a program under Title XVIII or under a state health care program.

**History**
- *Source Note: The provisions of this §357.588 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.589** Scope of Sanction {#sec-357.589 omnilex-key=us-tx-regs-official--title-1--357.589}

(a) A sanction may be applied to all affiliates of a provider after considering all relevant facts and circumstances. The violation, failure, or inadequacy of performance may be attributed to a provider's affiliate if the affiliate knew or approved of the misconduct within the course of his official duty.

(b) When a person is excluded under the provisions of §79.2105 of this title (relating to Grounds for Fraud Referral and Administrative Sanction) he must neither personally nor through a clinic, group, corporation, or other association bill or receive payment for any Title XIX or XX services or supplies provided on or after the date of the exclusion. Additionally, he must not order or prescribe services to Title XIX or XX recipients after that date. A clinic, group, corporation, or other association that is a provider is not permitted to submit claims for any services or supplies provided by a person within the organization who is excluded from participation unless the services or supplies are provided before the exclusion effective date. A provider is not permitted to include in a cost report or any documents used to determine an individual payment rate, a statewide payment rate, or a fee, the salary, fringe, overhead, or any other costs associated with any employee, owner, officer, director, board member, independent contractor, or agent associated with the provider who was previously excluded from the Medicare or Medicaid Program for program abuse. Under certain circumstances, depending upon the reason for exclusion, the department does not permit the excluded physician or individual to act as a stockholder owning 5.0% or more ownership interest, officer, director, board member, independent contractor, manager, consultant, employee providing or billing for services provided to Title XIX or XX recipients, or agent associated with a Title XIX or XX provider. Additionally, the department may exclude a Title XIX or XX provider who knowingly and willingly uses a person or entity as an employee, independent contractor, or agent who was previously excluded under these provisions.

(c) If any of the sections in this subchapter and in §§79.2301-79.2305 of this title (relating to Recovery of Benefits Wrongfully Received); state or federal law; provider agreements, provider manuals, or Medicaid bulletins are violated, the department may exclude the organization and any person in the organization who is responsible for the violation.

(d) To be readmitted, the provider must reapply for participation after exclusion. The department or its agent considers the merits of the case.

(e) Except as specified in subsection (f) of this section, no Title XIX or XX payments are made for services or supplies provided by participating provider that have been prescribed or ordered by an excluded practitioner on or after the effective date specified by the department. This date is subsequent to the actual effective date of the provider exclusion unless the provider's license to practice has been cancelled, in which case nothing can be ordered or prescribed after license cancellation. The following criteria are used to determine when payments begin to be denied.

(1) If the department excludes under its own authority and the excluded provider fails to appeal, payments are denied 45 days from the date the excluded provider's right to appeal expires.

(2) If the department excludes under its own authority and the excluded provider appeals within the time allowed, payments are denied 45 days from the date of the administrative law judge's final decision.

(3) If the department excludes under a mandate by the Department of Health and Human Services, and Federal Financial Participation (FFP) is denied, payments are denied 45 days from the date of exclusion. When FFP is denied, the state statute postponing the exclusion until after disposition of the appeal does not apply.

(f) An order or prescription written before the exclusion of a physician is valid for the duration of the order except as specified in subsection (h) of this section.

(g) If, after the effective date of an exclusion, the excluded person submits claims for which payment is prohibited, he may be subject to a civil monetary penalty under the authority contained in 42 United States Code 1329a-7a or § 79.2402 of this title (relating to Liability).

(h) Unless the department determines that the health and safety of patients receiving services warrants an earlier exclusion effective date, under the following circumstances an exclusion does not apply to payments made under Title XIX or XX until 30 days after its effective date:

(1) inpatient institutional services furnished to an individual who was admitted to the institution before the effective date of the exclusion; and

(2) home health services and hospice care furnished to an individual under a plan established before the effective date of the exclusion.

(i) In the event that an individual is excluded under §79.2105(4) of this title (relating to Grounds for Fraud Referral and Administrative Sanction), the period of the exclusion is equal to the sum of:

(1) the length of the period in which the individual failed to grant the immediate access; and

(2) an additional period, not to exceed 90 days, set by the department.

**History**
- *Source Note: The provisions of this §357.589 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.590** Imposing a Sanction {#sec-357.590 omnilex-key=us-tx-regs-official--title-1--357.590}

The decision to impose a sanction or make a fraud referral is at the discretion of the deputy commissioner or designee responsible for the program area affected by the violation. In determining the sanction to be imposed, the decision-maker may consider the seriousness of the program violation, the extent of the violation, prior imposition of sanctions, willingness to comply with program rules, recommendations of peer review groups, or any other pertinent information.

**History**
- *Source Note: The provisions of this §357.590 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective September 29, 1987, 11 TexReg 3226; amended to be effective August 1, 1988, 13 TexReg 3530; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.591** Notice of Adverse Action {#sec-357.591 omnilex-key=us-tx-regs-official--title-1--357.591}

(a) Except in the following circumstances, the department sends the provider prior written notification about its intent to impose an exclusion sanction and includes a time frame for the provider to take action necessary to correct the problem areas:

(1) any criminal conduct;

(2) any action by the federal government that would preclude federal financial participation (FFP);

(3) any conduct or omission of conduct that presents a significant health, safety, or security hazard to a recipient receiving services from the provider;

(4) any conduct or omission of conduct that causes financial loss to a recipient receiving services from the provider, if the financial loss is caused by a violation of the requirements of the Texas Medicaid Program;

(5) any conduct or omission of conduct by the provider that indicates a pattern of repeated violations of the Texas Medicaid Program;

(6) any conduct or omission of conduct by the provider that causes a significant loss of department funds paid for services not provided or not provided according to the requirements of the Texas Medical Assistance Program;

(7) any conduct or omission of conduct by the provider that would preclude the department or its authorized agents, representatives of the department of health and human services, or the attorney general's Medicaid Fraud Control Unit from obtaining, upon request, access to or copies of records of services provided to Medicaid recipients and payments made for those services including, but not limited to, documents related to diagnosis, treatment, service, lab results, and x-rays.

(b) When the department or its agent has notified a provider about a violation or an overpayment, future payments may be withheld on pending and subsequently received claims or all payments may be suspended pending a final determination. Recovery of overpayments may be calculated by applying a percentage, determined through sampling methods, the total claims paid for a particular service for a specified period of time.

(c) When the department decides to sanction a provider under §79.2112(a) of this title (relating to Administrative Sanctions and Actions), the provider is notified in writing. The notice includes a statement of the provider's right to request a formal review of the decision. Formal reviews are requested according to policies and procedures outlined in the department's legal services rules and procedures in the various program provider handbooks.

(d) Providers may request informal reviews of the department's or its agent's action regarding claims payment or administrative actions under §79.2112(c) of this title (relating to Administrative Sanctions and Actions).

(e) Letters notifying providers about exclusion must contain a description of the duration of the action and the method the provider uses to request reinstatement.

**History**
- *Source Note: The provisions of this §357.591 adopted to be effective February 29,1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.592** Informing Other Interested Parties {#sec-357.592 omnilex-key=us-tx-regs-official--title-1--357.592}

(a) When a provider has been excluded, the department notifies, as appropriate, the applicable professional society, board of registration or licensure, and federal or state agencies about the findings made and the actions imposed according to federal requirements of the Act.

(b) The department also notifies providers, recipients, and the public about providers being excluded, through procedures established by the department.

(c) All department offices that maintain provider lists are promptly notified.

**History**
- *Source Note: The provisions of this §357.592 adopted to be effective February 29, 1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.593** Provider Education {#sec-357.593 omnilex-key=us-tx-regs-official--title-1--357.593}

Except when an exclusion is imposed, each person who is sanctioned or is seeking reinstatement may be asked to participate in a provider education program. These educational meetings are arranged by the division administrator or designee and are held at a location designated by the department.

**History**
- *Source Note: The provisions of this §357.593 adopted to be effective February 29, 1980, 5 TexReg 526; amended to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.594** Request for Reinstatement {#sec-357.594 omnilex-key=us-tx-regs-official--title-1--357.594}

After the exclusion period specified by the department, the provider or entity may request reinstatement as specified in the notification letter. The department determines the need for individual provider participation or reinstatement. The request for reinstatement could result in a denial by the department. This determination is based on the following criteria:

(1) accessibility of other health care to the recipient population; and

(2) the provider's previous conduct, including conduct during participation in the Titles XVIII, XIX, XX, and V programs in any state, or any conduct or action for which a sanction could have been taken, as described in these sections or §79.2105 of this title (relating to Grounds for Fraud Referral and Administrative Sanctions) or §79.2402 of this title (relating to Liability).

**History**
- *Source Note: The provisions of this §357.594 adopted to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.595** Obligation of Health Care Practitioners and Providers {#sec-357.595 omnilex-key=us-tx-regs-official--title-1--357.595}

(a) Each provider is responsible for ensuring that items or services furnished personally by, at the medical direction of, or on the prescription or order of an excluded physician are not billed to the Titles XIX and XX programs after dates specified in this subchapter.

(b) Providers must not bill recipients for services or items specified in subsection (a) unless:

(1) the recipient is informed, before delivery of the item or service, that those services are not reimbursed by the department; and

(2) the provider obtains and retains before delivery of the item or service, a signed consent from the recipient indicating that the recipient understands he is responsible for the payment of these services and that he still requests the service.

(c) Providers who violate department rules by billing recipients are subject to all applicable administrative sanctions described in Subchapter V of this chapter (relating to Fraud and Abuse).

**History**
- *Source Note: The provisions of this §357.595 adopted to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter N** FRAUD OR ABUSE INVOLVING PROVIDERS (EXCEPT MEDICAL)

##### **1 Tex. Admin. Code § 357.601** Responsibilities of the Department In Relation to Provider Fraud {#sec-357.601 omnilex-key=us-tx-regs-official--title-1--357.601}

DHS' responsibilities in relation to provider fraud include:

(1) setting criteria for identifying cases of possible fraud or abuse;

(2) establishing the methods of referral for investigating those case in which fraud is suspected;

(3) keeping appropriate records and making periodic reports of suspected fraudulent cases;

(4) collecting all overpayments.

**History**
- *Source Note: The provisions of this §357.601 adopted to be effective April 1, 1981, 6 TexReg 1081; amended to be effective June 15, 1987, 12 TexReg 1394; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.602** Statutory Bases for Prosecution {#sec-357.602 omnilex-key=us-tx-regs-official--title-1--357.602}

(a) For all services for which DHS provides remuneration, DHS is in effect, the legal owner of the funds used to pay for the goods or services. DHS has the right and responsibility to seek legal redress for any overpayments that may occur as a result of a provider's actions.

(b) The most common form of criminal sanction would take place under the Texas Penal Code, §§31.032, 7.23, and 37.10.

**History**
- *Source Note: The provisions of this §357.602 adopted to be effective April 1, 1981, 6 TexReg 1081; amended to be effective June 15, 1987, 12 TexReg 1394; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter O** RECOVERY OF BENEFITS WRONGFULLY RECEIVED

##### **1 Tex. Admin. Code § 357.621** Department Responsibility {#sec-357.621 omnilex-key=us-tx-regs-official--title-1--357.621}

(a) The department or its agents are responsible for recovering from providers all payments made for services delivered or provided under fraudulent or abusive circumstances or through error or misunderstanding. At the department's discretion, overpayments may be collected in a lump sum or in installments. If collection is made through installments, the provider must comply with the payment plan established by the department for a reasonable length of time not to exceed 12 months.

(b) The department determines the need for individual provider participation or reinstatement. This determination is based on the following criteria:

(1) accessibility of other health care to the recipient population; and

(2) previous conduct of the provider during participation in the Medicare or Medicaid program in any state or any conduct or action for which a sanction as described in these sections could have been taken.

(c) The department or its agents recover overpayments made because of claims processing errors by the department or its agents.

**History**
- *Source Note: The provisions of this §357.621 adopted to be effective July 1, 1986, 11 TexReg 2828; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.622** Recovery from Providers {#sec-357.622 omnilex-key=us-tx-regs-official--title-1--357.622}

(a) Overpayments involving possible fraud are referred to the Attorney General's Fraud Control Unit. If intent to defraud is not determined or cannot be proven, the department or its agents may take an administrative sanction to recoup overpayments. Recovery of the overpayments from a provider who made a false statement or misrepresentation, or who omitted pertinent facts may include the cumulative dollar amount due. The following situations are not intended to be all inclusive.

(1) An ordering provider causes an overpayment to be made to himself or to another provider as a result of a false statement, misrepresentation, or omission of pertinent facts on a claim, attachments to a claim, medical records, or any other documentation used to adjudicate a claim for payment; any documentation submitted or maintained by the provider to support payment on individual claims or to support representations made on cost reports; or other documents used to establish fees, daily payment rates, or vendor payments.

(2) A provider makes a false statement, a misrepresentation, or omits pertinent facts on a provider agreement or any documents required as a prerequisite for Medicaid participation.

(b) Medicaid Fraud Control Unit is primarily responsible for obtaining and reporting restitution in fraud court cases. If a particular case involves both judicial and administrative processes, the judicial process takes precedence. The unit is responsible for arranging repayment terms in fraud cases of court-ordered restitution. The department may take any other administrative sanction or action pertinent to the violation.

(c) The department may recover funds when no actual overpayment was made. The following instances are not intended to be all inclusive:

(1) recover of a patient's trust fund money for distribution to appropriate recipients or their responsible parties if those funds were misapplied, misused, or embezzled; or the provider is required to make this distribution;

(2) recovery of funds previously collected by the provider from recipients if collection is not allowed by contract, statute, regulation, rules, provider policy or procedure manuals, published Medicaid bulletins, policy notification letters, or interpretations previously sent to the provider;

(3) recovery of the cost of a contract appeals hearing from the provider if the department's action is upheld by the final decision of the contract appeals committee. For the purpose of this paragraph, cost of a contract appeals hearing is defined as the total cost for the court reporter and any transcripts and copies developed in preparation for, during, or after the hearing; and

(4) recovery of an unpaid debt plus interest, if any, owed to any state Medicaid or Medicare program as the result of fraudulent or abusive actions by the provider. The department distributes the balance of the recovered amount to the state Medicaid or Medicare program after recovering any administrative costs associated with the recovery. Any appeal by the provider is based solely upon whether there is or is not an unpaid balance owed to the state Medicaid or Medicare program in question.

**History**
- *Source Note: The provisions of this §357.622 adopted to be effective July 1, 1986, 11 TexReg 2828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.623** Recovery When Fraud Is Involved {#sec-357.623 omnilex-key=us-tx-regs-official--title-1--357.623}

(a) Decision to recover funds.

(1) Recovery of funds which are obtained through fraudulent means by a provider may be recommended by the prosecuting attorney or by an administrative determination by program staff.

(2) After a case is referred to the Fraud and Abuse Division, department staff may not attempt to recover funds without prior approval from the Fraud and Abuse Division. Vendor payments may be withheld to coincide with the investigation according to program procedures. If fraud cannot be determined or if the prosecuting attorney declines the case, the attorney general's unit returns the case to the department for administrative sanction or action.

(3) When provider fraud is suspected, the department makes no agreements for restitution. The decision regarding acceptance of restitution is left to the prosecuting attorney.

(4) The prosecuting attorney may decide to accept restitution payments before or after an indictment, or a court may order a repayment schedule upon conviction. Whether restitution is made instead of a prosecution or following a court order, all cashier's checks or money orders are made payable to the Texas Department of Human Services.

(5) The department or its agents are responsible for recoupment when referred cases do not result in prosecution. These cases are returned to the department's Fraud and Abuse Division to send to the appropriate division administrator for administrative action.

(b) Manner of repayment. When fraud is involved, repayment is arranged based on an administrative hearing, a recommendation by the district or county attorney, or a court order. Claims are collected in one lump sum whenever possible. If the provider is financially unable to pay the indebtedness in this manner, however, payment may be accepted in regular installments. Installment payments should be as large as possible. The claim should be liquidated within one year. Convicted providers should be ordered to make monthly or weekly payments.

**History**
- *Source Note: The provisions of this §357.623 adopted to be effective January 1, 1976; amended to be effective December 29, 1976, 1 TexReg 3515; amended to be effective March 1, 1979, 4 TexReg 555; amended to be effective February 29, 1980, 5 TexReg 529; amended to be effective July 1, 1986, 11 TexReg 2828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter P** CIVIL MONETARY PENALTIES

##### **1 Tex. Admin. Code § 357.641** Definitions {#sec-357.641 omnilex-key=us-tx-regs-official--title-1--357.641}

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Claim--An application for payment of health care services under Title XIX of the Social Security Act that is submitted by a person who is under a contract or provider agreement with DHS.

(2) Contract or provider agreement--Any written document (or series of documents) that obligates DHS or its health insuring agent to pay a person money under Title XIX of the Social Security Act in exchange for his goods or services. Included are claims for payment that a licensed practitioner (as defined by federal law) submits for services provided to Medicaid recipients.

(3) Commissioner--The commissioner of the Texas Department of Human Services.

(4) Days--Calendar days, unless otherwise specified.

(5) Department--The Texas Department of Human Services.

(6) Health insuring agent--An organization legally operating in the state that:

(A) pays providers of certain Title XIX medical services and supplies in exchange for premiums paid by DHS; and

(B) assumes an underwriting risk.

(7) Person--An individual, partnership, corporation, association, other organization, or legal entity that has a contract or provider agreement with DHS.

(8) Practitioner--A physician or other person licensed by the state to practice a profession.

(9) Provider--A person who has a contract or provider agreement with DHS.

(10) Title XIX--Title XIX of the Social Security Act.

**History**
- *Source Note: The provisions of this §357.641 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.642** Liability {#sec-357.642 omnilex-key=us-tx-regs-official--title-1--357.642}

DHS may assess a civil monetary penalty against a person who submits a claim, or causes a claim to be submitted, to DHS or its health insuring agent that contains a statement or representation that the person knew was false.

**History**
- *Source Note: The provisions of this §357.642 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.643** Maximum Amount {#sec-357.643 omnilex-key=us-tx-regs-official--title-1--357.643}

The maximum amount of the civil monetary penalty is:

(1) the amount that DHS or its health insuring agent pays because of the false claim and the interest on that amount determined at the rate provided by law for legal judgments (Texas Civil Statutes, Article 5069-1.05) accruing from the date on which the payment was made; plus

(2) twice the amount that DHS or its health insuring agent pays because of the false claim; plus

(3) $2,000 or less for each item or service for which payment was claimed.

**History**
- *Source Note: The provisions of this §357.643 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.644** Exemptions {#sec-357.644 omnilex-key=us-tx-regs-official--title-1--357.644}

(a) The requirements of §79.2402 of this title (relating to Liability) do not apply to a claim based on a voucher if DHS calculated and printed the claim amount on the voucher and submitted it for the provider's signature unless:

(1) the provider gave DHS information to use in preparing the voucher that he knew, or should have known, was false; or

(2) the provider failed to correct information he knew, or should have known, was false when given the opportunity to do so.

(b) DHS allows a 30-day grace period during which the provider may correct errors in a voucher prepared by DHS without penalty.

**History**
- *Source Note: The provisions of this §357.644 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.645** Determining the Amount {#sec-357.645 omnilex-key=us-tx-regs-official--title-1--357.645}

To determine the amount of a civil monetary penalty, DHS considers the following:

(1) the seriousness of the violation;

(2) the person's history in submitting claims; and

(3) the amount necessary to deter the person from submitting false claims in the future.

**History**
- *Source Note: The provisions of this §357.645 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.646** Assessment of a Civil Monetary Penalty {#sec-357.646 omnilex-key=us-tx-regs-official--title-1--357.646}

(a) Preliminary report. If after examining the facts the deputy commissioner or designee responsible for the program area affected by the violation concludes that the claim is false, the deputy commissioner or designee issues a preliminary report. The report includes the facts upon which the recommendation to assess a penalty were based and the amount of the recommended penalty.

(b) Notice of intent to assess a penalty.

(1) DHS must give the person charged with submitting a false claim a written notice of the preliminary report and DHS' intent to assess a civil monetary penalty. The notice must include the following information:

(A) a brief summary of the facts;

(B) the amount of the recommended penalty; and

(C) a statement of the person's right to an informal review of the false claim charge or penalty amount or both.

(2) Within 10 days of receiving the notice, the person may send the DHS office designated in the notice either:

(A) a written consent to the report and the recommended penalty; or

(B) a written request for an informal DHS review. The person must specify whether he is contesting the false claim charge or the penalty amount. He must present all information and documentation to support his position.

(c) Informal review process. If the person requests a review within the 10-day period, DHS conducts the review and sends the person a written notice. The notice includes:

(1) the results of the review;

(2) the procedures to request a hearing according to Subchapter Q of this chapter (relating to Contract Appeals).

(d) Contract hearing.

(1) The person may request a hearing by writing to DHS' Hearing Division. The Hearing Division must receive the request within 15 days after the person receives the notice specified in subsection (c) of this section.

(2) The hearing is conducted according to Subchapter Q of this chapter (relating to Contract Appeals).

(e) Notice of assessment of a civil monetary penalty. DHS assesses a penalty by sending the person written notice of the assessment in the following circumstances:

(1) after DHS receives the person's written consent to the preliminary report and recommended penalty as specified in subsections (a) and (b) of this section;

(2) if the person does not request an informal review as specified in subsection (b)(2) of this section;

(3) if the person does not request a contract hearing as specified in subsection (d)(1) of this section after receiving the results of the informal review and the statement of the recommended penalty; or

(4) if the administrative law judge at the contract hearing orders the assessment of a civil monetary penalty against the person.

**History**
- *Source Note: The provisions of this §357.646 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.647** Payment of a Civil Monetary Penalty {#sec-357.647 omnilex-key=us-tx-regs-official--title-1--357.647}

(a) Within 30 days of receiving the notice of assessment specified in §79. 2406 of this title (relating to Assessment of Civil Monetary Penalty), the person must submit the full amount in a manner and format specified by DHS. If the person requests a judicial review of the false claim or penalty amount ordered under §79.2406 of this title (relating to Assessment of Civil Monetary Penalty), he shall forward the amount of the penalty to DHS or submit to DHS a supersedeas bond, in a form approved by DHS, for the full amount. The bond is effective until all judicial review of the order or decision is final.

(b) If the person pays for the penalty but the penalty is later reduced, withdrawn, or not assessed, DHS remits the appropriate amount plus the interest accrued between the date that the penalty was paid and the date that the amount is remitted. Interest accrues at the rate provided by law for legal judgments.

(c) If the person has submitted a supersedeas bond as specified in subsection (a) of this section but the penalty is later withdrawn or not assessed, DHS releases the bond. If the person has submitted a supersedeas bond but the penalty is later reduced, DHS releases the bond when it receives an acceptable substitute bond or payment for the reduced amount. The deputy commissioner or designee responsible for the program area affected by the violation releases the bond.

**History**
- *Source Note: The provisions of this §357.647 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 357.648** Prohibited Use of Civil Monetary Penalties in Cost Reports or Claims {#sec-357.648 omnilex-key=us-tx-regs-official--title-1--357.648}

Civil monetary penalties and costs a person incurs as a result of a penalty are not allowable expenses for cost reports or claims that providers submit to determine rates or payments under the Texas Medical Assistance Program.

**History**
- *Source Note: The provisions of this §357.648 adopted to be effective May 16, 1988, 13 TexReg 1869; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter Q** REIMBURSEMENT RATES FOR PROSECUTION OF INTENTIONAL PROGRAM VIOLATIONS

##### **1 Tex. Admin. Code § 357.661** Rates of Reimbursement {#sec-357.661 omnilex-key=us-tx-regs-official--title-1--357.661}

The Texas Department of Human Services (DHS) contracts with county commissioners for prosecuting Aid to Families with Dependent Children (AFDC) and Food Stamp intentional program violations. As approved by the Texas Board of Human Services, DHS passes to the local prosecutors the federal share of the cost per case, and the local prosecutors supply the state match. The Budget Deficit Reduction Act of 1993 reduces the federal participation rate from 75% to 50% for fraud control activities, effective July 1, 1995. DHS is required to reduce the rate in effect before July 1, 1995, by 25% from:

(1) $420 to $280 for uncontested cases; and;

(2) $1,017 to $678 for contested cases.

**History**
- *Source Note: The provisions of this §357.661 adopted to be effective February 21, 1985, 10 TexReg 467; amended to be effective September 1, 1985, 10 TexReg 3132; amended to be effective June 15, 1987, 12 TexReg 1394; amended to be effective April 1, 1994, 19 TexReg 812; amended to be effective July 1, 1995, 20 TexReg 3476; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter R** JUDICIAL AND ADMINISTRATIVE REVIEW OF HEARINGS

##### **1 Tex. Admin. Code § 357.701** Purpose and Application {#sec-357.701 omnilex-key=us-tx-regs-official--title-1--357.701}

The purpose of this subchapter is to address the process for requesting administrative and judicial review of hearings. This subchapter applies to those hearings provided in this chapter that are related to benefits provided under the public assistance programs of Chapters 31 (TANF), 32 (Medicaid) and 33 (Nutrition Assistance Programs) Human Resources Code.

**History**
- *Source Note: The provisions of this §357.701 adopted to be effective September 1, 2007, 32 TexReg 5353; amended to be effective June 14, 2010, 35 TexReg 5033.*

##### **1 Tex. Admin. Code § 357.702** Definitions {#sec-357.702 omnilex-key=us-tx-regs-official--title-1--357.702}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Administrative Review--A desk review performed by an HHS System attorney of a hearing decision related to benefits provided under the public assistance programs of Chapters 31, 32 and 33, Human Resources Code and is limited to the hearing record that was considered by the hearings officer.

(2) Appellant--An applicant or client who requests a hearing or requests an administrative review of the hearing decision either personally or through a representative.

(3) Commission--The Texas Health and Human Services Commission.

(4) Date of Notice of Hearings Officer's Decision--The date on the written notice that contains the hearings officer's decision.

(5) Day--A calendar day, unless otherwise specified.

(6) Health and Human Services (HHS) System Agencies--The following five state agencies that are responsible for health and human services functions:

(A) Texas Health and Human Services Commission (HHSC);

(B) Department of Aging and Disability Services (DADS);

(C) Department of Assistive and Rehabilitative Services (DARS);

(D) Department of Family and Protective Services (DFPS); and

(E) Department of State Health Services (DSHS).

(7) Hearings Administrator--The administrator for fair and fraud hearings in the HHSC Appeals Division.

(8) Representative--Any person who assists the appellant in presenting the appellant's case. A legal counsel, relative, friend, or other spokesperson designated by the appellant may serve as a representative.

**History**
- *Source Note: The provisions of this §357.702 adopted to be effective September 1, 2007, 32 TexReg 5353; amended to be effective June 29, 2009, 34 TexReg 4292; amended to be effective June 14, 2010, 35 TexReg 5033.*

##### **1 Tex. Admin. Code § 357.703** Process and Timeframes {#sec-357.703 omnilex-key=us-tx-regs-official--title-1--357.703}

(a) The hearing officer makes the final administrative decision in a hearing for the HHS System agency and its designees, unless, in those instances related to benefits provided under the public assistance programs of Chapters 31, 32 and 33, Human Resources Code, the appellant or the appellant's representative files a request for an administrative review of the hearing decision.

(b) The following provisions establish the process and timelines for an administrative review under this subchapter.

(1) An appellant or the appellant's representative may make a timely request for an administrative review of a hearing officer's decision.

(2) To be timely, a request for an administrative review of the hearing officer's decision must be postmarked not later than the 30th day after the date of the notice of the decision and must be addressed to the hearings administrator. A request for administrative review will be considered timely if filed after 30 days, where Appellant demonstrates good cause. Exception: The 30 days does not begin until a new decision is issued if the appellant or appellant's representative is working with the hearing officer to reopen or reschedule the hearing.

(3) Within 10 days of receipt of the request for administrative review, the Commission designates a HHS System attorney to handle the administrative review of the hearing decision on behalf of the HHS System Agency. The assigned attorney reviews the hearing decision and the hearings record upon which it is based for errors of law and errors of fact using the "preponderance of evidence" standard. This standard means that the evidence as a whole shows that the fact sought to be proved is more probable than not.

(4) The attorney completes the administrative review and notifies the appellant in writing of the results not later than the 15th business day after the date the attorney receives the request for review.

(5) When an administrative review is conducted, the attorney makes the final decision for the HHS system agency and its designees.

(c) If the attorney's final decision in the administrative review is adverse to the appellant, judicial review may be obtained by filing for review with a district court in Travis County not later than the 30th day after the date of the notice of the final decision as provided under Government Code Chapter 2001.

**History**
- *Source Note: The provisions of this §357.703 adopted to be effective September 1, 2007, 32 TexReg 5353; amended to be effective June 29, 2009, 34 TexReg 4292; amended to be effective June 14, 2010, 35 TexReg 5033.*

### **Chapter 358** MEDICAID ELIGIBILITY FOR THE ELDERLY AND PEOPLE WITH DISABILITIES

#### **Subchapter A** GENERAL INFORMATION

##### **1 Tex. Admin. Code § 358.101** Purpose and Scope {#sec-358.101 omnilex-key=us-tx-regs-official--title-1--358.101}

(a) This chapter establishes the Medicaid eligibility criteria for Medicaid-funded programs for the elderly and people with disabilities (MEPD) in Texas, which provide medical assistance to eligible persons as described in this chapter and in:

(1) Title XVI of the Social Security Act (42 U.S.C. §§1382 et seq.);

(2) Title XIX of the Social Security Act (42 U.S.C. §§1396a et seq.);

(3) 20 CFR Part 416, Supplemental security income for the aged, blind, and disabled;

(4) 42 CFR Part 435, Eligibility in the States, District of Columbia, the Northern Mariana Islands, and American Samoa;

(5) 42 U.S.C. Chapter 7, Social Security; and

(6) the Texas State Plan for Medical Assistance (Medicaid).

(b) Any section of the United States Code of Federal Regulations cited in this chapter is adopted by reference as a part of the rule in which it is cited.

(c) Medicaid eligibility, as described in this chapter, is only one of the criteria used to determine eligibility for MEPD. Additional criteria, including functional and other assessments, are established by each program and are governed by the rules of that program.

(d) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §358.101 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.103** Definitions {#sec-358.103 omnilex-key=us-tx-regs-official--title-1--358.103}

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise:

(1) §1915(c) waiver program--A home or community-based service authorized for use in Texas by the Centers for Medicare and Medicaid Services in accordance with §1915(c) of the Social Security Act.

(2) Adverse action--A termination, suspension, or reduction of Medicaid eligibility or covered services.

(3) Annual review--The process of redetermining a person's continued eligibility for Medicaid.

(4) Appeal--A request for a review of an action or failure to act by the Texas Health and Human Services Commission (HHSC) that may result in a fair hearing.

(5) Applicant--A person seeking benefits under a Medicaid-funded program for the elderly and people with disabilities (MEPD) who is not currently receiving MEPD services.

(6) Application for assistance--A form prescribed by HHSC that a person uses to apply for MEPD or to have MEPD eligibility redetermined.

(7) Assets--All items a person owns that have monetary value. Assets include both income and resources.

(8) Authorized representative--An individual:

(A) who assists and represents a person in the application or eligibility redetermination process, and who is familiar with that person and that person's financial affairs; or

(B) who is a representative payee for an applicant or recipient for another federal benefit.

(9) Benefits office--A local HHSC office.

(10) Blind--A person who meets Supplemental Security Income (SSI) program requirements for blindness, as defined in 42 U.S.C. §1382c(a)(2).

(11) Budgeting--The process of determining a person's financial eligibility for MEPD or for calculating a co-payment.

(12) Burial space--A burial plot, grave site, crypt, mausoleum, urn, casket, niche, or other repository customarily and traditionally used for a deceased person's bodily remains. The term also includes necessary and reasonable improvements or additions to these spaces, including vaults, headstones, markers, or plaques; burial containers; arrangements for opening and closing the grave site; and contracts for care and maintenance of the grave site. Contracts for care and maintenance are sometimes referred to as endowment or perpetual care.

(13) Certification--HHSC's official authorization of an eligibility determination.

(14) CFR--Code of Federal Regulations.

(15) Community spouse--See Subchapter C, Division 5, §358.412 of this chapter (relating to Definitions).

(16) Co-payment--The amount of personal income a person must pay toward the cost of his or her care. Co-payment was formerly known as applied income.

(17) Countable income--The amount of a person's income that is not exempt or excluded.

(18) Countable resource--A resource owned by and accessible to a person that is not exempt or excluded.

(19) Coverage group--A group of people who are categorically eligible for MEPD under the Texas State Plan for Medical Assistance.

(20) Current market value--The amount of money an item would bring if sold in the current local market.

(21) Date of application--See §358.520 of this chapter (relating to Date of Application).

(22) Deeming--Counting all or part of the income or resources of another person (for example, a parent or spouse) as income or resources available to an applicant or recipient.

(23) Disabled--A person who meets SSI program requirements as defined in 42 U.S.C. §1382c(a)(3).

(24) Earned income--Income a person receives for services performed as an employee or from self-employment.

(25) Earned income tax credit--A special tax credit that reduces the federal tax liability of certain low-income working taxpayers.

(26) Eligibility determination--A decision made by HHSC concerning a person's initial eligibility for MEPD. This term does not include any functional or other assessment required for some MEPD services, unless the context clearly indicates otherwise.

(27) Eligibility redetermination--A decision made by HHSC concerning a person's continued eligibility for MEPD. This term does not include any functional or other assessment required for some MEPD services, unless the context clearly indicates otherwise.

(28) Equity value--The value of a resource based on its fair market value or current market value minus all money owed on the resources and, if sold, any costs usually associated with the sale.

(29) Excluded--Income or resources not counted for the purpose of determining eligibility only.

(30) Exempt--Income or resources not counted for the purpose of determining eligibility or calculating a co-payment.

(31) Fair hearing--An informal proceeding held before an impartial hearings officer in which a person or the person's representative appeals an action taken on the person's case.

(32) Fair market value--The current market value of a resource at the time of its sale or transfer.

(33) Family member--An applicant's or recipient's spouse, minor child, adult child, stepchild, adopted child, brother, sister, parent, or adoptive parent; or a spouse of the applicant's or recipient's minor child, adult child, stepchild, adopted child, brother, sister, parent, or adoptive parent.

(34) Fiduciary agent--A person or organization acting on behalf of or with the authorization of another person under circumstances that involve a high degree of confidence, good faith, and honesty. The term applies to anyone who acts in a financial capacity, whether formal or informal, regardless of title, such as representative payee, guardian, or conservator.

(35) Fraud--Deliberate misrepresentation or willful withholding of information for the purpose of obtaining public assistance, either for self or another person.

(36) Health Insurance Premium Payment Program--A Medicaid program that pays for the cost of medical premiums. The program reimburses recipients or employers for private health insurance payments for Medicaid-eligible persons when it is cost effective to do so.

(37) HHSC--The Texas Health and Human Services Commission.

(38) Home--A structure in which a person lives (including a mobile home, a houseboat, and a motor home), other buildings on the home property, and all adjacent land (including land separated by a road, river, or stream), in which the person has an ownership interest and that serves as his or her principal place of residence.

(39) Income--Any item a person receives in cash or in kind that can be used to meet his or her need for food or shelter. For purposes of determining MEPD financial eligibility, income includes the receipt of any item that can be applied, either directly or by sale or conversion, to meet the basic needs of food or shelter.

(40) Inheritance--Cash, other liquid resources, noncash items, or any right in real or personal property received as the result of someone's death. A person may not have access to his or her inheritance pending legal action or the discovery of the inheritance.

(41) Initial eligibility period--The time from a person's certification date to the person's first annual review.

(42) In-kind--Consisting of something (such as food, shelter, or replacement of a resource) that is not cash.

(43) Institution for mental diseases (IMD)--A hospital, nursing facility, or other institutional setting of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services. An IMD includes a state mental health facility operated by the Texas Department of State Health Services.

(44) Institutional care--Long-term nursing care, treatment, or services received in a Medicaid-certified long-term care facility.

(45) Institutional setting--A living arrangement in which a person applying for or receiving Medicaid lives in a Medicaid-certified long-term care facility or receives services under a §1915(c) waiver program.

(46) Insurance--The following terms apply to the definition of insurance:

(A) "The insured" means the person named in a life insurance policy whose death affects the proceeds and distribution of the policy.

(B) "The beneficiary" means the person or entity named in a contract to receive the proceeds of the policy upon the death of the insured.

(C) "The owner" means the person with the right to change the policy as the person sees fit. The owner is the only person who can receive the cash surrender value of the policy.

(D) "The insurer" is the company that contracts with the owner.

(E) "Cash surrender value" means the amount that the insurer pays the owner if the policy is cancelled before death or before it has matured. The cash surrender value usually increases with the age of the policy.

(F) A "participating life insurance policy" is one in which dividends are distributed to the policyholder.

(G) "Term life insurance" means life insurance that has no cash, loan, or dividend value, nor the potential for cash, loan, or dividend value.

(H) "Dividend" means a share of surplus funds allocated to the policyholders of a participating insurance policy. A dividend generally represents a previous overpayment of premiums.

(47) Intermediate care facility for persons with mental retardation or related conditions (ICF/MR)--A Medicaid-certified facility that provides care in a 24-hour specialized residential setting for persons with mental retardation or a related condition. An ICF/MR includes a state supported living center and a state center.

(48) Inter vivos trust--A trust established while the person creating the trust is still living.

(49) Level of care--The type of care a person is eligible to receive in an ICF/MR based upon an assessment of the person's need for care.

(50) Level of care determination--A determination made by the Texas Department of Aging and Disability Services that determines a person's level of care.

(51) Life estate--A right to real property conferred in a legal instrument on a person (beneficiary). The right is conferred for the duration of the beneficiary's lifetime or the lifetime of another person. The beneficiary usually has the right to possess, use, and receive profits from the real property during his or her possession.

(52) Liquid resource--Cash or other property that can be converted to cash within 20 working days.

(53) Long-term care facility--A nursing facility, ICF/MR, or IMD in which medical services are provided.

(54) Look-back period--The period of time HHSC considers to determine if a person transferred, gave away, disposed of, or otherwise reduced his or her countable resources and income without receiving equal value in return and with the intent to give away resources in order to qualify for MEPD.

(55) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act and the Texas Human Resources Code, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(56) Medical effective date--The date a person's Medicaid coverage begins.

(57) Medical necessity--The determination that a person requires the services of a licensed nurse in an institutional setting to carry out a physician's planned regimen for total care.

(58) Medical services--Services that are directed toward diagnostic, preventive, therapeutic, or palliative treatment of a medical condition and that are performed, directed, or supervised by a state-licensed health professional.

(59) Medicare--Medical coverage available under Title XVIII of the Social Security Act to people 65 years of age or older and to certain disabled people under 65 years of age.

(60) MEPD--A Medicaid-funded program for the elderly and people with disabilities. A public assistance program providing institutional and community-based health-related care for the elderly and people with disabilities. MEPD does not provide cash assistance. Examples of MEPD services and programs are:

(A) primary home care services;

(B) §1915(c) waiver programs, which provide community-based care as an alternative to institutional care;

(C) care in a Medicaid-certified long-term care facility; and

(D) the Program of All-Inclusive Care for the Elderly (PACE).

(61) Mineral rights--Ownership interest in the oil, gas, or minerals beneath the surface of a piece of property.

(62) Month of application--The month in which the date of application falls.

(63) Noninstitutional setting--A living arrangement in which a person applying for or receiving Medicaid does not live in a long-term care facility or receive services under a §1915(c) waiver program.

(64) Nursing facility--An entity that provides organized and structured nursing care and services, and is subject to licensure under Texas Health and Safety Code, Chapter 242.

(65) Parent--A child's natural or adoptive parent or the spouse of the natural or adoptive parent.

(66) Pension funds--Monies held in a retirement fund under a plan administered by an employer or union, or an individual retirement account (IRA) or Keogh account as described in the Internal Revenue Code.

(67) Personal needs allowance--An amount of the recipient's income that a recipient in an institutional setting may retain for personal use.

(68) Primary home care services--Medicaid-funded, in-home attendant services provided to a person with a medical need for specific tasks to delay or prevent the person's need for institutional care.

(69) Principal place of residence--The home where a person resides, occupies, and lives.

(70) Provider--A person, group, or agency contracted to provide a Medicaid-funded service to a person for a fee.

(71) Public institution--An institution defined in 20 CFR §416.201.

(72) Real property--Land and improvements, including buildings and structures. Real property may also include a mine or quarry, standing timber, or minerals.

(73) Recipient--A person receiving benefits under MEPD, including a person whose Medicaid eligibility is being redetermined.

(74) Representative payee--A person or an organization selected to receive benefits on behalf of a recipient, if the recipient is not able to manage or direct the management of benefit payments in his or her own interest.

(75) Resources--Cash, other liquid assets, or any real or personal property, that a person (or spouse or parent, as appropriate):

(A) owns;

(B) has the right, authority, or power to convert to cash (if not already cash); and

(C) is not legally restricted from using for his or her support and maintenance.

(76) Restitution--Securing payment from a recipient when fraud is not indicated or pursued and when the recipient's co-payment has been undercharged because of previously unreported or underreported monthly income or resources.

(77) Retirement, Survivors, and Disability Insurance (RSDI)--Benefits provided under Title II of the Social Security Act.

(78) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(79) Social Security--A federal system of retirement and disability insurance for various categories of employed and dependent persons, funded through dedicated payroll taxes.

(80) Social Security Act--The federal statute that provides the authority for various programs referenced in this chapter, including Medicare and Medicaid. See also the definition in this section for certain titles in the Social Security Act.

(81) Social Security Administration (SSA)--The federal agency that issues Social Security numbers, administers Social Security benefit programs, and manages the SSI program.

(82) Social service--A service, other than a medical service, that is intended to assist a person with a physical disability or social disadvantage to function in society on a level comparable to that of a person who does not have such a disability or disadvantage. No in-kind items are expressly identified as social services.

(83) Special income limit--The income limit used to test MEPD eligibility for a person or couple in an institutional setting in accordance with §358.433 of this chapter (relating to Special Income Limit).

(84) Spousal impoverishment--Provision implemented under §1924 of the Social Security Act (42 U.S.C. §1396r-5) designed to prevent the impoverishment of a family, usually a couple, when one spouse needs care in an institutional setting.

(85) State center--A facility operated by the Texas Department of State Health Services with which the Texas Department of Aging and Disability Services contracts to provide services to persons with mental retardation who reside in the facility.

(86) State mental health facility--A facility operated by the Texas Department of State Health Services that provides care for people with mental illness who need the safety, structure, and resources of an in-patient setting.

(87) State supported living center--A facility operated by the Texas Department of Aging and Disability Services that provides residential services and 24-hour supervision and active treatments to assist people with mental retardation.

(88) Supplemental Security Income (SSI) federal benefit rate--Standard payment amount in the SSI program.

(89) Supplemental Security Income (SSI) program--A federal income supplement program, funded by general tax revenues and managed by the SSA, that provides monthly income to people who are aged, blind, or disabled and have limited income and resources.

(90) Support and maintenance--The value of food and shelter that a person receives.

(91) Temporary Assistance for Needy Families--A program that provides temporary benefits (cash assistance) and work opportunities to families with needy dependent children, authorized under Title IV of the Social Security Act.

(92) Testamentary trust--A trust established by a will.

(93) Texas State Plan for Medical Assistance--Document describing the Medicaid-funded services provided in Texas, in accordance with §1902 of the Social Security Act (42 U.S.C. §1396a).

(94) Third-party resource--A source of payment for medical expenses other than Medicaid.

(95) Three months prior--The three calendar months before the month of application.

(96) Titles to Social Security Act--Divisions of the Social Security Act. Titles referenced in this chapter are:

(A) Title II, which governs RSDI benefits;

(B) Title XVI, which governs the SSI program;

(C) Title XVIII, which governs Medicare; and

(D) Title XIX, which governs Medicaid.

(97) Trust--A trust includes any legal instrument, device, or arrangement which may not be called a trust under state law, but which is similar to a trust. That is, it involves a grantor who transfers property to an individual or entity with fiduciary obligations with the intention that it be held, managed, or administered by the individual or entity for the benefit of the grantor or others. This can include (but is not limited to) escrow accounts, investment accounts, pension funds, irrevocable burial trusts, limited partnerships, and other similar entities managed by an individual or entity with the fiduciary obligations.

(98) Unearned income--Income that is not earned.

(99) U.S.C.--United States Code.

(100) Working day--Any day except Saturday, Sunday, a state holiday, or a federal holiday.

**History**
- *Source Note: The provisions of this §358.103 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.105** General Medicaid Eligibility Requirements {#sec-358.105 omnilex-key=us-tx-regs-official--title-1--358.105}

(a) To be determined eligible for a Medicaid-funded program for the elderly and persons with disabilities (MEPD), a person must:

(1) meet the criteria for an eligible coverage group, as described in §358.107 of this subchapter (relating to Coverage Groups);

(2) comply with the Texas Health and Human Services Commission's application and redetermination requirements, in accordance with Subchapter D of this chapter (relating to Application and Eligibility Determination);

(3) meet the nonfinancial eligibility requirements in Subchapter B of this chapter (relating to Nonfinancial Requirements); and

(4) meet the financial eligibility requirements in Subchapter C of this chapter (relating to Financial Requirements).

(b) Additional eligibility criteria for MEPD are established by each program and governed by the rules of that program.

**History**
- *Source Note: The provisions of this §358.105 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.107** Coverage Groups {#sec-358.107 omnilex-key=us-tx-regs-official--title-1--358.107}

(a) General. This section describes the groups of people who are categorically eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD) under the Texas State Plan for Medical Assistance.

(b) Mandatory coverage groups. In accordance with 42 CFR Part 435, Subpart B, the Texas Health and Human Services Commission (HHSC) determines eligibility for MEPD for a person who falls into at least one of the following mandatory coverage groups:

(1) Supplemental Security Income (SSI) eligible. In accordance with 42 CFR §435.120, this mandatory coverage group covers a person who is aged, blind, or disabled and is receiving SSI or deemed to be receiving SSI. The Social Security Administration (SSA) determines eligibility for SSI under Title XVI of the Social Security Act. If SSA determines that a person is eligible for SSI, HHSC accepts SSA's determination as an automatic determination of eligibility for Medicaid.

(2) Coverage for certain aliens. In accordance with 42 CFR §435.139, an alien, as defined in 42 CFR §435.406, is provided services necessary for the treatment of an emergency medical condition, as defined in 42 CFR §440.255.

(3) Disabled adult child. In accordance with §1634(c) of the Social Security Act (42 U.S.C. §1383c), this mandatory coverage group covers a person who:

(A) is at least 18 years of age;

(B) became disabled before 22 years of age;

(C) is denied SSI because of receipt of or an increase in Retirement, Survivors, and Disability Insurance (RSDI) disabled children's benefits received on or after July 1, 1987, and any subsequent increase; and

(D) meets current SSI criteria, excluding the RSDI benefit described in subparagraph (C) of this paragraph.

(4) Historical 1972 income disregard. In accordance with 42 CFR §435.134, this mandatory coverage group covers a person who:

(A) was receiving both public assistance and Social Security benefits in August 1972; and

(B) meets current SSI eligibility criteria, excluding from income the October 1972 cost-of-living adjustment (COLA) increase in Social Security benefits but not excluding subsequent COLA increases in Social Security benefits.

(5) Title II COLA disregard (Pickle). In accordance with 42 CFR §435.135(a) - (b), this mandatory coverage group covers a person who:

(A) has been denied SSI for any reason since April 1977; and

(B) meets current SSI eligibility criteria, excluding from countable income any Social Security COLA increases received after the person last received both SSI and Social Security benefits in the same month.

(6) Disabled widow's or widower's COLA disregard. In accordance with 42 CFR §435.137, this mandatory coverage group covers a person who:

(A) is 50 to 60 years of age;

(B) is ineligible for Medicare;

(C) was denied SSI due to an increase in a disabled widow's or widower's and surviving divorced spouse's RSDI; and

(D) meets SSI eligibility criteria, excluding from countable income the RSDI benefit and any subsequent COLA increases in RSDI.

(7) Early age widow's or widower's COLA disregard. In accordance with 42 CFR §435.138, this mandatory coverage group covers a disabled person who was denied SSI due to early receipt of Social Security widow's or widower's benefits and:

(A) is at least 60 years of age;

(B) is not eligible for Medicare; and

(C) meets current SSI eligibility criteria, excluding from countable income the RSDI benefit and any subsequent COLA increases in RSDI.

(8) SSI denied children. In accordance with §1902(a)(10)(A)(i)(II) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(i)(II)), this mandatory coverage group covers a person who:

(A) is under 18 years of age;

(B) was receiving SSI on August 22, 1996;

(C) was subsequently denied SSI because of the change in disability criteria implemented by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193); and

(D) meets SSI eligibility criteria, including the disability criteria in effect before August 22, 1996.

(c) Optional coverage groups. In accordance with 42 CFR Part 435, Subpart C, HHSC determines Medicaid eligibility for MEPD for a person who falls into an optional coverage group described in this subsection. Although federal regulations may allow other optional coverage groups, HHSC does not provide benefits to a member of an optional coverage group unless the group is included in the Texas State Plan for Medical Assistance.

(1) Institutional. In accordance with 42 CFR §435.211, this optional coverage group covers a person who would be eligible for SSI, as specified in 42 CFR §435.230, if the person were not in an institutional setting.

(2) Institutional special income limit. In accordance with 42 CFR §435.236, this optional coverage group covers a person who has lived in an institutional setting for at least 30 consecutive days, as described in §358.433 of this chapter (relating to Special Income Limit), and is eligible under the special income limit.

(3) §1915(c) waiver program. In accordance with 42 CFR §435.217, this optional coverage group covers a person who would be eligible for Medicaid if institutionalized, but is living in the community and receiving services under a §1915(c) waiver program.

(d) Other. In accordance with the Texas State Plan for Medical Assistance, HHSC determines Medicaid eligibility for MEPD for a person who meets the criteria for one of the following services:

(1) Primary home care services. This is a person who needs primary home care services and meets the criteria established in §1929(b)(2)(B) of the Social Security Act (42 U.S.C. §1396t(b)(2)(B)) but is not otherwise eligible for Medicaid.

(2) Program of All-Inclusive Care for the Elderly (PACE). In accordance with 42 CFR Part 460, this is a person who is enrolled in a PACE program under a PACE program agreement.

(3) *Susan Walker v. Bayer Corporation* services. A person who has received payments from the class action settlement of *Susan Walker v. Bayer Corporation* may be eligible for Medicaid as a result of excluding from countable resources the payments from the settlement.

(e) Retroactive coverage. In accordance with 42 CFR §435.914, HHSC may determine eligibility for retroactive coverage:

(1) for up to three months before the date of application for:

(A) an applicant;

(B) a person who has been denied SSI;

(C) a deceased person, if a representative for the deceased person requests that HHSC determine eligibility for retroactive coverage; and

(D) a person eligible under the SSI-denied-children coverage group in subsection (b)(8) of this section; and

(2) for up to two months before the month in which an SSI recipient's Medicaid coverage automatically begins.

(f) Medicare Savings Program. In accordance with 42 U.S.C. §1396a(a)(10)(E) for this mandatory coverage group, HHSC may determine eligibility for a person who meets the criteria in Chapter 359 of this title (relating to Medicare Savings Program) for a Medicare Savings Program, which uses Medicaid funds to help the person pay for all or some of the person's out-of-pocket Medicare expenses, such as premiums, deductibles, or coinsurance.

(g) Medicaid Buy-In Program. In accordance with §1902(a)(10)A)(ii)(XIII) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(ii)(XIII)) for this optional coverage group, HHSC may determine eligibility for a person with a disability who is working and earning income and meets the criteria established in Chapter 360 of this title (relating to Medicaid Buy-In Program).

(h) Medicaid Buy-In for Children. In accordance with §1902(cc) of the Social Security Act (42 U.S.C. §1396a(cc)) for this optional coverage group, HHSC may determine eligibility for a child with a disability who meets the criteria established in Chapter 361 of this title (relating to Medicaid Buy-In for Children Program).

**History**
- *Source Note: The provisions of this §358.107 adopted to be effective September 1, 2009, 34 TexReg 5497; amended to be effective January 1, 2011, 35 TexReg 11571.*

#### **Subchapter B** NONFINANCIAL REQUIREMENTS

##### **1 Tex. Admin. Code § 358.201** Purpose and Scope {#sec-358.201 omnilex-key=us-tx-regs-official--title-1--358.201}

(a) This subchapter describes the nonfinancial Medicaid eligibility criteria for a Medicaid-funded program for the elderly and people with disabilities (MEPD).

(b) Financial Medicaid eligibility criteria for MEPD are described in Subchapter C of this chapter (relating to Financial Requirements).

**History**
- *Source Note: The provisions of this §358.201 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.203** Citizenship and Qualified Alien Status {#sec-358.203 omnilex-key=us-tx-regs-official--title-1--358.203}

(a) In accordance with 42 CFR §435.406, to be eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), a person must be:

(1) a citizen or national of the United States (U.S.);

(2) an alien who entered the U.S. before August 22, 1996, who has lived in the U.S. continuously since entry, and who meets the definition of a qualified alien at 8 U.S.C. §1641; or

(3) an alien who entered the U.S. on or after August 22, 1996, who has lived in the U.S. continuously since entry, and who meets the definition of a qualified alien at 8 U.S.C. §1641 with the eligibility limitations in 8 U.S.C. §1612 and §1613.

(b) A person must provide proof of eligibility under subsection (a) of this section that establishes both identity and citizenship or alien status, unless the person:

(1) receives Supplemental Security Income (SSI) or has ever received SSI and was not denied due to citizenship;

(2) is entitled to or enrolled in any part of Medicare, as determined by the Social Security Administration (SSA); or

(3) is entitled to federal disability benefits based on SSA disability criteria.

**History**
- *Source Note: The provisions of this §358.203 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.205** Alien Status for Treatment of an Emergency Medical Condition {#sec-358.205 omnilex-key=us-tx-regs-official--title-1--358.205}

(a) Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and 42 CFR §440.255 require the state to provide Medicaid for the treatment of an emergency medical condition to an alien who is ineligible for regular Medicaid due to immigration status. The Texas Health and Human Services Commission administers the program in Texas.

(b) To qualify for Medicaid for the treatment of an emergency medical condition, an alien must:

(1) be:

(A) a qualified alien as defined in 8 U.S.C. §1641 and not meet the requirements to receive Medicaid as described in 8 U.S.C. §1612 and §1613; or

(B) an undocumented non-qualifying alien as described in 8 U.S.C. §1611;

(2) be otherwise eligible for regular Medicaid services; and

(3) require treatment of an emergency medical condition as described in 42 CFR §440.255.

(c) An undocumented non-qualifying alien applying for Medicaid for the treatment of an emergency medical condition is exempt from providing proof of alien status or providing a Social Security number as described in 42 CFR §435.406(b).

**History**
- *Source Note: The provisions of this §358.205 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.207** Residence {#sec-358.207 omnilex-key=us-tx-regs-official--title-1--358.207}

To be eligible for a Medicaid-funded program for the elderly and people with disabilities, a person must be a resident of the United States (U.S.) and the state of Texas.

(1) U.S. residence. The Texas Health and Human Services Commission (HHSC) follows 20 CFR §416.1603 in determining a person's U.S. residence.

(A) The U.S. residence requirement does not apply to:

(i) a child who is a citizen and is living with a parent who is a member of the U.S. Armed Forces assigned to permanent duty ashore outside the U.S.; or

(ii) to certain persons temporarily abroad for study.

(B) Once eligible for benefits, a person must maintain a presence in the U.S. in accordance with 42 U.S.C. §1382(f)(1). If a person has been outside the U.S. for 30 consecutive days, the person is not eligible for benefits until the person has been in the U.S. for 30 consecutive days.

(2) Texas residence. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §358.207 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.209** Social Security Number {#sec-358.209 omnilex-key=us-tx-regs-official--title-1--358.209}

In accordance with 42 CFR §435.910, a person must give his or her social security number to the Texas Health and Human Services Commission as a condition of eligibility, except as provided in §358.205(c) of this subchapter (relating to Alien Status for Treatment of an Emergency Medical Condition).

**History**
- *Source Note: The provisions of this §358.209 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.211** Aged, Blind, or Disabled {#sec-358.211 omnilex-key=us-tx-regs-official--title-1--358.211}

(a) To be eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), a person must be aged, blind, or disabled, according to the following criteria:

(1) Aged. A person must be 65 years of age or older to be considered aged, in accordance with 42 U.S.C. §1382c(a)(1)(A).

(2) Blind.

(A) To be considered blind for eligibility purposes, a person must meet the criteria in 42 U.S.C. §1382c(a)(2).

(B) There is no minimum age requirement for a person who is blind.

(C) A person must have a medical determination of blindness before the Texas Health and Human Services Commission (HHSC) can determine eligibility.

(3) Disabled.

(A) To be considered disabled for eligibility purposes, a person must meet the criteria in 42 U.S.C. §1382c(a)(3).

(B) There is no minimum age requirement for a person who is disabled, unless the person lives in an institution for mental diseases as described in §358.213 of this subchapter (relating to Resident of an Institution for Mental Diseases).

(C) A person must have a medical determination of a disability before HHSC can determine eligibility.

(b) A person under 65 years of age who has applied for Supplemental Security Income, and subsequently applies for retroactive coverage, must have a medical determination of blindness or a disability effective during any month of coverage that the person was under 65 years of age.

**History**
- *Source Note: The provisions of this §358.211 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.213** Resident of an Institution for Mental Diseases {#sec-358.213 omnilex-key=us-tx-regs-official--title-1--358.213}

A person who lives in an institution for mental diseases must be 65 years of age or older to be eligible for a Medicaid-funded program for the elderly and people with disabilities.

**History**
- *Source Note: The provisions of this §358.213 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.215** Inmates of Public Institutions {#sec-358.215 omnilex-key=us-tx-regs-official--title-1--358.215}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §358.215 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.217** Application for Other Benefits {#sec-358.217 omnilex-key=us-tx-regs-official--title-1--358.217}

To be eligible for a Medicaid-funded program for the elderly and people with disabilities, a person must apply for and obtain, if eligible, all other benefits to which the person may be entitled, in accordance with 42 U.S.C. §1382(e)(2).

**History**
- *Source Note: The provisions of this §358.217 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.219** Third-party Resources {#sec-358.219 omnilex-key=us-tx-regs-official--title-1--358.219}

(a) Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to the Texas Health and Human Services Commission (HHSC) the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

(b) If HHSC determines that a person's employer-based health insurance is cost-effective, the person must participate in HHSC's Health Insurance Premium Payment program as a condition of eligibility. HHSC denies eligibility to a person who voluntarily drops his or her employer-based health insurance or fails to provide HHSC with the information needed to determine cost effectiveness.

**History**
- *Source Note: The provisions of this §358.219 adopted to be effective September 1, 2009, 34 TexReg 5497.*

#### **Subchapter D** APPLICATION AND ELIGIBILITY DETERMINATION

##### **1 Tex. Admin. Code § 358.501** Purpose and Scope {#sec-358.501 omnilex-key=us-tx-regs-official--title-1--358.501}

(a) This subchapter establishes the application and eligibility determination processes for a person seeking health care benefits from a Medicaid-funded program for the elderly and people with disabilities (MEPD).

(b) This subchapter applies to both initial applications for assistance and eligibility redeterminations for MEPD, unless the context clearly indicates otherwise.

**History**
- *Source Note: The provisions of this §358.501 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.505** Application Process Overview {#sec-358.505 omnilex-key=us-tx-regs-official--title-1--358.505}

(a) The Texas Health and Human Services Commission (HHSC) gives anyone the opportunity to apply for a Medicaid-funded program for the elderly and people with disabilities (MEPD), in accordance with 42 CFR §435.906. A person can apply for MEPD by submitting:

(1) an application for assistance to HHSC; or

(2) an application for Supplemental Security Income (SSI) to the Social Security Administration.

(b) Under the application submittal process described in subsection (a)(1) of this section, a person must follow the requirements in §358.515 of this subchapter (relating to Application Requirements) to obtain an eligibility determination from HHSC.

(c) In accordance with 42 CFR §435.120 and §435.909(b)(1), an application for SSI as described in subsection (a)(2) of this section serves as an application for MEPD. A person receiving or deemed to be receiving SSI derives eligibility for MEPD from the person's SSI eligibility and does not require an eligibility determination from HHSC.

**History**
- *Source Note: The provisions of this §358.505 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.510** Authorized Representative {#sec-358.510 omnilex-key=us-tx-regs-official--title-1--358.510}

In accordance with 42 CFR §435.908, an authorized representative may accompany, assist, and represent an applicant or recipient in the application or eligibility redetermination process.

**History**
- *Source Note: The provisions of this §358.510 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.515** Application Requirements {#sec-358.515 omnilex-key=us-tx-regs-official--title-1--358.515}

(a) To apply for a Medicaid-funded program for the elderly and people with disabilities (MEPD) under the application submittal process described in §358.505(a)(1) and (b) of this subchapter (relating to Application Process Overview), and in accordance with 42 CFR §435.907, an applicant, authorized representative, or someone acting responsibly for the applicant (if the applicant is incompetent or incapacitated) must:

(1) use the application prescribed by the Texas Health and Human Services Commission (HHSC) and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant or authorized representative complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant or authorized representative a request for missing information or verification documents, or both, the applicant or authorized representative must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §358.515 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.520** Date of Application {#sec-358.520 omnilex-key=us-tx-regs-official--title-1--358.520}

(a) The date of application is the date on which:

(1) the Texas Health and Human Services Commission receives an application for assistance in accordance with subsection (c) of this section; or

(2) an application for Supplemental Security Income is filed with the Social Security Administration.

(b) If an application for assistance is received after the close of business, the date of application is the next working day.

(c) For purposes of determining the date of application for an application for assistance received under subsection (a)(1) of this section:

(1) an application received via fax or mail must contain, at a minimum, the applicant's name, address, and valid signature; and

(2) an application received via telephone or the Internet:

(A) must contain, at a minimum, the applicant's name and address; and

(B) the applicant must provide a valid signature within 45 days after the date of application.

**History**
- *Source Note: The provisions of this §358.520 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.525** Previously Completed Application for Assistance {#sec-358.525 omnilex-key=us-tx-regs-official--title-1--358.525}

An application for assistance remains valid for 90 days after a date of denial, if the Texas Health and Human Services Commission denies eligibility. An applicant may use his or her previously completed application to reapply during the 90-day period, in accordance with HHSC instructions.

**History**
- *Source Note: The provisions of this §358.525 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.530** Eligibility Determination {#sec-358.530 omnilex-key=us-tx-regs-official--title-1--358.530}

(a) Time frame for determination. After an applicant or authorized representative provides all information and verification documents requested, the Texas Health and Human Services Commission (HHSC) makes an eligibility determination within the following time frames, in accordance with 42 CFR §435.911:

(1) by the 90th day after the date of application if the applicant is applying on the basis of a disability;

(2) by the 45th day after the date of application for all other applicants; or

(3) beyond the time frames established in paragraphs (1) and (2) of this subsection under unusual circumstances, such as those set forth in 42 CFR §435.911.

(b) Basis for determination. HHSC decides whether an applicant meets the eligibility criteria for a Medicaid-funded program for the elderly and people with disabilities based on:

(1) a complete, signed, and dated application for assistance;

(2) information obtained from an interview, if an interview occurred; and

(3) required verification documents.

**History**
- *Source Note: The provisions of this §358.530 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.535** Notice of Eligibility Determination {#sec-358.535 omnilex-key=us-tx-regs-official--title-1--358.535}

(a) After making an initial eligibility determination, the Texas Health and Human Services Commission (HHSC) sends the applicant, in accordance with 42 CFR §435.912:

(1) a written notice of eligibility, including notice of any co-payment the person must pay and the medical effective date described in §358.540 of this subchapter (relating to Medical Effective Date); or

(2) a written notice of ineligibility, explaining the reason for the decision and the specific provision supporting the decision.

(b) After making an eligibility redetermination, HHSC sends the recipient a written notice of any change in eligibility or co-payment.

(c) The written notice informs the applicant or recipient of the right to request a hearing to appeal the eligibility determination. The hearing is held in accordance with 42 CFR Part 431, Subpart E and HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

**History**
- *Source Note: The provisions of this §358.535 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.540** Medical Effective Date {#sec-358.540 omnilex-key=us-tx-regs-official--title-1--358.540}

(a) If a person is eligible for a Medicaid-funded program for the elderly and people with disabilities (MEPD), the Texas Health and Human Services Commission (HHSC) includes in the notice of eligibility the date that the person's Medicaid benefits will begin, which is known as the medical effective date.

(b) HHSC determines the medical effective date:

(1) in accordance with 42 CFR §435.914, as the first day of the month in which a person meets all eligibility criteria, which may be up to three months before the date of application if:

(A) during the three months before the month of application, the person received MEPD services covered under the Texas State Plan for Medical Assistance; and

(B) would have been eligible for MEPD at the time the services were received if the person had applied (or someone had applied on behalf of the person), regardless of whether the person is alive when application for MEPD is made; or

(2) as approved by the Centers for Medicare and Medicaid Services for a §1915(c) waiver program.

**History**
- *Source Note: The provisions of this §358.540 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.545** Eligibility Redetermination {#sec-358.545 omnilex-key=us-tx-regs-official--title-1--358.545}

(a) In accordance with 42 CFR §435.916, the Texas Health and Human Services Commission (HHSC) redetermines a person's eligibility for a Medicaid-funded program for the elderly and people with disabilities (MEPD):

(1) at least every 12 months;

(2) after HHSC receives information about a change in the person's circumstances, such as living arrangement, income, or resources, that may affect MEPD eligibility; and

(3) at the appropriate time based on an anticipated change in the person's circumstances.

(b) If the result of an eligibility redetermination causes an adverse action, HHSC:

(1) gives timely and adequate notice of the proposed action to terminate, discontinue, or suspend MEPD eligibility;

(2) gives timely and adequate notice to reduce or discontinue MEPD services; and

(3) informs the person of the right to request a hearing to appeal the adverse action in accordance with 42 CFR Part 431, Subpart E and HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

**History**
- *Source Note: The provisions of this §358.545 adopted to be effective September 1, 2009, 34 TexReg 5497.*

#### **Subchapter E** RIGHTS AND RESPONSIBILITIES OF APPLICANTS AND RECIPIENTS

##### **1 Tex. Admin. Code § 358.601** Rights {#sec-358.601 omnilex-key=us-tx-regs-official--title-1--358.601}

An applicant or recipient has the right to:

(1) be treated fairly and equally regardless of race, color, religion, national origin, gender, political beliefs, or disability;

(2) have information collected for determining his or her eligibility to be treated as confidential;

(3) request a review of an action;

(4) have his or her eligibility tested for other programs before HHSC denies eligibility;

(5) review all information that contributed to an eligibility decision; and

(6) request a fair hearing to appeal an action by HHSC.

**History**
- *Source Note: The provisions of this §358.601 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.602** Disclosure of Official Records and Information {#sec-358.602 omnilex-key=us-tx-regs-official--title-1--358.602}

The Texas Health and Human Services Commission follows 20 CFR §§401 - 403 concerning disclosure of information about a person, both with and without the person's consent; the maintenance of records; and the general guidelines in deciding whether to make a disclosure.

**History**
- *Source Note: The provisions of this §358.602 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.603** Release of Medical Information {#sec-358.603 omnilex-key=us-tx-regs-official--title-1--358.603}

A person requesting assistance on the basis of disability must complete a medical information release form.

**History**
- *Source Note: The provisions of this §358.603 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.604** Responsibility To Provide Information and Report Changes {#sec-358.604 omnilex-key=us-tx-regs-official--title-1--358.604}

(a) An applicant or recipient must provide the Texas Health and Human Services Commission (HHSC) the necessary documentation and information to determine eligibility for Medicaid.

(b) An applicant or recipient must report to HHSC certain events that affect benefits in accordance with 20 CFR Subpart G.

**History**
- *Source Note: The provisions of this §358.604 adopted to be effective September 1, 2009, 34 TexReg 5497.*

##### **1 Tex. Admin. Code § 358.605** Fraud Referral and Restitution {#sec-358.605 omnilex-key=us-tx-regs-official--title-1--358.605}

(a) The Texas Health and Human Services Commission (HHSC) follows 42 CFR §§455.13 - 455.16 for issues governing fraud referral and restitution.

(b) HHSC evaluates a person's willful withholding of information for fraud, including:

(1) willful misstatements, oral or written, made by the person or the person's authorized representative in response to oral or written questions from HHSC concerning the person's income, resources, or other circumstances that may affect the amounts of benefits, including understatements or omission of information about income and resources; and

(2) willful failure by the person or the person's authorized representative to report changes in income, resources, or other circumstances that may affect the amount of benefits, if HHSC has clearly notified the person or the person's authorized representative of the person's obligation to report these changes.

**History**
- *Source Note: The provisions of this §358.605 adopted to be effective September 1, 2009, 34 TexReg 5497.*

### **Chapter 359** MEDICARE SAVINGS PROGRAM

##### **1 Tex. Admin. Code § 359.101** Purpose and Scope {#sec-359.101 omnilex-key=us-tx-regs-official--title-1--359.101}

(a) This chapter describes the assistance available and eligibility requirements for the Medicare Savings Program. Authorized under 42 U.S.C. §1396a(a)(10)(E), the Medicare Savings Program uses Medicaid funds to help eligible persons pay for all or some of their out-of-pocket Medicare expenses, such as premiums, deductibles, or coinsurance.

(b) The Texas Health and Human Services Commission (HHSC) manages the Medicare Savings Program, which consists of the following:

(1) the Qualified Medicare Beneficiary (QMB) Program;

(2) the Specified Low-Income Medicare Beneficiary (SLMB) Program;

(3) the Qualifying Individual (QI) Program; and

(4) the Qualified Disabled and Working Individual (QDWI) Program.

(c) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §359.101 adopted to be effective September 1, 2009, 34 TexReg 5516; amended to be effective February 3, 2013, 38 TexReg 366.*

##### **1 Tex. Admin. Code § 359.103** Qualified Medicare Beneficiary Program {#sec-359.103 omnilex-key=us-tx-regs-official--title-1--359.103}

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(i), the Qualified Medicare Beneficiary (QMB) Program pays Medicare premiums, deductibles, and coinsurance for a person who meets the requirements of this section. A person receiving Medicaid may also receive QMB benefits if the person meets the requirements of this section.

(b) To be eligible for QMB coverage, a person must:

(1) be entitled to benefits under Medicare Part A;

(2) meet income requirements in 42 U.S.C. §1396d(p), except for:

(A) payments made from or interest earned on a tuition savings program under 358.388 of this title (relating to Tuition Savings Programs);

(B) payments made from or interest earned on an Achieving a Better Life Experience (ABLE) account under §358.389 of this title (relating to Achieving a Better Life Experience Program); and

(C) income earned on a school-based savings program under §358.390 of this title (relating to School-Based Savings Program).

(3) meet resource requirements in 42 U.S.C. §1396d(p), except for:

(A) funds used to establish a tuition savings program under §358.356 of this title (relating to Tuition Savings Programs);

(B) funds used to establish an ABLE account and funds held in an ABLE account under §358.357 of this title (relating to Achieving a Better Life Experience Program); and

(C) funds held in a school-based savings program under §358.358 of this title (relating to School-Based Savings Program).

(c) A person is not eligible for QMB coverage if the person:

(1) is in the custody of penal authorities as defined in 42 C.F.R. §411.4(b); or

(2) is over 20 years of age and under 65 years of age and resides in an institution for mental diseases.

(d) A person's QMB eligibility begins on the first day of the month after the month the person is certified for QMB benefits.

(e) A person with QMB coverage is not eligible for three months prior medical coverage.

**History**
- *Source Note: The provisions of this §359.103 adopted to be effective September 1, 2009, 34 TexReg 5516; amended to be effective February 3, 2013, 38 TexReg 366; amended to be effective November 20, 2016, 41 TexReg 9004.*

##### **1 Tex. Admin. Code § 359.105** Specified Low-Income Medicare Beneficiary Program {#sec-359.105 omnilex-key=us-tx-regs-official--title-1--359.105}

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(iii), the Specified Low-Income Medicare Beneficiary (SLMB) Program pays only Medicare Part B premiums for a person who meets the requirements of this section. A person receiving Medicaid may also receive SLMB benefits if the person meets the requirements of this section.

(b) To be eligible for SLMB coverage, a person must meet the eligibility criteria for QMB coverage in §359.103(b) of this chapter (relating to Qualified Medicare Beneficiary Program), except the person must have an income that is greater than 100% but less than 120% of the federal poverty level.

(c) A person is not eligible for SLMB coverage if the person:

(1) is in the custody of penal authorities as defined in 42 C.F.R. §411.4(b); or

(2) is over 20 years of age and under 65 years of age and resides in an institution for mental diseases.

(d) A person's SLMB eligibility may begin with the month of application.

(e) A person with SLMB coverage is eligible for three months prior medical coverage, if all criteria are met.

**History**
- *Source Note: The provisions of this §359.105 adopted to be effective September 1, 2009, 34 TexReg 5516.*

##### **1 Tex. Admin. Code § 359.107** Qualifying Individual Program {#sec-359.107 omnilex-key=us-tx-regs-official--title-1--359.107}

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(iv) the Qualifying Individual (QI) Program pays only Medicare Part B premiums to a person who meets the requirements of this section. A person cannot be eligible for regular Medicaid and QI coverage at the same time.

(b) To be eligible for QI coverage, a person must meet the eligibility criteria for Qualified Medicare Beneficiary coverage in §359.103(b) of this chapter (relating to Qualified Medicare Beneficiary Program), except the person must have income that is at least 120% but less than 135% of the federal poverty level.

(c) Eligibility for QI coverage is determined for each calendar year.

(d) A person's QI eligibility may begin with the month of application.

(e) A person with QI coverage is eligible for three months prior medical coverage if all criteria are met. The three-month prior period cannot extend back into the previous calendar year.

**History**
- *Source Note: The provisions of this §359.107 adopted to be effective September 1, 2009, 34 TexReg 5516.*

##### **1 Tex. Admin. Code § 359.109** Qualified Disabled and Working Individual Program {#sec-359.109 omnilex-key=us-tx-regs-official--title-1--359.109}

(a) Authorized under 42 U.S.C. §1396a(a)(10)(E)(ii), the Qualified Disabled and Working Individual (QDWI) Program pays only Medicare Part A premiums for a person who meets the requirements of this section. A person cannot be eligible for regular Medicaid and QDWI coverage at the same time.

(b) To be eligible for QDWI coverage, a person must:

(1) be under 65 years of age;

(2) be entitled to benefits under Medicare Part A;

(3) not otherwise be eligible for Medicaid;

(4) have a monthly income equal to or less than 200% of the federal poverty level, except for the following exclusions:

(A) payments made from or interest earned on a tuition savings program under §358.388 of this title (relating to Tuition Savings Programs);

(B) payments made from or interest earned on an Achieving a Better Life Experience (ABLE) account under §358.389 of this title (relating to Achieving a Better Life Experience Program); and

(C) income earned on a school-based savings program under §358.390 of this title (relating to School-Based Savings Program).

(5) have no more than twice the countable resources allowed under the Supplemental Security Income (SSI) program, as described in §1611 of the Social Security Act (42 U.S.C. §1382), except for:

(A) funds used to establish a tuition savings program under §358.356 of this title (relating to Tuition Savings Programs);

(B) funds used to establish an ABLE account and funds held in an ABLE account under §358.357 of this title (relating to Achieving a Better Life Experience Program); and

(C) funds held in a school-based savings program under §358.358 of this title (relating to School-Based Savings Program).

(c) A person's QDWI eligibility begins in accordance with the coverage period described in §1818A of the Social Security Act (42 U.S.C. §1395i-2a(c)).

**History**
- *Source Note: The provisions of this §359.109 adopted to be effective September 1, 2009, 34 TexReg 5516; amended to be effective February 3, 2013, 38 TexReg 366; amended to be effective November 20, 2016, 41 TexReg 9004.*

### **Chapter 360** MEDICAID BUY-IN PROGRAM

##### **1 Tex. Admin. Code § 360.101** Overview and Purpose {#sec-360.101 omnilex-key=us-tx-regs-official--title-1--360.101}

(a) This chapter governs the eligibility requirements for the Medicaid Buy-In Program (MBI), which is authorized under Texas Government Code §532.0353, and which provides Medicaid benefits under the option explained in §1902(a)(10)(A)(ii)(XIII) of the Social Security Act (42 U.S.C. §1396a(a)(10)(A)(ii)(XIII)). All references in this chapter to MBI mean the Medicaid Buy-In Program.

(b) MBI is administered by the Texas Health and Human Services Commission (HHSC). All references in this chapter to HHSC mean the Texas Health and Human Services Commission.

(c) MBI provides Medicaid benefits to working persons with disabilities, regardless of age, who apply for Medicaid and meet the requirements explained in this chapter.

(d) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §360.101 adopted to
be effective September 1, 2009, 34 TexReg 5517; amended to be effective
April 1, 2025, 50 TexReg 830.*

##### **1 Tex. Admin. Code § 360.103** Applying and Providing Information {#sec-360.103 omnilex-key=us-tx-regs-official--title-1--360.103}

(a) A person applies for MBI by completing an application for MBI and submitting it to HHSC. The date of receipt of the signed application by HHSC is the application filing date, and thus establishes the application month explained in §360.119 of this chapter (relating to Medical Effective Date).

(b) HHSC notifies an MBI recipient in writing when it is time to redetermine the recipient's eligibility. This usually occurs once per year, although HHSC may require a person to reapply sooner if HHSC determines that a special review of the person's eligibility is appropriate. An MBI recipient must reapply when HHSC sends written notice of the requirement to the recipient's case address of record. The written notice explains the deadline to reapply. If an MBI recipient fails to reapply by the deadline stated in the written notice, HHSC may terminate the recipient's MBI eligibility.

(c) HHSC sends in writing to the person's case address of record the eligibility decision on an application, reapplication, or reported change. If the person disagrees, the person has the right to request a fair hearing to appeal HHSC's decision, as explained in HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

(d) An applicant for MBI must provide HHSC with all requested documentation and information that HHSC advises is necessary to determine the applicant's eligibility. If the applicant fails or refuses to provide requested information by the date specified in a written request from HHSC, HHSC may deny the application for failure to furnish information. When this occurs but the person later provides the requested information, the date that the requested information is provided to HHSC becomes the application filing date explained in subsection (a) of this section.

(e) A person who applies for or is receiving MBI must report to HHSC within 10 calendar days any information that may impact the person's eligibility. If a person fails to comply with the requirements of this subsection, HHSC may redetermine the person's eligibility as of the date the information should have been reported to HHSC.

**History**
- *Source Note: The provisions of this §360.103 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.105** Citizenship, Immigration Status, and Residency {#sec-360.105 omnilex-key=us-tx-regs-official--title-1--360.105}

To be eligible for MBI, a person must meet the citizenship, immigration status, and residency requirements in Chapter 358, Subchapter B, of this title (relating to Nonfinancial Requirements).

**History**
- *Source Note: The provisions of this §360.105 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.107** Disability {#sec-360.107 omnilex-key=us-tx-regs-official--title-1--360.107}

To be eligible for MBI, a person must meet the definition of disabled as defined by the Social Security Administration for purposes of the federal Supplemental Security Income program, as explained in 20 CFR §416.905 and §416.906, except the requirement that the person be unable to engage in any substantial gainful activity does not apply.

**History**
- *Source Note: The provisions of this §360.107 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.109** Work {#sec-360.109 omnilex-key=us-tx-regs-official--title-1--360.109}

To be eligible for MBI, a person must be working and earning income. The person must provide evidence of earnings that is satisfactory to HHSC.

**History**
- *Source Note: The provisions of this §360.109 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.111** Income {#sec-360.111 omnilex-key=us-tx-regs-official--title-1--360.111}

(a) Earned income.

(1) To be eligible for MBI, a person's monthly countable earned income must be less than 250% of the federal poverty level.

(2) Countable earned income means earned income for purposes of the Supplemental Security Income (SSI) program minus all applicable exclusions and exemptions, as explained in 20 CFR §§416.1110 - 416.1112.

(b) Unearned income is entirely excluded under this section, but is considered in the determination of a person's monthly premium amount, as explained in §360.117 of this chapter (relating to Cost Sharing).

**History**
- *Source Note: The provisions of this §360.111 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.113** Resources {#sec-360.113 omnilex-key=us-tx-regs-official--title-1--360.113}

(a) To establish and maintain eligibility for MBI, a person's countable resources must be equal to or less than $3,000 plus the amount of the Supplemental Security Income (SSI) resource limit for an individual that is explained in 20 CFR §416.1205. Countable resources means resources for SSI purposes as defined in 20 CFR §416.1205, minus all applicable exemptions and exclusions explained in 20 CFR §§416.1207 - 416.1239.

(b) In addition to the exemptions and exclusions explained in subsection (a) of this section, the following are not countable resources under this section:

(1) Independence accounts.

(A) An independence account (IA) is a segregated account in a financial institution, the purpose of which is to save for future health care and work-related expenses to increase an individual's independence and employment potential.

(B) Only a person's own earned income may be deposited into an IA, and amounts deposited cannot exceed 50% of the person's gross earnings. If for any SSA Qualifying Quarter a person deposits more than 50% of the person's gross earnings into an account that is designated as an IA, the account loses its IA designation and the funds in the account become a countable resource for the 12-month period beginning with the first month after the SSA Qualifying Quarter. An SSA Qualifying Quarter is a three-month period that ends on March 31, June 30, September 30, and December 31 of each calendar year and during which a person's reported earnings and FICA contributions are enough for SSA to give the person Social Security wage credits.

(C) Only health care or work-related expenses may be paid from an IA. For any SSA Qualifying Quarter, if funds in an IA account are used for any other purpose, the account loses its IA designation and the funds in the account become a countable resource for the 12-month period beginning with the first month after the SSA Qualifying Quarter.

(2) Retirement related tax-sheltered accounts. Retirement related tax-sheltered accounts include IRAs, 401(k)s, TSAs, and KEOUGHs that comply with IRS regulations.

(3) Tuition savings programs. The Texas Health and Human Services Commission excludes funds used to establish a tuition savings program under §358.356 of this title (relating to Tuition Savings Programs).

(4) Achieving a Better Life Experience (ABLE) Program. HHSC excludes from the calculation of countable resources funds used to establish an ABLE account and funds held in an ABLE account under §358.357 of this title (relating to Achieving a Better Life Program).

(5) School-Based Savings Program. HHSC excludes from the calculation of countable resources funds held in a school-based savings program under §358.358 of this title (relating to School-Based Savings Program).

**History**
- *Source Note: The provisions of this §360.113 adopted to be effective September 1, 2009, 34 TexReg 5517; amended to be effective February 3, 2013, 38 TexReg 366; amended to be effective November 20, 2016, 41 TexReg 9005.*

##### **1 Tex. Admin. Code § 360.115** Deeming of Income and Resources {#sec-360.115 omnilex-key=us-tx-regs-official--title-1--360.115}

(a) For purposes of MBI eligibility, each person is considered a household of one.

(b) If a person lives with a spouse, the person and spouse are each considered a household of one. The assets of each spouse are considered only with respect to that spouse. In the case of assets owned jointly by both spouses, one half is considered with respect to each spouse.

(c) If a person is a minor and lives with his or her parents, the assets of the parents are not considered with respect to the eligibility of the minor.

**History**
- *Source Note: The provisions of this §360.115 adopted to be effective September 1, 2009, 34 TexReg 5517.*

##### **1 Tex. Admin. Code § 360.117** Cost Sharing {#sec-360.117 omnilex-key=us-tx-regs-official--title-1--360.117}

(a) Monthly premiums. As a condition of establishing initial MBI eligibility and to remain eligible, a person must pay monthly premiums, as explained in this section, based on the amount of the person's countable earned and countable unearned income. A person may be exempt from paying monthly premiums as described in subsection (h) of this section.

(b) Countable earned income. For purposes of this section, countable earned income is as defined in 20 CFR §16.1110 and §416.1111, minus:

(1) earned income that is excluded by federal law, as explained in 20 CFR §416.1112(b); and

(2) mandatory payroll deductions for federal income tax, FICA, and retirement withholding.

(c) Countable unearned income. For purposes of this section, countable unearned income means unearned income, as defined in 20 CFR §§416.1120 - 416.1123, minus the exclusions and exemptions explained in 20 CFR §416.1124.

(d) Calculation of monthly premium. The monthly premium amount equals the amount of a person's countable unearned income for the month that exceeds the Supplemental Security Income (SSI) federal benefit rate for an individual, plus:

(1) $20 when monthly countable earned income is above 150% of the federal poverty level (FPL) up to and including 185% of the FPL;

(2) $25 when monthly countable earned income is above 185% of the FPL up to and including 200% of the FPL;

(3) $30 when monthly countable earned income is above 200% of the FPL up to and including 250% of the FPL; or

(4) $40 when monthly countable earned income is above 250% of the FPL.

(e) Upper limit on monthly premiums. The upper limit for the total monthly premium per person is $500. If the unearned income premium amount plus the earned income premium amount equals or exceeds $500, then the total monthly premium remains at $500.

(f) Payment of monthly premiums to establish initial eligibility. If the calculation explained in subsection (d) of this section results in an amount greater than $0, HHSC sends the person a written notice of the person's potential eligibility as described in this subsection. The initial eligibility period begins with the earliest benefit month and continues through the end of the latest benefit month identified on the written notice of the person's potential eligibility. This subsection explains the procedures that are followed and the requirements the person must meet to establish eligibility under this section for any or all of the months within the initial eligibility period. The steps are as follows:

(1) HHSC determines that the person is potentially eligible if the person meets all eligibility requirements for MBI other than the requirements of this section.

(2) HHSC sends the person a written notice (the notice) of the person's potential eligibility. The notice identifies the earliest month of potential eligibility and the amount of the monthly premiums due for each month in the initial eligibility period.

(3) The notice also includes:

(A) the total amount in monthly premiums that must be paid to obtain MBI coverage for the entire initial eligibility period; and

(B) the deadline by which payment must be submitted.

(4) The person chooses whether to pay the monthly premiums for either the entire initial eligibility period or for only a portion of the initial eligibility period (according to the months during which the person desires MBI coverage).

(5) The person submits to HHSC, by the deadline stated in the notice, either the total amount due as explained in the notice or a lesser amount if the person is not seeking coverage for the entire initial eligibility period.

(6) If the person submits payment of less than the total amount due to obtain MBI coverage for the entire initial eligibility period, HHSC applies the amount submitted first to satisfy the monthly premium for the month following the month of the notice, then to each prior month of potential eligibility, in reverse chronological order. After this, if any amount remaining is less than the premium for a full month's coverage, HHSC refunds that amount to the person.

(7) HHSC notifies the person of MBI eligibility and of the beginning date of MBI coverage, based on the amount submitted by the person under paragraph (5) of this subsection.

(8) If no amount is submitted by the deadline stated in the notice, or if the amount submitted is less than one month's premium such that it is refunded to the person as explained in paragraph (6) of this subsection, HHSC denies the person MBI eligibility. A person denied under this paragraph must file a new application for MBI before eligibility can be established.

(g) Payment of monthly premiums after initial eligibility. Monthly premiums after a person establishes initial eligibility under subsection (f) of this section are due and payable to HHSC no later than the last calendar day of each month, and are applied to the following month's eligibility and coverage of MBI benefits. If a monthly premium payment that is due is not received by HHSC by the end of the month, after written notice, HHSC may terminate the person's MBI eligibility.

(h) An MBI recipient residing in a federally declared disaster area is exempt from paying monthly premiums for up to three months beginning with the month in which the disaster is declared. A recipient will only be exempt from paying monthly premiums once per disaster.

**History**
- *Source Note: The provisions of this §360.117 adopted to be effective September 1, 2009, 34 TexReg 5517; amended to be effective October 25, 2011, 36 TexReg 7166.*

##### **1 Tex. Admin. Code § 360.119** Medical Effective Date {#sec-360.119 omnilex-key=us-tx-regs-official--title-1--360.119}

Beginning with the three months before the application month, the eligibility effective date for MBI coverage is the first day of the first month in which a person meets all eligibility criteria, including the timely payment of monthly premiums as explained in §360.117 of this chapter (relating to Cost Sharing).

**History**
- *Source Note: The provisions of this §360.119 adopted to be effective September 1, 2009, 34 TexReg 5517.*

### **Chapter 361** MEDICAID BUY-IN FOR CHILDREN PROGRAM

##### **1 Tex. Admin. Code § 361.101** Overview and Purpose {#sec-361.101 omnilex-key=us-tx-regs-official--title-1--361.101}

(a) This chapter governs the eligibility requirements for Medicaid Buy-In for Children (MBIC), which is authorized under Texas Government Code §532.0353. MBIC provides Medicaid benefits under the option explained in §1902(cc) of the Social Security Act (42 U.S.C. §1396a(cc)).

(b) MBIC is a Medicaid buy-in program for children with disabilities administered by the Texas Health and Human Services Commission (HHSC). It provides Medicaid benefits to eligible children with disabilities who are not eligible for Supplemental Security Income (SSI) for reasons other than disability. A child does not have to have applied for SSI in order to meet eligibility requirements for MBIC.

(c) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §361.101 adopted to
be effective January 1, 2011, 35 TexReg 11572; amended to be effective
April 1, 2025, 50 TexReg 830.*

##### **1 Tex. Admin. Code § 361.103** Definitions {#sec-361.103 omnilex-key=us-tx-regs-official--title-1--361.103}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking Medicaid benefits under MBIC who is not currently receiving Medicaid services.

(2) Authorized representative--An individual:

(A) who assists and represents a person in the application or eligibility redetermination process, and who is familiar with that person and that person's financial affairs; or

(B) who is a representative payee for an applicant or recipient for another federal benefit.

(3) CFR--Code of Federal Regulations.

(4) Child--An unmarried person under 19 years of age.

(5) Child with disabilities--A child who meets the Supplemental Security Income (SSI) program's definition of disability for children, as explained in 20 CFR §416.906.

(6) Eligibility certification month--Month in which MBIC eligibility is established.

(7) Family--A unit consisting of an applicant or recipient and the applicant's or recipient's parents and siblings who live in the same household as the applicant or recipient.

(8) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the Federal Register by the U.S. Department of Health and Human Services. Percentages of these guidelines are used to determine income eligibility for MBIC and certain other public assistance programs. In other programs, the FPL may be referred to as the Federal Poverty Income Level or the Federal Poverty Guidelines.

(9) HHSC--The Texas Health and Human Services Commission.

(10) Income--Funds a person receives that can be used to meet his or her need for food or shelter.

(11) In-kind support and maintenance--The value of food or shelter furnished to an applicant's or recipient's family.

(12) Intermediate care facility for persons with mental retardation (ICF/MR)--A Medicaid-certified facility that provides care in a 24-hour specialized residential setting for persons with mental retardation or a related condition. An ICF/MR includes a state supported living center and a state center.

(13) MBIC--Medicaid Buy-In for Children. A Medicaid buy-in program that provides Medicaid benefits to children with disabilities who are not eligible for SSI for reasons other than disability.

(14) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act and the Texas Human Resources Code, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(15) Parent--A child's natural or adoptive parent or the spouse of the natural or adoptive parent.

(16) Premium--A monthly payment to be made by a family to HHSC or its designee to buy MBIC coverage.

(17) Recipient--A person receiving Medicaid benefits under MBIC, including a person whose Medicaid eligibility is being redetermined.

(18) Sibling--A child's unmarried brother or sister (natural, adoptive, or step).

(19) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §361.103 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.105** Applying and Providing Information {#sec-361.105 omnilex-key=us-tx-regs-official--title-1--361.105}

(a) A person or the person's authorized representative applies for MBIC by completing an application prescribed by HHSC and submitting it to HHSC in accordance with HHSC instructions. The date of receipt of the completed signed application by HHSC is the application filing date, which establishes the application month explained in §361.119 of this chapter (relating to Medical Effective Date).

(b) An applicant or authorized representative must provide HHSC with all requested documentation and information that HHSC determines is necessary to make an eligibility determination or calculate a monthly premium. If the applicant or authorized representative fails or refuses to provide requested information by the date specified in a written request from HHSC, HHSC may deny the application for failure to furnish information. When this occurs but the person later provides the requested information, the date that the requested information is provided to HHSC becomes the application filing date explained in subsection (a) of this section.

(c) HHSC notifies a recipient in writing when it is time to redetermine the recipient's eligibility. This usually occurs once per year, although HHSC may require a person to send in documentation and information more often if HHSC determines that a special review of the person's eligibility is appropriate. A recipient must provide requested documentation and information when HHSC sends written notice of the requirement to the recipient's case address of record. The written notice explains the deadline to provide the information. If a recipient fails to provide the information by the deadline stated in the written notice, HHSC may terminate the recipient's MBIC eligibility.

(d) An applicant or recipient must report to HHSC within 10 calendar days any information that may impact the person's eligibility or monthly premium amount, in accordance with 42 U.S.C. §1383(e)(1)(A).

**History**
- *Source Note: The provisions of this §361.105 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.107** Nonfinancial Requirements {#sec-361.107 omnilex-key=us-tx-regs-official--title-1--361.107}

(a) Citizenship, immigration status, and residency. To be eligible for MBIC, a child must meet the citizenship, immigration status, and residency requirements in Chapter 358, Subchapter B of this title (relating to Nonfinancial Requirements).

(b) Disability. To be eligible for MBIC, a child must meet the Supplemental Security Income program's definition of disability for children, as explained in 20 CFR §416.906.

(c) Age. A child is eligible for MBIC through the month of his or her 19th birthday, if the child meets all other eligibility criteria.

(d) Marital status. To be eligible for MBIC, a child must not be married.

(e) Living arrangement.

(1) An applicant or recipient must not reside in a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010.

(2) If a recipient enters a nursing facility or intermediate care facility for persons with mental retardation, HHSC does not process the denial of MBIC Medicaid until eligibility for the appropriate institutional Medicaid program is determined.

(f) Social security number. In accordance with 42 CFR §435.910, a child or the child's authorized representative must give the child's social security number to HHSC as a condition of eligibility for MBIC.

(g) Application for other benefits. To be eligible for MBIC, a child or the child's authorized representative must apply for and obtain, if eligible, all other benefits to which the child may be entitled, in accordance with 42 U.S.C. §1382(e)(2).

**History**
- *Source Note: The provisions of this §361.107 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.109** Third-party Resources {#sec-361.109 omnilex-key=us-tx-regs-official--title-1--361.109}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §361.109 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.111** Income {#sec-361.111 omnilex-key=us-tx-regs-official--title-1--361.111}

(a) To be eligible for MBIC, a child's family must have monthly countable income less than or equal to 150% of the Federal Poverty Level (FPL).

(b) Countable income means:

(1) earned income for purposes of the Supplemental Security Income (SSI) program minus all applicable exclusions and exemptions, as explained in 20 CFR §§416.1110 - 416.1112; and

(2) unearned income for purposes of the SSI program minus all applicable exclusions and exemptions, as explained in 20 CFR §§416.1120 - 416.1124, except HHSC does not count as income:

(A) in-kind support and maintenance;

(B) payments made from or interest earned on a tuition savings program under §358.388 of this title (relating to Tuition Savings Programs);

(C) payments made from or interest earned on an Achieving a Better Life Experience (ABLE) account under §358.389 of this title (relating to Achieving a Better Life Program); and

(D) income earned on a school-based savings program under §358.390 of this title (relating to School-Based Savings Program).

(c) To determine the family's monthly countable income, HHSC counts the income of the child applying for or receiving MBIC, the income of the child's parents living in the same household as the child, and the income of the child's ineligible siblings living in the same household as the child.

(1) For a stepparent's income to count, the stepparent must be the current husband or wife of a natural or adoptive parent living in the same household as the child and the natural or adoptive parent.

(2) A sibling's income counts through the month of the sibling's:

(A) 18th birthday; or

(B) 22nd birthday, if the sibling is, as determined by HHSC, regularly attending school, college, or job training.

(3) HHSC calculates the family's monthly countable income as follows:

(A) Total the following:

(i) Monthly countable income of the child applying for or receiving MBIC.

(ii) Combined monthly countable income of the child's parents.

(iii) Countable monthly income of each of the child's ineligible siblings that is in excess of 150% of the FPL for a household of one, multiplied by 2, plus $85.

(B) Subtract $85 from the total arrived at in subparagraph (A) of this paragraph.

(C) Divide the total arrived at in subparagraph (B) of this paragraph by 2.

**History**
- *Source Note: The provisions of this §361.111 adopted to be effective January 1, 2011, 35 TexReg 11572; amended to be effective February 3, 2013, 38 TexReg 367; amended to be effective November 20, 2016, 41 TexReg 9006.*

##### **1 Tex. Admin. Code § 361.113** Employer-sponsored Health Insurance {#sec-361.113 omnilex-key=us-tx-regs-official--title-1--361.113}

As a condition of a child's eligibility for MBIC, a parent of an applicant or recipient living in the same household as the applicant or recipient must apply for, enroll in, and pay any required premiums for an employer-sponsored health insurance plan, if the parent's employer:

(1) offers family coverage under a group health plan that covers the applicant or recipient; and

(2) contributes at least 50 percent of the total cost of annual premiums.

**History**
- *Source Note: The provisions of this §361.113 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.115** Cost Sharing {#sec-361.115 omnilex-key=us-tx-regs-official--title-1--361.115}

(a) Monthly premium requirements for the months after the eligibility certification month. After HHSC establishes MBIC eligibility, HHSC or its designee sends the recipient written notice of the monthly premium amount and the due date for the monthly premium payment. HHSC provides a grace period of 60 days from the date on which the monthly premium is past due for the recipient to pay the monthly premium, in accordance with 42 U.S.C. §1396o(i)(3). If HHSC does not receive a monthly premium payment within the grace period, then HHSC terminates MBIC eligibility, effective the first day of the month after the grace period ends.

(b) Monthly premium requirements for the three months prior to the application month. As described in §361.119 of this chapter (relating to Medical Effective Date), an applicant may receive MBIC coverage for up to three months prior to the application month if the applicant meets the MBIC eligibility requirements. A month prior to the application month is a retroactive month. Prior to certifying MBIC eligibility for a retroactive month, HHSC or its designee sends the applicant written notice of the monthly premium amount for each eligible retroactive month and the due date for the monthly premium payment. HHSC provides the applicant at least 60 days to submit the premium payment for eligible retroactive months, in accordance with 42 U.S.C. §1396o(i)(3). HHSC or its designee must receive, by the due date, a full premium payment for at least one of the eligible retroactive months to certify MBIC eligibility for a retroactive month. If HHSC or its designee receives a premium payment that is less than the total amount due for all of the eligible retroactive months, then HHSC or its designee applies the amount to the eligible retroactive months in reverse chronological order.

(c) Monthly premium amounts. HHSC determines the monthly premium amounts on a sliding scale based on total monthly income as described in §361.111(c)(3)(A) of this chapter (relating to Income).

(1) For a recipient who is not enrolled in employer-sponsored health insurance, HHSC establishes full monthly premium amounts, up to the maximum amounts allowed by federal law.

(2) For a recipient who is enrolled in employer-sponsored health insurance and who receives premium assistance from HHSC under §1906 of the Social Security Act (42 U.S.C. §1396e), HHSC establishes reduced monthly premium amounts.

(d) Monthly premium amounts for a family with more than one MBIC recipient. If there is more than one MBIC recipient in a family, the family pays only one monthly premium amount.

(e) Undue hardship waivers. HHSC may, in its discretion, waive monthly premiums for undue hardship. HHSC determines eligibility for the undue hardship waivers described in paragraphs (1), (2), and (3) of this subsection based on information provided at application or information provided as described in §361.105 of this chapter (relating to Applying and Providing Information). A recipient must apply for the undue hardship waiver described in paragraph (4) of this subsection. HHSC does not waive monthly premiums for any months prior to the application month.

(1) A recipient who is an American Indian or Alaska Native as defined in 25 U.S.C. §§1603(c), 1603(f), 1679(b) or who has been determined eligible, as an Indian, pursuant to 42 CFR §136.12 or Title V of the Indian Health Care Improvement Act, to receive health care services is exempt from monthly premiums for the duration of enrollment in MBIC.

(2) A recipient who is enrolled in employer-sponsored health insurance, as determined by HHSC, and who does not receive premium assistance from HHSC under §1906 of the Social Security Act (42 U.S.C. §1396e) is exempt from monthly premiums for MBIC as long as the recipient remains enrolled in employer-sponsored health insurance and is not receiving premium assistance.

(3) A recipient residing in a federally declared disaster area is exempt from monthly premiums for three months beginning with the month in which the disaster is declared. A recipient may only receive one undue hardship waiver per disaster.

(4) A recipient or authorized representative may apply for an undue hardship waiver for loss of income.

(A) HHSC may grant an undue hardship waiver for loss of income if the loss of income is due to:

(i) termination of employment because of a layoff or business closing;

(ii) an involuntary reduction in work hours;

(iii) a parent leaving the household because of divorce or separation; or

(iv) a parent's death.

(B) A recipient who is determined by HHSC to be eligible for an undue hardship waiver for loss of income may be exempt from monthly premiums for three months.

(C) A recipient may only receive one undue hardship waiver for loss of income per 12 months.

(D) An undue hardship waiver for loss of income begins the first month for which HHSC or its designee did not receive a premium payment for the recipient.

(f) Cost-share limits. A recipient is exempt from monthly premiums for the remainder of the coverage period when the cost-share expenditures for the recipient reach the cost-share limit. HHSC determines the cost-share limit for a recipient, up to the maximum allowed by 42 U.S.C. §1396o(i)(2)(A).

(g) Tracking cost-share expenditures. For a recipient without employer-sponsored health insurance, HHSC or its designee determines when MBIC premium payments reach the cost-share limit. A recipient with employer-sponsored health insurance must track cost-share expenditures on the form provided by HHSC or its designee and report to HHSC or its designee when the annual cost-share limit is reached. Eligible cost-share expenditures include the monthly premiums for MBIC and cost sharing for employer-sponsored health insurance. HHSC or its designee:

(1) computes the cost-share limit for each recipient and informs the recipient of the cost-share limit at enrollment;

(2) provides the recipient with a form for keeping track of monthly premiums for MBIC and cost sharing for employer-sponsored health insurance; and

(3) provides a refund if HHSC receives a monthly premium payment that causes the recipient to exceed the cost-share limit.

**History**
- *Source Note: The provisions of this §361.115 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.117** Notice of Eligibility Determination and Right to Appeal {#sec-361.117 omnilex-key=us-tx-regs-official--title-1--361.117}

(a) After making an eligibility determination on an initial application, HHSC sends the applicant:

(1) a written notice of eligibility, including notice of any monthly premium requirements and the medical effective date described in §361.119 of this chapter (relating to Medical Effective Date); or

(2) a written notice of ineligibility and the reason for the decision.

(b) After making an eligibility determination or redetermination, HHSC sends the recipient a written notice of any change in eligibility or monthly premium requirement.

(c) The written notice informs the applicant or recipient of the right to request a hearing to appeal HHSC's decision. The hearing is held in accordance with 42 CFR Part 431, Subpart E and HHSC's fair hearing rules in Chapter 357 of this title (relating to Hearings).

**History**
- *Source Note: The provisions of this §361.117 adopted to be effective January 1, 2011, 35 TexReg 11572.*

##### **1 Tex. Admin. Code § 361.119** Medical Effective Date {#sec-361.119 omnilex-key=us-tx-regs-official--title-1--361.119}

(a) Beginning with the three months before the application month, except as described in subsection (b) of this section, the medical effective date for MBIC coverage is the first day of the first month in which a person meets all eligibility criteria.

(b) The medical effective date for MBIC cannot predate January 1, 2011.

**History**
- *Source Note: The provisions of this §361.119 adopted to be effective January 1, 2011, 35 TexReg 11572.*

### **Chapter 363** TEXAS HEALTH STEPS COMPREHENSIVE CARE PROGRAM

#### **Subchapter B** PRESCRIBED PEDIATRIC EXTENDED CARE CENTER SERVICES

##### **1 Tex. Admin. Code § 363.201** Purpose {#sec-363.201 omnilex-key=us-tx-regs-official--title-1--363.201}

(a) This subchapter defines the Prescribed Pediatric Extended Care Center services benefit available through the Early and Periodic Screening, Diagnosis, and Treatment Comprehensive Care Program, which in Texas is known as the Texas Health Steps Comprehensive Care Program.

(b) This subchapter applies to Medicaid fee-for-service and Medicaid managed care organizations that contract with the Texas Health and Human Services Commission to provide Medicaid services.

**History**
- *Source Note: The provisions of this §363.201 adopted to be effective November 1, 2016, 41 TexReg 8284.*

##### **1 Tex. Admin. Code § 363.203** Definitions {#sec-363.203 omnilex-key=us-tx-regs-official--title-1--363.203}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Activities of daily living (ADLs)--Activities that include eating, toileting, personal hygiene, dressing, bathing, transferring, positioning, and locomotion or mobility.

(2) Basic services--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 participant;

(ii) is developed in conjunction with the participant's responsible adult; and

(iii) specifies the medical, nursing, psychosocial, therapeutic, and developmental services required by the participant; and

(B) the caregiver training needs of a medically dependent or technologically dependent participant's parent or responsible adult.

(3) Correct or ameliorate--To improve, maintain, or slow the deterioration of the participant's health status.

(4) Direct care staff--An employee or contractor of a PPECC who:

(A) works under the supervision of a registered nurse;

(B) provides direct care to a participant; and

(C) meets the qualifications described in 26 TAC §550.409(a) (relating to Direct Care Staff Qualifications).

(5) Fair hearing--The process HHSC has adopted and implemented in Chapter 357, Subchapter A, of this title (relating to Uniform Fair Hearing Rules) in compliance with federal and state regulations governing Medicaid Fair Hearings.

(6) HHSC--The Texas Health and Human Services Commission or its designee.

(7) Licensed vocational nurse (LVN)--An employee or contractor of a PPECC who is licensed by the Texas Board of Nursing to practice vocational nursing in accordance with Texas Occupations Code Chapter 301.

(8) Medicaid managed care organization (MCO)--Any entity with which HHSC contracts to provide Medicaid services and that complies with Chapter 353 of this title (relating to Medicaid Managed Care).

(9) Medically or technologically dependent participant--

(A) An individual 20 years of age or younger:

(i) who has an acute or chronic medically complex or fragile condition or disability; and

(ii) whose condition or disability, as stated in clause (i) of this subparagraph, requires:

(I) ongoing skilled nursing care beyond the level of skilled nursing visits normally authorized under Texas Medicaid home health skilled nursing and home health aide services, prescribed by a physician to avert death or further disability; or

(II) the routine use of a medical device to compensate for a deficit in a life-sustaining bodily function.

(B) The term does not include a participant with a controlled or occasional medical condition that does not require ongoing nursing care.

(10) Notice (or notification)--A letter provided by HHSC or an MCO to a participant informing the participant of any reduction, denial, or termination of a requested service, as described in the Code of Federal Regulations, Title 42, §§431.206 and 431.210.

(11) Ordering physician--A doctor of medicine or doctor of osteopathy (M.D. or D.O.), legally authorized to practice medicine or osteopathy who provides ongoing medical care for the participant and continuing medical supervision of the participant's plan of care.

(12) Participant--An individual who is eligible to receive PPECC services under the Texas Health Steps Comprehensive Care Program from a provider enrolled in the Texas Medicaid program.

(13) Plan of care (POC)--A written comprehensive, interdisciplinary protocol of care that includes the physician's order for needed services, nursing care plan, and protocols establishing delegated tasks, plans to address functional developmental needs, plans to address psychosocial needs, personal care services for assistance with activities of daily living, and therapeutic service needs required by a participant and family served.

(14) PPECC--Prescribed Pediatric Extended Care Center. A center operated on a for-profit or nonprofit basis that provides non-residential basic services to four or more medically dependent or technologically dependent participants who require the services of the center and who are not related by blood, marriage, or adoption to the owner or operator of the center.

(15) Private Duty Nursing (PDN)--Nursing, as described by Texas Occupations Code Chapter 301, and its implementing regulations in 22 TAC Part 11 (relating to the Texas Board of Nursing), that provides a participant with more individual and ongoing care than is available from a visiting nurse or than is routinely provided by the nursing staff of a hospital or skilled nursing facility. PDN services include observation, assessment, intervention, evaluation, rehabilitation, care and counsel, or health teachings for a participant who has a disability or chronic health condition or who is experiencing a change in normal health processes.

(16) Registered nurse (RN)--An employee or contractor of a PPECC who is licensed by the Texas Board of Nursing to practice professional nursing in accordance with Texas Occupations Code Chapter 301.

(17) Respite--Services provided to relieve a participant's primary care giver.

(18) Responsible adult--An adult, as defined by Texas Family Code §101.003, who has agreed to accept the responsibility for providing food, shelter, clothing, education, nurturing, and supervision for a participant. Responsible adults include biological parents, adoptive parents, foster parents, guardians, court-appointed managing conservators, and other family members by birth or marriage. If the participant is 18 years of age or older, the responsible adult must be the participant's managing conservator or legal guardian.

(19) Skilled nursing--Services provided by a registered nurse or by a licensed vocational nurse, as authorized by Texas Occupations Code Chapter 301 and 22 TAC §217.11 (relating to Standards of Nursing Practice) and §217.12 (relating to Unprofessional Conduct).

(20) Stable--A status determined by a participant's ordering physician that the participant's health condition does not prohibit utilizing transportation to access outpatient medical services and does not present significant risk to other participants or personnel at the center.

(21) Texas Health Steps Comprehensive Care Program (THSteps-CCP)--A federal program, required by Medicaid and known as Early and Periodic Screening, Diagnosis, and Treatment (EPSDT), for children under 21 years of age who meet certain criteria for eligibility. Services are defined in the United States Code, Title 42, §1396d(r), and the Code of Federal Regulations, Title 42, §440.40(b).

**History**
- *Source Note: The provisions of this §363.203 adopted
to be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.205** Provider Participation Requirements {#sec-363.205 omnilex-key=us-tx-regs-official--title-1--363.205}

(a) A PPECC service provider must be independently enrolled in the Texas Medicaid program to be eligible to receive Medicaid reimbursement for providing PPECC services through the Texas Health Steps Comprehensive Care Program (THSteps-CCP).

(b) To participate in THSteps-CCP, a PPECC service provider must:

(1) be currently licensed under and comply with 26 TAC Chapter 550 (relating to Licensing Standards for Prescribed Pediatric Extended Care Centers);

(2) be enrolled and approved for participation in the Texas Medicaid program;

(3) agree to provide services in compliance with all applicable federal, state, and local laws and regulations, including Texas Occupations Code Chapter 301;

(4) comply with the terms of the Texas Medicaid Provider Agreement;

(5) comply with all state and federal regulations and rules relating to the Texas Medicaid program;

(6) comply with the requirements of the Texas Medicaid Provider Procedures Manual, including all published updates and revisions and all handbooks, standards, and guidelines published by HHSC or a Medicaid managed care organization (MCO) with which the provider contracts;

(7) comply with accepted professional standards and principles of nursing practice;

(8) comply with Texas Family Code Chapter 261, and Texas Health and Safety Code Chapter 260A, concerning mandatory reporting of suspected abuse or neglect of children and adults with disabilities; and

(9) maintain written policies and procedures for obtaining consent for medical treatment for participants in the absence of the responsible adult that meet the standards of Texas Family Code §32.001.

**History**
- *Source Note: The provisions of this §363.205 adopted
to be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.207** Participant Eligibility Criteria {#sec-363.207 omnilex-key=us-tx-regs-official--title-1--363.207}

(a) A participant may be admitted to a PPECC if:

(1) the participant is eligible for the Texas Health Steps Comprehensive Care Program (THSteps-CCP);

(2) the participant is 20 years of age or younger;

(3) the participant requires ongoing skilled nursing care and supervision and skilled observations, judgments, and therapeutic interventions all or part of the day to correct or ameliorate the participant's health status, such that delayed skilled intervention is expected to result in:

(A) deterioration of a chronic condition;

(B) loss of function;

(C) imminent risk to health status due to medical fragility; or

(D) risk of death;

(4) the participant is considered to be medically dependent or technologically dependent;

(5) the participant meets the criteria in 26 TAC §550.601 (relating to Admission Criteria);

(6) the participant has a physician's order prescribing PPECC services signed and dated by the ordering physician who has examined the participant in person within 30 calendar days prior to admission and reviewed all appropriate medical records, unless the physician waives this examination because the physician:

(A) has already established a diagnosis for the participant;

(B) is providing continuing care and medical supervision to the participant; and

(C) has stated in writing that an examination of the participant 30 calendar days prior to admission is not medically necessary;

(7) the participant resides with the responsible adult and does not reside in a 24-hour inpatient facility, including a:

(A) general acute hospital;

(B) skilled nursing facility;

(C) intermediate care facility; or

(D) special care facility, including sub-acute units or facilities for the treatment of acquired immune deficiency syndrome; and

(8) the PPECC has consent for admission to the PPECC signed and dated by the participant or by the participant's responsible adult.

(b) If a participant's ordering physician waives the examination of the participant in accordance with subsection (a)(6) of this section:

(1) the physician must examine the participant in person within 365 calendar days after the date of the participant's last examination; and

(2) the physician and PPECC must maintain documentation of the waived examination and the information described in subsection (a)(6) of this section in the participant's medical record.

(c) THSteps-CCP participants are eligible for all medically necessary PPECC services that are required to meet the participant's documented needs.

(d) Admission must be voluntary, based on the participant's, or the participant's responsible adult's choice for PPECC services.

(e) An authorized admission for PPECC services is not intended to supplant the right to a Medicaid Private Duty Nursing benefit, when medically necessary.

**History**
- *Source Note: The provisions of this §363.207 adopted to
be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.209** Benefits and Limitations {#sec-363.209 omnilex-key=us-tx-regs-official--title-1--363.209}

(a) Comprehensive plan of care (POC) and PPECC permissible services.

(1) A PPECC must develop, implement, and monitor a comprehensive POC that:

(A) is provided to a medically dependent or technologically dependent participant;

(B) is developed in collaboration with the participant's ordering physician, responsible adult, and interdisciplinary team, as well as the participant's existing service providers as needed to coordinate care;

(C) specifies the following prescribed services needed to address the medical, nursing, psychosocial, therapeutic, dietary, functional, and developmental needs of the participant and the training needs of the participant's responsible adult:

(i) skilled nursing;

(ii) personal care services to assist with activities of daily living while in the PPECC;

(iii) functional developmental services;

(iv) nutritional and dietary services, including nutritional counseling;

(v) occupational, physical and speech therapy;

(vi) respiratory care;

(vii) psychosocial services; and

(viii) training for the participant's responsible adult associated with caring for a medically or technologically dependent participant;

(D) specifies whether the participant is stable as determined by the participant's ordering physician;

(E) if the participant is stable, the participant's ordering physician, in collaboration with the PPECC, specifies one of the following to be on board the transport vehicle to assist the participant during transportation:

(i) a registered nurse (RN);

(ii) a licensed vocational nurse (LVN); or

(iii) direct care staff;

(F) is reviewed and revised for each authorization period of services per §363.211(d) of this subchapter or more frequently as the ordering physician deems necessary;

(G) is signed and dated by the participant's ordering physician;

(H) is developed and established with the participant or the participant's responsible adult;

(I) includes a nursing addendum signed by the participant or the participant's responsible adult;

(J) meets additional requirements prescribed in 26 TAC §550.607 (relating to Initial and Updated Plan of Care); and

(K) meets requirements contained in the Texas Medicaid Provider Procedures Manual.

(2) Transportation Services.

(A) A PPECC must provide transportation of a participant to and from the PPECC when:

(i) the participant's ordering physician determines the participant is stable; and

(ii) the responsible adult wants the participant to receive transportation.

(B) When a PPECC provides transportation for a participant, an RN, LVN, or direct care staff, as determined by the participant's ordering physician in collaboration with the PPECC, must be on board the transport vehicle to assist the participant during transportation.

(C) A PPECC must ensure that the driver and the RN, LVN, or direct care staff on board the transport vehicle maintain a daily transportation log that must include:

(i) the driver's name;

(ii) the name of the PPECC staff member and whether the staff member is an RN, LVN, or direct care staff;

(iii) the date;

(iv) the name of the participant;

(v) the time the participant is put on the transport vehicle to deliver the participant to the PPECC;

(vi) the time the participant arrives at the PPECC;

(vii) the time the participant is put on the transport vehicle to return to the responsible adult or an adult authorized by the participant's responsible adult;

(viii) the time the participant arrives at the participant's return destination and the name of the person to whom the participant was released; and

(ix) for a participant who is in transport for longer than one hour traveling to the PPECC or for longer than one hour traveling to their return destination, the reason that the transport time was longer than one hour.

(D) Payment for transportation services not substantiated by the documentation required in subparagraph (C) of this paragraph may be recouped.

(E) A responsible adult is not required to accompany a participant when the participant receives transportation services to and from the PPECC.

(F) A participant or participant's responsible adult may decline a PPECC's transportation services entirely, on a specific date, or for part of a specific date and choose to be transported by other means.

(G) A non-emergency ambulance may not be used for transport to and from a PPECC.

(3) PPECC services, including training provided to the participant's responsible adult associated with caring for a medically or technologically dependent participant, must be provided by the PPECC with the following intended outcomes:

(A) optimizing the participant's health status and outcomes; and

(B) promoting and supporting family-centered, community-based care as a component of an array of service options by:

(i) preventing prolonged or frequent hospitalizations or institutionalization;

(ii) providing cost-effective, quality care in the most appropriate environment; and

(iii) providing training and education of caregivers.

(4) A PPECC must provide written documentation about a participant's care each day to the participant's responsible adult, including documentation of medication given, services provided, and other relevant health-related information. A PPECC must provide documentation to the participant's responsible adult each day following service delivery when the responsible adult picks up the participant or when the PPECC transports the participant to the participant's return destination.

(5) For each day that PPECC services are provided, a participant's medical record must identify the specific person, for example, nursing, direct care staff, or therapist providing services, the type of services performed, and the start and end times of services performed.

(b) Amount and duration.

(1) HHSC evaluates the amount and duration of PPECC services requested upon review of:

(A) a physician's order;

(B) a PPECC POC;

(C) a completed request for authorization, including all required documentation, as indicated in the Texas Medicaid Provider Procedures Manual; and

(D) the full array of Medicaid services the participant is receiving at the time the plan of care is developed.

(2) HHSC re-evaluates the amount of PPECC services when:

(A) there is a change in the frequency of skilled nursing interventions, other PPECC medical services, or the complexity and intensity of the participant's care, or the authorized services are not commensurate with the participant's medical needs and additional authorized hours are medically necessary;

(B) the participant or the participant's responsible adult chooses alternate resources for comparable care; or

(C) the responsible adult becomes available and is willing to provide appropriate care for the participant.

(c) PPECC service limitations.

(1) The Medicaid rate for PPECC services does not include a PPECC providing the following services:

(A) services intended to provide respite care or child care, or services not directly related to the participant's medical needs or disability;

(B) services that are the legal responsibility of a local school district, including transportation;

(C) services covered separately by Texas Medicaid, such as:

(i) speech therapy, occupational therapy, physical therapy, respiratory care practitioner services, and early childhood intervention services;

(ii) durable medical equipment (DME), medical supplies, and nutritional products provided to the participant by Medicaid's DME and medical supply service providers; and

(iii) Private Duty Nursing (PDN), skilled nursing, and aide services provided in the home setting when medically needed in addition to the PPECC services authorized;

(D) baby food or formula;

(E) services to participants related to the PPECC owner by blood, marriage, or adoption;

(F) services rendered to a participant who does not meet the definition of a medically or technologically dependent participant; and

(G) individualized comprehensive case management beyond the service coordination required by the Texas Occupations Code Chapter 301.

(2) PPECC services are limited to 12 hours per day. Services begin when the PPECC assumes responsibility for the care of the participant (the point the participant is boarded onto PPECC transportation or when the participant is brought to the PPECC) and ends when the care is relinquished to the participant's responsible adult or an adult authorized by the participant's responsible adult.

(3) A participant who is eligible to receive PDN services may also receive PPECC services. A participant may choose to receive all authorized continuous skilled nursing service hours through PPECC services only, PDN services only, or a combination of both PPECC and PDN services. If a participant chooses to receive both PPECC and PDN services, the participant must not receive service hours in addition to what was initially authorized for PPECC and PDN, unless additional hours are medically necessary.

(4) The following medically necessary services may be billed on the same day as PPECC services, but may not be billed simultaneously with PPECC services. These services may be billed before or after PPECC services:

(A) PDN;

(B) home health skilled nursing;

(C) home health aide services; and

(D) personal care services.

(d) Parental accompaniment is not required for PPECC services, including therapy services rendered in a PPECC setting.

**History**
- *Source Note: The provisions of this §363.209 adopted to
be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.211** Service Authorization {#sec-363.211 omnilex-key=us-tx-regs-official--title-1--363.211}

(a) Authorization is required for payment of services. A PPECC must submit a complete request for prior authorization to be considered by HHSC for reimbursement. Prior authorization is a condition for reimbursement, but not a guarantee of payment.

(b) HHSC only authorizes those services that HHSC determines to be medically necessary and appropriate.

(c) HHSC prior authorizes PPECC services with reasonable promptness. HHSC completes prior authorization requests for PPECC services within three business days of receipt of a complete request.

(d) Initial authorization may not exceed 90 calendar days from the start of care. Following the initial authorization, no authorization for payment of PPECC services may be issued for a single service period exceeding 180 calendar days. In addition, specific authorizations may be limited to a time period less than the established maximum based on factors such as the stability and predictability of the participant's medical condition.

(e) HHSC may deny or reduce the PPECC services when:

(1) the participant does not meet the medical necessity criteria for admission;

(2) the participant does not have an ordering physician;

(3) the participant is not 20 years of age or younger;

(4) the services requested are not covered under this subchapter;

(5) the participant's needs are not beyond the scope of services available through Texas Medicaid home health skilled nursing or home health aide services, because the needs can be met on a part-time or intermittent basis through a visiting nurse as described by Chapter 354, Subchapter A, Division 3 of this title (relating to Medicaid Home Health Services);

(6) there is a duplication of services;

(7) the services are intended to provide respite care or child care;

(8) the services are provided for the sole purpose of training the participant's responsible adult;

(9) the prior authorization request is incomplete;

(10) the information in the prior authorization request is inconsistent; or

(11) the requested services are not nursing services as defined by the Texas Occupations Code Chapter 301 and its implementing regulations.

(f) All authorization requests, including initial authorization and authorization of extensions or revisions to an existing authorization, must be submitted in writing.

(g) Initial authorization requests for PPECC services must include the following documentation, which adheres to requirements in the Texas Medicaid Provider Procedures Manual:

(1) physician order for services (a physician signature on the PPECC plan of care serves as a physician order for authorization purposes);

(2) a plan of care developed by the PPECC in compliance with §363.209(a)(1) of this subchapter (relating to Benefits and Limitations);

(3) all required prior authorization forms listed in the Texas Medicaid Provider Procedures Manual, or Medicaid managed care organization forms if they contain comparable content; and

(4) signed consent of the participant or participant's responsible adult, that includes:

(A) documentation that the participant or participant's responsible adult chose PPECC services;

(B) acknowledgement by the participant or the participant's responsible adult that the PPECC informed the participant or participant's responsible adult that other services such as private duty nursing might be reduced as a result of accepting PPECC services; and

(C) the participant's or participant's responsible adult's consent for the PPECC to share the participant's personal health information with the participant's other providers, as needed to ensure coordination of care.

(h) Required documentation for recertification of PPECC service authorization after the initial authorization or after an authorization period ends includes the same documents required for an initial authorization, as set forth in subsection (g) of this section.

(i) Revisions during an existing authorization period may be requested at any time, if medically necessary. Revision requests must include the same documentation required for an initial request, as set forth in subsection (g) of this section.

(j) If inadequate or incomplete information is provided, HHSC requests additional documentation from the PPECC to enable HHSC to make a decision on the request.

(k) During the authorization process, PPECCs are required to deliver the requested services from the start of care date.

(l) PPECCs are responsible for a safe transition of services when the authorization decision is a termination, denial, or reduction in the PPECC services being delivered.

(m) A comprehensive nursing assessment must be completed, signed and dated by a PPECC registered nurse no earlier than three business days before the initial start of care and no later than the day the participant is admitted to the center. A nursing assessment is also required for a revision when there are changes in the participant's medical condition that impact the amount or duration of services during an existing authorization period, and for recertification of PPECC service authorization. The nursing assessment is used to establish the participant's plan of care, and must contain the elements identified in the Texas Medicaid Provider Procedures Manual.

**History**
- *Source Note: The provisions of this §363.211 adopted to
be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.212** Documentation Requirements for Services Other Than Transportation Services {#sec-363.212 omnilex-key=us-tx-regs-official--title-1--363.212}

(a) A PPECC must obtain and maintain the following documentation in a participant's medical record to be eligible for reimbursement for non-transportation PPECC services provided to the participant:

(1) a physician's specific, written, signed, and dated orders prescribing PPECC services;

(2) an approved prior authorization from HHSC that includes:

(A) a Comprehensive Care Program (CCP) Prior Authorization Request Form;

(B) a PPECC Plan of Care (POC);

(C) a PPECC nursing assessment;

(D) a Nursing Addendum to POC for Private Duty Nursing (PDN) and/or PPECC;

(E) consent for PPECC services as described in the Texas Medicaid Provider Procedures Manual; and

(F) documentation of medical necessity;

(3) the daily attendance log required by subsection (b) of this section; and

(4) the documentation required by subsection (c) of this section.

(b) A PPECC must maintain a daily attendance log that includes:

(1) the date of attendance;

(2) the name of the participant;

(3) the signature of the responsible adult and the time when the PPECC assumes responsibility for the care of the participant which is:

(A) the time the participant boards the PPECC transport vehicle; or

(B) the time the participant is brought to the PPECC by a responsible adult;

(4) the signature of the responsible adult and time when the responsible adult assumes responsibility for the care of the participant which is:

(A) the time the participant is taken off the transport vehicle at the participant's return destination; or

(B) the time the participant is picked up from the PPECC by a responsible adult; and

(5) the name of the PPECC staff member riding in the transport vehicle when PPECC transportation services are utilized and whether the staff member is a registered nurse, licensed vocational nurse, or direct care staff.

(c) A PPECC must maintain the following documentation:

(1) notes from interdisciplinary team meetings;

(2) discrepancies between the weekly service hours scheduled and the service hours provided;

(3) the names of the staff member providing services;

(4) the date of service;

(5) the type of service performed; and

(6) the start and end times of the service performed.

(d) HHSC may request that a PPECC provide documentation to substantiate the provision of services in addition to that required by subsections (a) - (c) of this section.

(e) HHSC may recoup payment for services not substantiated by the documentation required in this section.

**History**
- *Source Note: The provisions of this §363.212 adopted to
be effective February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.213** Ordering Physician Responsibilities {#sec-363.213 omnilex-key=us-tx-regs-official--title-1--363.213}

(a) An ordering physician in an employment or contractual relationship with a PPECC cannot provide the required physician's order unless the physician has a therapeutic relationship with and ongoing clinical knowledge of the participant.

(b) The ordering physician's responsibilities include:

(1) providing an in person examination or treatment to the participant within 30 calendar days before the start of PPECC services unless the physician waives this examination because:

(A) a diagnosis has already been established by the physician;

(B) the participant is under the continuing care and medical supervision of the physician; and

(C) the physician has stated in writing that an examination of the participant 30 calendar days prior to admission is not medically necessary;

(2) if a physician waives an examination in accordance with subsection (b)(1) of this section:

(A) the physician must examine the participant in person within 365 calendar days after the date of the participant's last examination; and

(B) the physician and PPECC must maintain documentation of the waived examination and the information described in subsection (b)(1) of this section in the participant's medical record;

(3) providing a written, signed, and dated order prescribing PPECC services within 30 calendar days before the participant's start of services;

(4) providing specific, written, signed, and dated physician orders for PPECC services which is valid through the initial authorization period and complies with requirements contained in the Texas Medicaid Provider Procedures Manual;

(5) providing specific, written, signed, and dated physician orders for each PPECC authorization period, once the initial order is no longer valid;

(6) performing an in person evaluation of the participant each year;

(7) reviewing, approving, signing, and dating a plan of care (POC), and any other documentation required for service prior authorization, including any updates or changes;

(8) affirming in writing that PPECC services are medically necessary for the participant;

(9) affirming in writing that the participant's medical condition is sufficiently stable to permit safe delivery of PPECC services as described in the POC;

(10) affirming in writing that the participant's medical condition is stable and the type of provider, a registered nurse, licensed vocational nurse, or direct care staff, that must be present on the PPECC transportation vehicle as indicated in the POC; and

(11) providing continuing care to and medical supervision of the participant.

**History**
- *Source Note: The provisions of this §363.213 adopted
to be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

##### **1 Tex. Admin. Code § 363.215** Termination, Reduction, or Denial of Authorization for Prescribed Pediatric Extended Care Center Services {#sec-363.215 omnilex-key=us-tx-regs-official--title-1--363.215}

(a) HHSC terminates authorization for PPECC services when:

(1) the participant is no longer eligible for the Texas Health Steps Comprehensive Care Program;

(2) the participant no longer meets the medical necessity criteria for PPECC services;

(3) the PPECC cannot ensure the health and safety of the participant;

(4) the participant or the participant's responsible adult refuses to comply with the plan of care, and compliance is necessary to assure the health and safety of the participant;

(5) the participant changes PPECC providers, and the change of notification is submitted to HHSC in writing with a prior authorization request from the new PPECC provider; or

(6) the participant declines to continue receiving PPECC services and chooses to receive services at home.

(b) Notice to approve, reduce, deny, or terminate requested PPECC services.

(1) HHSC notifies the participant and the responsible adult in writing of the approval, reduction, denial, or termination of PPECC services.

(2) HHSC notifies the provider in writing of the approval, reduction, denial, or termination of PPECC services.

(3) The effective date of the service reduction or denial is 30 calendar days after the date on the individual's notification letter.

(4) HHSC notifies the individual in writing of the process to appeal the reduction or denial of services.

(c) All participants of Medicaid-funded services have the right to appeal actions or determinations made by HHSC as described in Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules).

**History**
- *Source Note: The provisions of this §363.215 adopted to
be effective November 1, 2016, 41 TexReg 8284; amended to be effective
February 19, 2025, 50 TexReg 831.*

#### **Subchapter C** PRIVATE DUTY NURSING SERVICES

##### **1 Tex. Admin. Code § 363.301** Purpose {#sec-363.301 omnilex-key=us-tx-regs-official--title-1--363.301}

(a) The purpose of this subchapter is to establish rules for private duty nursing services under the federal Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Program, known in Texas as the Texas Health Steps - Comprehensive Care Program (THSteps-CCP).

(b) EPSDT recipients are entitled to all medically necessary EPSDT services that:

(1) correct or ameliorate defects and physical and mental illnesses and conditions; and

(2) are eligible for federal financial participation.

(c) This subchapter applies to Medicaid fee-for-service (FFS) and Medicaid managed care organizations (MCOs) that are contracted with HHSC to provide Medicaid services.

**History**
- *Source Note: The provisions of this §363.301 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.303** Definitions {#sec-363.303 omnilex-key=us-tx-regs-official--title-1--363.303}

The following words and terms apply only to this subchapter and have the following meanings, unless the context clearly indicates otherwise.

(1) Contractor--The entity with which HHSC contracts, pursuant to the requirements of the Code of Federal Regulations, Title 42, Part 434.

(2) Correct or ameliorate--To improve, maintain, or slow the deterioration of the recipient's health status.

(3) Day--A calendar day.

(4) Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)--The child and adolescent health component of the Medicaid program for recipients under 21 years of age, defined in the United States Code, Title 42, §1396d(r), and the Code of Federal Regulations, Title 42, §440.40(b). EPSDT means screening, vision, dental, hearing, laboratory, health care, treatment, diagnostic services, and other measures necessary to correct or ameliorate defects and physical and mental illnesses and conditions.

(5) Federal financial participation (FFP)--The federal government's share of a Medicaid expenditure made by a state agency, as defined in the Code of Federal Regulations, Title 45, §95.4.

(6) HHSC--The Texas Health and Human Services Commission or its designee, including a contractor or MCO.

(7) Home and Community Support Services Agency (HCSSA)--A public or private agency or organization licensed by the Texas Department of Aging and Disability Services under 40 TAC Chapter 97 (relating to Licensing Standards for Home and Community Support Services Agencies).

(8) Identified contingency plan--A structured process, developed by the recipient or the responsible adult and the Medicaid-enrolled provider, by which a recipient will receive care when a scheduled health care provider is unexpectedly unavailable, as required by 40 TAC §97.290 (relating to Backup Services and After Hours Care).

(9) Licensed Vocational Nurse (LVN)--An individual who is recognized by the Texas Board of Nursing to practice vocational nursing in Texas at the time and place the service is provided, pursuant to Texas Occupations Code §301.002(5) and 22 TAC, Part 11 (relating to Texas Board of Nursing).

(10) Medicaid--The Texas Medical Assistance Program, a joint federal and state program provided for in Chapter 32, Texas Human Resources Code, and subject to Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq.

(11) Medicaid managed care organization (MCO)--Any entity with which HHSC contracts to provide Medicaid managed care services and that complies with Chapter 353 of this title (relating to Medicaid Managed Care).

(12) Medical Director--HHSC's, its contractor's, or MCO's medical director or associate medical director.

(13) Notice--A letter provided by HHSC, its contractor, or MCO to a recipient informing the recipient of any reduction, denial, or termination of a requested service, as described in the Code of Federal Regulations, Title 42, §431.206 and §431.210.

(14) Physician--A doctor of medicine (MD) or osteopathy (DO) who is licensed in the state in which they practice.

(15) Private duty nursing (PDN) Services--Nursing, described by the Texas Occupations Code Chapter 301, and its implementing regulations at 22 TAC, Part 11 (relating to Texas Board of Nursing), when the recipient requires more individual and continuous care than is available from a visiting nurse or than is routinely provided by the nursing staff of a hospital or skilled nursing facility. PDN services include observation, assessment, intervention, evaluation, rehabilitation, care and counsel, or health teachings of a recipient who has a disability or chronic health condition or who is experiencing a change in normal health processes.

(16) Private duty nursing services provider--An independently practicing registered nurse, a licensed vocational nurse (LVN) under the supervision of a registered nurse, or a home and community support services agency (HCSSA) enrolled in the Texas Medicaid Program to provide private duty nursing services.

(17) Qualified Aide--An aide providing services consistent with the requirements of:

(A) 40 TAC Chapter 94 (relating to Nurse Aides);

(B) 40 TAC Chapter 95 (relating to Medication Aides--Program Requirements); or

(C) home health aide outlined in 40 TAC Chapter 97 (relating to Licensing Standards for Home and Community Support Services Agencies).

(18) Recipient--An individual who is eligible to receive services through the Texas Medicaid Program.

(19) Registered Nurse (RN)--An individual who is recognized by the Texas Board of Nursing to practice professional nursing in Texas at the time and place the service is provided, pursuant to the Texas Occupations Code §301.002.

(20) Responsible adult--An individual who is an adult, as defined by the Texas Family Code, who has agreed to accept the responsibility for providing food, shelter, clothing, education, nurturing, and supervision for a recipient who is a minor under the age of 18; or is over 18 years of age and the responsible adult is the managing conservator or legal guardian. Responsible adults include biological parents, adoptive parents, foster parents, guardians, court-appointed managing conservators, and other family members by birth or marriage.

(21) Texas Health Steps - Comprehensive Care Program--Medical, dental, and treatment services available as a federally mandated service for eligible EPSDT Medicaid recipients in Texas under the age of 21 years, pursuant to the EPSDT provision of Title XIX of the Social Security Act, 42 U.S.C. §1396d(r), and the Code of Federal Regulations, Title 42, §440.40(b).

(22) Treating physician--A physician who provides ongoing medical care of the recipient and ongoing medical supervision of the recipient's plan of care.

**History**
- *Source Note: The provisions of this §363.303 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.305** Provider Participation Requirements {#sec-363.305 omnilex-key=us-tx-regs-official--title-1--363.305}

(a) PDN services providers must be independently enrolled in the Texas Medicaid Program to be eligible to receive reimbursement for providing private duty nursing services through the Texas Health Steps Comprehensive Care Program.

(b) A PDN services provider must:

(1) be an RN, an LVN under the supervision of an RN, or a licensed HCSSA;

(2) be enrolled in the Texas Medicaid Program;

(3) comply with the terms of the Texas Medical Assistance Provider Agreement;

(4) agree to provide services in compliance with all applicable federal, state, and local laws and regulations, including the Texas Nursing Practice Act;

(5) comply with all applicable state and federal laws and regulations relating to the Texas Medicaid Program;

(6) comply with the requirements of the *Texas Medicaid Provider Procedures Manual,* including all updates and revisions published bimonthly in the *Texas Medicaid Bulletin,* and all handbooks, standards, and guidelines published by HHSC;

(7) comply with accepted professional standards and principles of nursing practice;

(8) comply with Texas Family Code Chapter 261 and Texas Human Resources Code Chapter 48, concerning mandatory reporting of suspected abuse and neglect of children and adults with disabilities; and

(9) maintain written policies and procedures for obtaining consent for medical treatment for clients in the absence of the responsible adult that meet the standards of Texas Family Code §32.001, relating to Consent by Non-Parent.

(c) Provider Notification of Termination of Services.

(1) Independently enrolled RNs must provide a recipient at least 30 days written notice of the intent to voluntarily terminate services, except in situations of a potential threat to the nurse's personal safety.

(2) An HCSSA must provide a recipient at least five days written notice of its intent to voluntarily terminate services, except as allowed by 40 TAC §97.295 (relating to Client Transfer or Discharge Notification Requirements).

**History**
- *Source Note: The provisions of this §363.305 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.307** Medical Necessity {#sec-363.307 omnilex-key=us-tx-regs-official--title-1--363.307}

(a) PDN services are available to EPSDT-eligible recipients when the services are medically necessary to correct or ameliorate the recipient's disability or physical or mental illness or condition. The services correct or ameliorate when they improve, maintain, or slow the deterioration of the recipient's health status.

(b) Medical necessity must be documented in the recipient's prior authorization request.

**History**
- *Source Note: The provisions of this §363.307 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.309** Benefits and Limitations {#sec-363.309 omnilex-key=us-tx-regs-official--title-1--363.309}

(a) PDN services are a benefit of the Texas Medicaid Program in accordance with the Code of Federal Regulations, Title 42, §440.80, relating to PDN services, and §440.40(b), relating to EPSDT services.

(b) EPSDT recipients are eligible for all PDN services that are medically necessary to correct or ameliorate the recipient's disability and physical and mental illnesses and conditions.

(c) The provider requesting PDN services must supply documentation to support the medical need for a private duty nurse. The documentation must also support the number of PDN hours that are medically necessary to correct or ameliorate the recipient's disability and physical and mental illnesses and conditions.

(d) EPSDT recipients are eligible for all medically necessary PDN services that are required to meet the recipient's documented PDN needs over the span of time the needs arise, as the needs occur over the course of a 24-hour day.

(e) PDN services must be:

(1) prescribed by and provided under the direction of a treating physician;

(2) included in a plan of care, as described in §363.313 of this subchapter (relating to Plan of Care);

(3) delivered by a Texas Medicaid Program-enrolled PDN services provider; and

(4) provided in compliance with all applicable state and federal laws and regulations.

(f) PDN services are available when an individual:

(1) is eligible for EPSDT services;

(2) has a treating physician who:

(A) issues a prescription or physician's order for PDN services;

(B) reviews and approves an established and maintained plan of care in accordance with §363.313 of this subchapter; and

(C) provides continuing care and medical supervision, including examination or treatment, within 30 days prior to the start of PDN services. This physician visit may be waived when a diagnosis has already been established by the physician, and the client is under the continuing care and medical supervision of the physician. The waiver must be based on the physician's written statement that an additional evaluation visit is not medically necessary. This documentation must be maintained by the physician and the provider in the client's medical record; and

(3) has a responsible adult who resides in the recipient's residence when the recipient is a minor under the age of 18 years or when the recipient is 18 years of age or older with a managing conservator or legal guardian.

(g) HHSC may not:

(1) require a recipient's responsible adult(s) to provide PDN services to the recipient;

(2) require a recipient or a recipient's responsible adult(s) to designate an alternate caregiver to provide PDN services; or

(3) deny or reduce the amount of requested PDN services because the recipient's responsible adult(s) is trained and capable of performing such services, but chooses not to do so.

(h) HHSC may require providers to instruct and train responsible adults to perform PDN services should an emergency arise, or if the responsible adults voluntarily choose to provide part of the recipient's PDN themselves.

(i) The amount of medically necessary PDN services available to recipients will not be capped.

(j) PDN services must be provided in a place of service consistent with the requirements in the Code of Federal Regulations, Title 42, §440.80, relating to PDN.

(k) PDN services may be provided only by an RN or by an LVN who is under the supervision of an RN.

(l) PDN services must be prior authorized by HHSC. PDN may be authorized for a period of up to six months.

(m) The PDN services provider is notified in writing by HHSC of the approval, reduction, or denial of requested PDN services.

(n) PDN services limitations.

(1) PDN is considered only when the services are consistent with the definition of "nursing" as described in the Texas Nursing Practice Act or its implementing regulations. PDN services will not be considered for reimbursement if the services are intended solely to provide respite care or child care, or do not directly relate to the recipient's nursing needs.

(2) A responsible adult is not eligible for reimbursement for delivering PDN services through the Texas Medicaid Program if he or she is the parent of a recipient who is under the age of 18 or the spouse of the recipient. A responsible adult who is the managing conservator or legal guardian of a recipient over 18 years of age is not eligible for reimbursement.

(o) HHSC may deny or reduce PDN hours if the recipient's PDN needs decrease.

(p) HHSC may not deny or reduce PDN when the recipient's nursing needs have not decreased.

**History**
- *Source Note: The provisions of this §363.309 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.311** Prior Authorization Requirements {#sec-363.311 omnilex-key=us-tx-regs-official--title-1--363.311}

(a) PDN services must be prior authorized. Prior authorization is a condition of reimbursement but is not a guarantee of payment.

(b) HHSC will publish in the *Texas Medicaid Provider Procedures Manual* and websites all processes, tools, and scales used to prior authorize PDN services. HHSC may use only these processes, tools, and scales to prior authorize PDN services.

(c) The provider must submit a complete request for prior authorization in order to be considered by HHSC for reimbursement. The authorization request must include the authorization form approved by HHSC, signed and dated by the recipient's treating physician. The provider must use the documents, tools, or processes published in the *Texas Medicaid Provider Procedures Manual* or any updates made available through bulletins, banners, or other means to request prior authorization.

(d) Documentation supporting the prior authorization request must clearly and consistently describe the recipient's:

(1) current diagnosis;

(2) functional status and condition;

(3) history and treatment; and

(4) frequency and complexity of skilled nursing needs, as those needs arise over the span of a 24-hour day.

(e) The supporting documentation:

(1) must include:

(A) documentation of the treating physician's orders, e.g., a prescription or a written or documented verbal order signed and dated by a treating physician; and

(B) a plan of care that satisfies the requirements as described in §363.313 of this subchapter (relating to Plan of Care);

(2) may include any additional materials the provider may choose to submit that supports the medical necessity of the requested PDN services;

(3) must explain to HHSC's satisfaction how the requested PDN is necessary to correct or ameliorate the recipient's disability or physical or mental illness or condition; and

(4) must show that the recipient's skilled nursing needs cannot be met on a part-time or intermittent basis by a visiting nurse as described in Chapter 354, Subchapter A, Division 3 of this title (relating to Medicaid Home Health Services).

(f) Process for authorizations.

(1) HHSC authorizes requested PDN services required to meet all of the recipient's PDN needs when the medical necessity for a private duty nurse is documented.

(2) HHSC reviews requests for PDN services that comply with subsections (b) through (e) of this section.

(3) The information must be complete and consistent throughout the documentation associated with the prior authorization request for PDN services.

(4) PDN services are prior authorized with reasonable promptness. Prior authorization determinations are completed by HHSC within three business days of receipt of a complete request.

(5) If a request for PDN is incomplete, inconsistent, or unclear, HHSC, its contractor, or MCO will contact the provider to request additional or clarifying documentation to enable HHSC to make a decision on the request.

(6) Prior authorizations for PDN services are not denied or reduced based solely on the recipient's diagnosis, type of illness, or health condition.

(7) Prior authorizations for PDN services are not denied or reduced solely because the recipient's condition or health status is stable or has not changed.

(g) HHSC authorizes requested medically necessary PDN services when:

(1) the prior authorization request for PDN is complete, as described in subsections (b) through (e) of this section;

(2) the requested services are nursing services as defined by the Texas Nursing Practice Act and its implementing regulations; and

(3) no third-party resource, as described in the *Texas Medicaid Provider Procedures Manual,* is financially responsible for the requested services.

(h) HHSC may deny or reduce PDN services when the:

(1) request is incomplete;

(2) information in the request is inconsistent;

(3) documentation does not explain to HHSC's satisfaction the medical need for a private duty nurse or no longer supports the medical need for a private duty nurse;

(4) documentation does not address how PDN services correct or ameliorate the recipient's disability or physical or mental illness or condition;

(5) requested PDN services are not nursing services as defined by the Texas Nursing Practice Act and its implementing regulations;

(6) medical director, after conferring with the recipient's treating physician, determines the requested PDN services are not medically necessary to correct or ameliorate the recipient's disability or physical or mental illness or condition; or

(7) recipient's nursing needs could be met through a visiting nurse as described in Chapter 354, Subchapter A, Division 3 of this title.

(i) Only the medical director may deny PDN services on the basis that the services do not correct or ameliorate the recipient's disability or physical or mental illness or condition. Before denying PDN services, the medical director will contact the recipient's treating physician to determine whether additional information or clarification can be provided that would allow for authorization of PDN services.

(j) All notices must afford a recipient an opportunity for a fair hearing in accordance with 42 CFR, Part 431, Subpart E, related to Fair Hearings for Applicants and Recipients.

(1) HHSC may determine, based on the information submitted, that PDN services will be denied, terminated, or reduced. A notice regarding the denial, termination, or reduction of PDN services must be sent to the recipient and the requesting provider. The notice must inform the recipient of his or her right to request a fair hearing as described in Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules).

(2) When HHSC determines that the requested services are not PDN services and that the documentation may support authorization of personal care services, as described in Subchapter F of this chapter (relating to Personal Care Services), the denial notice:

(A) describes the basis for this determination;

(B) briefly describes the personal care services benefit; and

(C) explains how to request personal care services.

(3) When HHSC determines that documentation for the services requested does not support a request for PDN because the recipient does not need more individual and continuous nursing care than could be provided on a per-visit basis, as described in §354.1031 of this title (relating to General), the denial notice:

(A) describes the basis for this determination;

(B) briefly describes the home health nursing benefit; and

(C) explains how to request prior authorization for home health nursing.

(4) When HHSC determines that the request for PDN services is incomplete, as referenced in subsection (h)(1) of this section, the denial notice will inform the recipient that the documentation or information is incomplete and identify the sections of the documentation or information that are incomplete.

(5) When HHSC determines that the request for PDN services is inconsistent, as referenced in subsection (h)(2) of this section, the denial notice will inform the recipient that the documentation or information is inconsistent and identify the inconsistencies.

(6) When HHSC determines that the request for PDN services does not explain to HHSC's satisfaction the medical need for a private duty nurse or no longer supports the medical need for a private duty nurse as referenced in subsection (h)(3) of this section, the denial notice will inform the recipient and address how the documentation or information does not explain to HHSC's satisfaction the medical need for a private duty nurse or how the documentation no longer supports the medical need for a private duty nurse.

(7) When HHSC determines that the information provided does not address how PDN services correct or ameliorate the recipient's disability or physical or mental illness or condition as referenced in subsection (h)(4) of this section, the denial notice will inform the recipient and address how the information provided in the request does not support the medical need for PDN services.

(8) When HHSC determines that the requested PDN services are not nursing services as defined by the Texas Nursing Practice Act and its implementing regulations, as referenced in subsection (h)(5) of this section, the denial notice will inform the recipient and address how the requested PDN services are not nursing services as defined by the Texas Nursing Practice Act and its implementing regulations.

(9) When an HHSC medical director, after conferring with the recipient's treating physician, determines the requested PDN services are not medically necessary to correct or ameliorate the recipient's disability or physical or mental illness or condition, as referenced in subsection (h)(6) of this section, the denial notice will inform the recipient and address why the requested PDN services are not medically necessary to correct or ameliorate the recipient's disability or physical or mental illness or condition.

(10) When HHSC determines that the recipient's nursing needs could be provided by a visiting nurse through Home Health Skilled Nursing services, as referenced in subsection (h)(7) of this section, the denial notice for PDN services will describe the basis for the denial and explain how to request Home Health Skilled Nursing services.

(k) A provider's authorization for PDN services is terminated if the recipient is no longer eligible for EPSDT.

(l) HHSC may ask a provider to take on an existing authorization for PDN services if it becomes necessary to terminate another provider's authorization for PDN services because the:

(1) recipient's health and safety needs are in jeopardy; or

(2) PDN services provided are inconsistent with the plan of care submitted for authorization.

**History**
- *Source Note: The provisions of this §363.311 adopted to be effective October 15, 2015, 40 TexReg 7056.*

##### **1 Tex. Admin. Code § 363.313** Plan of Care {#sec-363.313 omnilex-key=us-tx-regs-official--title-1--363.313}

(a) A plan of care is developed by an RN and represents the treating physician's orders.

(b) The plan of care must be established and periodically reviewed by the treating physician in consultation with the provider and the recipient or responsible adult.

(c) The plan of care developed by the RN must be:

(1) submitted with a request for prior authorization of PDN services;

(2) recommended, signed, and dated by the treating physician no more than 30 days before the start of care or 30 days before the end of the prior authorization period; and

(3) reviewed and revised by the treating physician with each prior authorization, or more frequently as the treating physician or the PDN services provider deems necessary.

(d) A plan of care developed by the RN must include the following elements:

(1) a clinical summary that documents active diagnoses and current clinical condition;

(2) the recipient's mental or cognitive status;

(3) the types of treatments and services, including amount, duration, and frequency;

(4) a description of any required equipment and/or supplies;

(5) the recipient's prognosis;

(6) the recipient's rehabilitation potential;

(7) the recipient's current functional limitations;

(8) the activities permitted;

(9) the recipient's nutritional requirements;

(10) the recipient's medications, including dose, route, and frequency;

(11) the safety measures to protect against injury;

(12) instructions for timely discharge or referral;

(13) the date the recipient was last seen by the treating physician;

(14) identification of activities of daily living and health maintenance activities with which the recipient needs assistance, consistent and 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) and 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). The plan of care must indicate whether the tasks must be performed by a licensed nurse or a qualified aide, or may be performed by a personal care attendant as described in Subchapter F of this chapter (relating to Personal Care Services);

(15) a certification statement that an identified contingency plan exists; and

(16) all other medical orders.

**History**
- *Source Note: The provisions of this §363.313 adopted to be effective October 15, 2015, 40 TexReg 7056.*

#### **Subchapter D** DENTAL SERVICES

##### **1 Tex. Admin. Code § 363.401** Eligibility for TH Steps Dental Services {#sec-363.401 omnilex-key=us-tx-regs-official--title-1--363.401}

(a) Persons are eligible for dental services if they have a current Texas Medicaid identification or Medicaid verification letter that indicates Medicaid and Texas Health Steps eligibility for the time period during which services are delivered, and are under age 21. Providers may also verify eligibility for clients who do not have a Medicaid identification or Medicaid verification letter by contacting the department's claims processing agent.

(b) Dental services can be continued through the month in which the recipient reaches 21. A recipient becomes ineligible for THSteps-Comprehensive Care Program (CCP) services on his or her 21st birthday.

(c) Persons one year of age and older who are eligible for Medicaid and Texas Health Steps services may receive periodic, preventive dental services as defined in §33.303 of this title (relating to Preventive Dental Services) every six months.

**History**
- *Source Note: The provisions of this §363.401 adopted to be effective December 8, 1998, 23 TexReg 12312; transferred effective September 1, 2002, as published in the Texas Register December 6, 2002, 27 TexReg 11527.*

#### **Subchapter E** EPSDT EYEGLASS PROGRAM

##### **1 Tex. Admin. Code § 363.501** Definitions {#sec-363.501 omnilex-key=us-tx-regs-official--title-1--363.501}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.

(1) EPSDT--The federally mandated Early and Periodic Screening, Diagnosis, and Treatment program defined in 25 TAC Chapter 33 (relating to Early and Periodic Screening, Diagnosis, and Treatment).

(2) Eyeglass supplier--A person, firm, or institution that has a written agreement with HHSC as an eyeglass supplier and is an eligible provider under the program. The fitting, adjustment, and repairs of the eyewear must be performed by an appropriate and qualified provider under Texas Medicaid. Suppliers accept the payments stipulated by HHSC as payment in full for the service and supplies involved, unless otherwise provided.

(3) Eyeglasses--Lenses and frames, dispensed and delivered, that: are medically necessary; are prescribed by an appropriate and qualified provider; are professionally determined to be necessary and appropriate for the lens, age, and sex of the recipient; and significantly improve visual acuity or impede progression of visual problems. The term eyeglasses does not include artificial eyes or any item of eyewear that is not covered under the EPSDT Eyeglass Program.

(4) HHSC--The Texas Health and Human Services Commission, a Texas Medicaid managed care organization, or another designee.

(5) Prosthetic eyewear--Eyewear that is medically necessary and prescribed by an appropriate and qualified provider under Texas Medicaid for post cataract surgery, congenital absence of the eye lens, or loss of an eye lens because of trauma. Prosthetic eyewear includes contact lenses and eyeglasses that meet state and federal specifications.

(6) Prosthetic eyewear supplier--A person, firm, or institution that has a written agreement with HHSC as an eyewear supplier. The fitting, adjustment, and repair of the eyewear must be performed by an appropriate and qualified provider. The eyewear supplier accepts the payment stipulated by HHSC as payment in full for the services and supplies, unless otherwise provided in this chapter.

**History**
- *Source Note: The provisions of this §363.501 adopted to be effective July 1, 1986, 11 TexReg 2758; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2002, as published in the Texas Register December 6, 2002, 27 TexReg 11527; amended to be effective December 10, 2015, 40 TexReg 8754.*

##### **1 Tex. Admin. Code § 363.502** Benefits and Limitations {#sec-363.502 omnilex-key=us-tx-regs-official--title-1--363.502}

In addition to the services specified in §354.1023 of this title (relating to Optometric Services Provider), the benefits and limitations applicable to vision services available through the Medicaid EPSDT Program are as follows.

(1) Recipient eligibility. All Medicaid recipients under the age of 21 are eligible for EPSDT vision services. Services may be continued through the month the eligible recipient becomes 21.

(2) Provider eligibility. All vision services reimbursable by the program must be provided to eligible recipients by an appropriate provider who is enrolled in the Medicaid Program at the time the service is provided.

(3) Reimbursable services.

(A) Examination. One examination of the eyes by refraction may be provided to each eligible recipient:

(i) once every twelve months;

(ii) if there is a significant change in visual acuity measured in diopter or axis changes, as defined by HHSC; or

(iii) if the exam is otherwise medically necessary.

(B) Eyewear. Eyewear that is medically necessary to correct vision defects may be provided to an eligible recipient. Eyewear includes eyeglasses (lenses and frames), contact lenses, and post cataract surgery prosthetic lenses.

(i) Nonprosthetic eyeglasses or contact lenses are available to an eligible recipient only once every 24 months, unless the recipient's visual acuity has changed in diopters or axis as defined by HHSC or the eyewear is lost or destroyed. Except in an emergency, HHSC must authorize in writing prescriptions for contact lenses before dispensing. Prior authorization is based on the provider's written documentation that contact lenses are the only means of correcting the vision defect.

(ii) Prosthetic eyewear is provided to an eligible recipient if prescribed for post cataract surgery, congenital absence of the eye lens, or loss of an eye lens because of trauma.

(I) Reimbursement is made for as many temporary lenses as are medically necessary during post cataract surgery convalescence (four months after the date of surgery).

(II) Only one pair of permanent prosthetic eyewear may be dispensed except to replace lost or destroyed prosthetic eyewear or if required because of a change in visual acuity measured in diopter or axis changes as defined by HHSC.

(C) Repairs. Eyeglasses repair is reimbursable if the cost of materials does not exceed the cost of replacement of the eyeglasses. Repairs costing less than $2.00 are not reimbursable, and the provider may not bill the recipient for these repairs.

(D) Replacement of lost or destroyed eyewear. Replacement of eyewear is reimbursable. The date nonprosthetic eyewear is replaced begins a new 24-month ineligibility period for new eyewear unless the conditions in subparagraph (B)(i) of this paragraph apply.

(E) Limitations. Eyeglasses and contacts, for residents of institutions that include these services in their vendor payment, are not reimbursed under this program.

**History**
- *Source Note: The provisions of this §363.502 adopted to be effective July 1, 1986, 11 TexReg 2758; amended to be effective January 1, 1987, 11 TexReg 5058; amended to be effective July 1, 1987, 12 TexReg 1779; amended to be effective October 28, 1987, 12 TexReg 3779; amended to be effective March 1, 1990, 14 TexReg 6888; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2002, as published in the Texas Register December 6, 2002, 27 TexReg 11527; amended to be effective November 4, 2003, 28 TexReg 9521; amended to be effective December 6, 2012, 37 TexReg 9493; amended to be effective December 10, 2015, 40 TexReg 8754.*

##### **1 Tex. Admin. Code § 363.503** Specifications for Eyewear {#sec-363.503 omnilex-key=us-tx-regs-official--title-1--363.503}

The provider must ensure that eyewear provided through this program meets the following specifications.

(1) Lenses must meet federal and state specifications and all standards of the American standard prescription requirements for first quality lenses and dress eyewear.

(2) Standard sizes of frames for individuals ages 6 months to 21 years are dispensed at no cost to the eligible recipient.

(3) An eyeglass supplier must show the recipient a minimum selection of frame styles and colors as required by HHSC policy.

(4) Frames are manufactured in the United States of America, unless foreign-made frames are comparable in quality and less expensive than American-made frames.

(5) Frames are serviceable and meet prescription quality standards.

(6) Lens and frame materials are new.

(7) Supplies are at least equivalent in quality to program eyeglasses provided under this category at no cost to the eligible recipient.

(8) Repair materials, if claimed for reimbursement, are new, are at least equivalent to the original item, and meet the specifications for eyewear cited in these provisions.

**History**
- *Source Note: The provisions of this §363.503 adopted to be effective July 1, 1986, 11 TexReg 2758; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2002, as published in the Texas Register December 6, 2002, 27 TexReg 11527; amended to be effective November 4, 2003, 28 TexReg 9521; amended to be effective December 10, 2015, 40 TexReg 8754.*

##### **1 Tex. Admin. Code § 363.504** Claims Information Requirements {#sec-363.504 omnilex-key=us-tx-regs-official--title-1--363.504}

Providers must meet the criteria established in this subchapter for vision services and the provisions for participation in the Medicaid Program established under Chapter 354, Subchapter A, Division 1, of this title (relating to Medicaid Procedures for Providers), and Chapter 354, Subchapter A, Division 11, of this title (relating to General Administration). In addition to the claims information requirements established in §354.1001 of this title (relating to Claim Information Requirements), the following information is required for claims for vision services:

(1) name, address, and Medicaid provider identification number of the ordering provider, as appropriate;

(2) description of lenses and frames provided;

(3) provider's signature on the claim verifying the diopter change required for the dispensing of eyeglasses;

(4) certification by the provider that the dispensed materials used for repairs meet the specifications for eyewear in §363.503 of this subchapter (relating to Specifications for Eyewear);

(5) claims for eyewear with special features, signed by the recipient, acknowledging selection of eyewear that is beyond the specifications for eyewear in §363.503 of this subchapter. A signed patient certification satisfies this requirement for claims the provider submitted electronically;

(6) a copy of the invoice for supplies dispensed, attached to a claim for repairs or kept the provider, as authorized by HHSC;

(7) if the claim is for replacement of prosthetic eyewear or of nonprosthetic eyewear when the records of HHSC show that less than 24 months have elapsed since the date of the original nonprosthetic eyewear service, then:

(A) submission of a statement justifying the need for the replacement eyewear (reimbursement is made only if the eyewear was lost or damaged beyond repair or if the recipient's visual acuity has changed significantly, as specified in §363.502(3)(B)(i) or (ii)(II) of this subchapter (relating to Benefits and Limitations)). If the original eyewear has been lost or damaged beyond repair, the recipient must sign the claim form or a patient certification if the provider submits claims electronically; and

(B) claim form signed by the recipient if the original eyewear was lost or damaged beyond repair.

**History**
- *Source Note: The provisions of this §363.504 adopted to be effective July 1, 1986, 11 TexReg 2758; amended to be effective July 1, 1987, 12 TexReg 1779; amended to be effective June 15, 1988, 13 TexReg 2557; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2002, as published in the Texas Register December 6, 2002, 27 TexReg 11527; amended to be effective November 4, 2003, 28 TexReg 9521; amended to be effective December 10, 2015, 40 TexReg 8754.*

#### **Subchapter F** PERSONAL CARE SERVICES

##### **1 Tex. Admin. Code § 363.601** Purpose {#sec-363.601 omnilex-key=us-tx-regs-official--title-1--363.601}

(a) The purpose of this subchapter is to define the personal care services (PCS) benefit that is available through the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)-Comprehensive Care Program, which in Texas is known as the Texas Health Steps-Comprehensive Care Program (THSteps-CCP).

(b) PCS may be provided to individuals from birth through 20 years of age and eligible for EPSDT through the medical assistance program.

(c) PCS are medically necessary when a recipient requires assistance with activities of daily living (ADLs), or instrumental activities of daily living (IADLs), because of a physical, cognitive or behavioral limitation that is related to the recipient's disability or chronic health condition.

**History**
- *Source Note: The provisions of this §363.601 adopted to be effective September 1, 2007, 32 TexReg 5355; amended to be effective September 1, 2014, 39 TexReg 5890.*

##### **1 Tex. Admin. Code § 363.602** Definitions {#sec-363.602 omnilex-key=us-tx-regs-official--title-1--363.602}

The following words and terms when used in this subchapter have the following meanings, unless the context clearly indicates otherwise.

(1) Activities of Daily Living (ADL)--Activities that include, but are not limited to, eating, toileting, personal hygiene, dressing, bathing, transferring, positioning, and locomotion or mobility.

(2) Assessment--An evaluation conducted with the recipient and responsible adult to determine the recipient's need for services.

(3) Attendant--A person who provides direct care to a recipient.

(4) Consumer Directed Services (CDS)--A service delivery option in which a recipient or legally authorized representative employs and retains service providers and directs the delivery of program services.

(5) Cueing--Indirect intervention provided during the delivery of personal care services to prompt or instruct a recipient with a cognitive impairment or behavioral condition in the performance of ADLs or IADLs to ensure the recipient performs the task properly.

(6) Delegation--Has the meaning assigned by 22 TAC §225.4 (relating to Definitions).

(7) Dependents--Any member of a household, other than the recipient, whose care and support is the legal responsibility of the responsible adult. A dependent includes a disabled adult family member living in the household. Care and support includes meeting the medical, educational, and psychosocial needs of a dependent.

(8) Early and Periodic Screening, Diagnosis, and Treatment Comprehensive Care Program (EPSDT-CCP)--A mandatory Medicaid program for individuals from birth through 20 years of age who meet certain economic eligibility criteria. In Texas EPSDT-CCP is called the Texas Health Steps Comprehensive Care Program (THSteps-CCP).

(9) Financial Management Services (FMS)--Services delivered by the Financial Management Services Agency to an employer such as orientation, training, support, assistance with and approval of budgets, and processing payroll and payables on behalf of the employer.

(10) Financial Management Services Agency (FMSA)--An entity that is certified by the Department of Aging and Disability Services (DADS) and is contracted with HHSC and/or a Managed Care Organization (MCO) to provide financial management services (FMS).

(11) HHSC--The Health and Human Services Commission or its designee.

(12) Health Maintenance Activities (HMAs)--Has the meaning assigned by 22 TAC §225.4 (relating to Definitions) and §225.8 (relating to Health Maintenance Activities Not Requiring Delegation).

(13) Home and Community Support Services Agency (HCSSA)--A public or private agency or organization that provides home and community supports and is licensed under 40 TAC Chapter 97 (relating to Licensing Standards for Home and Community Support Services Agencies).

(14) Instrumental Activities of Daily Living (IADLs)--Activities include, but are not limited to, meal preparation, grocery or household shopping, light housework, laundry, telephone use or other communication, escort or assistance with transportation services, medication assistance and, money management.

(15) Intervening--Direct contact or intervention provided by an attendant during the delivery of personal care services to a recipient with a physical or cognitive impairment in the performance of ADLs or IADLs to ensure the task is performed properly.

(16) Legally authorized representative (LAR)--A person authorized or required by law to act on behalf of an individual with regard to a matter described in this chapter, including a parent of a minor, step-parent of a minor, guardian of a minor, managing conservator of a minor, or the guardian of an adult.

(17) Managed Care Organization (MCO)--Has the meaning assigned by 1 TAC §353.2 (relating to Definitions).

(18) Personal Care Services (PCS)--Support services provided to a person eligible for THSteps-CCP services who requires assistance with ADLs or IADLs due to physical, cognitive, or behavioral limitations related to his or her disability or chronic health condition.

(19) Practitioner--A person who is currently licensed in a state in which the person practices as a physician, advanced practice nurse, or physician assistant.

(20) Practitioner's Statement of Need (PSON)--The document certifying that the individual has a physical, cognitive, or behavioral limitation related to a disability or chronic health condition.

(21) Recipient--An individual who is eligible to receive services through the medical assistance program.

(22) Redirecting--Intervention provided during the delivery of PCS to divert, change direction, or give new direction to a recipient with a cognitive or behavioral impairment in the performance of ADLs or IADLs to ensure the recipient completes the task.

(23) Responsible Adult--An individual, age 18 or older, who has agreed to accept responsibility for providing food, shelter, clothing, education, nurturing, and supervision for the recipient. The term includes biological parents, adoptive parents, step-parents, foster parents, legal guardians, court-appointed managing conservators or the primary adult who is acting in the role of parent.

(24) Texas Health Steps Comprehensive Care Program (THSteps-CCP)--Medical, dental, and treatment services available as a federally mandated service for eligible EPSDT Medicaid recipients in Texas under the age of 21 years, pursuant to the EPSDT provision of Title XIX of the Social Security Act, 42 U.S.C. §1396d(r) and the Code of Federal Regulations, Title 42, §440.40(b).

**History**
- *Source Note: The provisions of this §363.602 adopted to be effective September 1, 2014, 39 TexReg 5890.*

##### **1 Tex. Admin. Code § 363.603** Provider Participation Requirements {#sec-363.603 omnilex-key=us-tx-regs-official--title-1--363.603}

(a) Personal care services (PCS) must be provided by an individual who:

(1) is 18 years of age or older;

(2) is an attendant who:

(A) is an employee of a provider organization licensed as a home and community support services agency (HCSSA) per 40 TAC Chapter 97 (relating to Licensing Standards for Home and Community Support Services Agencies); or

(B) if the recipient is receiving PCS through the consumer directed services (CDS) option described in 40 TAC Chapter 41 (relating to Consumer Directed Services Option), is an employee of:

(i) the recipient; or

(ii) the recipient's responsible adult or legally authorized representative (LAR);

(3) has demonstrated the competence necessary, when competence cannot be demonstrated through education and experience, to perform the personal assistance tasks assigned by the provider organization supervisor or by the recipient or the recipient's responsible adult or LAR acting as employer through the CDS option described in 40 TAC Chapter 41;

(4) is not the responsible adult of the recipient if the recipient is under the age of 18; and

(5) is not the legal spouse of the recipient.

(b) HHSC may establish rates of reimbursement based on the level of care required by the recipient and the qualifications of and tasks performed by the PCS attendant.

(c) An organization that employs attendants who provide PCS must meet the licensing standards set out in 40 TAC Chapter 97 for one of the following license categories or special service types:

(1) Licensed Home Health Services, as set out in 40 TAC §97.401 (relating to Standards Specific to Licensed Home Health Services);

(2) Licensed and Certified Home Health Services, as set out in 40 TAC §97.402 (relating to Standards Specific to Licensed and Certified Home Health Services); or

(3) agencies licensed to provide personal assistance services, as set out in 40 TAC §97.404 (relating to Standards Specific to Agencies Licensed to Provide Personal Assistance Services).

(d) An organization serving as a Financial Management Services Agency (FMSA) providing financial management services and other employer support services to a recipient receiving PCS through the CDS option must meet the FMSA contracting requirements specified in 40 TAC Chapters 41 and 49 (relating to Consumer Directed Services Option and Contracting for Community Services).

(e) Provider organizations and FMSAs must successfully enroll as Texas Medicaid providers prior to seeking authorization or payment for PCS.

(f) Any organization that employs attendants who provide PCS and any organization serving as an FMSA must comply with all documentation requirements as specified in PCS program policy.

(g) Provider organizations, recipients, and responsible adults or LARs of recipients who employ attendants for PCS must:

(1) pay each attendant at least the base wage specified in §355.7051 of this title (relating to Base Wage for a Personal Attendant); and

(2) notify any person employed as an attendant of the requirement that the provider organizations, recipients, and responsible adults or LARs of recipients who employ attendants for PCS must pay each attendant at least the base wage specified in §355.7051 of this title.

**History**
- *Source Note: The provisions of this §363.603 adopted to be effective September 1, 2007, 32 TexReg 5355; amended to be effective September 1, 2014, 39 TexReg 5890; amended to be effective February 14, 2016, 41 TexReg 962; amended to be effective May 10, 2020, 45 TexReg 2826.*

##### **1 Tex. Admin. Code § 363.605** Benefits and Limitations {#sec-363.605 omnilex-key=us-tx-regs-official--title-1--363.605}

(a) Personal care services (PCS) include:

(1) Assistance with Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs);

(2) Nurse-delegated tasks and Health Maintenance Activities (HMAs) within the scope of PCS, as permitted by program policy and 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); and

(3) Hands-on assistance, cueing, redirecting, or intervening, to accomplish the approved PCS task.

(b) Prior to authorizing PCS, HHSC will require completion of:

(1) An assessment of the recipient with an HHSC-approved assessment form;

(2) Additional documentation required by HHSC to support the need for PCS and complete the authorization process; and

(3) An HHSC-approved Practitioner's Statement of Need (PSON) completed by a practitioner who has personally examined the recipient within the last twelve (12) months and reviewed all appropriate medical records.

(A) The PSON must be on file with HHSC prior to the initiation of PCS.

(B) If a recipient or intended recipient is entering or is in the conservatorship of the state, PCS may be provisionally initiated for up to 60 days once eligibility has been established through the assessment.

(C) HHSC will accept the PSON only if:

(i) The individual who completes the PSON is a physician, advanced practice registered nurse, or physician assistant; and

(ii) The practitioner is a Medicaid enrolled provider.

(c) In evaluating the request for PCS, HHSC will determine the amount and duration of PCS by taking into account the following:

(1) Whether the recipient has a physical, cognitive, or behavioral limitation related to a disability or chronic health condition that inhibits the recipient's ability to accomplish ADLs or IADLs;

(2) The responsible adult's need to sleep, work, attend school, and meet their own medical needs;

(3) The responsible adult's legal obligation to care for, support, and meet the medical, educational, and psychosocial needs of their other dependents;

(4) The responsible adult's physical ability to perform the personal care services;

(5) Whether requiring the responsible adult to perform the personal care services will put the recipient's health or safety in jeopardy;

(6) The time periods during which the personal care service tasks are required by the recipient, as they occur over the course of a 24-hour day, and a 7-day week;

(7) Whether or not the need to assist the family in performing personal care services on behalf of the recipient is related to a medical, cognitive, or behavioral condition that results in a level of functional ability that is below that expected of a typically developing child of the same chronological age; and

(8) Whether services are needed based on:

(A) the PSON; and

(B) the recipient's personal care assessment.

(d) HHSC will not arbitrarily deny authorization of PCS or reduce the number of requested hours of services based solely on the recipient's diagnosis, type of illness, or condition.

(e) A recipient may receive PCS through the Consumer Directed Services (CDS) option defined in 40 TAC Chapter 41 (relating to Consumer Directed Services Option).

(f) PCS limitations include the following:

(1) HHSC will not reimburse for PCS used for or intended to provide:

(A) Respite care;

(B) Child care; or

(C) Restraining of a recipient.

(2) PCS shall neither replace the responsible adult as the primary care giver, nor provide all the care a recipient requires to live at home. Primary care givers remain responsible for a substantial portion of a recipient's daily care, and PCS are intended to support the care of the recipient living at home.

(3) PCS may be delivered in a recipient to provider ratio other than one-on-one as long as each recipient's care is based on an individualized plan of care (POC) and each recipient's needs are being met. Only the time spent on authorized PCS tasks for each client is eligible for reimbursement. Total PCS billed for all clients cannot exceed an individual attendant's total number of hours at the place of service.

(4) PCS do not include the payment for transportation services available through the Medical Transportation Program (MTP).

(g) HHSC will require the reassessment of the recipient's need for PCS every 12 months, or when requested due to a change in the recipient's health or living condition. A new PSON will be required at each annual reassessment. If a reassessment is requested due to a change in the recipient's health condition, HHSC must obtain a new PSON indicating a change in the recipient's functional need or health condition.

(h) Authorization for PCS will be terminated by HHSC when:

(1) The recipient is no longer eligible for Texas Medicaid;

(2) The recipient no longer meets the criteria for PCS; or

(3) The authorization for PCS expires.

(i) Authorization for PCS may be suspended by HHSC when:

(1) An unsafe environment exists in the recipient's place of service which places the attendant's health and safety at risk; or

(2) The provider requests suspension for reasons as outlined in PCS program policy.

(j) A recipient may request a fair hearing in the event that PCS are denied, reduced, suspended or terminated, as per Chapter 357 of this title (relating to Hearings).

**History**
- *Source Note: The provisions of this §363.605 adopted to be effective September 1, 2007, 32 TexReg 5355; amended to be effective September 1, 2014, 39 TexReg 5890.*

##### **1 Tex. Admin. Code § 363.607** Place of Service {#sec-363.607 omnilex-key=us-tx-regs-official--title-1--363.607}

(a) Personal care services (PCS) may be provided in an individual or group setting.

(b) PCS may be authorized for the following place(s) of service:

(1) The recipient's home;

(2) The home of the primary or alternate care giver;

(3) The recipient's school;

(4) The recipient's day care facility; or

(5) Any community setting in which the recipient is located.

(c) PCS may not be authorized in hospitals, nursing facilities, or intermediate care facilities for individuals with intellectual or developmental disabilities.

(d) Texas Medicaid does not reimburse providers for PCS that duplicate services that are the legal responsibility of school districts. The school district, through the Individuals with Disabilities Education Act (IDEA), is required to meet the recipient's personal care needs while the recipient is at school. If those needs cannot be met by the school district, the school district must submit documentation to the Department of State Health Services case manager indicating the school district is unable to provide necessary services.

**History**
- *Source Note: The provisions of this §363.607 adopted to be effective September 1, 2007, 32 TexReg 5355; amended to be effective September 1, 2014, 39 TexReg 5890.*

### **Chapter 366** MEDICAID ELIGIBILITY FOR WOMEN, CHILDREN, YOUTH, AND NEEDY FAMILIES

#### **Subchapter C** PREGNANT WOMEN'S MEDICAID

##### **1 Tex. Admin. Code § 366.301** Purpose and Scope {#sec-366.301 omnilex-key=us-tx-regs-official--title-1--366.301}

(a) This subchapter establishes the eligibility criteria and participation requirements for Pregnant Women's Medicaid, in accordance with 42 U.S.C. §1396d(a).

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.301 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.303** Definitions {#sec-366.303 omnilex-key=us-tx-regs-official--title-1--366.303}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under Pregnant Women's Medicaid who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) CFR--Code of Federal Regulations.

(4) Change in circumstance--A change in circumstance that may affect eligibility including:

(A) a change in household composition; or

(B) a change in categorical eligibility (e.g., aging out, eligibility conferred through the receipt of other program benefits).

(5) Child--An adoptive, step, or natural child who is under 19 years of age.

(6) Continuous coverage--Uninterrupted eligibility for the extent of the certification period regardless of any changes in circumstances, unless:

(A) the recipient dies;

(B) the recipient disenrolls voluntarily;

(C) the recipient changes state residence;

(D) the state has erred in the eligibility determination; or

(E) the recipient or recipient's authorized representative has committed fraud, perjury, or abuse.

(7) Eligible group--A category of people who are eligible for Pregnant Women's Medicaid.

(8) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(9) HHSC--The Texas Health and Human Services Commission or its designee.

(10) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(11) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code Chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(12) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(13) Recipient--A person receiving Pregnant Women's Medicaid services.

(14) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(15) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at https://www.hhs.texas.gov/handbooks/texas-works-handbook.

(16) Third-party resource--A person or organization, other than HHSC or a person living with the applicant or recipient, who may be liable as a source of payment of the applicant's or recipient's medical expenses (for example, a health insurance company).

(17) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.303 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.305** General Eligibility Requirements {#sec-366.305 omnilex-key=us-tx-regs-official--title-1--366.305}

To be eligible for Pregnant Women's Medicaid, a person must:

(1) meet the criteria for an eligible group as described in §366.307 of this subchapter (relating to Eligible Group) and the provisions of Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology);

(2) comply with HHSC's application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.305 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.307** Eligible Group {#sec-366.307 omnilex-key=us-tx-regs-official--title-1--366.307}

To be eligible for Pregnant Women's Medicaid, an applicant must be a pregnant woman with household income equal to or less than 185% of the Federal Poverty Level after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

**History**
- *Source Note: The provisions of this §366.307 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.309** Application Requirements {#sec-366.309 omnilex-key=us-tx-regs-official--title-1--366.309}

(a) To apply for Pregnant Women's Medicaid benefits, an applicant, authorized representative, or person acting responsibly must:

(1) use the application prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.309 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.311** Application Processing {#sec-366.311 omnilex-key=us-tx-regs-official--title-1--366.311}

(a) HHSC processes Pregnant Women's Medicaid applications received electronically, by paper, or by telephone.

(b) HHSC allows any office of a state health and human services agency to accept an initial application.

(c) HHSC contracts with third parties to accept applications from hospital districts (including state-owned teaching hospitals), federally qualified health centers, and county health departments.

(d) HHSC may conduct an interview with an initial applicant.

(e) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 60 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(f) HHSC may reopen an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the three-month prior period.

(g) For an applicant who is potentially eligible but unable to provide proof of eligibility, HHSC:

(1) postpones verifications and provides Medicaid coverage to ensure access to medical care within 30 days after the application date;

(2) continues the coverage of an applicant who provides postponed verification by the 30th day after the application date; and

(3) denies the coverage of an applicant who fails to meet the 30-day deadline.

**History**
- *Source Note: The provisions of this §366.311 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.313** Citizenship {#sec-366.313 omnilex-key=us-tx-regs-official--title-1--366.313}

To be eligible for Pregnant Women's Medicaid, an applicant must be:

(1) a citizen or national of the United States;

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the United States for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the United States (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.313 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.315** Social Security Number {#sec-366.315 omnilex-key=us-tx-regs-official--title-1--366.315}

An applicant or recipient must provide or apply for her social security number. Prior to denying eligibility, HHSC allows a period of reasonable opportunity for an applicant or recipient to provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.315 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.317** Residence {#sec-366.317 omnilex-key=us-tx-regs-official--title-1--366.317}

An applicant or recipient must be a resident of Texas. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §366.317 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.319** Child Support and Medical Support {#sec-366.319 omnilex-key=us-tx-regs-official--title-1--366.319}

Applicants and recipients may volunteer to receive child support or medical support services.

**History**
- *Source Note: The provisions of this §366.319 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective November 20, 2016, 41 TexReg 9007.*

##### **1 Tex. Admin. Code § 366.321** Income Levels {#sec-366.321 omnilex-key=us-tx-regs-official--title-1--366.321}

To be eligible for Pregnant Women's Medicaid, an applicant or recipient must meet the income requirement established in §366.307 of this subchapter (relating to Eligible Group).

**History**
- *Source Note: The provisions of this §366.321 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.323** Third-Party Resources {#sec-366.323 omnilex-key=us-tx-regs-official--title-1--366.323}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §366.323 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.325** Medical Eligibility Effective Date {#sec-366.325 omnilex-key=us-tx-regs-official--title-1--366.325}

HHSC determines the Medicaid eligibility effective dates for an applicant as follows.

(1) Medicaid coverage begins on the earliest day of the application month on which the applicant meets all eligibility criteria.

(2) Retroactive coverage may begin as early as three months before the application month.

(3) A recipient's coverage for Medicaid remains effective through the twelfth month after the pregnancy ends.

**History**
- *Source Note: The provisions of this §366.325 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.327** Resident of an Institution for Mental Diseases {#sec-366.327 omnilex-key=us-tx-regs-official--title-1--366.327}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.327 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.329** Inmates of Public Institutions {#sec-366.329 omnilex-key=us-tx-regs-official--title-1--366.329}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.329 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.331** Information from Other Agencies {#sec-366.331 omnilex-key=us-tx-regs-official--title-1--366.331}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid applicant or recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the applicant or recipient.

**History**
- *Source Note: The provisions of this §366.331 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.333** Requirement to Report Changes {#sec-366.333 omnilex-key=us-tx-regs-official--title-1--366.333}

(a) A recipient must report:

(1) a change of address; and

(2) termination of the pregnancy.

(b) If a recipient reports a change described in subsection (a) of this section, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient.

**History**
- *Source Note: The provisions of this §366.333 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.335** Right to Appeal {#sec-366.335 omnilex-key=us-tx-regs-official--title-1--366.335}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.335 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter D** MEDICAID FOR BREAST AND CERVICAL CANCER

##### **1 Tex. Admin. Code § 366.401** Purpose and Scope {#sec-366.401 omnilex-key=us-tx-regs-official--title-1--366.401}

(a) This subchapter establishes the eligibility criteria and participation requirements for Medicaid for treatment of breast and cervical cancer, as authorized by 42 United States Code §1396r-1b.

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of section 5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under section 1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.401 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.403** Definitions {#sec-366.403 omnilex-key=us-tx-regs-official--title-1--366.403}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Applicant--A person seeking assistance under the Medicaid for Breast and Cervical Cancer Program (MBCC) who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) CFR--Code of Federal Regulations.

(3) Creditable coverage--A health insurance plan that covers any aspect of breast or cervical cancer treatment, including:

(A) a group health plan;

(B) health insurance coverage;

(C) Medicare (Part A or B);

(D) armed forces insurance;

(E) a state health benefits risk pool; and

(F) Medicaid coverage other than MBCC.

(4) Eligible group--A category of people who are eligible for MBCC. In other Medicaid programs, an eligible group may be called a coverage group.

(5) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act and the Texas Human Resources Code, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(6) Recipient--A person receiving MBCC services, including a person who is renewing eligibility for MBCC.

(7) Screen--A test for breast or cervical cancer conducted under the Centers for Disease Control and Prevention's Breast and Cervical Cancer Early Detection Program.

(8) Texas Health and Human Services Commission (HHSC)--The state agency that identifies and refers applicants for MBCC.

(9) Texas Works Handbook--An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), and Medicaid programs for children and families.

(10) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.403 adopted to be effective June 9, 2010, 35 TexReg 4661; amended to be effective March 20, 2023, 48 TexReg 1552.*

##### **1 Tex. Admin. Code § 366.405** Eligible Group {#sec-366.405 omnilex-key=us-tx-regs-official--title-1--366.405}

The eligible group consists of women screened and found to need treatment for breast or cervical cancer through the Centers for Disease Control and Prevention's National Breast and Cervical Cancer Early Detection Program, created by Public Law 101-354 and its amendments (Public Law 103-183 and Public Law 105-340), and administered by the Texas Health and Human Services Commission as the Breast and Cervical Cancer Services Program.

**History**
- *Source Note: The provisions of this §366.405 adopted to be effective June 9, 2010, 35 TexReg 4661; amended to be effective March 20, 2023, 48 TexReg 1552.*

##### **1 Tex. Admin. Code § 366.407** Eligibility Requirements {#sec-366.407 omnilex-key=us-tx-regs-official--title-1--366.407}

To be eligible for Medicaid for Breast and Cervical Cancer, an applicant must:

(1) be a woman under 65 years of age;

(2) be:

(A) a citizen or national of the U.S.;

(B) an alien who legally entered the U.S. before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(C) an alien who legally entered the U.S. on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the U.S. for five years only if the alien meets one of the following eligibility requirements:

(i) the alien is an honorably discharged veteran or active duty military personnel;

(ii) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(iii) the alien entered the U.S. before August 22, 1996, and remained continuously present in the U.S. (a single absence from the U.S. of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the U.S. without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the U.S. with valid immigration documents);

(iv) the alien entered the U.S. with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(v) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(D) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b);

(3) be a resident of Texas, as determined by the Texas Health and Human Services Commission in accordance with 42 CFR §435.403;

(4) provide or apply for a social security number before she is certified;

(5) not be otherwise eligible for Medicaid; and

(6) not have creditable coverage.

**History**
- *Source Note: The provisions of this §366.407 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.409** Application Requirements and Processing {#sec-366.409 omnilex-key=us-tx-regs-official--title-1--366.409}

(a) An applicant is identified through the Texas Health and Human Services Commission (HHSC) Breast and Cervical Cancer Services (BCCS) Program.

(b) A BCCS Program provider, acting only to the extent permitted by applicable scope of licensure laws under the Texas Occupations Code, screens and diagnoses qualifying medical conditions and makes a determination of presumptive eligibility.

(c) BCCS Program providers have been designated as qualified entities for presumptive eligibility determinations.

(d) A BCCS Program provider sends the applicant's application packet containing the provider's determination of presumptive eligibility and an application for assistance to HHSC within five working days after the date the presumptive eligibility determination is made. HHSC determines eligibility no later than 15 days from the application's file date.

(e) The period of presumptive Medicaid eligibility is specified in 42 U.S.C. §1396r-1b(b)(1) as beginning with the date a qualified entity determines eligibility under the State Plan, based upon preliminary information, and ends with (and includes) the earlier of:

(1) the date an eligibility determination is made by HHSC; or

(2) the last day of the month following the month presumptive eligibility was determined.

**History**
- *Source Note: The provisions of this §366.409 adopted to be effective June 9, 2010, 35 TexReg 4661; amended to be effective March 20, 2023, 48 TexReg 1552.*

##### **1 Tex. Admin. Code § 366.411** Medicaid Eligibility Effective Date {#sec-366.411 omnilex-key=us-tx-regs-official--title-1--366.411}

The period of coverage begins no earlier than the day after screening and diagnosis of the qualifying medical condition, and lasts for the duration of the cancer treatment or until the woman no longer meets all eligibility requirements, whichever is earlier.

**History**
- *Source Note: The provisions of this §366.411 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.413** Inmates of Public Institutions {#sec-366.413 omnilex-key=us-tx-regs-official--title-1--366.413}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.413 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.415** Eligibility Renewal {#sec-366.415 omnilex-key=us-tx-regs-official--title-1--366.415}

(a) A recipient who returns a completed renewal application and all necessary documentation continues to receive ongoing Medicaid coverage.

(b) The Texas Health and Human Services Commission reviews a recipient's Medicaid eligibility every six months.

(c) A recipient's certification ends before the end of her six-month certification period if the recipient:

(1) dies;

(2) moves out of state;

(3) reaches 65 years of age;

(4) receives creditable coverage; or

(5) is no longer receiving treatment.

**History**
- *Source Note: The provisions of this §366.415 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.417** Information from Other Agencies {#sec-366.417 omnilex-key=us-tx-regs-official--title-1--366.417}

(a) Periodically, the Texas Health and Human Services Commission (HHSC) and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient.

**History**
- *Source Note: The provisions of this §366.417 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.419** Requirement to Report Changes {#sec-366.419 omnilex-key=us-tx-regs-official--title-1--366.419}

(a) A recipient must report to the Texas Health and Human Services Commission (HHSC) if she:

(1) moves out of state;

(2) receives creditable coverage; or

(3) is no longer receiving treatment.

(b) If a recipient reports a change that affects the recipient's eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient.

**History**
- *Source Note: The provisions of this §366.419 adopted to be effective June 9, 2010, 35 TexReg 4661.*

##### **1 Tex. Admin. Code § 366.421** Right to Appeal {#sec-366.421 omnilex-key=us-tx-regs-official--title-1--366.421}

(a) An applicant or recipient has the right to appeal Texas Health and Human Services Commission (HHSC) decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.421 adopted to be effective June 9, 2010, 35 TexReg 4661.*

#### **Subchapter E** CHILDREN'S MEDICAID

##### **1 Tex. Admin. Code § 366.501** Purpose and Scope {#sec-366.501 omnilex-key=us-tx-regs-official--title-1--366.501}

(a) This subchapter establishes the eligibility criteria and participation requirements for Children's Medicaid.

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.501 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.503** Definitions {#sec-366.503 omnilex-key=us-tx-regs-official--title-1--366.503}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under Children's Medicaid who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) Caretaker--An adult who is present in the home, who supervises and cares for a child, and who meets relationship requirements in §366.519(b) of this subchapter (relating to Relationship and Domicile).

(4) CFR--Code of Federal Regulations.

(5) Child--An adoptive, step, or natural child who is under 19 years of age.

(6) Continuous coverage--Uninterrupted eligibility for the extent of the certification period regardless of any changes in circumstances, unless:

(A) the recipient attains the maximum age for that specific program;

(B) the recipient dies;

(C) the recipient disenrolls voluntarily;

(D) the recipient changes state residence;

(E) the state has erred in the eligibility determination; or

(F) the recipient or the recipient's representative has committed fraud, abuse, or perjury.

(7) Eligible group--A category of people who are eligible for Children's Medicaid.

(8) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(9) HHSC--The Texas Health and Human Services Commission or its designee.

(10) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(11) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(12) Newborn--A child from birth through 12 months of age.

(13) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(14) Recipient--A person receiving Children's Medicaid services, including a person who is renewing eligibility for Children's Medicaid.

(15) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(16) Texas Health Steps--Federally mandated Medicaid services that provide medical and dental check-ups, diagnosis, and treatment to eligible clients from birth through age 20. Federally, this program is known as the Early Periodic Screening, Diagnostic, and Treatment (EPSDT) Program.

(17) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at www.dads.state.tx.us/handbooks/TexasWorks.

(18) Third-party resource--A person or organization, other than HHSC or a person living with the applicant or recipient, who may be liable as a source of payment of the applicant's or recipient's medical expenses (for example, a health insurance company).

(19) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.503 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.505** General Eligibility Requirements {#sec-366.505 omnilex-key=us-tx-regs-official--title-1--366.505}

To be eligible for Children's Medicaid, a person must:

(1) meet the criteria for an eligible group as described in §366.507 of this subchapter (relating to Eligible Groups) and the provisions of Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology);

(2) comply with HHSC's initial and renewal application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.505 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.507** Eligible Groups {#sec-366.507 omnilex-key=us-tx-regs-official--title-1--366.507}

To be eligible for Children's Medicaid, an applicant or recipient must be:

(1) a newborn with household income equal to or less than 185% of the Federal Poverty Level (FPL);

(2) a child one to 18 years of age with household income equal to or less than 133% of the FPL;

(3) a newborn whose birth mother was a Texas Medicaid recipient when the child was born; or

(4) a child born while the child's mother was incarcerated in a Texas criminal justice facility as provided by Texas Human Resources Code §80.003.

**History**
- *Source Note: The provisions of this §366.507 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.509** Application Requirements {#sec-366.509 omnilex-key=us-tx-regs-official--title-1--366.509}

(a) To apply for Children's Medicaid benefits, an applicant, authorized representative, or person acting responsibly must:

(1) use the application prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.509 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.511** Application Processing {#sec-366.511 omnilex-key=us-tx-regs-official--title-1--366.511}

(a) HHSC processes Children's Medicaid applications received electronically, by paper, or by telephone.

(b) HHSC allows any office of a state health and human services agency to accept an initial application.

(c) HHSC contracts with third parties to accept applications from hospital districts (including state-owned teaching hospitals), federally qualified health centers, and county health departments.

(d) HHSC may conduct an interview with an initial applicant.

(e) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 60 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(f) HHSC reconsiders the eligibility of a recipient who is terminated for failure to submit a renewal form or necessary information, so long as the recipient complies with the missed requirements within 90 days after the date of termination. HHSC otherwise requires the recipient to file a new application.

(g) HHSC may reopen an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the three-month prior period.

**History**
- *Source Note: The provisions of this §366.511 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.513** Citizenship {#sec-366.513 omnilex-key=us-tx-regs-official--title-1--366.513}

To be eligible for Children's Medicaid, an applicant must be:

(1) a citizen or national of the United States; or

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the United States for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the U.S. (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.513 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.515** Social Security Number {#sec-366.515 omnilex-key=us-tx-regs-official--title-1--366.515}

An applicant or recipient must provide or apply for a social security number. Prior to denying eligibility, HHSC allows a period of reasonable opportunity for an applicant or recipient to provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.515 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.517** Residence {#sec-366.517 omnilex-key=us-tx-regs-official--title-1--366.517}

An applicant or recipient must be a resident of Texas. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §366.517 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.519** Relationship and Domicile {#sec-366.519 omnilex-key=us-tx-regs-official--title-1--366.519}

(a) An applicant or recipient must live in a home with a caretaker who is present in the home and supervises and cares for the applicant or recipient. A home is a family setting maintained or being established, as evidenced by continuation of responsibility for day-to-day care of the applicant or recipient.

(b) A caretaker must be the applicant's or recipient's:

(1) father or mother;

(2) grandparent, to the degree of a "great, great, great" grandparent;

(3) brother or sister;

(4) uncle or aunt, to the degree of a "great, great" uncle or aunt;

(5) first cousin;

(6) nephew or niece, to the to the degree of a "great, great" nephew or niece;

(7) stepfather or stepmother;

(8) stepbrother or stepsister; or

(9) first cousin once removed.

(c) An independent child may live alone or with a person who is not a parent or relative. An independent child is a child who does not live with a parent and who:

(1) is able to apply for Medicaid on his or her own behalf; or

(2) is eligible for Medicaid because a responsible person who is not within the degree of relationship required for eligibility in subsection (b) of this section applies on the child's behalf.

**History**
- *Source Note: The provisions of this §366.519 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.521** Child Support and Medical Support {#sec-366.521 omnilex-key=us-tx-regs-official--title-1--366.521}

If an applicant or recipient for Children's Medicaid volunteers to receive services provided by the Office of Attorney General of Texas (OAG), HHSC will collect absent parent information and refer the child's case to the OAG.

**History**
- *Source Note: The provisions of this §366.521 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.523** Income Limits {#sec-366.523 omnilex-key=us-tx-regs-official--title-1--366.523}

To be eligible for Children's Medicaid, an applicant or recipient must meet the household income requirements established in §366.507 of this subchapter (relating to Eligible Groups) after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

**History**
- *Source Note: The provisions of this §366.523 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.525** Third-Party Resources {#sec-366.525 omnilex-key=us-tx-regs-official--title-1--366.525}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §366.525 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.527** Medicaid Eligibility Effective Date {#sec-366.527 omnilex-key=us-tx-regs-official--title-1--366.527}

HHSC determines the Medicaid eligibility effective date for an applicant as follows:

(1) Medicaid coverage begins on the earliest day of the application month on which the applicant meets all eligibility criteria.

(2) Retroactive coverage may begin as early as three months before the application month, except that a newborn's coverage begins no earlier than the child's date of birth.

(3) A recipient is continuously eligible for Medicaid for six months or through the month of the recipient's 19th birthday, whichever is earlier. A recipient who is a newborn has continuous eligibility through the month of his or her first birthday. If the applicant is eligible in the application or process month, the child is eligible for continuous coverage beginning the first month the applicant meets the eligibility criteria.

**History**
- *Source Note: The provisions of this §366.527 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.529** Resident of an Institution for Mental Diseases {#sec-366.529 omnilex-key=us-tx-regs-official--title-1--366.529}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.529 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.531** Inmates of Public Institutions {#sec-366.531 omnilex-key=us-tx-regs-official--title-1--366.531}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.531 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.533** Eligibility Renewal {#sec-366.533 omnilex-key=us-tx-regs-official--title-1--366.533}

(a) At 12 months after the recipient was determined eligible, HHSC determines if a recipient is still eligible to receive Medicaid coverage.

(b) HHSC does not review or change the Medicaid eligibility of a child under 19 years of age whose coverage began on or after January 1, 2002, regardless of changes in income, until the earlier of:

(1) six months; or

(2) the child's 19th birthday.

**History**
- *Source Note: The provisions of this §366.533 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.535** Comprehensive Health Care Requirements {#sec-366.535 omnilex-key=us-tx-regs-official--title-1--366.535}

(a) A parent or guardian of an applicant must:

(1) attend a health care orientation;

(2) accompany the child on a visit to a health care provider; or

(3) meet with an HHSC representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

(b) The parent or guardian of a recipient who is eligible for Texas Health Steps must:

(1) comply with the Texas Health Steps regimen of health care requirements, as required by the Texas Department of State Health Services in 25 TAC Chapter 33 (relating to Early and Periodic Screening, Diagnosis, and Treatment); or

(2) meet with an HHSC representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

**History**
- *Source Note: The provisions of this §366.535 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.537** Information from Other Agencies {#sec-366.537 omnilex-key=us-tx-regs-official--title-1--366.537}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid applicant or recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the applicant or recipient.

**History**
- *Source Note: The provisions of this §366.537 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.539** Requirement to Report Changes {#sec-366.539 omnilex-key=us-tx-regs-official--title-1--366.539}

(a) During the first six months of eligibility, a recipient must report:

(1) a change of address;

(2) if a certified child leaves the home, is institutionalized, or dies; and

(3) the addition of a child to the household, if the household wants Medicaid for the child.

(b) Following the first six months of eligibility, a recipient must report any changes that affect eligibility.

(c) If a recipient reports a change described in subsection (a) or (b) of this section, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient. A change not described in subsection (a) or (b) of this section is documented and handled at the next review.

**History**
- *Source Note: The provisions of this §366.539 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.541** Right to Appeal {#sec-366.541 omnilex-key=us-tx-regs-official--title-1--366.541}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.541 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter F** MEDICAID FOR TRANSITIONING FOSTER CARE YOUTH

##### **1 Tex. Admin. Code § 366.601** Purpose and Scope {#sec-366.601 omnilex-key=us-tx-regs-official--title-1--366.601}

(a) This subchapter establishes the eligibility criteria for the Medicaid for Transitioning Foster Care Youth Program, which provides medical assistance to eligible youths who leave foster care and transition into the community.

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.601 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.603** Definitions {#sec-366.603 omnilex-key=us-tx-regs-official--title-1--366.603}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under the Medicaid for Transitioning Foster Care Youth Program who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) CFR--Code of Federal Regulations.

(4) Child--An adoptive, step, or natural child who is under age 19.

(5) Eligible group--A category of people who are eligible for MTFCY.

(6) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(7) HHSC--The Texas Health and Human Services Commission or its designee.

(8) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(9) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(10) MTFCY--The Medicaid for Transitioning Foster Care Youth Program.

(11) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(12) Recipient--A person receiving MTFCY services.

(13) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(14) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at www.hhsc.state.tx.us/Programs/Programs.shtml#handbooks.

(15) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.603 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.605** Program Administration {#sec-366.605 omnilex-key=us-tx-regs-official--title-1--366.605}

HHSC administers MTFCY in cooperation with the Texas Department of Family and Protective Services.

**History**
- *Source Note: The provisions of this §366.605 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.607** Legal Basis {#sec-366.607 omnilex-key=us-tx-regs-official--title-1--366.607}

MTFCY finds its legal authority in the following statutes:

(1) 42 U.S.C. §1396d(w);

(2) 42 U.S.C. §1396a(10)(A)(ii)(XVII);

(3) Texas Human Resources Code §32.0247; and

(4) the Foster Care Independence Act of 1999 (42 U.S.C. §677).

**History**
- *Source Note: The provisions of this §366.607 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.609** General Eligibility Requirements {#sec-366.609 omnilex-key=us-tx-regs-official--title-1--366.609}

To be eligible for MTFCY, a person must:

(1) meet the criteria for an eligible group as described in §366.611 of this subchapter (relating to Eligible Group) and the provisions of Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology);

(2) comply with HHSC's initial and renewal application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.609 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.611** Eligible Group {#sec-366.611 omnilex-key=us-tx-regs-official--title-1--366.611}

(a) Except as provided by subsection (b) of this section, an applicant is eligible for MTFCY if the applicant:

(1) is in foster care when he or she leaves conservatorship of this State;

(2) is 18 - 20 years of age (coverage continues through the month of his or her 21st birthday); and

(3) is not covered by a health benefits plan offering adequate benefits, as HHSC defines adequate benefits.

(b) An individual who was receiving MTFCY as of December 31, 2013, is eligible for MTFCY through the month of his or her 21st birthday regardless of the state that served as conservator at the time the individual left conservatorship.

**History**
- *Source Note: The provisions of this §366.611 adopted to be effective June 9, 2010, 35 TexReg 4661; amended to be effective June 30, 2014, 39 TexReg 4953.*

##### **1 Tex. Admin. Code § 366.613** Application Requirements {#sec-366.613 omnilex-key=us-tx-regs-official--title-1--366.613}

(a) Except for an applicant described in subsection (b) of this section, the Texas Department of Family and Protective Services certifies that an applicant's income meet eligibility requirements and notifies HHSC to authorize Medicaid coverage.

(b) An applicant who previously received MTFCY benefits, and seeks to reapply for MTFCY, must reapply for MTFCY as described in subsections (c) - (e) of this section.

(c) For an applicant described in subsection (b) of this section, the applicant, authorized representative, or person acting responsibly must:

(1) use the application for assistance prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(d) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(e) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.613 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.615** Application Processing {#sec-366.615 omnilex-key=us-tx-regs-official--title-1--366.615}

(a) HHSC processes applications received electronically, by paper, or by telephone.

(b) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 60 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(c) HHSC reconsiders the eligibility of a recipient who is terminated for failure to submit a renewal form or necessary information, so long as the recipient complies with the missed requirements within 90 days after the date of termination. HHSC otherwise requires the recipient to file a new application.

(d) HHSC reopens an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the prior three-month period.

**History**
- *Source Note: The provisions of this §366.615 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.617** Citizenship {#sec-366.617 omnilex-key=us-tx-regs-official--title-1--366.617}

To be eligible for MTFCY, an applicant must be:

(1) a citizen or national of the United States;

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the U.S. for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the United States (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.617 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.619** Social Security Number {#sec-366.619 omnilex-key=us-tx-regs-official--title-1--366.619}

An applicant or recipient to MTFCY must provide or apply for a social security number. Prior to denying eligibility, HHSC allows a period of reasonable opportunity for a recipient to provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.619 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.621** Residence {#sec-366.621 omnilex-key=us-tx-regs-official--title-1--366.621}

An applicant or recipient must be a resident of Texas. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §366.621 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.623** Income Limits {#sec-366.623 omnilex-key=us-tx-regs-official--title-1--366.623}

To be eligible for MTFCY, an applicant or recipient must have household income that is equal to or less than 400% of the Federal Poverty Level (FPL) after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

**History**
- *Source Note: The provisions of this §366.623 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.625** Medicaid Eligibility Effective Dates {#sec-366.625 omnilex-key=us-tx-regs-official--title-1--366.625}

(a) Medicaid eligibility begins the first month the person meets all eligibility criteria as long as the person is not eligible for or receiving other Medicaid coverage.

(b) A person eligible for MTFCY is also eligible for retroactive coverage.

**History**
- *Source Note: The provisions of this §366.625 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.627** Resident of an Institution for Mental Diseases {#sec-366.627 omnilex-key=us-tx-regs-official--title-1--366.627}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.627 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.629** Inmates of Public Institutions {#sec-366.629 omnilex-key=us-tx-regs-official--title-1--366.629}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.629 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.631** Eligibility Renewal {#sec-366.631 omnilex-key=us-tx-regs-official--title-1--366.631}

At 12 months, HHSC determines if the recipient is still eligible to receive Medicaid coverage.

**History**
- *Source Note: The provisions of this §366.631 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.633** Information from Other Agencies {#sec-366.633 omnilex-key=us-tx-regs-official--title-1--366.633}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid applicant or recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the applicant or recipient.

**History**
- *Source Note: The provisions of this §366.633 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.635** Requirement to Report Changes {#sec-366.635 omnilex-key=us-tx-regs-official--title-1--366.635}

(a) A recipient must report:

(1) a change of address; and

(2) the start of adequate health coverage.

(b) If a recipient reports a change described in subsection (a) of this section, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient. A change not described in subsection (a) of this section is documented and handled at the next review.

**History**
- *Source Note: The provisions of this §366.635 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.637** Right to Appeal {#sec-366.637 omnilex-key=us-tx-regs-official--title-1--366.637}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.637 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter G** MEDICAID FOR PARENTS AND CARETAKER RELATIVES PROGRAM

##### **1 Tex. Admin. Code § 366.701** Purpose and Scope {#sec-366.701 omnilex-key=us-tx-regs-official--title-1--366.701}

(a) This subchapter establishes the eligibility criteria and participation requirements for the Medicaid for Parents and Caretaker Relatives Program.

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.701 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.703** Definitions {#sec-366.703 omnilex-key=us-tx-regs-official--title-1--366.703}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under the Medicaid for Parents and Caretaker Relatives Program who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) Caretaker--A person who supervises and cares for a dependent child and who meets relationship requirements in §366.719(c) of this subchapter (relating to Relationship and Domicile).

(4) CFR--Code of Federal Regulations.

(5) Dependent child--A child who is:

(A) under the age of 18; or

(B) 18 and a full-time student in secondary school or equivalent vocational or technical training, if before attaining age 19 the child may reasonably be expected to complete such school or training.

(6) Eligible group--A category of people who are eligible for the Medicaid for Parents and Caretaker Relatives Program.

(7) Federal Poverty Level (FPL)--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(8) HHSC--The Texas Health and Human Services Commission or its designee.

(9) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(10) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(11) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(12) Recipient--A person receiving benefits under the Medicaid for Parents and Caretaker Relatives Program, including a person who is renewing eligibility for the Medicaid for Parents and Caretaker Relatives Program.

(13) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(14) Texas Works Handbook --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The Texas Works Handbook is found on the Internet at www.hhsc.state.tx.us/Programs/Programs.shtml#handbooks.

(15) Third-party resource--A person or organization, other than HHSC or a person living with the applicant or recipient, who may be liable as a source of payment of the applicant's or recipient's medical expenses (for example, a health insurance company).

(16) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.703 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981; amended to be effective November 20, 2016, 41 TexReg 9007.*

##### **1 Tex. Admin. Code § 366.705** General Eligibility Requirements {#sec-366.705 omnilex-key=us-tx-regs-official--title-1--366.705}

To be eligible for the Medicaid for Parents and Caretaker Relatives Program, a person must:

(1) meet the criteria for an eligible group as described in §366.707 of this subchapter (relating to Eligible Group) and the provisions of Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology);

(2) comply with HHSC's initial and renewal application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.705 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.707** Eligible Group {#sec-366.707 omnilex-key=us-tx-regs-official--title-1--366.707}

To be eligible for the Medicaid for Parents and Caretaker Relatives Program, a person must be a parent or caretaker relative of a dependent child who receives Medicaid. The spouse of a parent or caretaker relative is also eligible for the Medicaid for Parents and Caretaker Relatives Program, if living with such parent or other caretaker relative.

**History**
- *Source Note: The provisions of this §366.707 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective November 20, 2016, 41 TexReg 9007.*

##### **1 Tex. Admin. Code § 366.709** Application Requirements {#sec-366.709 omnilex-key=us-tx-regs-official--title-1--366.709}

(a) To receive benefits under the Medicaid for Parents and Caretaker Relatives Program, an applicant, authorized representative, or person acting responsibly must:

(1) use the application prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.709 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.711** Application Processing {#sec-366.711 omnilex-key=us-tx-regs-official--title-1--366.711}

(a) HHSC processes Medicaid for Parents and Caretaker Relatives Program applications received electronically, by paper, or by telephone.

(b) HHSC allows any office of a state health and human services agency to accept an initial application.

(c) HHSC contracts with third parties to accept applications from hospital districts (including state-owned teaching hospitals), federally qualified health centers, and county health departments.

(d) HHSC requires an interview with an initial applicant.

(e) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 60 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(f) HHSC reconsiders the eligibility of a recipient who is terminated for failure to submit a renewal form or necessary information, so long as the recipient complies with the missed requirements within 90 days after the date of termination. HHSC otherwise requires the recipient to file a new application.

(g) HHSC may reopen an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the three-month prior period.

**History**
- *Source Note: The provisions of this §366.711 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.713** Citizenship {#sec-366.713 omnilex-key=us-tx-regs-official--title-1--366.713}

To be eligible for the Medicaid for Parents and Caretaker Relatives Program, an applicant must be:

(1) a citizen or national of the United States;

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the United States for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the United States (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.713 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.715** Social Security Number {#sec-366.715 omnilex-key=us-tx-regs-official--title-1--366.715}

An applicant or recipient must provide or apply for a social security number. Prior to denying eligibility, HHSC allows a period of reasonable opportunity for an applicant or recipient to provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.715 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.717** Residence {#sec-366.717 omnilex-key=us-tx-regs-official--title-1--366.717}

An applicant or recipient must be a resident of Texas. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §366.717 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.719** Relationship and Domicile {#sec-366.719 omnilex-key=us-tx-regs-official--title-1--366.719}

(a) To be eligible for the Medicaid for Parents and Caretaker Relatives Program, a caretaker must live in a home with and care for a dependent child for which the caretaker has the required degree of relationship as described in subsection (c) of this section.

(b) A home is a family setting maintained or being established, as evidenced by continuation of responsibility for day-to-day care of a child.

(c) A person meets the relationship requirement, if the person is by law, marriage, or adoption a child's:

(1) father or mother;

(2) grandparent, to the degree of a "great, great, great" grandparent;

(3) brother or sister;

(4) uncle or aunt, to the degree of a "great, great" uncle or aunt;

(5) first cousin;

(6) nephew or niece, to the to the degree of a "great, great" nephew or niece;

(7) stepfather or stepmother;

(8) stepbrother or stepsister; or

(9) first cousin once removed.

**History**
- *Source Note: The provisions of this §366.719 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.721** Medical Support {#sec-366.721 omnilex-key=us-tx-regs-official--title-1--366.721}

(a) As a condition of eligibility, a recipient must comply with medical support requirements, as provided by §1912(a)(1) of the Social Security Act (42 U.S.C. §1396k(a)(1)).

(b) Good cause for noncooperation exists if:

(1) the child was conceived as a result of incest or rape;

(2) adoption proceedings for the child are pending;

(3) the parent of the child, for three months or less, has been working with an agency to decide whether to place the child for adoption;

(4) the child may be physically or emotionally harmed by cooperation;

(5) the parent may be physically harmed, or emotionally harmed to the extent of impairing the parent's ability to care for the child, by cooperation; or

(6) the requirement is waived under 45 CFR §260.52(c) in accordance with the requirements of Texas Human Resources Code §31.0322.

**History**
- *Source Note: The provisions of this §366.721 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.723** Income Eligibility {#sec-366.723 omnilex-key=us-tx-regs-official--title-1--366.723}

(a) HHSC determines income eligibility for the Medicaid for Parents and Caretaker Relatives Program after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

(b) To be eligible for the Medicaid for Parents and Caretaker Relatives Program, an applicant or recipient must have household income for the applicable household size that is equal to or less than the amount determined by HHSC and listed in the *Texas Works Handbook.*

**History**
- *Source Note: The provisions of this §366.723 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.725** Third-Party Resources {#sec-366.725 omnilex-key=us-tx-regs-official--title-1--366.725}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §366.725 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.727** Medicaid Eligibility Effective Date {#sec-366.727 omnilex-key=us-tx-regs-official--title-1--366.727}

HHSC determines the Medicaid eligibility effective date as the earliest day of the application month on which the applicant meets all eligibility criteria.

**History**
- *Source Note: The provisions of this §366.727 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.729** Resident of an Institution for Mental Diseases {#sec-366.729 omnilex-key=us-tx-regs-official--title-1--366.729}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.729 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.731** Inmates of Public Institutions {#sec-366.731 omnilex-key=us-tx-regs-official--title-1--366.731}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.731 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.733** Retroactive Coverage {#sec-366.733 omnilex-key=us-tx-regs-official--title-1--366.733}

To qualify for retroactive coverage, applicants and recipients must meet the requirements of §1902(a)(34) of the Social Security Act (42 U.S.C. §1396a(a)(34)).

**History**
- *Source Note: The provisions of this §366.733 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.735** Four Months Post-Medicaid Eligibility {#sec-366.735 omnilex-key=us-tx-regs-official--title-1--366.735}

A recipient is eligible for four months post-Medicaid coverage, as provided by §1931 of the Social Security Act (42 U.S.C. §1396u-1), if the recipient received Medicaid under §1931 of the Social Security Act (42 U.S.C. §1396u-1) and then was denied Medicaid because of receipt of child support or spousal support.

**History**
- *Source Note: The provisions of this §366.735 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.737** Twelve-Month Transitional Medicaid {#sec-366.737 omnilex-key=us-tx-regs-official--title-1--366.737}

(a) A recipient, certified as required by §1931 of the Social Security Act (42 U.S.C. §1396u-1) and §32.0255 of the Texas Human Resources Code, who is denied because of new or increased earnings may be eligible for 12-month transitional Medicaid, as provided by §1925 of the Social Security Act (42 U.S.C. §1396r-6).

(b) To remain eligible for 12-month transitional Medicaid, a recipient must report changes in the fourth, seventh, and tenth months.

(c) A recipient who reports changes is denied only for one or more of the following reasons:

(1) no eligible child is in the home;

(2) on the seventh- or tenth-month report, the caretaker relative had no earnings in one of the previous three months; or

(3) the average monthly income exceeds 185% of the Federal Poverty Level on the seventh- or tenth-month report.

**History**
- *Source Note: The provisions of this §366.737 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.739** Eligibility Renewal {#sec-366.739 omnilex-key=us-tx-regs-official--title-1--366.739}

At 12 months, HHSC determines if the recipient is still eligible to receive Medicaid coverage.

**History**
- *Source Note: The provisions of this §366.739 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.741** Information from Other Agencies {#sec-366.741 omnilex-key=us-tx-regs-official--title-1--366.741}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid applicant or recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the applicant or recipient.

**History**
- *Source Note: The provisions of this §366.741 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.743** Requirement to Report Changes {#sec-366.743 omnilex-key=us-tx-regs-official--title-1--366.743}

A recipient must report the following changes within 10 days after learning of the change:

(1) residence;

(2) a source of income;

(3) household composition;

(4) wage rate or status for employed household members;

(5) the amount of non-exempt unearned income of any household member;

(6) private medical insurance coverage;

(7) circumstances other than employment that affect a recipient's eligibility; and

(8) address, job, or other information related to an absent parent.

**History**
- *Source Note: The provisions of this §366.743 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.745** Right to Appeal {#sec-366.745 omnilex-key=us-tx-regs-official--title-1--366.745}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.745 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter H** MEDICALLY NEEDY PROGRAM

##### **1 Tex. Admin. Code § 366.801** Purpose and Scope {#sec-366.801 omnilex-key=us-tx-regs-official--title-1--366.801}

(a) This subchapter establishes the eligibility criteria and participation requirements for the Medically Needy Program in accordance with §1902(a)(10)(C) of the Social Security Act (42 U.S.C. §1396a(a)(10)(C)).

(b) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.801 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.803** Definitions {#sec-366.803 omnilex-key=us-tx-regs-official--title-1--366.803}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under the Medically Needy Program who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) Caretaker--A person who supervises and cares for a child. A caretaker must be related to the child.

(4) Child--An adoptive, step, or natural child who is under age 19.

(5) CFR--Code of Federal Regulations.

(6) Eligible group--A category of people who are eligible for the Medically Needy Program.

(7) HHSC--The Texas Health and Human Services Commission or its designee.

(8) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(9) MAGI--Modified adjusted gross income.

(10) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(11) Medically Needy (MN) Program--A program HHSC administers that provides Medicaid benefits to pregnant women and children whose income is too high to qualify for other Medicaid programs and who have high medical expenses.

(12) Newborn--A child from birth through 12 months of age.

(13) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(14) Provider--A health care practitioner, institution, or other entity that is enrolled with the state Medicaid claims administrator to provide Medicaid services in Texas and is authorized to submit claims for payment or reimbursement of medical assistance.

(15) Recipient--A person receiving Medically Needy Program services.

(16) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(17) Spend down--The amount of income that an applicant must apply toward incurred medical bills before the applicant can be certified for the Medically Needy Program.

(18) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Assistance Nutrition Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at www.hhsc.state.tx.us/Programs/Programs.shtml#handbooks.

(19) Third-party resource--A person or organization, other than HHSC or a person living with the applicant or recipient, who may be liable as a source of payment of the applicant's or recipient's medical expenses (for example, a health insurance company).

(20) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.803 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.805** General Eligibility Requirements {#sec-366.805 omnilex-key=us-tx-regs-official--title-1--366.805}

To be eligible for the Medically Needy Program, a person must:

(1) meet the criteria for an eligible group as described in §366.807 of this subchapter (relating to Eligible Groups) and the provisions of Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology);

(2) comply with HHSC's initial and renewal application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.805 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.807** Eligible Groups {#sec-366.807 omnilex-key=us-tx-regs-official--title-1--366.807}

To qualify for Medically Needy Program benefits, an applicant must:

(1) be:

(A) a pregnant woman; or

(B) a child under 19 years of age; and

(2) have household income that meets the applicable income limit in §366.823 of this subchapter (relating to Income Limits) after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

**History**
- *Source Note: The provisions of this §366.807 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.809** Application Requirements {#sec-366.809 omnilex-key=us-tx-regs-official--title-1--366.809}

(a) To receive Medically Needy Program benefits, an applicant, authorized representative, or person acting responsibly must:

(1) use the application prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via telephone, Internet request, or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(b) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(c) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.809 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.811** Application Processing {#sec-366.811 omnilex-key=us-tx-regs-official--title-1--366.811}

(a) HHSC processes Medically Needy Program applications received electronically, by paper, or by telephone.

(b) HHSC allows any office of a state health and human services agency to accept an initial application.

(c) HHSC contracts with third parties to accept applications from hospital districts (including state-owned teaching hospitals), federally qualified health centers, and county health departments.

(d) HHSC may conduct an interview with an initial applicant.

(e) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 60 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(f) HHSC reconsiders the eligibility of a recipient who is terminated for failure to submit a renewal form or necessary information, so long as the recipient complies with the missed requirements within 90 days after the date of termination. HHSC otherwise requires the recipient to file a new application.

(g) HHSC may reopen an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the three-month prior period.

(h) For a pregnant applicant who is potentially eligible but unable to provide proof of eligibility, HHSC:

(1) postpones verifications and provides Medicaid coverage to ensure access to medical care within 30 days after the application date;

(2) continues the coverage of women who provide postponed verifications by the 30th day after the application date; and

(3) denies the coverage of those who fail to meet the 30-day deadline.

(i) There are no conditions limiting the designation of an authorized representative.

**History**
- *Source Note: The provisions of this §366.811 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.813** Citizenship {#sec-366.813 omnilex-key=us-tx-regs-official--title-1--366.813}

In accordance with 42 CFR §435.406, to be eligible for the Medically Needy Program, a person must be:

(1) a citizen or national of the United States;

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the United States for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the United States (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child 18 years of age or under who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.813 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.815** Social Security Number {#sec-366.815 omnilex-key=us-tx-regs-official--title-1--366.815}

An applicant or recipient must provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.815 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.817** Residence {#sec-366.817 omnilex-key=us-tx-regs-official--title-1--366.817}

An applicant or recipient must be a resident of Texas. HHSC follows 42 CFR §435.403 in determining a person's state residence.

**History**
- *Source Note: The provisions of this §366.817 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.819** Relationship and Domicile {#sec-366.819 omnilex-key=us-tx-regs-official--title-1--366.819}

(a) An applicant or recipient who is a child must live in a home with a caretaker who is present in the home and supervises and cares for the applicant or recipient. A home is a family setting maintained or being established, as evidenced by continuation of responsibility for day-to-day care of the applicant or recipient.

(b) A caretaker must be the applicant's or recipient's:

(1) father or mother;

(2) grandparent, to the degree of a "great, great, great" grandparent;

(3) brother or sister;

(4) uncle or aunt, to the degree of a "great, great" uncle or aunt;

(5) first cousin;

(6) nephew or niece, to the to the degree of a "great, great" nephew or niece;

(7) stepfather or stepmother;

(8) stepbrother or stepsister; or

(9) first cousin once removed.

(c) An independent child may live alone or with a person who is not a parent or relative. An independent child is a child who does not live with a parent and who:

(1) is able to apply for Medicaid on his or her own behalf; or

(2) is eligible for Medicaid because a responsible person who is not within the degree of relationship required for eligibility in subsection (b) of this section applies on the child's behalf.

**History**
- *Source Note: The provisions of this §366.819 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.821** Child Support and Medical Support {#sec-366.821 omnilex-key=us-tx-regs-official--title-1--366.821}

An applicant who is a child under 19 years of age or a pregnant woman is not required to cooperate to find absent parents to obtain child or medical support.

**History**
- *Source Note: The provisions of this §366.821 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981; amended to be effective November 20, 2016, 41 TexReg 9007.*

##### **1 Tex. Admin. Code § 366.823** Income Limits {#sec-366.823 omnilex-key=us-tx-regs-official--title-1--366.823}

(a) To be eligible for the Medically Needy Program, an applicant or recipient must meet the applicable Medically Needy Income Limit (MNIL) as provided in the following table after application of the methodology in Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology):

Attached Graphic

(b) An applicant whose household income, as calculated under §366.1113 of this chapter (relating to Calculation of Household Income), exceeds the applicable MNIL may, in accordance with 42 CFR §435.831, spend down the excess amount of income to pay unpaid medical bills and qualify for the Medically Needy Program with spend down.

**History**
- *Source Note: The provisions of this §366.823 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.825** Third-Party Resources {#sec-366.825 omnilex-key=us-tx-regs-official--title-1--366.825}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §366.825 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.827** Medicaid Eligibility Effective Date {#sec-366.827 omnilex-key=us-tx-regs-official--title-1--366.827}

HHSC determines Medicaid eligibility effective dates for an applicant as follows.

(1) Medicaid coverage begins on the earliest day of the application month on which the applicant meets all eligibility criteria.

(2) Retroactive coverage may begin as early as three months before the application month.

(3) The Medicaid coverage of an applicant whose household income, as calculated under §366.1113 of this chapter (relating to Calculation of Household Income), exceeds the Medically Needy Income Limits (MNIL) may spend down the excess amount of income to pay unpaid medical bills and qualify for Medicaid. Medicaid begins on the earliest day of the month of potential eligibility on which spend down requirements are met.

(4) Once a pregnant woman meets spend down, she remains continuously eligible through her pregnancy and the end of the month in which the 12-month postpartum period ends and is not required to meet spend down again until the end of her 12-month postpartum period.

**History**
- *Source Note: The provisions of this §366.827 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.829** Resident of an Institution for Mental Diseases {#sec-366.829 omnilex-key=us-tx-regs-official--title-1--366.829}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.829 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.831** Inmates of Public Institutions {#sec-366.831 omnilex-key=us-tx-regs-official--title-1--366.831}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.831 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.833** Exemption for Newborns {#sec-366.833 omnilex-key=us-tx-regs-official--title-1--366.833}

(a) Except as described in subsection (b) of this section, a newborn is exempt from the following:

(1) child support and medical support requirements in §366.821 of this subchapter (relating to Child Support and Medical Support);

(2) school attendance; and

(3) social security number requirements in §366.815 of this subchapter (relating to Social Security Number).

(b) If a pregnant woman received assistance under the Medically Needy Program with spend down, her newborn is not exempt as described in subsection (a) of this section.

**History**
- *Source Note: The provisions of this §366.833 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.835** Comprehensive Health Care Requirements {#sec-366.835 omnilex-key=us-tx-regs-official--title-1--366.835}

(a) A parent or guardian of an applicant must:

(1) attend a health care orientation;

(2) accompany the child on a visit to a health care provider; or

(3) meet with an HHSC representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

(b) The parent or guardian of a recipient who is eligible for Texas Health Steps must:

(1) comply with the Texas Health Steps regimen of health care requirements, as required by the Texas Department of State Health Services in 25 TAC Chapter 33 (relating to Early and Periodic Screening, Diagnosis, and Treatment); or

(2) meet with an HHSC representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

**History**
- *Source Note: The provisions of this §366.835 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.837** Information from Other Agencies {#sec-366.837 omnilex-key=us-tx-regs-official--title-1--366.837}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid applicant or recipient if the information does not match, so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the Medicaid applicant or recipient.

**History**
- *Source Note: The provisions of this §366.837 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.839** Requirement to Report Changes {#sec-366.839 omnilex-key=us-tx-regs-official--title-1--366.839}

(a) A recipient must report the following changes within 10 days after the recipient learns of a change:

(1) in income, including the source of income and the amount of income;

(2) in household composition, including new household members and household members who leave the home;

(3) of address;

(4) to medical insurance;

(5) in information relating to an absent parent (such as a new job or residence address); and

(6) in circumstances, other than employment, that affects benefits.

(b) A recipient who is pregnant must report the termination of pregnancy.

**History**
- *Source Note: The provisions of this §366.839 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.841** Right to Appeal {#sec-366.841 omnilex-key=us-tx-regs-official--title-1--366.841}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.841 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.843** Resources {#sec-366.843 omnilex-key=us-tx-regs-official--title-1--366.843}

(a) In determining eligibility, HHSC counts the resources of the applicant or recipient and all members of the applicant's or recipient's household composition. For those who are subject to this Subchapter (relating to the Medically Needy Program):

(1) the resources of any household composition member who is not the parent or spouse of the applicant or recipient are not counted; and

(2) the resources of an alien's sponsor and the sponsor's spouse are counted to the extent allowed by federal law in the case of an applicant or recipient 19 years of age and older who is an alien or has a sponsored alien in his or her household composition.

(b) HHSC does not count resources in determining eligibility for pregnant women.

(c) HHSC considers the value of a nonliquid resource, except for a vehicle, to be its equity value. HHSC determines the equity value by subtracting any money owed on the resource and any reasonable cost associated with selling or transferring the resource from the fair market value.

(d) An applicant or recipient meets the resources eligibility requirement if the applicant or recipient's countable resources are at or below:

(1) $3,000 for an applicant or recipient who lives in the same physical residence with an individual who is aged or disabled and meets relationship requirements, even if the aged or disabled member is not part of the applicant or recipient's household composition; or

(2) $2,000 for all other applicants or recipients.

(e) An applicant, if otherwise eligible, is not denied Medically Needy Program services because the applicant transferred resources to qualify for Medicaid.

**History**
- *Source Note: The provisions of this §366.843 adopted to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.845** Vehicles {#sec-366.845 omnilex-key=us-tx-regs-official--title-1--366.845}

(a) HHSC considers the value of a vehicle to be its fair market value.

(b) HHSC exempts the value of the highest valued countable vehicle from countable resources.

(c) HHSC exempts the value of a vehicle from countable resources, if:

(1) it is income producing;

(2) it is used for a disabled household member;

(3) its equity value is equal to or less than $1,500;

(4) it is used for long distance travel for employment;

(5) it is used as the applicant or recipient's home; or

(6) it is necessary to carry fuel or water anticipated to be the primary source of fuel or water for the applicant or recipient during the certification period.

(d) HHSC exempts for each adult member of the household composition up to $4,650 of the value of any vehicle not exempt under subsection (b) of this section. HHSC exempts any other licensed vehicle a minor (under 18 years of age) drives to work, training, school, or to seek employment if the fair market value (FMV) is less than $4,650. HHSC counts the FMV in excess of $4,650 as a resource.

**History**
- *Source Note: The provisions of this §366.845 adopted to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.847** Exempt Resources {#sec-366.847 omnilex-key=us-tx-regs-official--title-1--366.847}

HHSC exempts the following from countable resources:

(1) funds in a retirement account (even if accessible, so long as the funds remain in the account);

(2) balances in the Texas Guaranteed Tuition Plan (formerly called the Texas Tomorrow Fund) even if accessible, so long as the funds remain in the account;

(3) crime victim's compensation payments;

(4) earned income tax credit (EIC) payments to applicants the month of receipt and the following month, and to recipients the month of receipt and the following 11 months, unless there is a break in certification of more than 30 days, in which case any remaining portion of the EIC payment is counted as a resource;

(5) payments or allowances made under any federal law for the purpose of energy assistance;

(6) federal disaster payments and comparable disaster assistance provided by states, local governments, and disaster assistance organizations if the applicant or recipient is subject to legal penalties if the funds are not used as intended;

(7) transitional living allowances;

(8) any resource federal law excludes;

(9) funds from veterans payments earmarked as a housebound allowance or as an aid and attendance allowance;

(10) the cash value of life insurance policies;

(11) an amount up to $7,500 per person of prepaid burial insurance (or of a prepaid funeral plan);

(12) loans, if the circumstances satisfy HHSC that there exists an understanding the money will be repaid, and the applicant or recipient reasonably explains to HHSC how the money will be repaid;

(13) personal possessions HHSC determines are essential for daily living, such as clothing, jewelry, furniture, livestock, and farm equipment;

(14) burial plots;

(15) the homestead and surrounding real property, including:

(A) any structure, including a houseboat or a motor home, the applicant or recipient uses as its primary residence;

(B) surrounding real property divided by a public right-of-way (such as a street or road) but not divided by real property owned by others; and

(C) the homestead if it is temporarily unoccupied due to employment, training for future employment, illness, casualty, or natural disaster, as long as the household intends to return;

(16) income-producing property (any real or personal property that generates income) that:

(A) is essential to a household composition member's employment or self-employment (such as tools of a trade, farm machinery, stock, and inventory), including:

(i) during temporary periods of unemployment if the household composition member expects to return to work; and

(ii) for farmers or fishers, the value of the land or equipment for one year after the date the self-employment ceases;

(B) annually produces income consistent with a fair market value comparable in the community (as determined by HHSC through sources such as local realtors, tax assessors, and the Small Business Administration), even if used only on a seasonal basis such as rental property; or

(C) is that portion of the property that is necessary for the maintenance or use of a vehicle exempted as income-producing or as necessary for transporting a physically disabled household member;

(17) real property HHSC determines the applicant or recipient is making a good faith effort to sell;

(18) resources HHSC determines are not accessible to the applicant or recipient;

(19) funds from educational assistance payments (but only during the quarter, semester, or applicable period the payment is intended to cover);

(20) equity value of resources that are not legally available (inaccessible) to the household;

(21) a nonliquid resource if its equity is less than or equal to $1,500;

(22) a One-Time Temporary Assistance for Needy Families (OTTANF) payment for the month of receipt and any remaining OTTANF benefits the month after receipt;

(23) a TANF One-Time Grandparent payment;

(24) reimbursements earmarked and used for replacing or repairing an exempt resource;

(25) for an applicant or recipient who lives at the same physical address as a sponsored alien, the resources of a sponsor and the sponsor's spouse to the extent allowed by federal law;

(26) resources of residents in shelters for battered women and children if:

(A) resources are jointly owned by the member of the household composition in the shelter and household composition members of the former physical living address; and

(B) shelter resident's access to the value of the resource depends on the agreement of a joint owner who still lives in the resident's former physical living address;

(27) resources of a recipient of Supplemental Security Income living in the home;

(28) liquid resources resulting from the earnings of a certified child who is attending school full time, or less than full time and employed less than 30 hours per week; and

(29) funds held in a school-based account or bond as described by §28.0024 of the Texas Education Code and authorized by §32.02611 of the Texas Human Resources Code.

**History**
- *Source Note: The provisions of this §366.847 adopted to be effective June 1, 2014, 39 TexReg 3981; amended to be effective November 20, 2016, 41 TexReg 9007.*

#### **Subchapter I** EMERGENCY MEDICAL SERVICES FOR ALIENS INELIGIBLE FOR REGULAR MEDICAID

##### **1 Tex. Admin. Code § 366.901** Legal Basis {#sec-366.901 omnilex-key=us-tx-regs-official--title-1--366.901}

(a) Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and 42 CFR §435.139 require the state to provide Medicaid for the treatment of an emergency medical condition to an alien who is ineligible for regular Medicaid due to immigration status. The Texas Health and Human Services Commission administers the program in Texas.

(b) To qualify for Medicaid for the treatment of an emergency medical condition, an applicant must meet the eligibility requirements in this subchapter and Subchapter K of this chapter (relating to Modified Adjusted Gross Income Methodology).

(c) Nothing in these rules shall be construed to violate the maintenance of eligibility requirements of §5001 of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) and make eligibility standards, methodologies, or procedures under the Texas State Plan for Medical Assistance (or any waiver under §1115 of the Social Security Act (42 U.S.C. §1315)) more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) that were in effect on July 1, 2008.

**History**
- *Source Note: The provisions of this §366.901 adopted to be effective June 9, 2010, 35 TexReg 4661; amended to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.903** Application and Eligibility Requirements {#sec-366.903 omnilex-key=us-tx-regs-official--title-1--366.903}

(a) To apply for Medicaid for the treatment of an emergency medical condition, a person completes an application for assistance and returns it to a Texas Health and Human Services Commission office or representative.

(b) To qualify for Medicaid for treatment of an emergency medical condition, a person must:

(1) be:

(A) a qualified alien as defined in 8 U.S.C. §1641 who does not meet the requirements to receive Medicaid under the Texas State Plan for Medical Assistance, which is a document describing the Medicaid-funded services provided in Texas in accordance with §1902 of the Social Security Act (42 U.S.C. §1396a); or

(B) an undocumented non-qualified alien as described in 8 U.S.C. §1611;

(2) be otherwise eligible for regular Medicaid services; and

(3) require treatment of an emergency medical condition as described in 42 CFR §440.255(c).

(c) An undocumented non-qualified alien applying for Medicaid for the treatment of an emergency medical condition is exempt from providing proof of alien status or providing a Social Security number as described in 42 CFR §435.406(b).

**History**
- *Source Note: The provisions of this §366.903 adopted to be effective June 9, 2010, 35 TexReg 4661.*

#### **Subchapter J** FORMER FOSTER CARE CHILDREN'S PROGRAM

##### **1 Tex. Admin. Code § 366.1001** Purpose and Scope {#sec-366.1001 omnilex-key=us-tx-regs-official--title-1--366.1001}

This subchapter establishes the eligibility criteria for the Former Foster Care Children's Program, in accordance with Social Security Act §1902(a)(10)(A)(i)(IX) (42 U.S.C. §1396a(a)(10)(A)(i)(IX)).

**History**
- *Source Note: The provisions of this §366.1001 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1003** Definitions {#sec-366.1003 omnilex-key=us-tx-regs-official--title-1--366.1003}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance under the Former Foster Care Children Program who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Authorized representative--A person or organization whom an applicant authorizes to apply for Medicaid benefits on behalf of the applicant.

(3) CFR--Code of Federal Regulations.

(4) Child--An adoptive, step, or natural child under age 19.

(5) Eligible group--A category of people who are eligible for the Former Foster Care Children's Program.

(6) HHSC--The Texas Health and Human Services Commission or its designee.

(7) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(8) Medicaid--A state and federal cooperative program, authorized under Title XIX of the Social Security Act (42 U.S.C. §1396 et seq.) and Texas Human Resources Code chapter 32, that pays for certain medical and health care costs for people who qualify. Also known as the medical assistance program.

(9) Person acting responsibly--A person, other than a provider, who may apply for Medicaid on behalf of an applicant who is incompetent or incapacitated if the person is determined by HHSC to be acting responsibly on behalf of the applicant.

(10) Recipient--A person receiving Former Foster Care Children's Program services, including a person who is renewing eligibility for the Former Foster Care Children's Program.

(11) Retroactive coverage--Payment for Medicaid-reimbursable medical services received up to three months before the month of application.

(12) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for Supplemental Nutrition Assistance Program (SNAP) food benefits, Temporary Assistance for Needy Families (TANF), the Children's Health Insurance Program (CHIP), and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at www.dads.state.tx.us/handbooks/TexasWorks.

(13) Third-party resource--A person or organization, other than HHSC or a person living with the applicant or recipient, who may be liable as a source of payment of the applicant's or recipient's medical expenses (for example, a health insurance company).

(14) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §366.1003 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1005** Program Administration {#sec-366.1005 omnilex-key=us-tx-regs-official--title-1--366.1005}

HHSC administers the Former Foster Care Children's Program in cooperation with the Texas Department of Family and Protective Services.

**History**
- *Source Note: The provisions of this §366.1005 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1007** Legal Basis {#sec-366.1007 omnilex-key=us-tx-regs-official--title-1--366.1007}

The Former Foster Care Children's Program is authorized by Social Security Act §1902(a)(10)(A)(i)(IX) (42 U.S.C. §1396a(a)(10)(A)(i)(IX)).

**History**
- *Source Note: The provisions of this §366.1007 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1009** General Eligibility Requirements {#sec-366.1009 omnilex-key=us-tx-regs-official--title-1--366.1009}

To be eligible for the Former Foster Care Children's Program, a person must:

(1) meet the criteria for an eligible group as described in §366.1011 of this subchapter (relating to Eligible Group);

(2) comply with HHSC's initial and renewal application requirements in this subchapter; and

(3) meet all other eligibility and participation requirements in this subchapter.

**History**
- *Source Note: The provisions of this §366.1009 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1011** Eligible Group {#sec-366.1011 omnilex-key=us-tx-regs-official--title-1--366.1011}

To be eligible for the Former Foster Care Children's Program, a person must:

(1) have been under the conservatorship of a State upon attaining age 18;

(2) have received Medicaid at the time he or she left foster care; and

(3) be 18 to 25 years of age (coverage continues through the month of his or her 26th birthday).

**History**
- *Source Note: The provisions of this §366.1011 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.1013** Application Requirements {#sec-366.1013 omnilex-key=us-tx-regs-official--title-1--366.1013}

(a) Except for an applicant described in subsection (b) or (c) of this section, the Texas Department of Family and Protective Services certifies an applicant's eligibility and notifies HHSC to authorize Medicaid coverage.

(b) An applicant who meets the criteria for an eligible group and who aged out of foster care in this State prior to implementation of the Former Foster Care Children's Program must apply to HHSC as described in subsections (d) - (f) of this section.

(c) An applicant who previously received benefits under the Former Foster Care Children's Program and seeks to reapply for the Former Foster Care Children's Program, must reapply to HHSC as described in subsections (d) - (f) of this section.

(d) For an applicant described in subsections (b) or (c) of this section, the applicant, authorized representative, or person acting responsibly must:

(1) use the application for assistance prescribed by HHSC and complete it according to HHSC instructions:

(A) in writing, using a paper application obtained via Internet request, telephone or other means;

(B) online, using the application process available over the Internet;

(C) over the telephone, through the State's toll-free telephone number; or

(D) in person, by visiting an HHSC benefits office;

(2) provide all requested information according to HHSC instructions; and

(3) sign the application for assistance under penalty of perjury.

(e) If someone helps an applicant, authorized representative, or person acting responsibly complete the application for assistance, the name of the person completing the form must appear as requested on the application.

(f) If HHSC sends an applicant, authorized representative, or person acting responsibly a request for missing information or verification documents, or both, the applicant, authorized representative, or person acting responsibly must provide the requested information to HHSC by the due date given in the request, or eligibility may be denied.

**History**
- *Source Note: The provisions of this §366.1013 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1015** Application Processing {#sec-366.1015 omnilex-key=us-tx-regs-official--title-1--366.1015}

(a) HHSC processes Former Foster Care Children's Program applications received electronically, by paper, or by telephone.

(b) HHSC reopens a denied initial application, so long as the applicant complies with the missed requirements within 90 days after the date the application was submitted. HHSC otherwise requires the applicant to file a new application.

(c) HHSC reconsiders the eligibility of a recipient who is terminated for failure to submit a renewal form or necessary information, so long as the recipient complies with the missed requirements within 90 days after the date of termination. HHSC otherwise requires the recipient to file a new application.

(d) HHSC reopens an application for three months prior coverage if:

(1) within two years after the application was filed, the applicant requests that the application be reopened; and

(2) a Medicaid eligibility determination was not previously made for the prior three-month period.

**History**
- *Source Note: The provisions of this §366.1015 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1017** Citizenship {#sec-366.1017 omnilex-key=us-tx-regs-official--title-1--366.1017}

In accordance with 42 CFR §435.406, to be eligible for the Former Foster Care Children's Program, a person must be:

(1) a citizen of the United States;

(2) an alien who legally entered the United States before August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1641(b) or (c);

(3) an alien who legally entered the United States on or after August 22, 1996, and who meets the eligibility criteria in 8 U.S.C. §1612(b) and §1613, except that a legal permanent resident alien is eligible after residing in the United States for five years only if the alien meets one of the following eligibility requirements:

(A) the alien is an honorably discharged veteran or active duty military personnel;

(B) the alien is a spouse, unmarried surviving spouse, or minor unmarried child of an honorably discharged veteran or active duty military personnel (if a surviving spouse of a deceased veteran or active duty military person, the surviving spouse must not have remarried);

(C) the alien entered the United States before August 22, 1996, and remained continuously present in the United States (a single absence from the United States of more than 30 days or a combined absence of more than 90 days interrupts the "continuous presence") since at least August 21, 1996, until obtaining qualifying immigrant status (an alien who entered the United States without proper documents or overstayed his or her visa, is treated the same as an alien who entered and remained in the United States with valid immigration documents);

(D) the alien entered the United States with a status described in the *Texas Works Handbook,* Item A-342, Chart C and meets those eligibility criteria, or meets the criteria in the *Texas Works Handbook,* Item A-343, How to Determine Eligibility for Battered Aliens; or

(E) the alien meets the 40 qualifying quarters requirements in the *Texas Works Handbook,* Item A-354, Verifying 40 "Qualifying Quarters," and five years have passed since the alien's legal date of entry; or

(4) an alien child under the age of 21 who meets the definition of a qualified alien at 8 U.S.C. §1641(b).

**History**
- *Source Note: The provisions of this §366.1017 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1019** Social Security Number {#sec-366.1019 omnilex-key=us-tx-regs-official--title-1--366.1019}

An applicant or recipient must provide or apply for a social security number. Prior to denying eligibility, HHSC allows a period of reasonable opportunity for an applicant or recipient to provide or apply for a social security number.

**History**
- *Source Note: The provisions of this §366.1019 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1021** Residence {#sec-366.1021 omnilex-key=us-tx-regs-official--title-1--366.1021}

An applicant or recipient must be a resident of Texas. HHSC determines a person's state residence according to 42 CFR §435.403.

**History**
- *Source Note: The provisions of this §366.1021 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1023** Third-Party Resources {#sec-366.1023 omnilex-key=us-tx-regs-official--title-1--366.1023}

Medicaid is considered the payor of last resort for a person's medical expenses. As a condition of eligibility, in accordance with 42 CFR §§433.138 - 433.148, an applicant or recipient must:

(1) assign to HHSC the applicant's or recipient's right to recover any third-party resources available for payment of medical expenses covered under the Texas State Plan for Medical Assistance; and

(2) report to HHSC any third-party resource within 60 days after learning about the third-party resource.

**History**
- *Source Note: The provisions of this §366.1023 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1025** Medicaid Eligibility Effective Dates {#sec-366.1025 omnilex-key=us-tx-regs-official--title-1--366.1025}

(a) Medicaid eligibility begins the first month the person meets all eligibility criteria as long as the person is not eligible for and receiving other Medicaid coverage.

(b) A person eligible for the Former Foster Care Children's Program is also eligible for retroactive coverage but no earlier than January 1, 2014.

(c) A pregnant recipient in the Former Foster Care Children's Program remains continuously eligible through the duration of the member's pregnancy and the end of the 12-month postpartum period.

**History**
- *Source Note: The provisions of this §366.1025 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.1027** Resident of an Institution for Mental Diseases {#sec-366.1027 omnilex-key=us-tx-regs-official--title-1--366.1027}

A person who lives in an institution for mental diseases, as defined in 42 CFR §435.1010, is eligible for Medicaid payment for Medicaid covered services received only while residing in the institution for mental diseases to the extent allowed by federal law.

**History**
- *Source Note: The provisions of this §366.1027 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1029** Inmates of Public Institutions {#sec-366.1029 omnilex-key=us-tx-regs-official--title-1--366.1029}

An inmate of a public institution, including a jail, prison, reformatory, or other correctional or holding facility, as defined in 42 CFR §435.1009 and §435.1010, is not eligible for Medicaid payment for Medicaid-covered services received while residing in the public institution.

**History**
- *Source Note: The provisions of this §366.1029 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1031** Eligibility Renewal {#sec-366.1031 omnilex-key=us-tx-regs-official--title-1--366.1031}

(a) At 12 months, HHSC determines whether the recipient is still eligible to receive Medicaid coverage.

(b) If the recipient is pregnant and eligible to receive continuous eligibility, a renewal review will be conducted at the end of the recipient's 12-month postpartum period to determine if the individual is still eligible to receive Medicaid coverage.

**History**
- *Source Note: The provisions of this §366.1031 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 2, 2024, 49 TexReg 3795.*

##### **1 Tex. Admin. Code § 366.1033** Information from Other Agencies {#sec-366.1033 omnilex-key=us-tx-regs-official--title-1--366.1033}

(a) HHSC and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, HHSC contacts the Medicaid recipient if the information does not match so that HHSC can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, HHSC does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient.

**History**
- *Source Note: The provisions of this §366.1033 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1035** Requirement to Report Changes {#sec-366.1035 omnilex-key=us-tx-regs-official--title-1--366.1035}

(a) A recipient must report changes:

(1) a change of address; and

(2) the start of adequate health coverage.

(b) If a recipient reports a change described in subsection (a) of this section, HHSC takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the recipient. A change not described in subsection (a) of this section is documented and handled at the next review.

**History**
- *Source Note: The provisions of this §366.1035 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1037** Right to Appeal {#sec-366.1037 omnilex-key=us-tx-regs-official--title-1--366.1037}

(a) An applicant or recipient has the right to appeal HHSC decisions. Appeals are governed by HHSC's fair hearing rules contained in Chapter 357 of this title (relating to Hearings).

(b) HHSC provides an action notice regarding an HHSC decision to applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

**History**
- *Source Note: The provisions of this §366.1037 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter K** MODIFIED ADJUSTED GROSS INCOME METHODOLOGY

##### **1 Tex. Admin. Code § 366.1101** Purpose and Scope {#sec-366.1101 omnilex-key=us-tx-regs-official--title-1--366.1101}

This subchapter establishes income eligibility requirements for Medicaid programs in accordance with §1902(e)(14) of the Social Security Act (42 U.S.C. §1396a(e)(14)). This subchapter applies to the following Chapter 366 Medicaid programs: Subchapter C (relating to Pregnant Women's Medicaid), Subchapter E (relating to Children's Medicaid), Subchapter F (relating to Medicaid for Transitioning Foster Care Youth), Subchapter G (relating to Medicaid for Parents and Caretaker Relatives Program), Subchapter H (relating to Medically Needy Program), and Subchapter I (relating to Emergency Medical Services for Aliens Ineligible for Regular Medicaid).

**History**
- *Source Note: The provisions of this §366.1101 adopted to be effective January 1, 2014, 38 TexReg 9467.*

##### **1 Tex. Admin. Code § 366.1103** Definitions {#sec-366.1103 omnilex-key=us-tx-regs-official--title-1--366.1103}

In this subchapter, words and terms have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person seeking assistance from a Medicaid program to which this subchapter applies who:

(A) has never received Medicaid and is not currently receiving Medicaid; or

(B) previously received Medicaid but subsequently was denied and reapplies for Medicaid.

(2) Child--An adoptive, step, or natural child who is under age 19.

(3) Federal Poverty Level (FPL)--The income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(4) HHSC--The Texas Health and Human Services Commission or its designee.

(5) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(6) Household income--The sum of the individual income of every individual within an applicant's or recipient's household composition, from which is subtracted the standard income disregard.

(7) Household size--The number of individuals in an applicant's or recipient's household composition, plus the number of unborn children if applicable, referenced in 42 CFR §435.603(b) as "family size."

(8) Individual income--The sum of income received by the individuals in a household composition, from which is subtracted expenses, in compliance with 42 CFR §435.603(e), referenced as "MAGI-based income."

(9) MAGI--Modified adjusted gross income.

(10) Non-custodial parent--A parent who does not have custody of a child pursuant to a court order, or binding agreement of separation or divorce.

(11) Parent--An individual who is the adoptive, step, or natural parent of a child.

(12) Recipient--A person receiving Medicaid program services, including a person who is renewing eligibility for a Medicaid program subject to this subchapter.

(13) Sibling--An individual under age 19 who is an adoptive, step, or natural sibling of a child.

(14) Spend down--The amount of income that an applicant must apply toward incurred medical bills before the applicant can be certified for the Medically Needy Program.

(15) Standard income disregard--An income disregard equal to five percentage points of FPL for the applicable household size.

(16) Tax dependent--An individual who expects to be claimed as a dependent on a federal income tax return for the taxable year in which Medicaid eligibility is requested.

(17) Taxpayer--An individual, or a married couple, who expects:

(A) to file a federal income tax return for the taxable year in which Medicaid eligibility is requested;

(B) if married, to file a joint federal income tax return for the taxable year in which Medicaid eligibility is requested;

(C) that no other taxpayer will be able to claim him, her, or them as a tax dependent on a federal income tax return for the taxable year in which Medicaid eligibility is requested; or

(D) to claim a personal exemption deduction on his or her federal income tax return for one or more applicants, who may or may not include himself or herself and his or her spouse.

(18) Taxable year--The 12-month period between January and December that an individual uses to report income for federal income tax purposes.

**History**
- *Source Note: The provisions of this §366.1103 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1105** Methodology {#sec-366.1105 omnilex-key=us-tx-regs-official--title-1--366.1105}

(a) In general, HHSC determines income eligibility for a Medicaid Program subject to this subchapter by:

(1) determining the applicant's or recipient's household composition in accordance with §366.1107 of this subchapter (relating to Determination of Household Composition);

(2) calculating the individual income of each person in the applicant's or recipient's household composition in accordance with §366.1109 of this subchapter (relating to Calculation of Individual Income);

(3) determining if the individual income of each individual in the applicant's or recipient's household composition is included in the calculation of household income in accordance with §366.1111 of this subchapter (relating to Determination Regarding Including an Individual's Income in the Household Income); and

(4) calculating the applicant's or recipient's household income in accordance with §366.1113 of this subchapter (relating to Calculation of Household Income).

(b) To be eligible for a Medicaid Program, the applicant's or recipient's household income must be less than or equal to the Federal Poverty Level of the applicable Medicaid Program.

**History**
- *Source Note: The provisions of this §366.1105 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1107** Determination of Household Composition {#sec-366.1107 omnilex-key=us-tx-regs-official--title-1--366.1107}

(a) To determine household composition, an individual is designated as:

(1) a taxpayer;

(2) a tax dependent who does not meet any exceptions;

(3) a tax dependent who meets one or more of the exceptions set out in 42 CFR §435.603(f)(2); or

(4) not a taxpayer or tax dependent.

(b) If the individual is a taxpayer, the following individuals are included in the taxpayer's household composition:

(1) the taxpayer;

(2) the taxpayer's spouse, if the taxpayer and the spouse live together;

(3) the taxpayer's spouse, if the taxpayer and spouse file a joint federal income tax return; and

(4) any individual the taxpayer expects to claim as a tax dependent for the taxable year in which Medicaid eligibility is requested.

(c) If the individual is a tax dependent, the following individuals are included in the tax dependent's household composition:

(1) the tax dependent;

(2) the household composition of the taxpayer claiming the tax dependent; and

(3) the tax dependent's spouse, if the tax dependent and the spouse live together.

(d) The rules in subsection (e) of this section apply to a tax dependent who:

(1) is not the taxpayer's spouse or the taxpayer's child;

(2) is a child who lives with both parents who did not file a joint federal income tax return and was claimed by one parent; or

(3) is a child who is claimed as a tax dependent only by a non-custodial parent.

(e) The household composition of an individual who is not a taxpayer or a tax dependent includes:

(1) the individual's spouse;

(2) the individual's children; and

(3) if a child, the individual's parents and siblings.

(f) A spouse is included in an individual's household composition if living together or filing a joint federal income tax return.

(g) Subsection (c) of this section applies to an individual who is both a tax dependent and taxpayer.

(h) The number of unborn children is included in the household composition of:

(1) a pregnant woman; and

(2) any individual whose household composition includes the pregnant woman.

**History**
- *Source Note: The provisions of this §366.1107 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981; amended to be effective November 20, 2016, 41 TexReg 9007.*

##### **1 Tex. Admin. Code § 366.1109** Calculation of Individual Income {#sec-366.1109 omnilex-key=us-tx-regs-official--title-1--366.1109}

(a) HHSC calculates individual income in accordance with Internal Revenue Code §36B(d)(2)(B), with adjustments for lump sum payments, certain income of American Indians/Alaskan Natives, and scholarships, awards, and fellowship grants used for education purposes.

(b) Assets tests do not apply to groups subject to the provisions of this subchapter, except for those subject to Subchapter H of this chapter (relating to Medically Needy Program). HHSC may collect information on assets and resources from Medicaid program applicants and recipients during the eligibility determination process.

**History**
- *Source Note: The provisions of this §366.1109 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1111** Determination Regarding Inclusion of Individual Income in the Household Income {#sec-366.1111 omnilex-key=us-tx-regs-official--title-1--366.1111}

(a) Individual income is counted as part of the household income unless:

(1) the individual is a child who is included in the household composition of a parent and is not required to file a federal income tax return for the taxable year in which Medicaid eligibility is requested; or

(2) the individual is a tax dependent and is not required to file a federal income tax return for the taxable year in which Medicaid eligibility is requested.

(b) Individual income described in subsection (a)(1) of this section is excluded from the household income of each individual in the household composition as defined in §366.1107 of this subchapter (relating to Determination of Household Composition).

(c) Individual income described in subsection (a)(2) of this section is excluded from the household income of the taxpayer.

**History**
- *Source Note: The provisions of this §366.1111 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1113** Calculation of Household Income {#sec-366.1113 omnilex-key=us-tx-regs-official--title-1--366.1113}

(a) For each applicant or recipient, the household income is:

(1) the sum of the individual income (as calculated under §366.1109 of this subchapter (relating to Calculation of Individual Income)) for each individual in the applicant's or recipient's household composition (as determined under §366.1107 of this subchapter (relating to Determination of Household Composition)); and

(2) less a standard income disregard equal to five percentage points of the Federal Poverty Level for the applicable household size, as permitted by 42 CFR §435.603(d)(4).

(b) For an applicant or recipient for the Medically Needy Program under Subchapter H of this chapter (relating to Medically Needy Program), the household income is:

(1) the sum of the individual income (as calculated under §366.1109 of this subchapter for the following individuals in the applicant's or recipient's household composition (as determined under §366.1107 of this subchapter):

(A) the applicant or recipient;

(B) the applicant's or recipient's parents; and

(C) the applicant's or recipient's spouse;

(2) less a standard income disregard equal to five percentage points of the Federal Poverty Level for the applicable household size, as permitted by 42 CFR §435.603(d)(4); and

(3) additional deductions allowed for spend down.

**History**
- *Source Note: The provisions of this §366.1113 adopted to be effective January 1, 2014, 38 TexReg 9467; amended to be effective June 1, 2014, 39 TexReg 3981.*

##### **1 Tex. Admin. Code § 366.1115** Modification {#sec-366.1115 omnilex-key=us-tx-regs-official--title-1--366.1115}

HHSC may modify or implement additional income eligibility policies developed pursuant to this subchapter consistent with state and federal laws.

**History**
- *Source Note: The provisions of this §366.1115 adopted to be effective January 1, 2014, 38 TexReg 9467.*

#### **Subchapter L** MEDICAID FOR YOUTH UNDER THE INTERSTATE COMPACT ON THE PLACEMENT OF CHILDREN

##### **1 Tex. Admin. Code § 366.1201** Purpose and Eligibility {#sec-366.1201 omnilex-key=us-tx-regs-official--title-1--366.1201}

(a) The Texas Health and Human Services Commission (HHSC) provides medical assistance for a reasonable category of former foster care youth under the age of 21, in accordance with 42 U.S.C. §1396a(a)(10)(A)(ii)(I) and 42 C.F.R. §435.222, who had been placed inside or outside of Texas under the Interstate Compact on the Placement of Children (ICPC).

(b) To be eligible for Medicaid under this subchapter, an applicant must:

(1) be in foster care and in a placement under ICPC in accordance with Texas Family Code §162.102 when he or she leaves conservatorship of a State;

(2) be 18 - 20 years of age (coverage continues through the month of his or her 21st birthday); and

(3) not be covered by a health benefits plan offering adequate benefits, as HHSC defines adequate benefits.

(c) Medicaid under this subchapter is subject to the same requirements as set forth in Subchapter J of this chapter (relating to Former Foster Care Children's Program), except for §366.1011 of that subchapter (relating to Eligible Group).

**History**
- *Source Note: The provisions of this §366.1201 adopted to be effective June 30, 2014, 39 TexReg 4953.*

### **Chapter 370** STATE CHILDREN'S HEALTH INSURANCE PROGRAM

#### **Subchapter A** PROGRAM ADMINISTRATION

##### **1 Tex. Admin. Code § 370.1** Purpose {#sec-370.1 omnilex-key=us-tx-regs-official--title-1--370.1}

(a) This chapter implements the State Children's Health Insurance Program (CHIP), authorized under the Texas Health and Safety Code, Chapters 62 (relating to Child Health Plan for Certain Low-Income Children) and 63 (relating to Health Benefits Plan For Certain Children), in a manner that is timely, efficient, fair, and that promotes access to quality and economical health and dental care for eligible children and their families in Texas.

(b) This chapter also defines requirements for CHIP managed care organizations (MCOs). An MCO must comply with this chapter and the terms of its contract with HHSC.

(c) CHIP is a state-designed child health insurance plan authorized under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa, et seq.), and the Texas Health and Safety Code, Chapters 62 (relating to Child Health Plan For Certain Low-Income Children) and 63 (relating to Health Benefits Plan for Certain Children), which provides access to low-cost preventive and primary health and dental care to children, including children with special health care needs, in certain low-income families of this state.

(d) CHIP is administered, in part, in accordance with the state plan for children's health insurance, filed by HHSC with the federal Secretary of Health and Human Services, which describes the general conditions under which joint federal state child health insurance program funds will be administered in Texas.

(e) The rules in this chapter must be read in conjunction with:

(1) federal and state statutes;

(2) rules relating to CHIP; and

(3) except where otherwise indicated, Texas Department of Insurance rules regarding:

(A) regulation of health maintenance organizations at 28 TAC Chapter 11 (relating to Health Maintenance Organizations); and

(B) exclusive provider benefit plans at 28 TAC Chapter 3, Subchapter KK (relating to Exclusive Provider Benefit Plan).

(f) Nothing in this chapter shall be construed as providing an individual with an entitlement to health or dental insurance benefits or health care or to assistance in obtaining health insurance or health benefits.

**History**
- *Source Note: The provisions of this §370.1 adopted to be effective April 4, 2001, 26 TexReg 2519; amended to be effective January 1, 2006, 30 TexReg 8666; amended to be effective March 1, 2012, 37 TexReg 1301; amended to be effective January 1, 2014, 38 TexReg 9477.*

##### **1 Tex. Admin. Code § 370.4** Definitions {#sec-370.4 omnilex-key=us-tx-regs-official--title-1--370.4}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Action--

(A) In the context of an eligibility or disenrollment determination by HHSC or its designee, action is defined as:

(i) denial of Children's Health Insurance Program (CHIP) eligibility;

(ii) disenrollment from CHIP; or

(iii) the failure of HHSC or its designee to act within 45 days on an applicant's request for CHIP eligibility determination.

(B) "Action" does not include expiration of a time-limited service.

(2) Acute care--Preventive care, primary care, and other medical or behavioral health care provided for a condition having a relatively short duration.

(3) Acute care hospital--A hospital that provides acute care services.

(4) Adverse determination--A determination by a managed care organization (MCO) that the health care services or dental services furnished, or proposed to be furnished, to a patient are not medically necessary or appropriate.

(5) Agreement or Contract--The formal, written, and legally enforceable contract and amendments thereto between HHSC and an MCO.

(6) Alien--A person who is not a native born or naturalized citizen of the United States of America.

(7) Allowable revenue--All managed care revenue received by the MCO pursuant to the contract during the contract period, including retroactive adjustments made by HHSC. This would include any revenue earned on CHIP managed care funds such as investment income, earned interest, or third party administrator earnings from services to delegated networks.

(8) Appeal--The formal process by which a member or his or her representative requests a review of the MCO's action.

(9) Applicant--An individual who applies for health and dental care coverage on behalf of the child. An applicant can only be:

(A) a child's parent, whether biological or adoptive;

(B) a child's grandparent, relative or other adult who provides care for the child;

(C) a minor not living with an adult applying for himself/herself;

(D) a child's step-parent; or

(E) a taxpayer who expects to claim the child on a federal income tax return for the taxable year in which CHIP eligibility is requested

(10) Application--The standardized, written document that an applicant must complete to apply for health and dental care coverage through CHIP.

(11) Behavioral health service--A covered service for the treatment of mental, emotional, or chemical dependency disorders.

(12) Capitation rate--A fixed, predetermined fee paid by HHSC to the MCO each month, in accordance with the contract, for each enrolled member in exchange for which the MCO arranges for or provides a defined set of covered services to the member, regardless of the amount of covered services used by the enrolled member.

(13) Child--An adoptive, step, or natural child who is under the age of 19.

(14) Children's Health Insurance Program or CHIP or Program--The Texas State Children's Health Insurance Program established under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa, et seq.) the Texas Health and Safety Code, Chapters 62 (relating to Child Health Plan For Certain Low-Income Children) and 63 (relating to Health Benefits Plan for Certain Children).

(15) CHIP Dental Services--The dental services provided through a dental MCO to a CHIP member.

(16) Claims processing entity--The MCO or its subcontractor that processes claims for CHIP.

(17) CMS--The Centers for Medicare and Medicaid Services, which is the federal agency responsible for administering Medicare and overseeing state administration of Medicaid and CHIP.

(18) HHSC--The Texas Health and Human Services Commission.

(19) Complainant--A member, or a treating provider or other individual designated to act on behalf of the member, who files a complaint.

(20) Complaint--Any dissatisfaction, expressed by a complainant, orally or in writing, to the MCO, with any aspect of the MCO's operation, including dissatisfaction with plan administration; procedures related to review or appeal of an adverse determination, as set forth in Texas Insurance Code, Chapter 843, Subchapter G (relating to Dispute Resolution); the denial, reduction, or termination of a service for reasons not related to medical necessity; the way a service is provided; or disenrollment decisions. The term does not include misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the member.

(21) Cost Sharing--Any enrollment fees or co-payments the member is responsible for paying.

(22) Covered service--A health care service or a dental service or item that the MCO must arrange to provide and pay for on a member's behalf under the terms of the contract executed between the MCO and HHSC. This includes all covered services and benefits identified in the Texas CHIP State Plan, and all value-added services approved by HHSC.

(23) Cultural competency--The ability of individuals and systems to provide services effectively to people of various cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity.

(24) Day--Calendar day, unless otherwise specified.

(25) Default enrollment--The process established by HHSC to assign a CHIP managed care enrollee to an MCO when the enrollee has not selected an MCO.

(26) Dental contractor--A dental MCO that is under contract with HHSC for the delivery of dental services.

(27) Dental home--A provider who has contracted with a dental MCO to serve as a dental home to a member and who is responsible for providing routine preventive, diagnostic, urgent, therapeutic, initial, and primary care to patients, maintaining the continuity of patient care, and initiating referral for care. Provider types that can serve as dental homes are federally qualified health centers and individuals who are general dentists or pediatric dentists.

(28) Dental managed care organization (dental MCO)--A dental indemnity insurance provider or dental health maintenance organization licensed or approved by the Texas Department of Insurance.

(29) Dental service--The routine preventive, diagnostic, urgent, therapeutic, initial, and primary care provided to a member and included within the scope of HHSC's agreement with a dental contractor. For purposes of this chapter, "dental service" does not include dental devices for craniofacial anomalies; treatment rendered in a hospital, urgent care center, or ambulatory surgical center setting for craniofacial anomalies; or emergency services provided in a hospital, urgent care center, or ambulatory surgical center setting involving dental trauma. These types of emergency services are treated as health care services in this chapter.

(30) Designee--A contractor of HHSC authorized to act on behalf of HHSC under this chapter.

(31) Disability--A physical or mental impairment that substantially limits one or more of an individual's major life activities, such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, socializing, or working.

(32) Eligible provider--A network provider who provides medical services to a member or a non-network provider who agrees with an MCO to see a member for an agreed-upon rate on a case-by-case basis.

(33) Emergency behavioral health condition--Any condition, without regard to the nature or cause of the condition, that in the opinion of a prudent layperson possessing an average knowledge of health and medicine:

(A) requires immediate intervention and/or medical attention without which the client would present an immediate danger to themselves or others; or

(B) renders the client incapable of controlling, knowing, or understanding the consequences of his or her actions.

(34) Emergency Medical Condition--A medical condition manifesting itself by acute symptoms of recent onset and sufficient severity (including severe pain), such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical care could result in:

(A) placing the patient's health in serious jeopardy;

(B) serious impairment to bodily functions;

(C) serious dysfunction of any bodily organ or part;

(D) serious disfigurement; or

(E) serious jeopardy to the health of a pregnant woman or her unborn child.

(35) Emergency Service--A covered inpatient and outpatient service, furnished by a network provider or out-of-network provider that is qualified to furnish such service, that is needed to evaluate or stabilize an emergency medical condition and/or an emergency behavioral health condition. For health care MCOs, the term "emergency service" includes post-stabilization care services.

(36) Enrollment--The process by which a child determined to be eligible for CHIP is enrolled in a CHIP MCO serving the service area in which the child resides.

(37) Exclusive provider benefit plan (EPBP)--An MCO that complies with 28 TAC §§3.9201 - 3.9212 (relating to the Texas Department of Insurance's requirements for EPBPs), and contracts with HHSC to provide CHIP coverage.

(38) Experience rebate--The portion of the MCO's net income before taxes that is returned to the State in accordance with the MCO's contract with HHSC.

(39) Federal Poverty Level (FPL)--The income guidelines issued annually and published in the *Federal Register* by the United States Department of Health and Human Services.

(40) Health care managed care organization (health care MCO)--An entity that is licensed or approved by the Texas Department of Insurance to operate as a health maintenance organization or to issue an EPBP.

(41) Health care services--The acute care, behavioral health care, and health-related services that an enrolled population might reasonably require in order to be maintained in good health, including, at a minimum, emergency services and inpatient and outpatient services.

(42) Health maintenance organization (HMO)--An organization that holds a certificate of authority from the Texas Department of Insurance to operate as an HMO under Chapter 843 of the Texas Insurance Code, or a certified Approved Non-Profit Health Corporation formed in compliance with Chapter 844 of the Texas Insurance Code (relating to Certification of Nonprofit Health Corporations).

(43) Hospital--A licensed public or private institution as defined in the Texas Health and Safety Code at Chapter 241 (relating to Hospitals), or Chapter 261 (relating to Municipal Hospitals).

(44) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(45) Main dental home provider--See definition of "dental home" in this section.

(46) Main dentist--See definition of "dental home" in this section.

(47) Managed care--A health care delivery system or dental services delivery system in which the overall care of a patient is coordinated by or through a single provider or organization.

(48) Managed care organization (MCO)--A dental MCO or a health care MCO.

(49) Marketing--Any communication from an MCO to a client who is not enrolled with the MCO that can reasonably be interpreted as intended to influence the client's decision to enroll, not to enroll, or to disenroll from a particular MCO.

(50) Marketing materials--Materials that are produced in any medium by or on behalf of the MCO that can reasonably be interpreted as intending to market to potential members. Materials relating to the prevention, diagnosis or treatment of a medical or dental condition are not marketing materials.

(51) Medical home--A primary care provider (PCP) or specialty care provider who has accepted the responsibility for providing accessible, continuous, comprehensive, and coordinated care to members participating in an MCO contracted with HHSC.

(52) Medically necessary health care services--Means:

(A) Dental services and non-behavioral health services that are:

(i) reasonable and necessary to prevent illnesses or medical conditions, or provide early screening, interventions, or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a disability, cause illness or infirmity of a member, or endanger life;

(ii) provided at appropriate facilities and at the appropriate levels of care for the treatment of a member's health conditions;

(iii) consistent with health care practice guidelines and standards that are endorsed by professionally recognized health care organizations or governmental agencies;

(iv) consistent with the member's diagnoses;

(v) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency;

(vi) not experimental or investigative; and

(vii) not primarily for the convenience of the member or provider.

(B) Behavioral health services that:

(i) are reasonable and necessary for the diagnosis or treatment of a mental health or chemical dependency disorder, or to improve, maintain, or prevent deterioration of functioning resulting from such a disorder;

(ii) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care;

(iii) are furnished in the most appropriate and least restrictive setting in which services can be safely provided;

(iv) are the most appropriate level or supply of service that can safely be provided;

(v) could not be omitted without adversely affecting the member's mental and/or physical health or the quality of care rendered;

(vi) are not experimental or investigative; and

(vii) are not primarily for the convenience of the member or provider.

(53) Member education program--A planned program of education:

(A) concerning access to health care services or dental services through the MCO and about specific health or dental topics;

(B) that is approved by HHSC; and

(C) that is provided to members through a variety of mechanisms that must include, at a minimum, written materials and face-to-face or audiovisual communications.

(54) Member materials--All written materials produced or authorized by the MCO and distributed to members or potential members containing information concerning the managed care program. Member materials include member ID cards, member handbooks, provider directories, and marketing materials.

(55) Member--A child enrolled in a CHIP MCO.

(56) Participating MCO--An MCO that has a contract with HHSC to provide services to members.

(57) Primary care provider (PCP)--A physician or other provider who has agreed with the health care MCO to provide a medical home to members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care.

(58) Provider--A credentialed and licensed individual, facility, agency, institution, organization or other entity, and its employees and subcontractors, that has a contract with the MCO for the delivery of covered services to the MCO's members.

(59) Provider education program--Program of education about the CHIP managed care program and about specific health or dental care issues presented by the MCO to its providers through written materials and training events.

(60) Provider network or network--All providers that have contracted with the MCO for the CHIP program.

(61) Quality improvement--A system to continuously examine, monitor, and revise processes and systems that support and improve administrative and clinical functions.

(62) Recipient--An individual receiving CHIP services, including a person who is renewing eligibility for CHIP.

(63) Risk--The potential for loss as a result of expenses and costs of the MCO exceeding payments made by HHSC under the contract.

(64) Service area--The counties included in any HHSC-defined service area as applicable to each MCO.

(65) Qualified Alien--An alien who, at the time of application, satisfies the criteria established under 8 U.S.C. §1641(b).

(66) Significant traditional provider (STP)--A provider identified by HHSC as having provided a significant level of care to the target population.

(67) SSI--Supplemental Security Income.

(68) State Fiscal Year--The 12-month period beginning September 1 of each calendar year and ending August 31 of the following calendar year.

(69) State Plan--The plan permitted under federal law and approved by CMS that allows the state to implement the CHIP program.

(70) Value-added service--A service provided by an MCO that is in addition to the covered services included within the scope of the CHIP State Plan and the MCO's contract with HHSC.

**History**
- *Source Note: The provisions of this §370.4 adopted to be effective April 4, 2001, 26 TexReg 2519; amended to be effective September 1, 2003, 28 TexReg 7337; amended to be effective August 24, 2004, 29 TexReg 4448; amended to be effective January 1, 2006, 30 TexReg 8666; amended to be effective September 1, 2007, 32 TexReg 5359; amended to be effective March 1, 2012, 37 TexReg 1301; amended to be effective July 8, 2012, 37 TexReg 4854; amended to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983; amended to be effective January 22, 2015, 39 TexReg 9889.*

##### **1 Tex. Admin. Code § 370.10** Duties and Responsibilities of HHSC {#sec-370.10 omnilex-key=us-tx-regs-official--title-1--370.10}

HHSC is the single state agency responsible for the CHIP Program. The responsibilities include, but are not limited to the following:

(1) maintaining a state-designed Program to obtain health care and dental coverage for children in low-income families in a manner that qualifies for federal funding under Title XXI of the Social Security Act;

(2) making policy, including policy related to covered benefits provided under the Program, a duty which the Commission may not delegate to another agency or entity;

(3) contracting with appropriate individuals and organizations to provide health care and dental coverage, and other services related to the implementation or operation of the Program;

(4) conducting a review of each entity that enters into a contract with the Commission to ensure that the entity is available, prepared, and able to fulfill the entity's obligations under the contract; and

(5) ensuring that amounts spent for CHIP administration do not exceed any limit on administrative expenditures imposed by federal law.

**History**
- *Source Note: The provisions of this §370.10 adopted to be effective April 4, 2001, 26 TexReg 2519; amended to be effective September 1, 2003, 28 TexReg 7337; amended to be effective January 1, 2006, 30 TexReg 8666; amended to be effective March 1, 2012, 37 TexReg 1301; amended to be effective January 1, 2014, 38 TexReg 9477.*

##### **1 Tex. Admin. Code § 370.12** Maternal Depression Screening {#sec-370.12 omnilex-key=us-tx-regs-official--title-1--370.12}

The covered services under CHIP must include a maternal depression screening for an enrollee's mother, regardless of whether the mother is also an enrollee, that is performed during a covered well-child or other office visit for the enrollee that occurs before the enrollee's first birthday.

**History**
- *Source Note: The provisions of this §370.12 adopted to be effective August 29, 2018, 43 TexReg 5502.*

#### **Subchapter D** ELIGIBILITY FOR UNBORN CHILDREN

##### **1 Tex. Admin. Code § 370.401** Perinates {#sec-370.401 omnilex-key=us-tx-regs-official--title-1--370.401}

(a) An unborn child, also referred to as a "perinate," is eligible for CHIP if:

(1) the mother of the perinate is not eligible for Medicaid; and

(2) he or she meets CHIP income eligibility requirements in §370.44 of this chapter (relating to Income and Assets) and Subchapter I of this chapter (relating to Modified Adjusted Gross Income Methodology).

(b) A perinate who is CHIP eligible under subsection (a) of this section is:

(1) eligible for a 12-month continuous period if the household income is greater than 185% of FPL;

(2) exempt from the 90-day waiting period in §370.46 of this chapter (relating to Waiting Period);

(3) exempt from cost sharing in §370.321 of this chapter (relating to Requirements and Exemptions); and

(4) exempt from the requirements in §370.70 of this chapter (relating to Income Eligibility Check in 6th Month of Coverage).

(c) HHSC's designee is required to expedite eligibility and enrollment for perinates so as to allow quick access to healthcare.

(d) The Applicant for a perinate has the right to file a Medicaid application at any time after the child is born. If the child is eligible for Medicaid, the child will be enrolled in Medicaid.

**History**
- *Source Note: The provisions of this §370.401 adopted to be effective April 30, 2006, 31 TexReg 3527; amended to be effective September 1, 2007, 32 TexReg 5359; amended to be effective September 1, 2010, 35 TexReg 7726; amended to be effective January 1, 2014, 38 TexReg 9477.*

#### **Subchapter E** PROVIDER REQUIREMENTS

##### **1 Tex. Admin. Code § 370.452** Significant Traditional Provider {#sec-370.452 omnilex-key=us-tx-regs-official--title-1--370.452}

(a) The Health and Human Services Commission (HHSC) will determine whether a provider meets the definition of significant traditional provider (STP) at §370.4 of this title (relating to Definitions).

(b) If a provider is not initially determined to be an STP, the provider may appeal that determination by sending a written notice to the HHSC, Children's Health Insurance Program, P.O. Box 13247, Austin, Texas 78711-3247, stating that it wishes to appeal the STP determination. HHSC will then notify the provider of the appeal procedure to follow.

**History**
- *Source Note: The provisions of this §370.452 adopted to be effective September 1, 2006, 31 TexReg 6638; amended to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.453** Balance Billing {#sec-370.453 omnilex-key=us-tx-regs-official--title-1--370.453}

(a) A provider may only seek reimbursement from a CHIP managed care organization for a covered service provided to a CHIP member. A provider may not seek reimbursement or attempt to obtain payment from a CHIP member, the CHIP member's family, or the CHIP member's guardian for a covered service.

(b) The provisions of subsection (a) of this section apply to all covered services provided to a CHIP member, including emergency services provided by an out-of-network provider, in compliance with federal regulations (42 C.F.R. §457.515(f)).

(c) The provisions of subsection (a) of this section do not apply to:

(1) co-payment authorized under Subchapter C, Division 2 of this title (relating to Cost-Sharing Requirements);

(2) a covered service of CHIP with a capped benefit level, once the CHIP member exceeds the benefit cap; or

(3) services that are not covered services under CHIP.

(d) Providers may not bill or take other recourse against the CHIP member, the CHIP member's family, or the CHIP member's guardian for claims denied as a result of error attributed to the provider or Claims Processing Entity.

(e) This rule applies to providers that participate in a CHIP managed care organization's network and out-of-network providers.

**History**
- *Source Note: The provisions of this §370.453 adopted to be effective September 1, 2006, 31 TexReg 6638; amended to be effective January 22, 2015, 39 TexReg 9889.*

##### **1 Tex. Admin. Code § 370.454** Experience Rebate in the Children's Health Insurance Program {#sec-370.454 omnilex-key=us-tx-regs-official--title-1--370.454}

Each MCO participating in CHIP must pay to the State an experience rebate calculated according to the graduated rebate method described in the MCO's contract with HHSC.

**History**
- *Source Note: The provisions of this §370.454 adopted to be effective September 1, 2006, 31 TexReg 6638; amended to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.455** Provider Complaints and Appeals Processes {#sec-370.455 omnilex-key=us-tx-regs-official--title-1--370.455}

Provider complaints and claims payment appeals are subject to disposition consistent with the Texas Insurance Code and any applicable Texas Department of Insurance (TDI) regulations. Providers may report alleged violations to TDI.

**History**
- *Source Note: The provisions of this §370.455 adopted to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.456** Prohibition of Provider Discrimination Based on Immunization Status {#sec-370.456 omnilex-key=us-tx-regs-official--title-1--370.456}

(a) Pursuant to Texas Government Code §531.02119, a Children's Health Insurance Program (CHIP) provider may not refuse to provide health care services to a CHIP member based solely on the member's refusal or failure to obtain a vaccine or immunization for a particular infectious or communicable disease.

(b) Notwithstanding subsection (a) of this section, a provider is not in violation of this section if the provider:

(1) adopts a policy requiring some or all the provider's patients, including patients who are CHIP members to be vaccinated or immunized against a particular infection or communicable disease to receive health care services from the provider; and

(2) provides an exemption to the policy described in paragraph (1) of this subsection and accepts an oral or written request from the CHIP member or legally authorized representative, as defined by Texas Health and Safety Code §241.151, for an exemption from each required vaccination or immunization based on:

(A) a reason of conscience, including a sincerely held religious belief, observance, or practice, that is incompatible with the administration of the vaccination or immunization; or

(B) a recognized medical condition for which the vaccination or immunization is contraindicated.

(c) This section does not apply to a provider who is a specialist in:

(1) oncology; or

(2) organ transplant services.

(d) HHSC or its designee withholds payments to any CHIP participating provider only if HHSC determines, after review of the evidence obtained, that the provider is in violation of this section.

(1) HHSC withholds payments for services to the provider until HHSC determines the provider corrected the circumstances resulting in the vendor hold.

(2) A provider subject to an HHSC vendor hold under this section has the right to notice of the alleged violation and the procedures for requesting an appeal.

(3) A provider has the right to appeal an HHSC vendor hold as provided by Chapter 357, Subchapter I of this title (relating to Hearings Under the Administrative Procedure Act).

(4) If the final decision in the administrative appeal is adverse to the appellant, the appellant may obtain a judicial review by filing for review with a district court in Travis County not later than the 30th day after the date of the notice of the final decision as provided under Texas Government Code Chapter 2001.

(e) Subsection (d) of this section applies only to an individual provider. HHSC or its designee may not refuse to reimburse a provider who did not violate this section based on the provider's membership in a provider group or medical organization with an individual provider who violated this section.

**History**
- *Source Note: The provisions of this §370.456 adopted to
be effective April 29, 2025, 50 TexReg 2597; transferred effective
May 13, 2025, as published in the May 9, 2025, issue of the Texas
Register, 50 TexReg 2818.*

#### **Subchapter F** SPECIAL INVESTIGATIVE UNITS

##### **1 Tex. Admin. Code § 370.501** Purpose {#sec-370.501 omnilex-key=us-tx-regs-official--title-1--370.501}

(a) This subchapter implements the Health and Human Services Commission's (HHSC), Office of Inspector General (OIG) authority to approve annually, each managed care organization (MCO) plan to prevent and reduce waste, abuse, and fraud. This authority is granted by Texas Government Code §544.0353.

(b) An MCO that provides or arranges for the provision of health care services or dental services to an individual under the children's health insurance program (CHIP), must arrange for a special investigative unit to investigate fraudulent claims and other types of program abuse by recipients and providers. An MCO may choose to:

(1) establish and maintain the special investigative unit within the MCO; or

(2) contract with another entity for the investigation.

(c) An MCO must:

(1) develop a plan to prevent and reduce waste, abuse, and fraud;

(2) submit the plan annually to the HHSC-OIG for approval each year the MCO is enrolled with the State of Texas; and

(3) submit the plan 90 days before the start of the State fiscal year.

(d) If HHSC-OIG does not approve the initial plan to prevent and reduce waste, abuse, and fraud, the MCO must resubmit the plan to HHSC-OIG within 15 working days of receiving the denial letter, which will explain the deficiencies. If the plan is not resubmitted within the time allotted, the MCO will be in default and remedies or sanctions may be imposed.

(e) If the MCO elects to contract with another entity for the investigation of fraudulent claims and other types of program abuse as referenced in subsection (b)(2) of this section, the MCO must adhere to all requirements of Title 42, §438.230 of the Code of Federal Regulations.

**History**
- *Source Note: The provisions of this §370.501 adopted to
be effective August 8, 2004, 29 TexReg 7302; amended to be effective
March 1, 2012, 37 TexReg 1301; amended to be effective April 1, 2025,
50 TexReg 833.*

##### **1 Tex. Admin. Code § 370.502** Managed Care Organization's Plans and Responsibilities in Preventing and Reducing Waste, Abuse, and Fraud {#sec-370.502 omnilex-key=us-tx-regs-official--title-1--370.502}

(a) Each managed care organization (MCO) subject to this section must develop a plan to prevent and reduce waste, abuse, and fraud and submit that plan annually to the Health and Human Services Commission (HHSC), Office of Inspector General (OIG) for approval.

(b) The MCO is responsible for investigating possible acts of waste, abuse, or fraud for all services, including those that the MCO subcontracts to outside entities.

(c) The plan submitted to the HHSC-OIG must include the following information to be considered for approval.

(1) A description of the MCO's procedures for detecting possible acts of waste, abuse, and fraud by providers. The description must address each of the following requirements:

(A) use of audits to monitor compliance and assist in detecting and identifying CHIP program violations and possible waste, abuse, and fraud overpayments through data matching, analysis, trending, and statistical activities;

(B) monitoring of service patterns for providers, subcontractors, and recipients;

(C) use of a hotline or another mechanism to report potential or suspected violations;

(D) use of random payment review of claims submitted by providers for reimbursement to detect potential waste, abuse, or fraud;

(E) use of edits or other evaluation techniques to prevent payment for fraudulent or abusive claims;

(F) use of routine validation of MCO data; and

(G) verification that MCO members actually received services that were billed.

(2) A description of the MCO's procedures for investigating possible acts of waste, abuse, and fraud by providers. The procedures must satisfy the requirements in subparagraphs (A) - (C) of this paragraph.

(A) The MCO must conduct a preliminary investigation within 15 working days of the identification or reporting of suspected or potential waste, abuse, or fraud.

(B) The preliminary investigation must include the following:

(i) Determining if the MCO has received any previous reports of incidences of suspected waste, abuse, or fraud or conducted any previous investigations of the provider in question. If so, the investigation should include a review of all materials related to the previous investigations, the outcome of the previous investigations, and a determination of whether the new allegations are the same or relate to the previous investigation.

(ii) Determining if the service provider has received any educational training from the MCO in regard to the allegation.

(iii) Conducting a review of the provider's billing pattern to determine if there are any suspicious indicators.

(iv) Reviewing the provider's payment history for the past three years, if available, to determine if there are any suspicious indicators.

(v) Reviewing the policies and procedures for the program type in question to determine if what has been alleged is a violation.

(C) If it is determined that suspicious indicators of possible waste, abuse, or fraud exist, within 15 working days from the conclusion of subparagraphs (A) and (B) of this paragraph, the MCO must select a sample for further review. The sample must consist of a minimum of 50 recipients or 15% of a provider's claims related to the suspected waste, abuse, and fraud; provided, however, that if the MCO selects a sample based upon 15% of the claims, the sample must include claims relating to at least 50 recipients. The MCO must:

(i) within 15 working days of the selection of the sample, request medical or dental records and encounter data for the sample recipients.

(ii) review the requested medical or dental records and encounter data within 45 working days of receipt of the records to:

(I) validate the sufficiency of service delivery data and to assess utilization and quality of care;

(II) ensure that the encounter data submitted by the provider is accurate; and

(III) evaluate if the review of other pertinent records is necessary to determine if waste, abuse, or fraud has occurred. If the review of additional records is necessary then conduct such review.

(3) A description of the MCO's procedures for detecting possible acts of waste, abuse, and fraud by recipients. The description must address the following:

(A) Review of claims when waste, abuse, or fraud is suspected or reported to determine if:

(i) Treatment(s) and/or medication(s) prescribed by more than one provider appears to be duplicative, excessive, or contraindicated;

(ii) Recipients are using more than one provider to obtain similar treatments and /or medications;

(iii) Providers other than the assigned Primary Care Provider (PCP) are treating the recipient, and there is no evidence that the recipient was treated by the assigned PCP for a similar or related condition; and

(iv) The recipient has a high volume of emergency room visits with a non-emergent diagnosis.

(B) Review medical or dental records for the recipients in question if claims review does not clearly determine if waste, abuse, or fraud has occurred.

(C) For health care MCOs, use of edits or other evaluation techniques to identify possible overuse or abuse of psychotropic or controlled medications by recipients who are allegedly treated at least monthly by two or more physicians. A physician includes: psychiatrists, pain management specialists, anesthesiologists, and physical medicine and rehabilitation specialists.

(4) A description of the MCO's procedures for investigating possible acts of waste, abuse, and fraud by recipients. The procedures must satisfy the requirements in subparagraphs (A) - (B) of this paragraph, as applicable.

(A) An MCO must conduct a preliminary investigation within 15 working days of the identification or reporting of suspected or potential waste, abuse, or fraud.

(B) For a health care MCO, a preliminary investigation must include the following:

(i) Review of acute care and emergency room claims submitted by providers for the recipient suspected of waste, abuse, or fraud.

(ii) Analysis of pharmacy claim data submitted by providers for the recipient suspected of waste, abuse, or fraud to determine possible abuse of controlled or non-controlled medications. If the MCO does not have the data necessary to conduct the pharmacy claims review, the MCO must request the data within 15 working days of the initial identification or reporting of the suspected or potential waste, abuse, or fraud.

(iii) Analysis of claims submitted by providers to determine if the diagnosis is appropriate for the medications prescribed.

(5) A description of the MCO's internal procedures for referring possible acts of waste, abuse, or fraud to the MCO's Special Investigative Unit (SIU) and the mandatory reporting of possible acts of waste, abuse, or fraud by providers or recipients to the HHSC-OIG. The procedures must satisfy the requirements in subparagraphs (A) - (E) of this paragraph.

(A) Assign an officer or director the responsibility and authority for reporting all investigations resulting in a finding of possible acts of waste, abuse, or fraud to the OIG. An officer could be but is not limited to a Compliance Officer, a Manager of Government Programs, or a Regulatory Compliance Analyst.

(B) Provide specific and detailed internal procedures for officers, directors, managers, and employees to report possible acts of waste, abuse, and fraud to the MCO's SIU. The procedures must include but are not limited to:

(i) Guidance regarding what information must be reported to the MCO's SIU.

(ii) A requirement that information must be reported to the MCO's SIU within 24 hours of identification or reporting of suspected waste, abuse, and fraud.

(C) Provide specific and detailed internal procedures for the SIU to report investigations resulting in a finding of waste, abuse, or fraud to the assigned officer or director. The procedures must include but are not limited to:

(i) Guidance regarding what information must be reported to the assigned officer or director.

(ii) A requirement that possible acts of waste, abuse, or fraud be reported to the assigned officer or director must occur within 15 working days of making the determination.

(D) Utilizing the HHSC-OIG fraud referral form, the assigned officer or director must report and refer all possible acts of waste, abuse or fraud to the HHSC-OIG within 30 working days of receiving the reports of possible acts of waste, abuse or fraud from the SIU. The report and referral must include an investigative report identifying the allegation, statutes/regulations violated or considered, and the results of the investigation; copies of program rules and regulations violated for the time period in question; the estimated overpayment identified; a summary of interviews conducted; the encounter data submitted by the provider for the time period in question; and all supporting documentation obtained as the result of the investigation. This requirement applies to all reports of possible acts of waste, abuse, and fraud with the exception of an expedited referral.

(E) An expedited referral is required when the MCO has reason to believe that a delay may result in:

(i) harm or death to patients;

(ii) the loss, destruction, or alteration of valuable evidence;

(iii) a potential for significant monetary loss that may not be recoverable; or

(iv) hindrance of an investigation or criminal prosecution of the alleged offense.

(6) A description of the MCO's procedures for educating recipients and providers and training personnel to prevent waste, abuse, and fraud. The procedures must satisfy the requirements in subparagraphs (A) - (H) of this paragraph.

(A) On an annual basis, the MCO must ensure that waste, abuse and fraud training is provided to each employee and subcontractor who is directly involved in any aspect of CHIP. At a minimum, training is required for all individuals responsible for data collection, provider enrollment or disenrollment, encounter data, claims processing, utilization review, appeals or grievances, quality assurance, and marketing.

(B) The training must be specific to the area of responsibility for the MCO and subcontractor staff receiving the training and contain examples of waste, abuse or fraud in their particular area of interest.

(C) The MCO must ensure that general training is provided to all CHIP managed care staff of the MCO and its subcontractors that are not directly involved with the areas listed in subparagraph (A) of this paragraph. The general training must provide information about the definition of waste, abuse, and fraud; how to report suspected waste, abuse, and fraud and to whom the suspected waste, abuse, and fraud is reported.

(D) The organization must provide waste, abuse, and fraud training to all new MCO and subcontractor staff that will be directly involved with any aspect of CHIP within 90 days of the employee's employment date.

(E) Provide updates to all affected areas when changes to policy and/or procedure may affect their area(s). The updates must be provided within 20 working days of the changes occurring.

(F) Educate recipients, providers, and employees about their responsibilities, the responsibility of others, the definition of waste, abuse, and fraud and how and where to report it. Appropriate methods of educating recipients, providers, and employees may include but are not limited to newsletters, pamphlets, bulletins, and provider manuals.

(G) The MCOs will maintain a training log for all training pertaining to waste, abuse, and/or fraud in CHIP. The log must include the name and title of the trainer, names of all staff attending the training, and the date and length of the training. The log must be provided immediately upon request to the HHSC-OIG, Office of the Attorney General's (OAG)-Medicaid Fraud Control Unit (MFCU) and OAG-Civil Medicaid Fraud Division (CMFD), and the United States Health and Human Services-Office of Inspector General (HHS-OIG).

(H) Written standards of conduct, and written policies and procedures that include a clearly delineated commitment from the MCOs for detecting, preventing and investigating waste, abuse, and fraud.

(7) The name, title, address, telephone number, and fax number of the assigned officer or director responsible for carrying out the plan;

(A) The person carrying out the plan should be but is not limited to a Compliance Officer, a Manager of Government Programs, Regulatory Compliance Analyst, Director of Quality Integrity or a person in senior management.

(B) When the person that is responsible for carrying out the plan changes, the required information is to be reported to HHSC-OIG within 15 working days of the change.

(8) A description, process flow diagram, or chart outlining the organizational arrangement of the MCO's personnel responsible for investigating and reporting possible acts of waste, abuse, or fraud; and

(9) Advertising and marketing materials utilized by the MCOs must be complete and accurately reflect the information about the MCO. Marketing materials includes any informational materials targeted to recipients.

(d) Each MCO must satisfy the requirements in paragraphs (1) - (3) of this subsection related to investigations of waste, abuse, and fraud conducted by the MCO's SIU.

(1) On a monthly basis, submit to the HHSC-OIG a report listing all investigations conducted that resulted in no findings of waste, abuse, or fraud. The report shall include the allegation, the investigated recipient's or provider's CHIP number, the source, the time period in question, and the date of receipt of the identification and/or reporting of suspected and/or potential waste, abuse, or fraud.

(2) Maintain a log of all incidences of suspected waste, abuse and fraud received by the MCO, regardless of the source. The log shall contain the subject of the complaint, the source, the allegation, the date the allegation was received, the recipient's or provider's CHIP number, and the status of the investigation.

(3) The log should be provided at the time of a reasonable request to the HHSC-OIG, OAG-MFCU, OAG-CMFD, and the HHS-OIG. A reasonable request means a request made during hours that the business or premises is open for business.

(e) MCOs must maintain the confidentiality of any patient information relevant to an investigation of waste, abuse, or fraud.

(f) MCOs must retain records obtained as the result of an investigation conducted by the SIU for a minimum period of five years or until all audit questions, appealed hearings, investigations, or court cases are resolved.

(g) Failure of the provider to supply the records requested by the MCO will result in the provider being reported to the HHSC-OIG as refusing to supply records upon request and the provider may be subject to sanction or immediate payment hold.

**History**
- *Source Note: The provisions of this §370.502 adopted to be effective August 8, 2004, 29 TexReg 7302; amended to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.503** Managed Care Organization's Contracts {#sec-370.503 omnilex-key=us-tx-regs-official--title-1--370.503}

If a Managed Care Organization (MCO) contracts for the investigation of fraudulent claims and other types of programs abuse by recipients and providers under subsection 370.501(e), within 10 working days of executing the contract the MCO shall file with the Health and Human Services Commission, Office of Inspector General (HHSC-OIG):

(1) A copy of the written contract including any and all attachments.

(2) The names, titles, addresses, telephone numbers, and fax numbers of the principals of the entity with which the MCO has contracted; and

(3) A description of the qualifications of the principals of the entity with which the MCO has contracted to perform the contracted responsibilities.

**History**
- *Source Note: The provisions of this §370.503 adopted to be effective August 8, 2004, 29 TexReg 7302.*

##### **1 Tex. Admin. Code § 370.504** Review of Managed Care Organization's Records {#sec-370.504 omnilex-key=us-tx-regs-official--title-1--370.504}

(a) Immediately upon request, the Health and Human Services Commission, Office of Inspector General (HHSC-OIG), Office of the Attorney General-Medicaid Fraud Control Unit (OAG-MFCU) and OAG, Office of the Attorney General-Civil Medicaid Fraud Division (OAG-CMFD), and the United States Health and Human Services, Office of Inspector General (HHS-OIG) may review the records of a managed care organization (MCO) to determine compliance with this subchapter.

(b) Upon receipt of a record review request from any state or federal agency authorized to conduct compliance, regulatory, or program integrity functions, an MCO must:

(1) At no charge to the entities identified in subsection (a) of this section, provide the records requested by a properly identified agent of any state or federal agency authorized to conduct compliance, regulatory, or program integrity functions on the provider, person, MCO, or the services rendered by the provider or person within 24 hours of the request.

(2) An exception to the 24 hours stated in paragraph (1) of this subsection may be made when the OIG or another state or federal agency representative reasonably believes that the requested records are about to be altered or destroyed or that the request may be completed at the time of the request and/or in less than 24 hours.

(c) The request for record review may include but is not limited to:

(1) clinical medical or dental patient records;

(2) other records pertaining to the patient;

(3) any other records of services provided to CHIP or other health and human services program recipients and payments made for those services;

(4) documents related to diagnosis, treatment, service, lab results, charting;

(5) billing records, invoices, documentation of delivery items, equipment, or supplies;

(6) radiographs and study models related to orthodontia services;

(7) business and accounting records with backup support documentation;

(8) statistical documentation;

(9) computer records and data; and

(10) contracts with providers and subcontractors.

(d) Failure to produce the records or make the records available for the purpose of reviewing, examining, and securing custody of the records may result in HHSC imposing contractual remedies, HHSC-OIG imposing sanctions against the MCO as described in Chapter 371, Subchapter G of this title (relating to Legal Action Relating to Providers of Medical Assistance), or both contractual remedies and sanctions.

**History**
- *Source Note: The provisions of this §370.504 adopted to be effective August 8, 2004, 29 TexReg 7302; amended to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.505** Recovery of Funds {#sec-370.505 omnilex-key=us-tx-regs-official--title-1--370.505}

(a) If a managed care organization (MCO) suspects fraud or abuse in the Medicaid or CHIP program, based on information, data, or facts obtained by the MCO, it must:

(1) immediately notify the Health and Human Services Commission-Office of Inspector General (HHSC-OIG) and the Office of the Attorney General (OAG);

(2) following the completion of ordinary due diligence regarding a suspected overpayment, begin payment recovery efforts subject to subsection (b) of this section; and

(3) ensure that any payment recovery efforts in which the MCO engages are in accordance with this subchapter.

(b) If the amount to be recovered exceeds $100,000, the MCO may not engage in payment recovery efforts if it receives a notice from the HHSC-OIG or the OAG indicating that the MCO is not authorized to proceed with recovery effort. Such notice must be supplied no later than the tenth business day after the MCO notifies the HHSC-OIG and OAG of the suspected fraud or abuse.

(c) If the HHSC-OIG or the OAG has assumed responsibility for completion of the investigation and final disposition of any administrative, civil, or criminal action taken by the state or federal government, the HHSC-OIG or the OAG will determine and direct the collection of any overpayment.

(d) An MCO may retain any money recovered by the MCO.

(e) The HHSC-OIG will distribute any amounts collected to the MCO, less any costs of investigation and collection proceedings.

(f) An MCO must submit a quarterly report to the HHSC-OIG detailing the amount of money recovered.

**History**
- *Source Note: The provisions of this §370.505 adopted to be effective August 8, 2004, 29 TexReg 7302; amended to be effective March 1, 2012, 37 TexReg 1301.*

#### **Subchapter G** STANDARDS FOR CHIP MANAGED CARE

##### **1 Tex. Admin. Code § 370.601** Applicability of Medicaid Managed Care Standards to CHIP {#sec-370.601 omnilex-key=us-tx-regs-official--title-1--370.601}

The following requirements of Chapter 353, Subchapter E of this title (relating to Standards for Medicaid Managed Care) apply to CHIP managed care, except that references to Medicaid are replaced with CHIP:

(1) Section 353.405 (relating to Marketing);

(2) Section 353.407 (relating to Requirements of Managed Care Plans);

(3) Section 353.409 (relating to Scope of Services);

(4) Section 353.411 (relating to Accessibility of Services);

(5) Section 353.417 (relating to Quality Assessment and Performance Improvement); and

(6) Section 353.419 (relating to Financial Standards).

**History**
- *Source Note: The provisions of this §370.601 adopted to be effective March 1, 2012, 37 TexReg 1301.*

##### **1 Tex. Admin. Code § 370.602** Member Complaints and Appeals {#sec-370.602 omnilex-key=us-tx-regs-official--title-1--370.602}

(a) CHIP member complaints and appeals are subject to disposition consistent with applicable federal and state laws, regulations and rules, including the Texas Insurance Code and Texas Department of Insurance (TDI) regulations.

(b) Any member, or a representative acting on behalf of the member, may file a complaint or appeal with their managed care organization (MCO) through the MCO's internal appeal and complaint system.

(c) Any person, including those dissatisfied with the MCO's resolution of a member complaint or appeal, may submit a complaint to report an alleged violation to TDI.

(d) Any member or a representative acting on behalf of the member may request an external review of the MCO's adverse benefit determination, to be conducted by an independent review organization, when:

(1) the MCO internal appeal and complaint system regarding the adverse benefit determination has been exhausted; and

(2) the member or representative acting on behalf of the member is dissatisfied with the MCO's resolution of the appeal of an adverse benefit determination.

**History**
- *Source Note: The provisions of this §370.602 adopted to be effective March 1, 2012, 37 TexReg 1301; amended to be effective February 10, 2021, 46 TexReg 907.*

##### **1 Tex. Admin. Code § 370.604** Managed Care Organization Requirements Concerning Out-of-Network Providers {#sec-370.604 omnilex-key=us-tx-regs-official--title-1--370.604}

(a) Network adequacy. Each MCO participating in CHIP must offer a network of providers that is sufficient to meet the needs of CHIP members enrolled in the MCO. HHSC uses reports from the MCOs and complaints received from providers and members to monitor MCO members' access to an adequate provider network. Subsection (c) of this section describes the reporting requirements with which an MCO must comply.

(b) MCO requirements concerning treatment of members by out-of-network providers.

(1) An MCO must allow a provider to submit a referral of its member(s) to an out-of-network provider, must timely issue the proper authorization for such referral consistent with managed care contract requirements for authorization of medically necessary services, and must reimburse the out-of-network provider for authorized services provided in accordance with statutory and contractual timeframes when:

(A) CHIP covered services are medically necessary, as described in section 370.4(49) of this chapter (relating to Definitions), and these services are not available through an in-network provider;

(B) a provider currently providing authorized services to the member requests authorization for such services to be provided to the member by an out-of-network provider; and

(C) the authorized services are provided within the time period specified in the MCO's authorization. If the services are not provided within the required time period, the requesting provider must submit a new referral request to the MCO prior to the provision of services.

(2) An MCO may not refuse to reimburse an out-of-network provider for emergency services.

(3) Health care MCO requirements concerning emergency services.

(A) A health care MCO must allow its members to be treated by any emergency services provider for emergency services, and for services to determine if an emergency condition exists. The health care MCO must pay for such services.

(B) A health care MCO may not require an authorization for emergency services or for services to determine if an emergency condition exists.

(C) A health care MCO may not refuse to reimburse an out-of-network provider for post-stabilization care services provided as a result of the MCO's failure to arrange for and authorize a timely transfer of a member.

(4) Dental MCO requirements concerning emergency services.

(A) A dental MCO must allow its members to be treated for covered emergency services provided outside of a hospital or ambulatory surgical center setting and for covered services provided outside of such settings to determine if an emergency condition exists. The dental MCO must pay for such services unless subparagraph (C) of this paragraph specifies otherwise.

(B) A dental MCO may not require an authorization for the services described in subparagraph (A) of this paragraph.

(C) A dental MCO is not responsible for payment of non-capitated emergency services and post-stabilization care provided in a hospital or ambulatory surgical center setting or for devices for craniofacial anomalies. A dental MCO is not responsible for hospital and physician services, anesthesia, drugs related to treatment, and post-stabilization care for:

(i) a dislocated jaw, traumatic damage to a tooth, or removal of a cyst;

(ii) an oral abscess of tooth or gum origin; or

(iii) craniofacial anomalies.

(D) The services and benefits described in subparagraph (C) of this paragraph are reimbursed through the health care MCO.

(5) An MCO may be required by contract with HHSC to allow members to obtain services from out-of-network providers in circumstances other than those described in paragraphs (1) - (4) of this subsection.

(c) Reporting requirements.

(1) Each MCO that contracts with HHSC to provide health care services or dental services to members in a service area must submit an Out-of-Network quarterly report to HHSC.

(2) Each Out-of-Network quarterly report must contain information about members enrolled in CHIP. The report must include the following information:

(A) For a health care MCO, the total number of hospital admissions, as well as the number of admissions that occur at each out-of-network hospital. Each out-of-network hospital must be identified.

(B) For a health care MCO, the total number of emergency room visits, as well as the total number of emergency room visits that occur at each out-of-network hospital. Each out-of-network hospital must be identified.

(C) Total dollars billed for services other than those described in subparagraphs (C) and (D) of this paragraph, as well as total dollars billed by out-of-network providers for other services.

(D) Any additional information that HHSC requires.

(3) HHSC will determine the specific form of the report described in this subsection and will include the report form as part of the CHIP managed care contract between HHSC and the MCOs.

(d) Utilization.

(1) Upon review of the reports described in subsection (c) of this section, HHSC may determine that an MCO exceeded the maximum out-of-network usage standards HHSC set for out-of-network access to health care services and dental services during the reporting period.

(2) Out-of-network usage standards.

(A) Inpatient admissions: No more than 15 percent of a health care MCO's total hospital admissions, by service area, may occur in out-of-network facilities.

(B) Emergency room visits: No more than 20 percent of a health care MCO's total emergency room visits, by service area, may occur in out-of-network facilities.

(C) Other services: For services that are not included in subparagraph (A) or (B) of this paragraph, no more than 20 percent of total dollars billed to an MCO may be billed by out-of-network providers.

(3) Special considerations in calculating a health care MCO's out-of-network usage of inpatient admissions and emergency room visits.

(A) In the event that a health care MCO exceeds the maximum out-of-network usage standard set by HHSC for inpatient admissions or emergency room visits, HHSC may modify the calculation of that health care MCO's out-of-network usage for that standard if:

(i) the admissions or visits to a single out-of-network facility account for 25 percent or more of the health care MCO's admissions or visits in a reporting period; and

(ii) HHSC determines that the health care MCO has made all reasonable efforts to contract with that out-of-network facility as a network provider without success.

(B) In determining whether a health care MCO has made all reasonable efforts to contract with the single out-of-network facility described in subparagraph (A) of this paragraph, HHSC will consider at least the following information:

(i) How long the health care MCO has been trying to negotiate a contract with the out-of-network facility;

(ii) The in-network payment rates the health care MCO has offered to the out-of-network facility;

(iii) The other, non-financial contractual terms the health care MCO has offered to the out-of-network facility, particularly those relating to prior authorization and other utilization management policies and procedures;

(iv) The health care MCO's history with respect to claims payment timeliness, overturned claims denials, and provider complaints;

(v) The health care MCO's solvency status; and

(vi) The out-of-network facility's reasons for not contracting with the health care MCO.

(C) If the conditions described in subparagraph (A) of this paragraph are met, HHSC may modify the calculation of the health care MCO's out-of-network usage for the relevant reporting period and standard by excluding from the calculation the inpatient admissions or emergency room visits to that single out-of-network facility.

(e) Reimbursement rates.

(1) HHSC does not set reimbursement rate standards for out-of-network CHIP providers. MCOs are required to reimburse providers for emergency services and assessments in accordance with Texas Insurance Code §1271.155.

(2) A health care or dental MCO providing CHIP out-of-network services must comply with the reimbursement standards set forth by the Texas Department of Insurance for out-of-network providers.

(f) Provider complaints.

(1) HHSC accepts and investigates provider complaints regarding overuse of out-of-network providers.

(2) Not later than the 60th day after HHSC receives a provider complaint, HHSC notifies the provider who initiated the complaint of the conclusions of HHSC's investigation into the complaint. The notification to the complaining provider will include a description of the corrective action plan, if required, that HHSC has initiated under subsection (g) of this section.

(3) Provider complaints regarding reimbursement rates should be submitted to the Texas Department of Insurance.

(g) Corrective action plan.

(1) HHSC initiates a corrective action plan with an MCO if HHSC determines through investigation that:

(A) the MCO did not comply with the out-of-network utilization standards for health care services and dental services described in subsection (d) of this section; and

(B) HHSC has not granted a special consideration under subsection (d)(3).

(2) HHSC may impose other contractual remedies as appropriate.

(h) Application to Pharmacy Providers. The requirements of this section do not apply to providers of outpatient pharmacy benefits.

**History**
- *Source Note: The provisions of this §370.604 adopted to be effective January 22, 2015, 39 TexReg 9890.*

#### **Subchapter H** OUTPATIENT PHARMACY SERVICES

##### **1 Tex. Admin. Code § 370.701** Applicability of Medicaid Managed Care Standards for Outpatient Pharmacy Services to CHIP {#sec-370.701 omnilex-key=us-tx-regs-official--title-1--370.701}

Requirements of Chapter 353, Subchapter J of this title (relating to Outpatient Pharmacy Services) apply to the CHIP program, with the following exceptions:

(1) references to Medicaid are replaced with CHIP;

(2) the CHIP program does not have a preferred drug list; therefore, requirements relating to the preferred drug list do not apply to the CHIP program; and

(3) Section 353.913 of this title (relating to Managed Care Organization Requirements Concerning Out-of-network Outpatient Pharmacy Services) does not apply to the CHIP program.

**History**
- *Source Note: The provisions of this §370.701 adopted to be effective March 1, 2012, 37 TexReg 1301.*

#### **Subchapter I** MODIFIED ADJUSTED GROSS INCOME METHODOLOGY

##### **1 Tex. Admin. Code § 370.801** Purpose and Scope {#sec-370.801 omnilex-key=us-tx-regs-official--title-1--370.801}

The purpose of this subchapter is to establish income eligibility requirements for the State Children's Health Insurance Program (CHIP) in accordance with §2102(b) of the Social Security Act (42 U.S.C. §1397bb(b)).

**History**
- *Source Note: The provisions of this §370.801 adopted to be effective January 1, 2014, 38 TexReg 9477.*

##### **1 Tex. Admin. Code § 370.803** Definitions {#sec-370.803 omnilex-key=us-tx-regs-official--title-1--370.803}

In this subchapter, words and terms have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--An individual who applies for health and dental care coverage on behalf of the child. An applicant can only be:

(A) a child's parent, whether biological or adoptive;

(B) a child's grandparent, relative, or other adult who provides care for the child;

(C) a minor not living with an adult applying for himself/herself;

(D) a child's step-parent; or

(E) a taxpayer who expects to claim the child on a federal income tax return for the taxable year in which CHIP eligibility is requested.

(2) Child--An adoptive, step, or natural child who is under age 19.

(3) Federal Poverty Income Level (FPL)--The income guidelines issued annually and published in the *Federal Register* by the U.S. Department of Health and Human Services.

(4) HHSC--The Texas Health and Human Services Commission.

(5) Household composition--The group of individuals who are considered in determining eligibility for an applicant or recipient for certain medical programs based on tax status, tax relationships, living arrangements, and family relationships, referenced in 42 CFR §435.603(f) as "household."

(6) Household income--The sum of the individual income of every individual within an applicant's or recipient's household composition, from which is subtracted the standard income disregard.

(7) Household size--The number of individuals in an applicant's or recipient's household composition, plus the number of unborn children if applicable, referenced in 42 CFR §435.603(b) as "family size."

(8) Individual income--The sum of certain income received by individuals in a household composition, from which is subtracted certain expenses, referenced in 42 CFR §435.603(e) as "MAGI-based income."

(9) MAGI--Modified adjusted gross income.

(10) Non-custodial parent--A parent who does not have custody of a child pursuant to a court order, or binding agreement of separation or divorce.

(11) Parent--An individual who is the adoptive, step, or natural parent of a child.

(12) Recipient--An individual receiving CHIP services, including a person who is renewing eligibility for CHIP.

(13) Sibling--An individual under age 19 who is an adoptive, step, or natural sibling of a child.

(14) Standard income disregard--An income disregard equal to five percentage points of FPL for the applicable household size.

(15) Tax dependent--An individual who expects to be claimed as a dependent on a federal income tax return for the taxable year in which CHIP eligibility is requested.

(16) Taxpayer--An individual, or a married couple, who expects:

(A) to file a federal income tax return for the taxable year in which CHIP eligibility is requested;

(B) if married, to file a joint federal income tax return for the taxable year in which CHIP eligibility is requested;

(C) that no other taxpayer will be able to claim him, her, or them as a tax dependent on a federal income tax return for the taxable year in which CHIP eligibility is requested; or

(D) to claim a personal exemption deduction on his or her federal income tax return for one or more applicants, who may or may not include himself or herself and his or her spouse.

(17) Taxable year--The 12-month period between January and December that an individual uses to report income for federal income tax purposes.

**History**
- *Source Note: The provisions of this §370.803 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983.*

##### **1 Tex. Admin. Code § 370.805** Methodology {#sec-370.805 omnilex-key=us-tx-regs-official--title-1--370.805}

(a) HHSC determines income eligibility for CHIP by:

(1) determining the applicant's or recipient's household composition in accordance with §370.807 of this subchapter (relating to Determination of Household Composition);

(2) calculating the individual income of each person in the applicant's or recipient's household composition in accordance with §370.809 of this subchapter (relating to Calculation of Individual Income);

(3) determining if the individual income of each individual in the applicant's or recipient's household composition is included in the calculation of household income in accordance with §370.811 of this subchapter (relating to Determination Regarding Including an Individual's Income in the Household Income); and

(4) calculating the applicant's or recipient's household income in accordance with §370.813 of this subchapter (relating to Calculation of Household Income).

(b) To be eligible for CHIP, the applicant's or recipient's household income must be less than or equal to 200% of the Federal Poverty Level (FPL) for a family of the size involved.

**History**
- *Source Note: The provisions of this §370.805 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983.*

##### **1 Tex. Admin. Code § 370.807** Determination of Household Composition {#sec-370.807 omnilex-key=us-tx-regs-official--title-1--370.807}

(a) To determine household composition, an individual is designated as:

(1) a taxpayer;

(2) a tax dependent who does not meet any exceptions;

(3) a tax dependent who meets one or more of the exceptions; or

(4) not a taxpayer or tax dependent.

(b) If the individual is a taxpayer, the following individuals are included in the taxpayer's household composition:

(1) the taxpayer;

(2) the taxpayer's spouse, if the taxpayer and the spouse live together;

(3) the taxpayer's spouse, if the taxpayer and spouse file a joint federal income tax return; and

(4) any individual the taxpayer expects to claim as a tax dependent for the taxable year in which CHIP eligibility is requested.

(c) If the individual is a tax dependent, the following individuals are included in the tax dependent's household composition:

(1) the tax dependent;

(2) the taxpayer's household claiming the tax dependent; and

(3) the tax dependent's spouse, if the tax dependent and the spouse live together.

(d) The rules in subsection (e) of this section apply to a tax dependent who:

(1) is not the taxpayer's spouse or the taxpayer's child;

(2) is a child who lives with both parents whose parents did not file a joint federal income tax return and was claimed as a tax dependent by one parent; or

(3) is a child who is claimed as a tax dependent by a non-custodial parent pursuant to 42 CFR §435.603(f)(2).

(e) The household composition of an individual who is not a taxpayer or a tax dependent includes:

(1) the individual;

(2) the individual's spouse;

(3) the individual's children; and

(4) if the individual is a child, the individual's parents and siblings.

(f) A spouse is included in an individual's household composition if living together or filing a joint federal income tax return.

(g) Subsection (c) of this section applies to an individual who is both a tax dependent and taxpayer.

(h) The number of unborn children a pregnant individual is expected to deliver is included in the household composition of that pregnant individual or an applicant under §370.401 of this chapter (relating to Perinates).

**History**
- *Source Note: The provisions of this §370.807 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983; amended to be effective November 20, 2016, 41 TexReg 9008.*

##### **1 Tex. Admin. Code § 370.809** Calculation of Individual Income {#sec-370.809 omnilex-key=us-tx-regs-official--title-1--370.809}

(a) HHSC calculates individual income in accordance with Internal Revenue Code §36B(d)(2)(B), with adjustments for lump sum payments, certain income of American Indians/Alaskan Natives, and scholarships, awards, and fellowship grants used for education purposes.

(b) Assets tests do not apply to groups subject to the provisions of this subchapter. HHSC may collect information on assets and resources from Medicaid program applicants and recipients during the eligibility determination process.

**History**
- *Source Note: The provisions of this §370.809 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983.*

##### **1 Tex. Admin. Code § 370.811** Determination Regarding Inclusion of Individual Income in the Household Income {#sec-370.811 omnilex-key=us-tx-regs-official--title-1--370.811}

(a) Individual income is counted as part of the household income unless:

(1) the individual is a child who is included in the household composition of a parent and is not required to file a federal income tax return for the taxable year in which CHIP eligibility is requested; or

(2) the individual is a tax dependent and is not required to file a federal income tax return for the taxable year in which CHIP eligibility is requested.

(b) Individual income described in subsection (a)(1) of this section is excluded from the household income of each individual in the household composition as defined in §370.807 of this subchapter (relating to Determination of Household Composition).

(c) Individual income described in subsection (a)(2) of this section is excluded from the household income of the taxpayer.

**History**
- *Source Note: The provisions of this §370.811 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983.*

##### **1 Tex. Admin. Code § 370.813** Calculation of Household Income {#sec-370.813 omnilex-key=us-tx-regs-official--title-1--370.813}

For each applicant, the household income is:

(1) the sum of the individual income for each individual in the applicant's household composition as defined in §370.809 of this subchapter (relating to Calculation of Individual Income) and §370.811 of this subchapter (relating to Determination Regarding Inclusion of Individual Income in the Household Income); and

(2) less a standard income disregard equal to five percentage points of the Federal Poverty Level (FPL) for the applicable household size, as permitted by 42 CFR §435.603(d)(4).

**History**
- *Source Note: The provisions of this §370.813 adopted to be effective January 1, 2014, 38 TexReg 9477; amended to be effective June 1, 2014, 39 TexReg 3983.*

##### **1 Tex. Admin. Code § 370.815** Modification {#sec-370.815 omnilex-key=us-tx-regs-official--title-1--370.815}

HHSC may modify or implement additional income eligibility policies developed pursuant to this subchapter consistent with State and Federal laws.

**History**
- *Source Note: The provisions of this §370.815 adopted to be effective January 1, 2014, 38 TexReg 9477.*

### **Chapter 371** MEDICAID AND OTHER HEALTH AND HUMAN SERVICES FRAUD AND ABUSE PROGRAM INTEGRITY

#### **Subchapter B** OFFICE OF INSPECTOR GENERAL

##### **1 Tex. Admin. Code § 371.1** Definitions {#sec-371.1 omnilex-key=us-tx-regs-official--title-1--371.1}

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise:

(1) Abuse--A practice by a provider that is inconsistent with sound fiscal, business, or medical practices and that results in an unnecessary cost to the Medicaid program; the reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care; or a practice by a recipient that results in an unnecessary cost to the Medicaid program.

(2) Address of record--

(A) An HHS provider's current mailing or physical address, including a working fax number, as provided to the appropriate HHS program's claims administrator or as required by contract, statute, or regulation; or

(B) a non-HHS provider's last known address as reflected by the records of the United States Postal Service or the Texas Secretary of State's records for business organizations, if applicable.

(3) Affiliate; affiliate relationship--A person who:

(A) has a direct or indirect ownership interest (or any combination thereof) of five percent or more in the person;

(B) is the owner of a whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the entity whose interest is equal to or exceeds five percent of the value of the property or assets of the person;

(C) is an officer or director of the person, if the person is a corporation;

(D) is a partner of the person, if the person is organized as a partnership;

(E) is an agent or consultant of the person;

(F) is a consultant of the person and can control or be controlled by the person or a third party can control both the person and the consultant;

(G) is a managing employee of the person, that is, a person (including a general manager, business manager, administrator or director) who exercises operational or managerial control over a person or part thereof, or directly or indirectly conducts the day-to-day operations of the person or part thereof;

(H) has financial, managerial, or administrative influence over the operational decisions of a person;

(I) shares any identifying information with another person, including tax identification numbers, social security numbers, bank accounts, telephone numbers, business addresses, national provider numbers, Texas provider numbers, and corporate or franchise names; or

(J) has a former relationship with another person as described in subparagraphs (A) - (I) of this definition, but is no longer described, because of a transfer of ownership or control interest to an immediate family member or a member of the person's household of this section within the previous five years if the transfer occurred after the affiliate received notice of an audit, review, investigation, or potential adverse action, sanction, board order, or other civil, criminal, or administrative liability.

(4) Agent--Any person, company, firm, corporation, employee, independent contractor, or other entity or association legally acting for or in the place of another person or entity.

(5) Allegation of fraud--Allegation of Medicaid fraud received by HHSC from any source that has not been verified by the state, including an allegation based on:

(A) a fraud hotline complaint;

(B) claims data mining;

(C) data analysis processes; or

(D) a pattern identified through provider audits, civil false claims cases, or law enforcement investigations.

(6) Applicant--An individual or an entity that has filed an enrollment application to become a provider, re-enroll as a provider, or enroll a new practice location in a Medicaid program or the Children's Health Insurance Program as described in paragraph (23) of this subsection.

(7) At the time of the request--Immediately upon request and without delay.

(8) Audit--A financial audit, attestation engagement, performance audit, compliance audit, economy and efficiency audit, effectiveness audit, special audit, agreed-upon procedure, nonaudit service, or review conducted by or on behalf of the state or federal government. An audit may or may not include site visits to the provider's place of business.

(9) Auditor--The qualified person, persons, or entity performing the audit on behalf of the state or federal government.

(10) Business day--A day that is not a Saturday, Sunday, or state legal holiday. In computing a period of business days, the first day is excluded and the last day is included. If the last day of any period is a Saturday, Sunday, or state legal holiday, the period is extended to include the next day that is not a Saturday, Sunday, or state legal holiday.

(11) C.F.R.--The Code of Federal Regulations.

(12) CHIP--The Texas Children's Health Insurance Program or its successor, established under Title XXI of the federal Social Security Act (42 U.S.C. §§1397aa et seq.) and Chapter 62 of the Texas Health and Safety Code.

(13) Claim--

(A) A written or electronic application, request, or demand for payment by the Medicaid or other HHS program for health care services or items; or

(B) A submitted request, demand, or representation that states the income earned or expense incurred by a provider in providing a product or a service and that is used to determine a rate of payment under the Medicaid or other HHS program.

(14) Claims administrator--The entity an operating agency has designated to process and pay Medicaid or HHS program provider claims.

(15) Closed-end contract--A contract or provider agreement for a specific period of time. It may include any specific requirements or provisions deemed necessary by the OIG to ensure the protection of the program. It must be renewed for the provider to continue to participate in the Medicaid or other HHS program.

(16) CMS--The Centers for Medicare & Medicaid Services or its successor. CMS is the federal agency responsible for administering Medicare and overseeing state administration of Medicaid and CHIP.

(17) Complete Application--A provider enrollment application that contains all the required information, including:

(A) all questions answered completely, including correct dates of birth, social security numbers, license numbers, and all requirements per provider type defined in the Texas Medicaid Provider Procedures Manual;

(B) IRS Form W-9, if required;

(C) signed and certified provider agreements;

(D) Provider Information Form (PIF-1);

(E) Principal Information Forms (PIF-2) on all persons required to be disclosed, if required;

(F) full disclosure of all criminal history, including copies of complete dispositions on all criminal history;

(G) full disclosure of all board or licensing orders, including documentation of compliance with current board orders;

(H) full disclosure of all corporate compliance agreements, settlement agreements, state or federal debt, and sanctions;

(I) documentation of an active license that is not subject to expiration within 30 days of submission of the enrollment application, if required;

(J) completion of a pre-enrollment site visit by HHSC, if required, and all required current documentation (e.g., liability insurance);

(K) documentation of fingerprints of a provider or any person with a five percent or more direct or indirect ownership in the provider, if required; and

(L) any additional documentation related to the addition of a practice location, if required or requested by HHSC.

(18) Conviction or convicted--Means that:

(A) a judgment of conviction has been entered against an individual or entity by a federal, state, or local court, regardless of whether:

(i) there is a post-trial motion or an appeal pending; or

(ii) the judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise removed;

(B) a federal, state, or local court has made a finding of guilt against an individual or entity;

(C) a federal, state, or local court has accepted a plea of guilty or nolo contendere by an individual or entity; or

(D) an individual or entity has entered into participation in a first offender, deferred adjudication, pre-trial diversion, or other program or arrangement where judgment of conviction has been withheld.

(19) Credible allegation of fraud--An allegation of fraud that has been verified by the state. An allegation is considered to be credible when HHSC has carefully reviewed all allegations, facts, and evidence and has verified that the allegation has indicia of reliability. HHSC acts judiciously on a case-by-case basis.

(20) DADS--The Texas Department of Aging and Disability Services, its successor, or designee; the state agency responsible for administering long-term services and support for people who are aging and people with intellectual and physical disabilities.

(21) Day--A calendar day.

(22) Delivery of a health care item or service--Providing any item or service to an individual to meet his or her physical, mental or emotional needs or well-being, whether or not reimbursed under Medicare, Medicaid, or any federal health care program.

(23) Enrollment--The HHSC process that a provider or applicant follows to enroll or re-enroll as a provider or enroll a new practice location.

(24) Enrollment application--Documentation required by HHSC that an applicant submits to HHSC to enroll or re-enroll as a provider or to add a practice location. An enrollment application includes any supplemental forms used to add practice locations for Medicare-enrolled or limited-risk providers, as determined by HHSC.

(25) Exclusion--The suspension of a provider or any person from being authorized under the Medicaid program to request reimbursement of items or services furnished by that specific provider.

(26) Executive Commissioner--The HHSC Executive Commissioner.

(27) False statement or misrepresentation--Any statement or representation that is inaccurate, incomplete, or untrue.

(28) Federal health care program--Any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States government (other than the federal employee health insurance program under Chapter 89 of Title 5, U.S.C.).

(29) Fraud--Any intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to that person or some other person. The term does not include unintentional technical, clerical, or administrative errors.

(30) Full investigation--Review and development of evidence to support an allegation or complaint to resolution through dismissal, settlement, or formal hearing.

(31) Furnished--Items or services provided or supplied, directly or indirectly, by any person. This includes items and services manufactured, distributed, or otherwise provided by persons that do not directly submit claims to Medicare, Medicaid, or any federal health care program, but that supply items or services to providers, practitioners, or suppliers who submit claims to these programs for such items or services. This term does not include persons that submit claims directly to these programs for items and services ordered or prescribed by another person.

(A) Directly--The provision of items and services by individuals or entities (including items and services provided by them, but manufactured, ordered, or prescribed by another individual or entity) who submit claims to Medicare, Medicaid, or any federal health care program.

(B) Indirectly--The provision of items and services manufactured, distributed, or otherwise supplied by individuals or entities who do not directly submit claims to Medicare, Medicaid, or other federal health care programs, but that provide items and services to providers, practitioners, or suppliers who submit claims to these programs for such items and services.

(32) Health information--Any information, whether oral or recorded in any form or medium, that is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse, and that relates to:

(A) the past, present, or future physical or mental health or condition of an individual;

(B) the provision of health care to an individual; or

(C) the past, present, or future payment for the provision of health care to an individual.

(33) HHS--Health and human services. Means:

(A) a health and human services agency under the umbrella of HHSC, including HHSC;

(B) a program or service provided under the authority of HHSC, including Medicaid and CHIP; or

(C) a health and human services agency, including those agencies delineated in Texas Government Code §521.0001.

(34) HHSC--The Texas Health and Human Services Commission, its successor, or designee.

(35) HIPAA--Collectively, the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. §§1320d et seq., and regulations adopted under that act, as modified by the Health Information Technology for Economic and Clinical Health Act (HITECH) (P.L. 111-105), and regulations adopted under that act at 45 C.F.R. Parts 160 and 164.

(36) Immediate family member--An individual's spouse (husband or wife); natural or adoptive parent; child or sibling; stepparent, stepchild, stepbrother or stepsister; father-, mother-, daughter-, son-, brother- or sister-in-law; grandparent or grandchild; or spouse of a grandparent or grandchild.

(37) Indirect ownership interest--Any ownership interest in an entity that has an ownership interest in another entity. The term includes an ownership interest in any entity that has an indirect ownership interest in the entity at issue.

(38) Inducement--An attempt to entice or lure an action on the part of another in exchange for, without limitation, cash in any amount, entertainment, any item of value, a promise, specific performance, or other consideration.

(39) Inspector General--The individual appointed to be the director of the OIG by the Texas Governor in accordance with Texas Government Code §544.0101.

(40) "Item" or "service" means--

(A) Any item, device, medical supply or service provided to a patient:

(i) that is listed in an itemized claim for program payment or a request for payment; or

(ii) for which payment is included in other federal or state health care reimbursement methods, such as a prospective payment system; and

(B) In the case of a claim based on costs, any entry or omission in a cost report, books of account, or other documents supporting the claim.

(41) Jurisdiction--An issue or matter that the OIG has authority to investigate and act upon.

(42) Knew or should have known--A person, with respect to information, knew or should have known when the person had or should have had actual knowledge of information, acted in deliberate ignorance of the truth or falsity of the information, or acted in reckless disregard of the truth or falsity of the information. Proof of a person's specific intent to commit a program violation is not required in an administrative proceeding to show that a person acted knowingly.

(43) Managed care plan--A plan under which a person undertakes to provide, arrange for, pay for, or reimburse, in whole or in part, the cost of any health care service. A part of the plan must consist of arranging for or providing health care services as distinguished from indemnification against the cost of those services on a prepaid basis through insurance or otherwise. The term does not include an insurance plan that indemnifies an individual for the cost of health care services.

(44) Managing employee--An individual, regardless of the person's title, including a general manager, business manager, administrator, officer, or director, who exercises operational or managerial control over the employing entity, or who directly or indirectly conducts the day-to-day operations of the entity.

(45) MCO--Managed care organization. Has the meaning described in §353.2 of this title (relating to Definitions) and for purposes of this chapter includes an MCO's special investigative unit under Texas Government Code §544.0352(a)(1), and any entity with which the MCO contracts for investigative services under Texas Government Code §544.0352(a)(2).

(46) MCO provider--An association, group, or individual health care provider furnishing services to MCO members under contract with an MCO.

(47) Medicaid or Medicaid program--The Texas medical assistance program established under Texas Human Resources Code Chapter 32 and regulated in part under Title 42 C.F.R. Part 400 or its successor.

(48) Medicaid-related funds--Any funds that:

(A) a provider obtains or has access to by virtue of participation in Medicaid; or

(B) a person obtains through embezzlement, misuse, misapplication, improper withholding, conversion, or misappropriation of funds that had been obtained by virtue of participation in Medicaid.

(49) Medical assistance--Includes all of the health care and related services and benefits authorized or provided under state or federal law for eligible individuals of this state.

(50) Member of household--An individual who is sharing a common abode as part of a single-family unit, including domestic employees, partners, and others who live together as a family unit.

(51) OAG--Office of the Attorney General of Texas or its successor.

(52) OIG--HHSC Office of the Inspector General, its successor, or designee.

(53) OIG's method of finance--The sources and amounts authorized for financing certain expenditures or appropriations made in the General Appropriations Act.

(54) Operating agency--A state agency that operates any part of the Medicaid or other HHS program.

(55) Overpayment--The amount paid by Medicaid or other HHS program or the amount collected or received by a person by virtue of the provider's participation in Medicaid or other HHS program that exceeds the amount to which the provider or person is entitled under §1902 of the Social Security Act or other state or federal statutes for a service or item furnished within the Medicaid or other HHS programs. This includes:

(A) any funds collected or received in excess of the amount to which the provider is entitled, whether obtained through error, misunderstanding, abuse, misapplication, misuse, embezzlement, improper retention, or fraud;

(B) recipient trust funds and funds collected by a person from recipients if collection was not allowed by Medicaid or other HHS program policy; or

(C) questioned costs identified in a final audit report that found that claims or cost reports submitted in error resulted in money paid in excess of what the provider is entitled to under an HHS program, contract, or grant.

(56) Ownership interest--A direct or indirect ownership interest (or any combination thereof) of five percent or more in the equity in the capital, stock, profits, or other assets of a person or any mortgage, deed, trust, note, or other obligation secured in whole or in part by the person's property or assets.

(57) Payment hold (suspension of payments)--An administrative sanction that withholds all or any portion of payments due a provider until the matter in dispute, including all investigation and legal proceedings, between the provider and HHSC or an operating agency are resolved. This is a temporary denial of reimbursement under Medicaid for items or services furnished by a specified provider.

(58) Person--Any legally cognizable entity, including an individual, firm, association, partnership, limited partnership, corporation, agency, institution, MCO, Special Investigative Unit, CHIP participant, trust, non-profit organization, special-purpose corporation, limited liability company, professional entity, professional association, professional corporation, accountable care organization, or other organization or legal entity.

(59) Person with a disability--An individual with a mental, physical, or developmental disability that substantially impairs the individual's ability to provide adequately for the person's care or his or her own protection, and:

(A) who is 18 years of age or older; or

(B) who is under 18 years of age and who has had the disabilities of minority removed.

(60) Physician--An individual licensed to practice medicine in this state, a professional association composed solely of physicians, a partnership composed solely of physicians, a single legal entity authorized to practice medicine owned by two or more physicians, or a nonprofit health corporation certified by the Texas Medical Board under Chapter 162, Texas Occupations Code.

(61) Practitioner--An individual licensed or certified under state law to practice the individual's profession.

(62) Preliminary investigation--A review by the OIG undertaken to verify the merits of a complaint/allegation of fraud, waste, or abuse from any source. The preliminary investigation determines whether there is sufficient basis to warrant a full investigation.

(63) Prima facie--Sufficient to establish a fact or raise a presumption unless disproved.

(64) Professionally recognized standards of health care--Statewide or national standards of care, whether in writing or not, that professional peers of the individual or entity whose provision of care is an issue, recognize as applying to those peers practicing or providing care within the state of Texas.

(65) Program violation--A failure to comply with a Medicaid or other HHS provider contract or agreement, the Texas Medicaid Provider Procedures Manual or other official program publications, or any state or federal statute, rule, or regulation applicable to the Medicaid or other HHS program, including any action that constitutes grounds for enforcement as delineated in this subchapter.

(66) Provider--Any person, including an MCO and its subcontractors, that:

(A) is furnishing Medicaid or other HHS services under a provider agreement or contract with a Medicaid or other HHS operating agency;

(B) has a provider or contract number issued by HHSC or by any HHS agency or program or its designee to provide medical assistance, Medicaid, or any other HHS service in any HHS program, including CHIP, under contract or provider agreement with HHSC or an HHS agency; or

(C) provides third-party billing services under a contract or provider agreement with HHSC.

(67) Provider agreement--A contract, including any and all amendments and updates, with Medicaid or other HHS program to subcontract services, or with an MCO to provide services.

(68) Provider screening process--The process in which a person participates to become eligible to participate and enroll as a provider in Medicaid or other HHS program. This process includes enrollment under this chapter or Chapter 352 of this title (relating to Medicaid and Children's Health Insurance Program Provider Enrollment), 42 C.F.R Part 1001, or other processes delineated by statute, rule, or regulation.

(69) Reasonable request--Request for access, records, documentation, or other items deemed necessary or appropriate by the OIG or a requesting agency to perform an official function, and made by a properly identified agent of the OIG or a requesting agency during hours that a person, business, or premises is open for business.

(70) Recipient--A person eligible for and covered by the Medicaid or any other HHS program.

(71) Records and documentation--Records and documents in any form, including electronic form, which include:

(A) medical records, charting, other records pertaining to a patient, radiographs, laboratory and test results, molds, models, photographs, hospital and surgical records, prescriptions, patient or client assessment forms, and other documents related to diagnosis, treatment, or service of patients;

(B) billing and claims records, supporting documentation such as Title XIX forms, delivery receipts, and any other records of services provided to recipients and payments made for those services;

(C) cost reports and documentation supporting cost reports;

(D) managed care encounter data and financial data necessary to demonstrate solvency of risk-bearing providers;

(E) ownership disclosure statements, articles of incorporation, bylaws, corporate minutes, and other documentation demonstrating ownership of corporate entities;

(F) business and accounting records and support documentation;

(G) statistical documentation, computer records, and data;

(H) clinical practice records, including patient sign-in sheets, employee sign-in sheets, office calendars, daily or other periodic logs, employment records, and payroll documentation related to items or services rendered under an HHS program; and

(I) records affidavits, business records affidavits, evidence receipts, and schedules.

(72) Recoupment of overpayment--A sanction imposed to recover funds paid to a provider or person to which the provider or person was not entitled.

(73) Requesting agency--The OIG; the OAG's Medicaid Fraud Control Unit or Civil Medicaid Fraud Division; any other state or federal agency authorized to conduct compliance, regulatory, or program integrity functions on a provider, a person, or the services rendered by the provider or person.

(74) Risk analysis--The process of defining and analyzing the dangers to individuals, businesses, and governmental entities posed by potential natural and human-caused adverse events. A risk analysis can be either quantitative, which involves numerical probabilities, or qualitative, which involves observations that are not numerical in nature.

(75) Sanction--Any administrative enforcement measure imposed by the OIG pursuant to this subchapter other than administrative actions defined in §371.1701 of this chapter (relating to Administrative Actions).

(76) Sanctioned entity--An entity that has been convicted of any offense described in 42 C.F.R §§1001.101 - 1001.401 or has been terminated or excluded from participation in Medicare, Medicaid in Texas, or any other state or federal health care program.

(77) Services--The types of medical assistance specified in §1905(a) of the Social Security Act (42 U.S.C. §1396d(a)) and other HHS program services authorized under federal and state statutes that are administered by HHSC and other HHS agencies.

(78) SIU--A Special Investigative Unit of an MCO as defined under Texas Government Code §544.0352(a)(1).

(79) Social Security Act--Legislation passed by Congress in 1965 that established the Medicaid program under Title XIX of the Act and created the Medicare program under Title XVIII of the Act.

(80) Solicitation--Offering to pay or agreeing to accept, directly or indirectly, overtly or covertly, any remuneration in cash or in kind to or from another for securing a patient or patronage for or from a person licensed, certified, or registered or enrolled as a provider or otherwise by a state health care regulatory or HHS agency.

(81) State health care program--A State plan approved under Title XIX, any program receiving funds under Title V or from an allotment to a State under such Title, any program receiving funds under Subtitle I of Title XX or from an allotment to a State under Subtitle I of Title XX, or any State child health plan approved under Title XXI.

(82) Substantial contractual relationship--A relationship in which a person has direct or indirect business transactions with an entity that, in any fiscal year, amounts to more than $25,000 or five percent of the entity's total operating expenses, whichever is less.

(83) Suspension of payments (payment hold)--An administrative sanction that withholds all or any portion of payments due a provider until the matter in dispute, including all investigation and legal proceedings, between the provider and HHSC or an operating agency or its agent(s) are resolved. This is a temporary denial of reimbursement under the Medicaid or other HHS program for items or services furnished by a specified provider.

(84) System recoupment--Any action to recover funds paid to a provider or other person to which they were not entitled, by means other than the imposition of a sanction under these rules. It may include any routine payment correction by an agency or an agency's fiscal agent to correct an overpayment that resulted without any alleged wrongdoing.

(85) TEFRA--The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, a federal law that allows states to make medical assistance available to certain children with disabilities without counting their parent's income.

(86) Terminated--Means:

(A) with respect to a Medicaid or CHIP provider, the revocation of the billing provider's Medicaid or CHIP billing privileges after the provider has exhausted all applicable appeal rights or the timeline for appeal has expired; and

(B) with respect to a Medicare provider, supplier, or eligible professional, the revocation of the provider's, supplier's, or eligible professional's Medicare billing privileges after the provider, supplier, or eligible professional has exhausted all applicable appeal rights or the timeline for appeal has expired.

(87) Terminated for cause--Termination based on allegations related to fraud, program violations, integrity, or improper quality of care.

(88) Title V--Title V (Maternal and Child Health Services Block Grant) of the Social Security Act, codified at 42 U.S.C. §§701 et seq.

(89) Title XVIII--Title XVIII (Medicare) of the Social Security Act, codified at 42 U.S.C. §§1395 et seq.

(90) Title XIX--Title XIX (Medicaid) of the Social Security Act, codified at 42 U.S.C. §§1396-1 et seq.

(91) Title XX--Title XX (Social Services Block Grant) of the Social Security Act, codified at 42 U.S.C. §§1397 et seq.

(92) Title XXI--Title XXI (State Children's Health Insurance Program (CHIP)) of the Social Security Act, codified at 42 U.S.C. §§1397aa et seq.

(93) TMRP--The Texas Medical Review Program, which is the inpatient hospital utilization review process HHSC uses for hospitals reimbursed under HHSC's prospective payment system.

(94) U.S.C.--United States Code.

(95) Vendor hold--Any legally authorized hold or lien by any state or federal governmental unit against future payments to a person. Vendor holds may include tax liens, state or federal program holds, liens established by the OAG Collections Division, and State Comptroller voucher holds.

(96) Waste--Practices that a reasonably prudent person would deem careless or that would allow inefficient use of resources, items, or services.

**History**
- *Source Note: The provisions of this §371.1 adopted
to be effective May 1, 2016, 41 TexReg 2941; amended to be effective
February 12, 2017, 42 TexReg 417; amended to be effective April 1,
2025, 50 TexReg 1801.*

##### **1 Tex. Admin. Code § 371.3** Purpose and Authority {#sec-371.3 omnilex-key=us-tx-regs-official--title-1--371.3}

(a) The OIG is responsible for preventing, detecting, auditing, inspecting, reviewing, and investigating fraud, waste, and abuse in Medicaid and other HHS programs. In addition, the OIG is responsible for enforcing state law relating to the provision of HHS in Medicaid and other HHS programs.

(b) The statutory authority for this chapter is provided by Texas Human Resources Code Chapters 32 and 36; Texas Government Code Chapters 540 and 544, and federal law (Social Security Act) and regulations (42 C.F.R.).

**History**
- *Source Note: The provisions of this §371.3 adopted to be
effective May 1, 2016, 41 TexReg 2941; amended to be effective April
1, 2025, 50 TexReg 1801.*

##### **1 Tex. Admin. Code § 371.11** Scope {#sec-371.11 omnilex-key=us-tx-regs-official--title-1--371.11}

(a) The OIG is responsible for preventing, detecting, auditing, inspecting, reviewing, and investigating fraud, waste, and abuse in the provision of HHS in Medicaid and other HHS programs. As part of its authority, the OIG may impose sanctions upon a finding by the OIG of fraud, waste, or abuse in Medicaid. The OIG is also responsible for enforcing state law relating to the provision of HHS in Medicaid and other HHS programs. As a result, the OIG may also investigate a suspected regulatory violation in a non-Medicaid, HHS program and, upon a finding of a violation, may recommend the HHS program take appropriate enforcement action to the extent of the HHS program's regulatory authority. The OIG administers program integrity and enforces program violations to the extent of applicable law governing Medicaid and the provision of other HHS. This includes pursuing Medicaid and other HHS fraud, abuse, overpayment, or waste. To accomplish the objectives of this chapter, the OIG implements review processes to distinguish payment discrepancies that can be corrected through routine payment adjustments from those suspected to result from program violations requiring investigation and possible administrative enforcement or judicial action.

(b) The Inspector General establishes objectives and priorities for the OIG that emphasize:

(1) coordinating investigative efforts to aggressively recover funds;

(2) allocating resources to cases that have the strongest supportive evidence and the greatest potential for recovery of money; and

(3) maximizing opportunities for referral of cases to the OAG.

(c) In addition to performing functions and duties otherwise provided by law, the OIG may:

(1) assess administrative penalties otherwise authorized by law on behalf of HHSC;

(2) request that the OAG obtain an injunction to prevent a person from disposing of an asset identified by the OIG as potentially subject to recovery by the OIG due to the person's fraud, waste, or abuse;

(3) provide for coordination between the OIG and SIUs or entities with which managed care organizations contract to identify and investigate fraudulent claims and other types of program abuse by recipients and providers, and approve the plan of the SIUs to prevent and reduce fraud, waste, or abuse;

(4) audit the use and effectiveness of state or federal funds, including contract and grant funds, administered by a person or state agency receiving the funds from an HHS agency;

(5) conduct investigations relating to the funds described in paragraph (4) of this subsection; and

(6) recommend policies promoting economical and efficient administration of the funds described in paragraph (4) of this subsection and the prevention and detection of fraud, waste, or abuse in the administration of those funds.

(d) The OIG may require employees of HHS agencies to provide assistance to the OIG in connection with its duties relating to the review, inspection, investigation, or audit of fraud, waste, abuse, or overpayment in the provision of HHS.

(e) The OIG is entitled to access to any information maintained by an HHS agency, including internal records, relevant to the functions of the OIG. This chapter sets forth the types of activities performed by the OIG to ensure program integrity.

(f) HHSC may obtain any information or technology necessary to enable the OIG to meet its responsibilities as mandated by state statute or other law.

**History**
- *Source Note: The provisions of this §371.11 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.17** Detection {#sec-371.17 omnilex-key=us-tx-regs-official--title-1--371.17}

The OIG utilizes automation as well as other techniques to detect and identify program violations and possible fraud, waste, abuse, and overpayments. These automated detection systems are mandated by state and federal statutes. One automated system is additionally required to utilize neural network and learning technologies. These systems detect patterns of inappropriate billing from which an overpayment is identified immediately without the need for additional investigation. They also detect anomalous billing and service patterns, which then require investigation for evidence of program violations.

**History**
- *Source Note: The provisions of this §371.17 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.23** Surety Bond {#sec-371.23 omnilex-key=us-tx-regs-official--title-1--371.23}

(a) The OIG may require each provider of medical assistance in the Medicaid program, in a provider type that has demonstrated significant potential for fraud, waste, or abuse, to file with the OIG a surety bond in a reasonable amount. The amount of the surety bond may not exceed the maximum amount allowed by state or federal law, plus the maximum amount of penalties allowed by state and federal law.

(b) The OIG requires a provider of medical assistance or person to file, with the OIG, a surety bond in a reasonable amount if the OIG identifies acts or behavior that indicate suspected fraud, waste, or abuse involving criminal conduct relating to the provider's services under the program that indicates the need for protection against potential future acts of fraud, waste, or abuse. The amount of the surety bond shall not exceed the maximum amount allowed by state or federal law, plus the maximum amount of penalties allowed by state and federal law.

(c) The surety bond required of a provider or person, by the OIG, under subsections (a) and (b) of this section must be payable to HHSC to compensate HHSC for damages resulting from, or penalties or fines imposed in connection with, an act of fraud, waste, or abuse committed by the provider or person under the program.

(d) The OIG may require a provider of medical assistance or person to file with the OIG a surety bond in an amount and manner specified by the OIG. A surety bond may be required if the OIG identifies acts or behavior that indicate suspected fraud, waste, or abuse that involves criminal conduct that relates to the provider's services under the program and that indicate the need for protection against potential loss of recoupment of overpayments, penalties, damages, or other debts assessed against the provider by the OIG, due to potential default of the provider or failure of the provider to reimburse the OIG assessed amounts. Among other reasons, a surety bond may be imposed in connection with a settlement agreement, a provisional, probationary, or closed end contract, or as a condition of reinstatement.

(e) Subject to subsection (f) or (g) of this section, the OIG may require each provider of medical assistance that establishes a resident's trust fund account to post a surety bond to secure the account. The bond must be payable to HHSC to compensate residents of the bonded provider for trust funds that are lost, stolen, or otherwise unaccounted for if the provider does not repay any deficiency in a resident's trust fund account to the person legally entitled to receive the funds.

(f) For that portion of a case involving a resident's trust fund accounts, the OIG does not require the amount of a surety bond posted for a single facility provider under subsection (e) of this section to exceed the average of the total average monthly balance of all of the provider's resident trust fund accounts for the 12-month period preceding the bond issuance or renewal date. This limitation does not apply to any type of violations other than resident trust fund accounts.

(g) If an employee of a provider of medical assistance is responsible for the loss of funds in a resident's trust fund account, the resident, the resident's family, and the resident's legal representative are not obligated to make any payments to the provider that would have been made out of the trust fund had the loss not occurred.

(h) Failure by a provider or person to post a surety bond timely and as required by the OIG may result in imposition of any of the administrative actions or sanctions and/or imposition of damages and penalties, as specified in Subchapter G of this chapter (relating to Administrative Actions and Sanctions).

(i) Surety bonds required by the OIG are considered administrative actions. Administrative actions are further described in §371.1701 of this chapter (relating to Administrative Actions).

**History**
- *Source Note: The provisions of this §371.23 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.25** Injunction to Prevent Disposing of Assets and Application to Debts {#sec-371.25 omnilex-key=us-tx-regs-official--title-1--371.25}

Based on the results of investigative findings and evidence that potential fraud, waste, or abuse exists and a potential overpayment, penalty, or damage has been identified, a method that may be used by the OIG, as a fiduciary for the state, is injunctive relief. The purpose of the injunctive relief is to ensure assets remain to reimburse the state monies owed such as recoupment of overpayments and assessed damages and penalties. The OIG may request that the Attorney General obtain an injunction to prevent a provider or person from disposing of an asset identified by the OIG as potentially subject to recovery by the OIG due to the provider's or person's fraud, waste, or abuse. Upon final resolution of the case, any funds derived from the forfeited asset(s), after offsetting any expenses attributable to the sale of those assets, are applied to the unpaid debt by the OIG.

**History**
- *Source Note: The provisions of this §371.25 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.27** Prohibition against Solicitation of Medicaid or CHIP Recipients {#sec-371.27 omnilex-key=us-tx-regs-official--title-1--371.27}

(a) A provider or person who furnishes services, under the Medicaid program or Child Health Insurance Plan program, must comply with Chapter 102, Texas Occupations Code.

(b) A provider or person is prohibited from offering to pay or agreeing to accept, directly or indirectly, overtly or covertly, any remuneration in cash or in kind to or from another for securing or soliciting a patient or patronage for or from a person licensed, certified, or registered or enrolled as a provider or otherwise by a state health care regulatory or HHS agency.

(c) A provider or person is prohibited from engaging in any of the actions or conduct described in the provisions relating to bribe, kickback, rebate, or inducement specified in §371.1669 of this chapter (relating to Self-Dealing).

(d) Providers or persons in violation of the prohibition against solicitation may be excluded from participation in the Medicaid and CHIP programs and may have their contract to participate cancelled.

**History**
- *Source Note: The provisions of this §371.27 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.29** Random Prepayment Review {#sec-371.29 omnilex-key=us-tx-regs-official--title-1--371.29}

The OIG may perform a random prepayment review of claims submitted by Medicaid providers for reimbursement to determine whether the claim involves fraud, waste, or abuse. Suspect claims identified through this process may result in:

(1) imposition of a recoupment of overpayments and/or other pertinent administrative sanctions or actions;

(2) initiation of a full fraud, waste, or abuse investigation;

(3) referral for criminal or civil investigation and prosecution;

(4) withholding payment of these claims for not more than five working days without notice to the provider for which claims were submitted.

**History**
- *Source Note: The provisions of this §371.29 adopted to be effective January 9, 2005, 29 TexReg 12128; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.31** Federal Felony Match {#sec-371.31 omnilex-key=us-tx-regs-official--title-1--371.31}

The OIG has a system to cross-reference data collected for the programs identified in Texas Government Code §544.0454 with the list of fugitive felons maintained by the federal government. The purpose of the data match is to identify fugitive felons who may be enrolled as recipients in programs that are referenced in Texas Government Code §544.0454.

**History**
- *Source Note: The provisions of this §371.31 adopted to be effective January 9, 2005, 29 TexReg 12128 ; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective April 1, 2025,50 TexReg 1801.*

##### **1 Tex. Admin. Code § 371.33** On-Site Reviews of Prospective Providers {#sec-371.33 omnilex-key=us-tx-regs-official--title-1--371.33}

(a) The Inspector General may implement procedures targeted at minimizing the potential for fraud, abuse, false statements, misrepresentations, and omissions by prospective Medicaid and other HHS providers. The Inspector General may conduct on-site reviews of providers who have applied to provide services to recipients.

(b) On-Site Review Criteria and Effect.

(1) During its on-site review, the Inspector General will determine whether or not an applicant has the ability to provide the services proposed within its application. To make this determination, personnel will conduct the inspections and interviews set forth in subsection (c) of this section (relating to Scope of Review), and evaluate information gathered thereby within the context of applicable industry standards, including state or federal governmental licensing and/or certification standards that apply to the applicant under review.

(2) In the event an on-site review reveals that a provider is not capable of delivering the services proposed within its application or develops other evidence of fraud, abuse, false statements, misrepresentations, or omissions, the application may be denied. The Inspector General also may forward to the Attorney General or other appropriate law enforcement agency any information discovered during an on-site review that the Inspector General believes warrants further evaluation in a law enforcement context.

(c) Scope of Review.

(1) Inspections and interviews. During on-site reviews, Inspector General personnel may:

(A) inspect a provider's site for physical compliance with state and federal law governing Medicaid or other HHS providers;

(B) review and verify licenses, certifications, and accreditation required by or relevant to the Medicaid or other HHS programs;

(C) interview randomly selected provider staff-members, patients, and patients' family members;

(D) review randomly selected Medicaid and other HHS agency patients' medical records;

(E) review business records, as determined necessary by the Inspector General, of prospective provider; and

(F) verify any and all items in the application for participation, contract, provider agreement, or any other documents supplied for purposes of provider enrollment.

(2) Personnel shall conduct all interviews during on-site reviews in accordance with a standard format consistent with interview procedures established for survey and investigation of existing Medicaid and other HHS providers.

**History**
- *Source Note: The provisions of this §371.33 adopted to be effective January 9, 2005, 29 TexReg 12128.*

##### **1 Tex. Admin. Code § 371.35** Use of Statistical Sampling and Extrapolation {#sec-371.35 omnilex-key=us-tx-regs-official--title-1--371.35}

(a) When the OIG is determining the amount of a recoupment due because of an overpayment, and a review of all items in the population where the suspected overpayment has occurred is not practical or reasonable, the OIG uses statistical sampling and extrapolation to estimate the amount of the recoupment.

(b) When using statistical sampling and extrapolation, the OIG:

(1) uses the RAT-STATS software available from the Office of Inspector General for the United States Department of Health & Human Services for purposes of selecting the sample and calculating the overpayment estimate; and

(2) adopts and follows policies and procedures that are consistent with the mathematical processes for sampling and overpayment estimation as described by CMS's Medicare Program Integrity Manual.

**History**
- *Source Note: The provisions of this §371.35 adopted to be effective May 15, 2016, 41 TexReg 3302.*

##### **1 Tex. Admin. Code § 371.37** Audit of Managed Care Organizations {#sec-371.37 omnilex-key=us-tx-regs-official--title-1--371.37}

(a) The Office of Inspector General (OIG) plans and conducts regular audits of Managed Care Organizations (MCOs) participating in Medicaid. OIG audits of MCOs are conducted independent of the Health and Human Services Commission (HHSC), but rely on the coordination described in this section.

(b) For purposes of this rule, "MCO" includes any entity with which an MCO contracts.

(c) OIG's roles and responsibilities for audits of MCOs include:

(1) coordinating with the HHSC Medicaid and CHIP Services Division (MCSD) and Health and Human Services (HHS) Internal Audit Division in the development of audit plans to minimize duplication of activities relating to audits of MCOs;

(2) conferring with MCSD on potential OIG MCO audits;

(3) considering input from MCSD, including input into the development of risk assessment methodologies;

(4) considering audit requests by HHS System executive management;

(5) performing risk assessments to select MCOs or MCO activities for audit;

(6) considering previous audit and review findings of MCOs by MCSD, HHS Internal Audit Division, and HHSC audit contractors;

(7) submitting to the HHS Executive Commissioner, at least annually, a draft audit plan identifying the OIG's planned audits of MCOs;

(8) considering and responding to any comments, or alternative or additional audit topics, submitted to the OIG by the HHS Executive Commissioner, or the HHS Executive Commissioner's designee, on the OIG's draft audit plan before finalizing the annual audit plan;

(9) consulting with MCSD management, consulting with subject matter experts, and, when necessary, obtaining specialized training, to ensure the OIG has sufficient knowledge and understanding of managed care-related policies and contract requirements to effectively conduct audits of MCOs;

(10) communicating preliminary results of MCO audits to MCSD for review and comment;

(11) considering MCSD comments before finalizing MCO audit report recommendations; and

(12) sharing proposed audit findings with MCSD before issuing a final report to an MCO or to MCSD.

(d) Notwithstanding subsections (a), (b), and (c) of this section, the OIG may conduct unplanned audits of allegations of suspected fraud, waste, or abuse by MCOs. Such unplanned audits need not be part of any OIG audit plan or part of the usual processes described in this section and the OIG may, after sharing proposed audit findings with MCSD, issue audit reports directly to MCOs.

**History**
- *Source Note: The provisions of this §371.37 adopted to be effective July 14, 2016, 41 TexReg 5039; amended to be effective August 17, 2020, 45 TexReg 5625.*

#### **Subchapter C** UTILIZATION REVIEW

##### **1 Tex. Admin. Code § 371.200** Inpatient Hospital Utilization Review Program {#sec-371.200 omnilex-key=us-tx-regs-official--title-1--371.200}

(a) HHSC conducts the TMRP in accordance with:

(1) applicable federal regulations at 42 C.F.R. Part 456, Subparts A, B, and C, which require HHSC to operate a utilization review program that controls the utilization of inpatient hospital services and assesses the appropriateness and quality of those services; and

(2) an approved waiver under the Social Security Act, §1903(i)(4), as it relates to the use of Title XVIII utilization review procedures for Title XIX patients in acute care general hospitals other than hospitals reimbursed under TEFRA reimbursement principles.

(b) The TEFRA review process relates directly to hospitals reimbursed under the TEFRA reimbursement principles and facility-specific per diem methodology.

**History**
- *Source Note: The provisions of this §371.200 adopted to be effective June 14, 1989, 14 TexReg 2624; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; amended to be effective November 22, 1995, 20 TexReg 9274; transferred effective September 1, 1997, as published in the Texas Register February 18, 2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.201** Case Selection Process {#sec-371.201 omnilex-key=us-tx-regs-official--title-1--371.201}

(a) HHSC selects TMRP cases for review by a statistically valid random sampling methodology and/or focused case selection. Cases consist of paid inpatient claims for diagnosis-related groups (DRGs), which may include:

(1) readmissions up to 30 days;

(2) ambulatory surgical procedures billed on inpatient claims;

(3) questionable admissions or claims coding identified by other entities;

(4) admissions identified through HHSC's quality review program as potential quality of care concerns;

(5) DRG payments made to freestanding rehabilitation facilities;

(6) day or cost outlier payments; or

(7) any other DRG or claims submission errors.

(b) HHSC selects TEFRA and facility-specific per diem methodology cases for review by a statistically valid random sampling methodology and/or focused case selection. Cases consist of paid inpatient claims for admissions to children's hospitals and freestanding psychiatric facilities.

**History**
- *Source Note: The provisions of this §371.201 adopted to be effective January 1, 1993, 17 TexReg 8457; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; amended to be effective July 27, 1994, 19 TexReg 5493; amended to be effective November 22, 1995, 20 TexReg 9274; transferred effective September 1, 1997, as published in the Texas Register February 18, 2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.203** TMRP Review Process {#sec-371.203 omnilex-key=us-tx-regs-official--title-1--371.203}

(a) The TMRP review process includes:

(1) Admission review to evaluate the medical necessity of the admission. For purposes of the TMRP reviews, medical necessity means the patient has a condition requiring treatment that can be safely provided only in the inpatient setting.

(2) Diagnosis-related group (DRG) validation to confirm documentation in the medical record of the critical elements necessary to assign a DRG. The hospital staff is responsible and held accountable for the accuracy of the required critical elements. Those elements are age, sex, discharge status, admission date, discharge date, principal diagnosis, principal and secondary procedures, any complications or comorbidities (secondary diagnoses), and Present on Admission (POA) indicators.

(A) POA review validates the POA indicator assigned to the principal and secondary diagnoses codes reported on claim forms. If it is determined that the principal and/or secondary diagnoses were not present at the time the order for inpatient admission occurs, HHSC revises the POA indicator for the diagnosis code. Conditions that develop during an outpatient encounter, including emergency department, observation, or outpatient surgery, are considered POA.

(B) DRG validation confirms that the principal and secondary diagnoses and procedures are sequenced correctly. The principal diagnosis is the diagnosis (condition) established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care. The secondary diagnoses are conditions that affect the patient care in terms of requiring: clinical evaluation, therapeutic treatment, diagnostic procedures, extended length of hospital stay, increased nursing care and/or monitoring, or in the case of a newborn, conditions the physician deems to have clinically significant implications for future health care needs. If the principal diagnosis, secondary diagnoses, or procedures are not substantiated in the medical record, are not sequenced correctly, or have been omitted, codes may be deleted, changed, or added.

(C) When the correct diagnosis and procedure coding and sequencing have been determined, the information is entered into the applicable version of the Grouper software for a DRG assignment. CMS-approved DRG Grouper software considers the required critical elements and determines the final DRG assignment. If the DRG validation process results in deletions, changes, or additions to the critical elements and these changes cause the DRG to be reassigned, HHSC directs the claims administrator to adjust the payment to the hospital accordingly.

(3) Quality of care review to assess whether the care provided meets generally accepted standards of medical and hospital care practices or puts the patient at risk of unnecessary injury, disease, or death. Quality of care review includes the use of discharge screens and generic quality screens. If quality of care issues are identified, physician consultants under contract with HHSC and of the specialty related to the care provided determine possible clinical recommendations or corrective actions.

(4) Readmission review to evaluate each admission on its individual merits and determine if the second or subsequent admissions resulted from a premature discharge or were required to provide services that should have been provided in a previous admission.

(5) Day outlier review, which includes DRG validation, verifies the medical necessity of each day of the admission.

(6) Cost outlier review to verify that services billed were medically necessary, ordered by a physician or non-physician provider, rendered and billed appropriately, and substantiated in the medical record.

(b) HHSC reviews the complete medical record for the requested admission(s) to make decisions on all aspects of this review process. The complete medical record may include: emergency room records, medical/surgical history and physical examination, discharge summary, physicians' progress notes, physicians' orders, lab reports, diagnostic and imaging reports, operative reports, pathology reports, nurses' notes, medication sheets, vital signs sheets, therapy notes, specialty consultation reports, and special diagnostic and treatment records. If the complete medical record is not available during the review, HHSC issues a preliminary technical denial and notifies the facility.

(c) A physician consultant under contract with HHSC makes all decisions concerning medical necessity, cause of readmission, and appropriateness of setting for the service provided. In the event the physician consultant determines the services were not medically necessary, should have been provided in a previous admission, or were not provided in the appropriate setting, the claim is denied, and HHSC notifies the hospital in writing. If a hospital claim is denied for lack of medical necessity or for being provided in an inappropriate setting, HHSC considers for denial physician and/or non-physician Medicaid provider claims associated with the hospital admission or service when such claims can be identified and are deemed to be the result of inappropriate admission orders. Physicians and/or non-physician providers are notified in writing if the claim for professional services is denied. The written notification explains the process for appealing the denial.

(d) The OIG conducts training for providers, in a manner and format determined by the OIG, on at least an annual basis to communicate with and educate providers about the DRG validation criteria used by the OIG in conducting hospital utilization reviews and audits as outlined in this section.

**History**
- *Source Note: The provisions of this §371.203 adopted to be effective July 11, 1989, 14 TexReg 3060; amended to be effective February 1, 1991, 16 TexReg 232; amended to be effective January 1, 1993, 17 TexReg 8457; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; amended to be effective July 27, 1994, 19 TexReg 5493; amended to be effective November 22, 1995, 20 TexReg 9274; amended to be effective March 25, 1996, 21 TexReg 2079; transferred effective September 1, 1997, as published in the Texas Register February 18,2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 11, 2004, 29 TexReg 357; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.204** Hospital Screening Criteria for TMRP, TEFRA, and Facility-Specific Per Diem Methodology Reviews {#sec-371.204 omnilex-key=us-tx-regs-official--title-1--371.204}

(a) HHSC uses recognized evidence-based guidelines for inpatient hospital screening criteria. Non-physician reviewers use the guidelines as criteria for the initial approval or for the referral of inpatient reviews for medical necessity decisions. If the criteria are not met or if the non-physician reviewer has any questions concerning the appropriateness of coding or quality of care, the non-physician reviewer refers the medical record to a physician consultant under contract with HHSC for a decision. Even if the criteria are met, the physician consultant may determine that an inpatient admission was not medically necessary, and HHSC issues an admission denial. If a hospital claim is denied for lack of medical necessity or for being provided in an inappropriate setting, HHSC considers for denial physician and/or non-physician Medicaid provider claims associated with the hospital admission or service when such claims can be identified and are deemed to be the result of inappropriate admission orders. A physician consultant may determine that an inpatient admission was not medically necessary if a physician admitted a patient in observation status and the patient was discharged from the outpatient status within the Texas Medicaid Provider Procedures Manual, or any subsequent provider manuals, defined observation period.

(b) For the purposes of the TMRP, TEFRA, and facility-specific per diem methodology reviews, medical necessity means that the patient has a condition requiring treatment that can be safely provided only in the inpatient setting.

**History**
- *Source Note: The provisions of this §371.204 adopted to be effective June 14, 1989, 14 TexReg 2624; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; transferred effective September 1, 1997, as published in the Texas Register February 18, 2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 11, 2004, 29 TexReg 357; amended to be effective August 1, 2006, 31TexReg 5603; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.206** Denials and Recoupments for TMRP, TEFRA Hospitals, and Facility-Specific Per Diem Methodology Reviews {#sec-371.206 omnilex-key=us-tx-regs-official--title-1--371.206}

(a) Reviews conducted under the TMRP, TEFRA, and facility-specific per diem methodology may result in denials of claims. HHSC notifies the hospital in writing of the denial decision and instructs the claims administrator to recoup payment. If a hospital claim is denied for lack of medical necessity or for being provided in an inappropriate setting, HHSC considers for denial physician and/or non-physician Medicaid provider claims associated with the hospital admission or service when such claims can be identified and are deemed to be the result of inappropriate admission orders. Physicians and/or non-physician providers are notified in writing if the claim for professional services is denied. The written notification of denial explains the appeal process. Types of denials are:

(1) Admission and days of stay denials. A physician consultant under contract with HHSC makes all decisions regarding medical necessity, cause of readmission, and appropriateness of setting.

(2) Technical denials. HHSC issues a technical denial when a hospital fails to make the complete medical record available for review within specified time frames. These services may not be rebilled on an outpatient basis.

(A) For on-site reviews, if the complete medical record is not made available during the on-site review, HHSC issues a preliminary technical denial at that time. The hospital is allowed 60 calendar days from the date of the exit conference to provide the complete medical record to HHSC. If the complete medical record is not received by HHSC within this time frame, HHSC issues a final technical denial. If HHSC requests a copy of the medical record in writing, and the copy is not received within the specified time frame, HHSC issues a preliminary technical denial by certified mail or fax machine. The hospital has 60 calendar days from the date of the notice to submit the complete medical record. If the complete medical record is not received by HHSC within this time frame, HHSC issues a final technical denial.

(B) For mail-in reviews, HHSC requests copies of medical records in writing. If HHSC does not receive the complete medical record within the specified time frame, HHSC issues a preliminary technical denial by certified mail or fax machine. The hospital has 60 calendar days from the date of the notice to submit the complete medical record. If HHSC does not receive the complete medical record within this specified time frame, HHSC issues a final technical denial.

(3) Readmission denial. If it is determined that the services provided in the second or subsequent admissions were the direct result of a premature discharge or should have been provided in the first or previous admission, HHSC denies the admission in question.

(4) Day outlier denial. If it is determined that any days qualifying as outlier days during the admission were not medically necessary, HHSC denies those days.

(5) Cost outlier denial. If it is determined that services delivered were not medically necessary, not ordered by a physician and/or authorized non-physician, not rendered or billed appropriately, or not substantiated in the medical record, HHSC denies those services.

(b) When an admission denial or day of stay denial is issued, HHSC directs the claims administrator to recoup payment. If a hospital claim is denied for lack of medical necessity or for being provided in an inappropriate setting, HHSC considers for denial physician and/or non-physician Medicaid provider claims associated with the hospital admission or service when such claims can be identified and are deemed to be the result of inappropriate admission orders. HHSC makes an exception in the case of TMRP hospitals if the patient was placed in observation and HHSC notified the hospital that it may submit a revised outpatient claim solely for medically necessary outpatient services provided during the Texas Medicaid Provider Procedures Manual (TMPPM), or any subsequent provider manuals, defined observation period. A physician's order for observation must be present in the physician's orders to document that the patient was placed in outpatient observation. The hospital must submit the revised outpatient claim and a copy of HHSC's notification letter to the claims administrator at the address indicated in the notification letter. The claims administrator must receive the outpatient claim and copy of the notification letter within 120 calendar days of the date of the notification letter. The claims administrator may consider payment for the medically necessary services provided during the TMPPM-defined observation period. The hospital may provide observation services in any part of the hospital where a patient can be assessed, monitored, and treated.

**History**
- *Source Note: The provisions of this §371.206 adopted to be effective June 14, 1989, 14 TexReg 2624; amended to be effective February 1, 1991, 16 TexReg 232; amended to be effective January 1, 1993, 17 TexReg 8457; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; amended to be effective November 22, 1995, 20 TexReg 9274; amended to be effective March 25, 1996, 21 TexReg 2079; transferred effective September 1, 1997, as published in the Texas Register February 18, 2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 11, 2004, 29 TexReg 357; amended to be effective April 14, 2004, 29 TexReg 3611; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.208** Appeals Related to Utilization Review Department Review Decisions {#sec-371.208 omnilex-key=us-tx-regs-official--title-1--371.208}

If a hospital receives notification from HHSC Utilization Review Unit of an adverse decision regarding medical necessity of admission, days of stay, diagnosis related group (DRG) validation, or a final technical denial, the hospital may appeal to HHSC. The written notification of adverse decision sets out the responsible area and time frame within which HHSC must receive the appeal. The Texas Medicaid Policy and Procedure Manual provides additional information on the appeal process.

**History**
- *Source Note: The provisions of this §371.208 adopted to be effective March 30, 2003, 28 TexReg 2481; amended to be effective August 1, 2006, 31 TexReg 5603; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.210** Inpatient Utilization Review for Hospitals Reimbursed Under TMRP and TEFRA Principles of Reimbursement and Facility-Specific Per Diem Methodology Reviews {#sec-371.210 omnilex-key=us-tx-regs-official--title-1--371.210}

(a) The TEFRA and facility-specific per diem methodology reviews process includes the following:

(1) Admission review to evaluate the medical necessity of the admission. For purposes of the TMRP, TEFRA, and facility-specific reviews, medical necessity means the patient has a condition requiring treatment that can be safely provided only in the inpatient setting.

(2) Continued stay review to verify the medical necessity of each day of stay.

(3) Quality of care review to assess whether the quality of care provided meets generally accepted standards of medical and hospital care practices or puts the patient at risk of unnecessary injury or death. Quality of care review includes the use of discharge screens and generic quality screens. If quality of care issues are identified, physician consultants under contract with HHSC and of the specialty related to the care provided determine possible clinical recommendations or corrective actions.

(b) HHSC reviews the complete medical record for the requested admission(s) to make decisions on all aspects of this review process. The complete medical record may include: emergency room records, medical/surgical history and physical examination, discharge summary, physicians' progress notes, physicians' orders, lab reports, diagnostic and imaging reports, operative reports, pathology reports, nurses' notes, medication sheets, vital signs sheets, therapy notes, specialty consultation reports, and special diagnostic and treatment records. If the complete medical record is not available during the review, HHSC issues a preliminary technical denial and notifies the facility.

(c) A physician consultant under contract with HHSC makes all decisions concerning medical necessity, cause of readmission, and appropriateness of setting for the service provided. In the event the physician consultant determines the services were not medically necessary, should have been provided in a previous admission, or were not provided in the appropriate setting, the claim is denied, and HHSC notifies the hospital in writing. If a hospital claim is denied for lack of medical necessity or for being provided in an inappropriate setting, HHSC considers for denial physician and/or non-physician Medicaid provider claims associated with the hospital admission or service when such claims can be identified and are deemed to be the result of inappropriate admission orders. Physicians and/or non-physician providers are notified in writing if the claim for professional services is denied. The written notification explains the process for appealing the denial.

**History**
- *Source Note: The provisions of this §371.210 adopted to be effective June 14, 1989, 14 TexReg 2624; amended to be effective February 1, 1991, 16 TexReg 232; amended to be effective January 1, 1993, 17 TexReg 8457; transferred effective September 1, 1993, as published in the Texas Register January 28, 1994, 19 TexReg 589; amended to be effective November 22, 1995, 20 TexReg 9274; transferred effective September 1, 1997, as published in the Texas Register February 18, 2000, 25 TexReg 1308; amended to be effective March 30, 2003, 28 TexReg 2481; amended to be effective January 11, 2004, 29 TexReg 357; amended to be effective January 1, 2014, 38 TexReg 9479; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.212** Utilization Review of Nursing Facilities {#sec-371.212 omnilex-key=us-tx-regs-official--title-1--371.212}

(a) OIG conducts utilization reviews of nursing facility providers for residents enrolled in fee-for-service and managed care.

(b) For purposes of this subchapter, Resource Utilization Group (RUG) means the 34-group case mix classification system selected by the state and established by CMS or a successor case mix classification system selected by the state.

(c) A nursing facility provider must conduct accurate, standardized, and reproducible assessments of each resident's functional capacity, using a minimum data set (MDS) assessment and the guidance of the Resident Assessment Instrument (RAI) User's Manual. These assessments must be conducted on the schedule required by HHSC. All MDS items coded on an MDS assessment must be in accordance with all applicable state and federal law, rules, and policy, including:

(1) the RAI User's Manual;

(2) CMS updates to the RAI User's Manual;

(3) 42 C.F.R. §483.20 (relating to Resident Assessment);

(4) administrative rules applicable to Medicaid providers, including 26 TAC Chapter 554 (relating to Nursing Facility Requirements for Licensure and Medicaid Certification); and

(5) HHSC and CMS policy guidance.

(d) A nursing facility provider must code on the MDS assessment only those events occurring during the look-back period. The look-back period is the assessment timeframe preceding the assessment reference date (ARD) that is used when coding each item on the MDS assessment. The ARD is the last day of the look-back period.

(e) Any information on the MDS assessment is part of each corresponding claim for Medicaid reimbursement.

(f) Electronic or digital signatures on an MDS assessment must comply with the RAI Manual and Texas Business and Commerce Code Chapter 322.

(g) A complete MDS assessment must include:

(1) a valid, supporting Long-Term Care Medicaid Information (LTCMI) form, or successor form required by HHSC, which the nursing facility provider must maintain with the corresponding MDS; and

(2) the signature and title of each person completing any section of the MDS assessment for Medicaid reimbursement and the sections and completion dates corresponding to each signature.

(h) Each individual signing the signature section of the MDS assessment is certifying that the information entered on the MDS assessment is accurate. Any individual or nursing facility provider that submits false or inaccurate information is subject to sanctions under Subchapter G of this chapter (relating to Administrative Actions and Sanctions).

(i) Upon request, a complete MDS assessment must be provided to the OIG nurse reviewer during the onsite or desk utilization review.

(j) When correcting errors in an MDS assessment prior to the start of an OIG utilization review, the nursing facility staff must use the MDS Correction Policy in the MDS RAI User's Manual. The nursing facility provider must maintain documentation in the clinical record that supports the corrected MDS assessment. Nursing facility staff must not correct or modify any MDS assessment reviewed during an OIG utilization review until after any reconsideration review and appeal has been finally determined.

**History**
- *Source Note: The provisions of this §371.212 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.214** HHSC-Approved Online RUG or Other HHSC-Required Training Course {#sec-371.214 omnilex-key=us-tx-regs-official--title-1--371.214}

All nursing facility registered nurse (RN) assessment coordinators must successfully complete the HHSC-approved online RUG, or an HHSC-approved successor training, within the HHSC-required time period. An RN assessment coordinator who signs the Long-Term Care Medicaid Information (LTCMI) or successor form or certifies the completeness of a minimum data set (MDS) assessment for Medicaid reimbursement must, at the time of signing, be current on his or her HHSC-approved RUG, or other HHSC-required, training.

**History**
- *Source Note: The provisions of this §371.214 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.216** Nursing Facility Clinical Records {#sec-371.216 omnilex-key=us-tx-regs-official--title-1--371.216}

(a) All coded items on minimum data set (MDS) assessments must be accurate and supported by documentation in the recipient's clinical record. Completion of the MDS assessment does not remove the nursing facility provider's responsibility to document in the clinical record a detailed assessment of all relevant issues that affect the recipient.

(1) Clinical documentation must contain individualized care plans and document pertinent facts, findings, and observations about an individual's health history, including past and present illnesses, treatments, and outcomes to support the assessment and the care provided.

(2) Sources of information, such as other health care professionals and family members, utilized for the MDS assessment must be identified in the clinical record.

(3) Clinical records must include the recipient's name and the signatures, dates of signatures, and titles of individuals providing care for the recipient.

(4) Documents, such as grids and flow sheets that include entries by multiple staff members at different times, must include complete dates with initials or signatures to clearly identify who provided the care. For purposes of this paragraph, a signature may be an original handwritten signature or an electronic signature as set out in Texas Business and Commerce Code Chapter 322 (relating to the Uniform Electronic Transactions Act).

(b) MDS items that are inaccurate or unsupported by documentation in the recipient's clinical record may result in an adjustment in the RUG classification of a recipient.

(c) A nursing facility provider that utilizes an electronic clinical record system must maintain MDS assessments in the recipient's clinical record in accordance with the Resident Assessment Instrument (RAI) User's Manual.

(d) Nursing facility resident records must be maintained in accordance with the nursing facility provider's contract with HHSC and all applicable state and federal law, rules, and policy, including:

(1) 26 TAC Chapter 554 (relating to Nursing Facility Requirements for Licensure and Medicaid Certification);

(2) 1 TAC §354.1004 (relating to Retention of Records);

(3) 45 C.F.R. Parts 160 and 164; and

(4) the RAI User's Manual.

**History**
- *Source Note: The provisions of this §371.216 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.218** Onsite and Desk Utilization Reviews of Nursing Facilities {#sec-371.218 omnilex-key=us-tx-regs-official--title-1--371.218}

(a) OIG selects nursing facilities for utilization review by conducting a comprehensive annual review of all facilities, considering factors such as:

(1) length of time since the last review;

(2) whether the nursing facility has ever been reviewed;

(3) previous review results;

(4) compliance history of the nursing facility;

(5) nursing facilities with claims in high-dollar reimbursement categories such as rehabilitation, extensive services, and special care services;

(6) variances in billing patterns;

(7) data analytics indicating potential fraud, waste, or abuse; and

(8) complaints and referrals.

(b) Onsite Utilization Reviews.

(1) Onsite utilization reviews (onsite reviews) may be announced or unannounced.

(2) The onsite review period begins when an OIG nurse reviewer presents an entrance letter to the nursing facility provider and ends when the nurse reviewer informs the provider that the onsite review is completed. The onsite review period does not include the onsite exit conference.

(3) During the onsite review, the nurse reviewer informs the facility staff which minimum data set (MDS) assessments were selected for review.

(4) The nursing facility provider must ensure an assigned staff member knowledgeable of the MDS assessments and clinical records is available at the facility to the nurse reviewer during the entire onsite review.

(5) A nursing facility provider must make reasonable efforts to begin providing requested documents to the nurse reviewer immediately after entrance to the facility. For records stored on-site, a nursing facility provider must provide all requested documents to the nurse reviewer within a reasonable time, not to exceed three hours, after the nurse reviewer's request for documents and during regular business hours. If OIG determines the requested records are stored off-site or otherwise unavailable for immediate retrieval, OIG may extend the three-hour deadline.

(6) During the onsite review, when the nurse reviewer identifies a potential MDS assessment error, the nurse reviewer requests supporting documentation from the assigned nursing facility staff member.

(7) The nursing facility provider must provide to OIG all requested documentation, including supporting documentation described in paragraph (6) of this subsection, in the format requested, during business hours of the onsite review period and prior to the onsite exit conference, except when OIG determines that the provider has made reasonable efforts to provide such documentation during the onsite review period but has been unable to do so.

(8) If OIG determines that the nursing facility provider has made reasonable efforts to provide requested documentation during the onsite review period but has been unable to do so, OIG allows the provider to provide the requested documentation in the format and time frame determined by OIG.

(9) When requested, the nursing facility provider must provide, for each requested record, a signed and notarized OIG-approved records affidavit that properly authenticates the documents provided to OIG as business records pursuant to Texas Rules of Evidence Rule 803(6) and Rule 902(10).

(10) If a nursing facility provider does not produce records requested by the nurse reviewer, the provider must provide a written statement explaining why the records were not produced.

(11) If a nursing facility provider refuses to provide a records affidavit, the nursing facility provider must state the refusal in writing and attach the statement to the records provided to the nurse reviewer.

(12) Failure to produce requested records and affidavits may result in an OIG enforcement action under Subchapter G of this chapter (relating to Administrative Actions and Sanctions).

(c) Desk Utilization Reviews.

(1) For a desk utilization review, OIG sends the nursing facility provider a written request for records. The written request for records specifies the date the requested records must be received by OIG. The written request for records gives the provider 30 calendar days to provide the requested records to OIG.

(2) The nursing facility provider must provide all requested records in the format requested, and, when requested, a signed and notarized OIG-approved records affidavit for each requested record that properly authenticates the documents as business records pursuant to Texas Rules of Evidence Rule 803(6) and Rule 902(10) to OIG by the date specified in the written request for records.

(3) If a nursing facility provider does not produce the requested records by the date specified in the OIG records request, the provider must provide a written statement explaining why the records were not produced.

(4) If a nursing facility provider refuses to provide a records affidavit, the nursing facility provider must state the refusal in writing and attach the statement to the records provided to OIG.

(5) Failure to produce requested records and affidavits may result in OIG enforcement action under Subchapter G of this chapter (relating to Administrative Actions and Sanctions).

**History**
- *Source Note: The provisions of this §371.218 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.220** Exit Conferences {#sec-371.220 omnilex-key=us-tx-regs-official--title-1--371.220}

(a) For onsite reviews:

(1) OIG conducts an onsite, and subsequent telephone, exit conference after the onsite review is complete.

(2) The nurse reviewer communicates preliminary findings to the nursing facility staff during the onsite exit conference.

(3) OIG conducts a telephone exit conference after the onsite exit conference.

(b) For desk reviews, OIG conducts a telephone exit conference after the desk review is complete.

(c) For onsite and desk reviews, OIG provides the following information in writing to the nursing facility staff prior to the telephone exit conference:

(1) a list of reviewed assessments with proposed RUG changes;

(2) a preliminary statement of findings;

(3) the notification of potential RUG changes letter;

(4) the estimated recovery amount; and

(5) the requirements for submission of a reconsideration request.

**History**
- *Source Note: The provisions of this §371.220 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.222** Reconsideration of Utilization Review Results {#sec-371.222 omnilex-key=us-tx-regs-official--title-1--371.222}

(a) The nursing facility provider may submit a request to OIG for reconsideration of the results of the onsite or desk utilization review.

(b) A complete reconsideration request must:

(1) be in writing;

(2) clearly identify the specific minimum data set (MDS) assessment errors for which reconsideration is requested;

(3) contain a detailed description of the basis for each objection to the MDS assessment errors for which reconsideration is requested;

(4) include any documents the nursing facility provider believes are necessary to support each objection to the identified MDS assessment errors for which reconsideration is requested, including the documents the nursing facility provider provided during the review;

(5) when requested, include a signed and notarized OIG-approved records affidavit, for each record, that properly authenticates the documents described in paragraph (4) of this subsection as business records pursuant to Texas Rules of Evidence Rule 803(6) and Rule 902(10);

(6) be sent to the OIG Utilization Review unit at the electronic or physical address indicated on the formal notification of RUG changes, or successor notification; and

(7) be electronically submitted or postmarked on or before the 15th calendar day after the telephone exit conference; or, if the 15th calendar day falls on a Sunday or national holiday as defined in Texas Government Code §662.003(a), the following business day.

(c) Untimely or incomplete reconsideration requests are denied. MDS assessment errors not specifically identified in the reconsideration request are not reconsidered. MDS assessment errors that do not result in a RUG change are not reconsidered.

(d) If, as part of the reconsideration request, the nursing facility provider submits documents that were not provided to OIG prior to the telephone exit conference, these documents must be accompanied by:

(1) when requested, a signed and notarized OIG-approved records affidavit, for each record, that properly authenticates the documents as business records pursuant to Texas Rules of Evidence Rule 803(6) and Rule 902(10); and

(2) a signed and notarized affidavit, for each record, specifying why the record was not previously produced and the circumstances under which the documents were found, including the date found, the person who found the documents, and the location of the documents when found.

(e) At the conclusion of the reconsideration review, OIG Utilization Review issues written results of the review to the nursing facility provider.

**History**
- *Source Note: The provisions of this §371.222 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.224** Appeals of Reconsideration Results {#sec-371.224 omnilex-key=us-tx-regs-official--title-1--371.224}

If a nursing facility provider disagrees with the results of a reconsideration review, the provider may request a hearing to appeal a RUG change pursuant to Chapter 357, Subchapter I of this title (relating to Hearings Under the Administrative Procedure Act). A nursing facility provider may not request a hearing to appeal a RUG change unless the provider made a timely and complete request for a reconsideration review.

**History**
- *Source Note: The provisions of this §371.224 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.226** Calculation of Overpayments and Underpayments {#sec-371.226 omnilex-key=us-tx-regs-official--title-1--371.226}

(a) For each specific RUG that is found to be in error during the review and for which no timely and complete reconsideration review was requested, OIG may direct the reclassification of the RUG and recover an overpayment, or reimburse an underpayment, after the reconsideration request deadline has passed.

(b) For each specific RUG for which a reconsideration review was granted and for which no hearing was requested, OIG may direct the reclassification of the RUG and recover an overpayment after the hearing request deadline has passed.

(c) For each specific RUG for which a timely request for a hearing is made, OIG may direct the reclassification of the RUG and recover an overpayment after a final decision regarding the appeal is issued.

(d) OIG may recover overpayments and reimburse underpayments after due process has been concluded for all RUGs in the review.

(e) OIG may use statistical sampling and extrapolation for nursing facility utilization review cases in accordance with §371.35 of this title (relating to Use of Statistical Sampling and Extrapolation).

**History**
- *Source Note: The provisions of this §371.226 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.228** Recoveries {#sec-371.228 omnilex-key=us-tx-regs-official--title-1--371.228}

(a) OIG recovers any overpayments associated with a minimum data set (MDS) assessment error. OIG may recover an overpayment if the overpayment was identified during an OIG utilization review of a nursing facility provider. The provider is reimbursed for any underpayments.

(b) An overpayment amount is a debt owed to the Texas Medicaid program.

**History**
- *Source Note: The provisions of this §371.228 adopted to be effective February 9, 2023, 48 TexReg 503.*

##### **1 Tex. Admin. Code § 371.230** Waiver of Extrapolation {#sec-371.230 omnilex-key=us-tx-regs-official--title-1--371.230}

(a) The OIG may waive the calculation of an overpayment by extrapolation for any of the RUG classifications found in error.

(b) A provider must request a waiver of extrapolation in writing on or before the 15th calendar day after receipt of the final notice of overpayment. The provider's request for waiver of extrapolation must include sufficient evidence to demonstrate good cause for the waiver. The OIG may request additional evidence or documentation from the provider or other sources in evaluating the request.

(c) The OIG is vested with the sole discretion to evaluate the provider's showing of good cause and to determine whether waiver of extrapolation is warranted.

(d) The decision to grant, deny, or modify a request for waiver of extrapolation is not subject to administrative or judicial review.

**History**
- *Source Note: The provisions of this §371.230 adopted to be effective February 9, 2023, 48 TexReg 503.*

#### **Subchapter E** PROVIDER DISCLOSURE AND SCREENING

##### **1 Tex. Admin. Code § 371.1001** Applicability {#sec-371.1001 omnilex-key=us-tx-regs-official--title-1--371.1001}

(a) This subchapter describes the disclosure requirements for applications and screening criteria used by the OIG in making a recommendation for an enrollment determination.

(b) This subchapter applies to:

(1) all applicants for enrollment as a provider in the Medicaid program or CHIP; and

(2) if requested by an HHS agency, applicants for enrollment with an HHS agency program.

**History**
- *Source Note: The provisions of this §371.1001 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.1005** Disclosure Requirements {#sec-371.1005 omnilex-key=us-tx-regs-official--title-1--371.1005}

(a) An applicant must disclose in its enrollment application the identity of any person or entity as requested by HHSC.

(b) The applicant's disclosures must identify every person whose identity must be disclosed pursuant to the Affordable Care Act, Title 42 of the Code of Federal Regulations, or state statute or administrative rule, as amended. Such disclosures include owners, certain subcontractors, creditors, managers, and agents.

(c) An applicant must disclose in its enrollment application every person that previously had an ownership or control interest in the applicant but whose interest was transferred to another person, if the person's former interest was transferred to an immediate family member or to a member of the person's household and the person's former interest was transferred within one year before or at any time after receiving notice of any potential adverse actions by a governmental entity against the person or against a provider for which the person has or had an ownership or control interest.

(d) An applicant must disclose in the enrollment application all information required by state or federal law or regulation, and all additional information requested by HHSC or the OIG, in its discretion, during the provider screening and enrollment process.

(e) If any information required to be disclosed under this section changes during the processing of an enrollment application, the applicant, provider, or person must disclose that information pursuant to §352.21 of this title (relating to Duty to Report Changes).

(f) A failure by an applicant, provider, or person to meet any of the disclosure requirements specified in this section constitutes a material non-disclosure of relevant information.

(g) The OIG may use information submitted by another HHS agency that relates to information required to be disclosed in lieu of requiring another submission of the same information by the applicant, provider, or person.

**History**
- *Source Note: The provisions of this §371.1005 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective February 12, 2017, 42 TexReg 417.*

##### **1 Tex. Admin. Code § 371.1007** Screening Levels {#sec-371.1007 omnilex-key=us-tx-regs-official--title-1--371.1007}

(a) The OIG uses a screening level of "Limited," "Moderate," or "High" risk, assigned in accordance with §352.9 of this title (relating to Screening Levels) to determine the verifications and further screening required under §371.1009 of this subchapter (relating to Verifications Required for Each Screening Level).

(b) Case-by-case recommendation of screening levels. For any enrollment application, the OIG may, in its sole discretion and on a case-by-case basis, recommend that HHSC assign a higher or lower screening level in accordance with §352.9(b) of this title if the OIG determines in its discretion that the applicant may pose an increased risk of committing fraud, waste, or abuse or may demonstrate unfitness to provide or bill for medical assistance items or services. The OIG may make such a recommendation after considering all circumstances, including the applicant's criminal, regulatory, and administrative sanction history, as well as the following, if applicable:

(1) The applicant or any person required to be disclosed in the enrollment application is under a payment suspension based on a credible allegation of fraud.

(2) The applicant or any person required to be disclosed in the enrollment application has failed to repay any overpayments incurred under Medicaid, CHIP, or other HHS programs.

(3) The applicant or any person required to be disclosed in the enrollment application was excluded from participation in Medicaid, CHIP, or other HHS program during the ten years before the date of the enrollment application.

(4) The applicant is seeking enrollment as a provider type that was subject to a state or federal temporary moratorium, if the moratorium was lifted within six months before the date of the enrollment application.

**History**
- *Source Note: The provisions of this §371.1007 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.1009** Verifications Required for Each Screening Level {#sec-371.1009 omnilex-key=us-tx-regs-official--title-1--371.1009}

(a) For an applicant or provider assigned a screening level of "Limited," the OIG verifies the accuracy and completeness of the information in or related to the enrollment application and 42 C.F.R. §455.450(a)(1), information about the applicant contained in state or federal records, including criminal history records, and any additional information requested of the applicant by the OIG.

(b) For an applicant assigned a screening level of "Moderate," the OIG:

(1) verifies all items described in subsection (a) of this section; and

(2) reviews the results of a pre-enrollment site visit in accordance with §352.9 of this title (relating to Screening Levels), if applicable.

(c) For an applicant or provider assigned a screening level of "High," HHSC or the OIG performs (notwithstanding subsection (f) of this section):

(1) all the verifications described in subsections (a) and (b) of this section; and

(2) a fingerprint-based criminal history check, in the form and manner prescribed by state or federal law, of each person that is an individual and has an ownership or control interest as defined in §371.1005 of this subchapter (relating to Disclosure Requirements) in the applicant.

(d) The OIG, in its sole discretion, may accept previously submitted fingerprints if an individual has been subjected to a fingerprint-based criminal history check by a licensing or regulatory authority or by another state's Medicaid, CHIP, or medical assistance program and the results are made available to HHSC.

(e) As provided in 42 C.F.R. §455.452, the OIG may establish provider screening methods in addition to or more stringent than those required by applicable federal regulations. The OIG may require a fingerprint-based criminal history check when required to do so under State law or because of the level of screening based on risk of fraud, waste, or abuse as determined for that category of provider.

(f) For the requirements outlined above, the OIG may rely on validated screenings as provided by 42 C.F.R. §455.410.

**History**
- *Source Note: The provisions of this §371.1009 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective February 12, 2017, 42 TexReg 417.*

##### **1 Tex. Admin. Code § 371.1011** Recommendation Criteria {#sec-371.1011 omnilex-key=us-tx-regs-official--title-1--371.1011}

(a) A felony or misdemeanor conviction, as defined in 42 C.F.R. §1001.2, under Texas law, the laws of another state, or federal law, may affect a provider's and/or person's ability to participate.

(b) The OIG may recommend denial of an enrollment application of the applicant or a person required to be disclosed in accordance with §371.1005 of this subchapter (relating to Disclosure Requirements) on the basis of information revealed through a background check on the applicant, provider, or a person required to be disclosed. A background check may include:

(1) information concerning the licensing status of the health care professional;

(2) information contained in the criminal history record information check performed in accordance with Texas Government Code §544.0153;

(3) a review of federal databases;

(4) the pendency of an open investigation by the OIG; and

(5) any other reason that the OIG determines appropriate.

(c) On a case-by-case basis, the OIG may recommend approval of an enrollment application despite the existence of a criminal history.

(1) When evaluating criminal history record information, the OIG takes into consideration:

(A) the extent to which the conduct relates to the services provided or to be provided under Medicaid;

(B) the degree to which the provider, applicant, or person required to be disclosed does or will interact with Medicaid recipients as a provider; and

(C) any previous evidence that the provider, applicant, or person required to be disclosed engaged in fraud, waste, or abuse under Medicaid.

(2) The OIG also considers the following circumstances:

(A) the number of criminal convictions as defined in 42 C.F.R. §1001.2;

(B) the nature and seriousness of the crime;

(C) whether the individual or entity has completed the sentence, punishment, or other requirements that were imposed for the crime and, if so, the length of time since completion;

(D) in the case of an individual, the age of the individual at the time the crime was committed;

(E) whether the crime was committed in connection with the individual's or entity's participation in Medicaid or other HHS programs;

(F) the extent of the individual's or entity's rehabilitation efforts and outcome;

(G) the conduct of the individual or entity, and the work history of the individual, both before and after the crime;

(H) the relationship of the crime to the individual or entity's fitness or capacity to remain a provider or become a provider;

(I) whether approving the individual or entity would offer the individual or entity the opportunity to engage in further criminal activity;

(J) the extent to which the individual or entity provides relevant information or otherwise demonstrates that approval should be granted; and

(K) any other circumstances that HHSC determines are relevant to the individual or entity's eligibility.

(3) The provider is responsible for providing to HHSC or to the OIG, within three business days of an IG request, information related to the degree to which a person could interact with Medicaid recipients as a provider.

(4) In all instances, the OIG takes into consideration evidence of multiple or repeated instances of the same or similar conduct.

(d) In addition to the considerations outlined in subsection (c) of this section, the OIG specifically takes into consideration the following conduct that may be contained in criminal history record information of providers, applicants, or persons required to be disclosed:

(1) for provider types that have or may have direct access to recipients in their capacity as a provider:

(A) conduct involving healthcare fraud;

(B) conduct involving abuse of patients, minors, the elderly, or the disabled;

(C) conduct involving prohibited sexual conduct or involving children as victims;

(D) conduct against the person such as homicide, kidnapping, or assault;

(E) conduct involving perjury or crimes of other falsification, such as tampering with physical evidence or governmental record;

(F) conduct involving insurance fraud;

(G) conduct involving illegal manufacture, use, possession or distribution of controlled substances; and

(H) conduct involving theft, including theft by check;

(2) for provider types that may transport recipients and guardians in their capacity as a provider:

(A) conduct involving healthcare fraud;

(B) conduct involving abuse of patients, minors, the elderly, or the disabled;

(C) conduct involving prohibited sexual conduct or involving children as victims;

(D) conduct against the person such as homicide, kidnapping, or assault;

(E) conduct involving perjury or tampering with a governmental record;

(F) conduct involving intoxication and operating a motor vehicle, including driving while intoxicated, intoxication assault, and intoxication manslaughter;

(G) conduct involving illegal manufacture, use, possession, or distribution of controlled substances;

(H) conduct involving criminal trespass;

(I) conduct involving extortion; and

(J) conduct involving promotion of prostitution or human trafficking;

(3) for provider types that may have interaction with or access to recipients, recipients' homes, or recipients' property in their capacity as a provider:

(A) conduct involving healthcare fraud;

(B) conduct involving abuse of patients, minors, the elderly, or the disabled;

(C) conduct involving prohibited sexual conduct or involving children as victims;

(D) conduct against the person such as homicide, kidnapping, or assault;

(E) conduct against property such as theft, burglary, property damage, or criminal trespass;

(F) conduct involving breach of fiduciary duty;

(G) conduct involving illegal manufacture, use, possession, or distribution of controlled substances; and

(4) for provider types that have no recipient interaction or access:

(A) conduct involving healthcare fraud;

(B) conduct involving breach of fiduciary duty or a deceptive business practice; and

(C) conduct involving theft, including theft by check.

(e) The OIG may recommend permanent denial of an enrollment application if:

(1) the applicant, provider, or a person required to be disclosed has been convicted, as defined in 42 C.F.R. §1001.2, of an offense arising from a fraudulent act under Medicaid or other HHS programs; and

(2) that fraudulent act resulted in injury to an elderly person, a person with a disability, or a person younger than 18 years of age.

(f) The OIG may recommend denial of any enrollment application, regardless of provider type, if it determines in its discretion that the applicant may pose an increased risk for committing fraud, waste, or abuse or may demonstrate unfitness to provide or bill for medical assistance items or services. In addition to the applicant's criminal, regulatory, and administrative sanction history, the OIG considers all applicable circumstances, including the following, if applicable:

(1) the applicant, a person required to be disclosed, or a person with an ownership or control interest in the provider did not submit complete, timely, and accurate information, failed to cooperate with any provider screening methods, or refused to permit access for a site visit;

(2) the applicant or a person required to be disclosed has failed to repay overpayments to Medicaid, CHIP, or other HHS programs;

(3) the applicant, provider, or a person required to be disclosed pursuant to §371.1005 of this subchapter, has been suspended or prohibited from participating, excluded, terminated, or debarred from participating in any state Medicaid, CHIP or other HHS agency program;

(4) the applicant, provider, or a person required to be disclosed has participated in Medicaid or CHIP program and failed to bill for medical assistance or refer clients for medical assistance within the 12-month period prior to submission of the enrollment application;

(5) the applicant, provider, or a person required to be disclosed has falsified any information on the enrollment application; and

(6) The OIG is unable to verify the identity of the applicant, provider, or a person required to be disclosed.

(g) Healthcare professionals who are licensed and in good standing with a Texas licensing authority that requires the submission of fingerprints for the purpose of conducting a criminal history record information check are not subject to an additional criminal history record information check by the OIG for the purposes of determining eligibility to enroll, unless performing a criminal history record information check is required or appropriate for other reasons, including for conducting an investigation of fraud, waste, or abuse or where required by 42 C.F.R. §455.450.

**History**
- *Source Note: The provisions of this §371.1011 adopted to
be effective December 31, 2012, 37 TexReg 10189; amended to be effective
May 1, 2016, 41 TexReg 2941; amended to be effective February 12,
2017, 42 TexReg 417; amended to be effective April 1, 2025, 50 TexReg
1801.*

##### **1 Tex. Admin. Code § 371.1013** Provider Enrollment Recommendations {#sec-371.1013 omnilex-key=us-tx-regs-official--title-1--371.1013}

(a) The OIG makes a recommendation on each enrollment application submitted for review in accordance with the requirements of this subchapter (relating to Provider Disclosure and Screening) and Chapter 352 of this title (relating to Medicaid and Children's Health Insurance Program Provider Enrollment), or other rule, as applicable. The recommendation is at the sole discretion of the OIG, and is not subject to administrative review or reconsideration.

(b) In making its enrollment recommendation, the OIG may consider any relevant circumstance or factor as it applies to the applicant, provider, or any person required to be disclosed in the enrollment application in accordance with this subchapter and Chapter 352 of this title, if applicable.

(c) Upon making a recommendation on a complete application, the OIG informs HHSC of its recommendation. HHSC makes the final enrollment decision after considering:

(1) the OIG's recommendation;

(2) any conditions for approval recommended by the OIG;

(3) the availability of access to care; and

(4) any other relevant facts or circumstances.

**History**
- *Source Note: The provisions of this §371.1013 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective October 1, 2015, 40 TexReg 6585; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.1015** Types of Provider Enrollment Recommendations {#sec-371.1015 omnilex-key=us-tx-regs-official--title-1--371.1015}

(a) The OIG may make the following types of recommendations regarding an enrollment application:

(1) Approval. If an enrollment application is recommended for approval, the recommendation is for a time-limited period of participation as specified in the provider agreement or notification of the enrollment decision. The prospective provider must complete and submit the provider agreement before enrollment is granted.

(2) Conditional approval. An enrollment application may be recommended for conditional approval with conditions as specified in the notification of the enrollment recommendation. The conditions may consist of the imposition of any one or more administrative actions or sanctions as specified in Subchapter G of this chapter (relating to Administrative Actions and Sanctions) or in other Medicaid or CHIP policy or rule.

(3) Denial. If an enrollment application is denied, HHSC sends a written notice of the decision by certified mail to the address of record on the enrollment application. The reason or reasons for denial are as specified in the written notice. If the denial is based upon a pending investigation, charge, or other legal proceeding, the applicant or provider is ineligible to reapply until such investigation or proceeding is finally resolved.

(b) If an enrollment application is denied based upon the OIG's recommendation, an applicant may request an informal desk review by the OIG of the recommendation within 20 business days from the date of the notice of denial as follows.

(1) The request for an informal desk review must be made in writing and must be submitted in accordance with the instructions in the notice.

(2) The request should state the basis for disagreement with the enrollment recommendation, include any documentary evidence, and describe any mitigating circumstances that would support a reconsideration of the initial enrollment recommendation.

(3) Upon conclusion of the resulting informal desk review, the OIG notifies HHSC of its final recommendation. HHSC sends a written notice of the final enrollment decision to the address of record on the enrollment application.

(4) The final enrollment recommendation is not subject to administrative review or reconsideration.

**History**
- *Source Note: The provisions of this §371.1015 adopted to be effective December 31, 2012, 37 TexReg 10189; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective February 12, 2017, 42 TexReg 417.*

#### **Subchapter F** INVESTIGATIONS

##### **1 Tex. Admin. Code § 371.1301** Purpose {#sec-371.1301 omnilex-key=us-tx-regs-official--title-1--371.1301}

(a) This subchapter provides procedures for the investigation of complaints or allegations to promote their just and efficient disposition.

(b) This subchapter governs the investigation of all jurisdictional complaints or allegations before the OIG.

**History**
- *Source Note: The provisions of this §371.1301 adopted to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.1305** Preliminary Investigation {#sec-371.1305 omnilex-key=us-tx-regs-official--title-1--371.1305}

(a) The OIG may receive and investigate complaints related to fraud, waste, or abuse within HHSC or an HHS agency. The OIG prioritizes complaints for purposes of determining the order in which complaints are investigated, taking into account the seriousness of the allegations made in a complaint. The OIG may consider the following factors when opening cases and prioritizing cases for the efficient management of the OIG's workload:

(1) the highest potential for recovery or risk to the State;

(2) the history of noncompliance with applicable law and regulations;

(3) identified fraud trends;

(4) internal affairs investigations according to the seriousness of the threat to recipient or public safety or the risk to program integrity in terms of the amount or scope of fraud, waste, or abuse posed by the allegation that is the subject of the investigation;

(5) acts or the failure to act that potentially threatens the public health or may result in physical harm to the public; and

(6) the potential for or actual physical destruction of state property, including the loss, theft and destruction of State assets, property, benefits, or equipment.

(b) The OIG assesses complaints received by the OIG from any source to determine within 30 days of receipt whether it has:

(1) sufficient indicators of fraud, waste, or abuse; and

(2) jurisdiction.

(c) If the OIG has jurisdiction and sufficient information to justify an investigation, the OIG completes a preliminary investigation within 45 days of receipt of the complaint to determine whether there is sufficient basis to warrant a full investigation. The OIG may also collaborate with federal or other state authorities in conducting audits or investigations and in taking enforcement measures in response to program violations.

(1) After completing its preliminary investigation, the OIG may, at its discretion, initiate settlement discussions of an administrative case with the person who is the subject of the investigation. If the matter cannot reasonably be settled or if the OIG determines that further investigation is required before the propriety of settlement or other enforcement can be evaluated, the OIG may conduct a full investigation.

(2) If, at any point during its investigation, the OIG determines that an overpayment resulted without wrongdoing, the OIG may refer the matter for routine payment correction by HHSC's fiscal agent or an operating agency or may offer a payment plan.

(d) The OIG may also consider the following factors in determining whether to open a full investigation:

(1) the nature of the program violation;

(2) evidence of knowledge and intent;

(3) the seriousness of the program violation;

(4) the extent of the violation;

(5) prior noncompliance issues;

(6) prior imposition of sanctions, damages, or penalties;

(7) willingness to comply with program rules;

(8) efforts to interfere with an investigation or witnesses;

(9) recommendations of peer review groups;

(10) program violations within Medicaid, Medicare, Titles V, XIX, XX, CHIP, and other HHS programs;

(11) pertinent affiliate relationships;

(12) past and present compliance with licensure and certification requirements;

(13) history of criminal, civil, or administrative liability; and

(14) any other relevant information or analysis the OIG deems appropriate.

(e) In addition to the factors listed in subsection (d) of this section, the OIG may also consider the following factors in determining whether to close a preliminary investigation:

(1) the complainant is unavailable or unwilling to cooperate;

(2) information or evidence to substantiate the complaint is unavailable or unobtainable;

(3) the complaint is resolved after it is filed with the OIG;

(4) data regarding the subject of the complaint, such as claims or encounter data, does not support the allegations raised in the complaint;

(5) an investigation, audit, inspection, or other review regarding the complaint already exists;

(6) an analysis of the provider's billing patterns does not show that the provider's billing patterns vary significantly from those of comparable providers; or

(7) any other relevant information or analysis the OIG deems appropriate.

(f) Once the preliminary investigation is completed, the OIG reviews the allegations of fraud, waste, abuse, or questionable practices, and all facts and evidence relating to the allegation and prepares a preliminary report before the allegation of fraud or abuse proceeds to a full investigation. The preliminary report documents the following:

(1) the allegation that is the basis of the report;

(2) the evidence reviewed;

(3) the procedures used to conduct the preliminary investigation;

(4) the findings of the preliminary investigation; and

(5) whether a full investigation is warranted.

(g) The OIG maintains a record of all allegations of fraud, waste, or abuse against a provider containing the date each allegation was received or identified and the source of the allegation, if available. This record is confidential under Texas Government Code §544.0259(e) and subject to Texas Government Code §544.0259(f).

**History**
- *Source Note: The provisions of this §371.1305 adopted to
be effective April 15, 2014, 39 TexReg 2833; amended to be effective
May 1, 2016, 41 TexReg 2941; amended to be effective July 23, 2019,
44 TexReg 3628; amended to be effective April 1, 2025, 50 TexReg 1801.*

##### **1 Tex. Admin. Code § 371.1307** Full Investigation {#sec-371.1307 omnilex-key=us-tx-regs-official--title-1--371.1307}

(a) The OIG begins a full investigation within 30 days of completing the preliminary investigation if it determines that a full investigation is warranted.

(b) The OIG may close a full investigation for one or more of the following reasons, if the OIG determines that:

(1) the investigative research and evidence gathered during the full investigation indicates that fraud, waste, or abuse is not present;

(2) there is no violation of Medicaid policy;

(3) there is no overpayment to recover;

(4) the potential identified overpayment is not cost-effective to pursue;

(5) the issues related to the complaint are outside of OIG jurisdiction;

(6) a referral to the appropriate licensure or oversight agency is deemed a more appropriate action;

(7) the case should be referred to another division of OIG for action;

(8) the provider should receive education;

(9) the Medicaid provider is deceased or out of business; or

(10) no administrative action, sanction, or overpayment is appropriate after weighing the following factors:

(A) the seriousness of the allegations and potential program violations;

(B) the investigative resources available to pursue the full investigation; and

(C) the sufficiency and strength of evidence gathered in the full investigation.

(c) A full investigation must be completed within 180 days unless the OIG determines that more time is needed to complete the investigation.

(d) If the OIG determines that more time is needed to complete the investigation, the OIG must notify the provider who is the subject of the investigation indicating that the investigation will exceed 180 days and specifying the reasons the OIG is unable to complete the investigation within the 180-day time period. However, the OIG is not required to notify the provider if the OIG determines that notice would jeopardize the investigation.

(e) Within 30 days of completion of the preliminary investigation, the OIG refers the case to the state's Medicaid fraud control unit if a provider is suspected of fraud, waste, or abuse involving criminal conduct or if the OIG learns or has reason to suspect that a provider's records are being withheld, concealed, destroyed, fabricated, or in any way falsified. This referral does not preclude the OIG from continuing its investigation of the provider.

**History**
- *Source Note: The provisions of this §371.1307 adopted to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective July 23, 2019, 44 TexReg 3628.*

##### **1 Tex. Admin. Code § 371.1309** Training of Investigators {#sec-371.1309 omnilex-key=us-tx-regs-official--title-1--371.1309}

Investigators who investigate Medicaid providers for potential fraud, waste, or abuse receive annual training on notice, service, due process, and any additional regulations or policies that may affect the OIG investigatory process.

**History**
- *Source Note: The provisions of this §371.1309 adopted to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941.*

##### **1 Tex. Admin. Code § 371.1311** Role of the OIG and SIUs {#sec-371.1311 omnilex-key=us-tx-regs-official--title-1--371.1311}

(a) An MCO is required by §353.502 of this title (relating to Managed Care Organization's Plans and Responsibilities in Preventing and Reducing Waste, Abuse, and Fraud) and §370.501 of this title (relating to Purpose) to establish and maintain an SIU to investigate allegations of waste, abuse, or fraud for all services in the MCO plan. If an MCO suspects possible waste, abuse, or fraud, the MCO must conduct a preliminary investigation in accordance with criteria in §353.502 and §370.501 of this title. If the preliminary investigation confirms waste, abuse, or fraud, the MCO must refer the matter to the OIG in accordance with §353.505 of this title (relating to Recovery of Funds).

(b) For a potential overpayment amount less than $100,000, the MCO pursues recovery of the overpayment, and remits one-half of the recovered amount in accordance with §353.505 of this title (relating to Recovery of Funds).

(c) For MCO referrals to the OIG where the potential overpayment amount exceeds $100,000, the OIG accepts the referral and conducts a preliminary investigation.

(1) The OIG evaluates the allegation(s) and evidence from the MCO-SIU for intentional deception, repeat billing pattern, or other indicators of questionable practices.

(2) The OIG determines within 30 business days whether to take additional investigative action, and notifies the referring MCO of the decision.

(d) If the preliminary investigation determines a full investigation is warranted, the OIG assesses the provider's billing activity in fee-for-service Medicaid and other MCOs in which the provider is credentialed.

**History**
- *Source Note: The provisions of this §371.1311 adopted to be effective May 1, 2016, 41 TexReg 2941; amended to be effective July 18, 2019, 44 TexReg 3544.*

##### **1 Tex. Admin. Code § 371.1312** Recipient Investigations {#sec-371.1312 omnilex-key=us-tx-regs-official--title-1--371.1312}

(a) The OIG may consider the following factors when opening and prioritizing recipient cases for the efficient management of the OIG's workload:

(1) the highest potential for recovery;

(2) applicable federal timeliness requirements;

(3) initial screening information obtained to support the allegation raised in the complaint;

(4) whether allegations in the complaint are violations of applicable agency policy, law or regulations; and

(5) any other relevant information or analysis the OIG deems appropriate.

(b) The OIG may consider the following factors in determining whether to close a recipient investigation:

(1) the investigation has been open for 180 days or longer, unless the OIG determines that more time is needed to complete the investigation;

(2) information or evidence to substantiate the complaint is unavailable or unobtainable;

(3) evidence regarding the subject of the complaint does not support the allegations raised in the complaint;

(4) an investigation, audit, inspection, or other review regarding the complaint already exists; or

(5) any other relevant information or analysis the OIG deems appropriate.

**History**
- *Source Note: The provisions of this §371.1312 adopted to be effective July 23, 2019, 44 TexReg 3628.*

### **Chapter 372** TEMPORARY ASSISTANCE FOR NEEDY FAMILIES AND SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAMS

#### **Subchapter A** OVERVIEW AND PURPOSE

##### **1 Tex. Admin. Code § 372.1** Purpose and Scope {#sec-372.1 omnilex-key=us-tx-regs-official--title-1--372.1}

This chapter covers the following programs:

(1) the Temporary Assistance for Needy Families (TANF) Program; and

(2) the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.

**History**
- *Source Note: The provisions of this §372.1 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.2** Definitions {#sec-372.2 omnilex-key=us-tx-regs-official--title-1--372.2}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Authorized representative--In the TANF Program, a person whom the certified group authorizes to apply for or manage the TANF benefits on behalf of the certified group but who is not included in the certified group. In SNAP, a person whom the household authorizes to apply for or manage the SNAP benefits on behalf of the household. References in this chapter to a certified group, client, or household include an authorized representative, unless the context indicates otherwise.

(2) Budgetary needs amount--In the TANF Program, a set dollar amount that represents the monthly amount needed by the certified group to pay for food, clothing, housing, utilities, and incidental expenses (which include day-to-day transportation, telephone, laundry, unreimbursed medical expenses, recreation, and household supplies).

(3) Caretaker--In the TANF Program, a person who cares for a dependent child, who meets relationship requirements in §372.108 of this chapter (relating to Relationship Requirement), whom the Texas Health and Human Services Commission (HHSC) includes in the certified group, and who ordinarily receives and manages the TANF benefits for the certified group.

(4) Certified group--The person or group of relatives whose needs HHSC includes together in a TANF case.

(5) CFR--The Code of Federal Regulations.

(6) Child--A person under 18 years of age. In the TANF Program, a child also includes a person under 19 years of age as long as the person is a full-time student in a secondary school (or participant in an equivalent vocational or technical training program) and the person is reasonably expected to complete the school (or the training) before the person's 19th birthday.

(7) Choices--The TANF employment and training program administered by the Texas Workforce Commission.

(8) Client--In the TANF Program, the member of the certified group who receives benefits for the certified group. In SNAP, the member of the household who receives benefits for the household.

(9) Dependent child--In the TANF Program, a child as described in the Texas Human Resources Code, §31.002(b). The term also means a child who has been deprived of parental support because of the death, absence, or incapacity of a parent who does not have enough income or resources for a reasonable subsistence compatible with health and safety, and who is living with a caretaker.

(10) Fair market value--The amount of money an item would bring if sold in the current local market.

(11) Family--A group of relatives living together who meet the relationship requirements in §372.108 of this chapter.

(12) Federal Poverty Guidelines--The household income guidelines issued annually and published in the Federal Register by the U.S. Department of Health and Human Services. Percentages of these guidelines are used to determine income eligibility for TANF, SNAP, and certain other public assistance programs.

(13) Household--The person or persons whose needs HHSC includes in a SNAP case for benefits. In the TANF Program, the family members who live together.

(14) Parent--A mother or father, as established through biological relationship or legal process.

(15) Payee--In the TANF Program, a person who receives and manages the TANF benefits for a certified group and who otherwise qualifies as a caretaker, except HHSC does not include the person in the certified group. HHSC designates a payee when no one in the household qualifies or wants to be caretaker.

(16) Personal Responsibility Agreement (PRA)--In the TANF Program, a written agreement that defines the responsibilities of participants.

(17) Protective payee--In the TANF Program, a person whom HHSC selects to receive and manage benefits for the certified group instead of the caretaker. HHSC may designate a protective payee whenever HHSC determines that the caretaker has failed to comply with one or more program requirements.

(18) Recognizable needs amount--In the TANF Program, a set dollar amount that is 25% of the budgetary needs amount for the certified group.

(19) Representative payee--In the TANF Program, a person designated to receive and manage the household's benefits for a client who is incapacitated or incompetent.

(20) Sibling--A brother, sister, half brother, or half sister, as established by biological relationship or legal process. A sibling does not include a stepbrother or stepsister.

(21) SNAP--Supplemental Nutrition Assistance Program, formerly known as the Food Stamp Program.

(22) TANF--Temporary Assistance for Needy Families.

(23) TANF Non-Cash Program--A component of the TANF Program providing TANF-funded services relating to matters such as education, employment, and the prevention and treatment of substance abuse, but that does not provide benefits (for example, cash assistance).

(24) TANF Program--A program providing temporary benefits (cash assistance) and work opportunities to families with needy dependent children. References in this chapter to the TANF Program also include the TANF State Program (TANF-SP), unless the context clearly indicates otherwise.

(25) TANF State Program (TANF-SP)--The state-created and state-funded program that is the same as the TANF Program, except limited to certain Texas counties and two-parent households. References in this chapter to TANF include TANF-SP, unless the context clearly indicates otherwise.

(26) Texas Health and Human Services Commission (HHSC)--The state agency that administers the TANF Program and SNAP in Texas.

(27) *Texas Works Handbook* --An HHSC manual containing policies and procedures used to determine eligibility for SNAP, TANF, and Medicaid programs for children and families. The *Texas Works Handbook* is found on the Internet at www.hhsc.state.tx.us/Programs/Programs.shtml#handbooks.

(28) U.S.--The United States of America.

(29) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §372.2 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.3** Legal Basis {#sec-372.3 omnilex-key=us-tx-regs-official--title-1--372.3}

(a) For the TANF Program, the federal law basis is:

(1) Title IV of the Social Security Act (42 U.S.C. §601 et seq.); and

(2) the federal regulations in 45 CFR, Parts 260 through 265.

(b) To the extent the regulations described in subsection (a) of this section impose federal mandates that apply to Texas, HHSC incorporates the regulations by reference for administration of TANF in Texas. If the regulations provide options from which Texas may choose, or if Texas is granted a waiver from a federal mandate, the rules of this chapter and other applicable state administrative rules and policy describe the options Texas has chosen and the waivers Texas has been granted.

(c) For the TANF Program, the state law basis is:

(1) the Texas Human Resources Code, Chapter 31, which authorizes the Texas Health and Human Services Commission (HHSC) to administer the TANF Program in Texas;

(2) the Texas Human Resources Code, Chapter 34, which authorizes HHSC to administer the TANF State Program; and

(3) the rules of this chapter, as well as other applicable HHSC rules.

(d) For SNAP, the federal law basis is:

(1) 7 U.S.C. §2011 et seq.; and

(2) the federal regulations in 7 CFR, Parts 271 through 283.

(e) To the extent the regulations described in subsection (d) of this section impose federal mandates that apply to Texas, HHSC incorporates the regulations by reference for administration of SNAP in Texas. If the regulations provide options from which Texas may choose, or if Texas is granted a waiver from a federal mandate, the rules of this chapter and other applicable state administrative rules and policy describe the options Texas has chosen and the waivers Texas has been granted.

(f) For SNAP, the state law basis is:

(1) the Texas Human Resources Code, Chapter 33, which authorizes HHSC to administer SNAP in Texas; and

(2) the rules of this chapter, as well as other applicable HHSC rules.

(g) The Texas Workforce Commission provides TANF and SNAP employment and hiring activities and support services as described in Title 40 of the Texas Administrative Code, Chapter 811 (relating to Choices) and Chapter 813 (relating to Supplemental Nutrition Assistance Program Employment and Training).

**History**
- *Source Note: The provisions of this §372.3 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.4** Purpose of TANF and SNAP {#sec-372.4 omnilex-key=us-tx-regs-official--title-1--372.4}

(a) The TANF Program encourages self-sufficiency by providing temporary cash assistance and work opportunities to needy families with dependent children.

(b) SNAP encourages improved diets by providing nutrition assistance to low-income individuals or groups.

**History**
- *Source Note: The provisions of this §372.4 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.5** Funding for TANF and SNAP {#sec-372.5 omnilex-key=us-tx-regs-official--title-1--372.5}

(a) The federal government and the State of Texas provide the funding for the TANF Program. The State of Texas fully funds the TANF State Program.

(b) The federal government provides most of the funding for SNAP and the State of Texas funds the rest. Federal funds pay for SNAP benefits and for one-half of the administrative costs. The State of Texas pays the other half of the administrative costs.

**History**
- *Source Note: The provisions of this §372.5 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.6** TANF and SNAP Administrator {#sec-372.6 omnilex-key=us-tx-regs-official--title-1--372.6}

(a) The Texas Health and Human Services Commission (HHSC) administers the TANF Program in Texas under guidance from the U.S. Department of Health and Human Services.

(1) HHSC:

(A) develops the state plan, policies, and procedures;

(B) certifies eligible children and families for benefits and services; and

(C) provides the benefits and services.

(2) The U.S. Department of Health and Human Services:

(A) approves the state plan;

(B) provides funding, guidance, and regulations; and

(C) monitors the operation of the program.

(b) HHSC administers SNAP in Texas, under guidance from the U.S. Department of Agriculture, Food and Nutrition Service.

(1) HHSC:

(A) develops the state plan;

(B) certifies eligible individuals and groups for benefits; and

(C) provides the benefits.

(2) The U.S. Department of Agriculture, Food and Nutrition Service:

(A) approves the state plan;

(B) provides guidance and regulations;

(C) monitors the operation of the program; and

(D) authorizes and manages food retailers.

**History**
- *Source Note: The provisions of this §372.6 adopted to be effective September 1, 2009, 34 TexReg 5361.*

#### **Subchapter G** RETAILER REQUIREMENTS

##### **1 Tex. Admin. Code § 372.1701** Definitions {#sec-372.1701 omnilex-key=us-tx-regs-official--title-1--372.1701}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Automated Clearing House Network (ACH)--A secure payment system of the U.S. Federal Reserve Bank that provides electronic funds transfer between banks.

(2) Advice--An electronic message a retailer sends to receive reimbursement for a transaction. The Electronic Benefit Transfer (EBT) system acknowledges receipt of the Advice, but does not send another approval. The Advice may be declined if it does not match the record of information associated with the original transaction authorized by the call center.

(3) Banking business day--A calendar day (begins at midnight and ends the following midnight), not including a Saturday, Sunday, or a holiday when banks are closed.

(4) Cash-back--The disbursement of funds from a TANF account transacted through a point-of-sale (POS) terminal.

(5) Chargeback--An account adjustment entry against the respondent's settlement account. The adjustment is made as a result of the resolution of the dispute in favor of the initiator.

(6) Client--A person authorized to receive benefits and perform transactions.

(7) Day--A calendar day unless otherwise specified.

(8) Electronic Benefit Transfer (EBT)--An electronic system that allows public assistance benefits to be issued to a client via a debit card. The client authorizes transfer of benefits from the client's account to a retailer account to receive cash or pay for products.

(9) EBT contractor--A vendor that contracts with the Texas Health and Human Services Commission (HHSC) to provide EBT services in Texas.

(10) EBT program transaction--Benefit or account transaction involving:

(A) authorization;

(B) issuance;

(C) redemption;

(D) accounting;

(E) settlement;

(F) reconciliation; or

(G) inquiry.

(11) EBT system--An electronic payments system that uses electronic funds transfer, automated teller machines, and point-of-sale technology for the delivery of public assistance benefits. The major components of the Texas EBT system are call center, retailer management, application software, and central processing.

(12) Entertainment--The sale of alcoholic beverages, legalized games of chance, sexually oriented material, coin-operated amusement machines, or amusement services as defined by the Comptroller of Public Accounts for tax purposes in 34 TAC §3.298 (relating to Amusement Services).

(13) Equipment--The hardware, including POS terminals, personal identification number (PIN) pads, cables, connectors, and power cords, the retailer management EBT contractor provides to state-supported retailers on behalf of HHSC.

(14) Food and Nutrition Service (FNS)--The division of the U.S. Department of Agriculture responsible for administering SNAP at the federal level.

(15) Initiator--The party initiating the process to resolve a disputed EBT account discrepancy with the respondent.

(16) Personal identification number (PIN)--A four-digit alphanumeric code selected by or assigned to a client. A PIN is used to verify the identity of a cardholder when performing an online EBT program transaction at an automatic teller machine or POS terminal.

(17) Point-of-sale (POS) terminal--A range of electronic devices deployed at retailer locations and used to initiate the electronic debit of client accounts and credit retailer accounts as a purchase is made, or to initiate the electronic credit to the client account and debit to the retailer account for a return.

(18) Respondent--The second party to a disputed EBT account discrepancy identified by the initiator.

(19) Retailer--A merchant authorized by the U.S. Department of Agriculture, Food and Nutrition Service to accept SNAP benefits, or that chooses to accept TANF cash for purchases or chooses to provide TANF cash.

(20) Retailer management EBT contractor--The vendor that contracts with HHSC and is responsible for retailer services, including settlement and reconciliation; dispute resolution; retailer agreement; retailer operating rules; and training, managing, and supplying equipment and help desk services for state-supported retailers.

(21) Settlement--The exchange of information that results in the transfer of funds from one entity to another to complete a financial transaction.

(22) Settlement date--The date on which settlement occurs.

(23) Software--The EBT applications program operated on or in connection with the equipment.

(24) State-supported retailer--A retailer that chooses to operate POS terminals supplied by the retailer management EBT contractor on behalf of HHSC.

(25) Switch provider--An entity that records, tracks, and accounts for EBT transaction activity and relays Texas EBT program transactions between the central processing system and the proper third-party processor or retailer.

(26) Third-party processor (TPP)--An entity that relays EBT program transactions through its own host system to the Texas EBT central processing system for authorization. The entity may be:

(A) a financial institution;

(B) a cardholder authorization processor other than a Texas EBT contractor; or

(C) a retailer that operates its own POS terminals.

**History**
- *Source Note: The provisions of this §372.1701 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1702** EBT System Participation Requirements {#sec-372.1702 omnilex-key=us-tx-regs-official--title-1--372.1702}

(a) To participate in the EBT system, a retailer must be:

(1) currently authorized by the U.S. Department of Agriculture to participate in SNAP; or

(2) a nonfood (not Food and Nutrition Service-authorized) retailer that provides TANF cash-back, and receives no more than 10% of its gross revenue from entertainment.

(b) A retailer must represent and warrant that the facility in which a point-of-sale terminal is or will be located complies with all applicable building and zoning codes and ordinances.

(c) A retailer or third-party processor:

(1) must represent and warrant that it validly exists and is in good standing under the laws of the jurisdiction of its organization and the State of Texas;

(2) must not have been debarred from contracting by any unit of the federal government or any unit of a state government; and

(3) must not be delinquent in making State of Texas franchise tax payments, if the retailer or third-party processor is a for-profit corporation.

(d) A retailer must comply with all applicable regulations in 7 CFR Parts 274 and 278, and this chapter.

(e) A retailer or third-party processor and the retailer management EBT contractor must execute a written agreement with HHSC adopted in compliance with 7 CFR §274.12(g)(6).

(f) Retailer participation in the EBT system is voluntary. A Food and Nutrition Service-authorized retailer must notify the retailer management EBT contractor in writing that it wishes to decline participation in the EBT system.

(g) A retailer that is suspended or terminated as a redeemer of SNAP benefits, for any reason, must:

(1) immediately notify the retailer management EBT contractor, whereupon the retailer management EBT contractor will discontinue connection to the retailer; and

(2) stop using the EBT system to redeem SNAP benefits.

(h) The retailer management EBT contractor provides a retailer's employees with training, in person, by phone, or by mail, in the processing of EBT program transactions, including operation of the equipment if the retailer management EBT contractor supplies the equipment. Employee training is completed before the retailer accepts EBT program transactions. If the retail management EBT contractor is providing in-person training, the retailer management EBT contractor notifies the retailer in advance of the scheduled time for in-person training.

(i) Access to the EBT system is granted:

(1) after the training in subsection (h) of this section has been completed; and

(2) when system testing has been approved.

(j) A retailer must not subject a client, employee, or applicant to actions that are discriminatory in nature or refuse to process a client's EBT program transaction on the grounds of race, color, national origin, age, sex, disability, religious belief, or political belief.

(k) A retailer redeeming TANF benefits by providing cash-back on a no-purchase-required basis must maintain a sufficient amount of cash on hand to accommodate cash-back transaction volumes.

(l) A retailer must not ask a client to reveal the client's personal identification number.

**History**
- *Source Note: The provisions of this §372.1702 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1703** Point-of-Sale Terminal Requirements {#sec-372.1703 omnilex-key=us-tx-regs-official--title-1--372.1703}

(a) Equipment. As specified in 7 CFR §274.12(g)(2), a retailer may, but is not required to, obtain equipment from the retailer management EBT contractor.

(b) Site survey. If a retailer obtains equipment from the retailer management EBT contractor, the retailer must permit the retailer management EBT contractor to:

(1) conduct necessary site surveys at all locations of a retailer participating in the EBT program; and

(2) during the course of the site survey, the retailer management EBT contractor determines the equipment needs for each qualified location to comply with the applicable point-of-sale (POS) terminal deployment, as provided by §372.1704 of this chapter (relating to Point-of-Sale Terminal Requirements to Redeem SNAP Benefits).

(c) Terminal software license. The retailer management EBT contractor provides software, under license, to state-supported retailers.

**History**
- *Source Note: The provisions of this §372.1703 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1704** Point-of-Sale Terminal Requirements to Redeem SNAP Benefits {#sec-372.1704 omnilex-key=us-tx-regs-official--title-1--372.1704}

(a) General. Retailers must deploy point-of-sale (POS) terminals, as required by 7 CFR §274.12(g)(4)(ii), whether the terminals are provided by the retailer management EBT contractor or by a third-party processor.

(b) Optional terminals. A retailer may deploy a POS terminal within its respective store office, customer service area, or another location to enable clients who are not making a purchase to complete credit transactions and TANF cash transactions.

(c) Minimum redemptions. Retailers with a SNAP redemption average, over any six-month period, that is:

(1) $100 per month or more, receive equipment at no cost from the retailer management EBT contractor; or

(2) less than $100 per month, must:

(A) obtain the software and equipment at their own expense; or

(B) use the manual voucher transaction process, as described in §372.1705 of this subchapter (relating to Manual Voucher Transaction Requirements).

(d) Special checkout lanes. A retailer must not establish special checkout lanes that are only for EBT program transactions, as stated in 7 CFR §274.12(g)(4)(i).

**History**
- *Source Note: The provisions of this §372.1704 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1705** Manual Voucher Transaction Requirements {#sec-372.1705 omnilex-key=us-tx-regs-official--title-1--372.1705}

(a) Retailers that must provide manual voucher services are:

(1) stores that do not qualify for equipment because they do not average at least $100 a month in SNAP transactions; or

(2) do not have electricity or a phone line at the time of the purchase.

(b) A retailer with online transaction processing capabilities may provide manual voucher services if the third-party processor, the Texas EBT system, the POS terminal, or the personal identification (PIN) pad is inoperative.

(c) A retailer authorized under 7 CFR §278.1 may use manual vouchers with preliminary or delayed telephone verification.

(d) Retailers that delay telephone verification or obtain preliminary telephone verification may process manual TANF cash-back redemptions and SNAP redemptions when they are able to:

(1) contact the EBT call center by telephone; and

(2) obtain an authorization number for the amount of purchase before completing the sale.

(e) Retailers that delay telephone verification or obtain preliminary telephone verification must:

(1) complete the manual voucher properly and legibly;

(2) include the telephone authorization number;

(3) ensure that the voucher is signed by the client and initialed by the sales clerk; and

(4) submit the voucher to the retailer management EBT contractor within 15 calendar days after the date of purchase.

(f) The retailer management EBT contractor:

(1) processes a voucher within three banking business days after receipt; or

(2) if the voucher is incomplete or otherwise improperly prepared and submitted, returns the voucher to the retailer for correction or completion, or both, within four banking business days after the date the retailer management EBT contractor receives it.

**History**
- *Source Note: The provisions of this §372.1705 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1706** Electronic Manual Voucher Transaction Requirements {#sec-372.1706 omnilex-key=us-tx-regs-official--title-1--372.1706}

(a) Electronic voucher transaction. A retailer may enter a manual voucher into a point-of-sale terminal at the retailer location and submit it as an electronic voucher in the form of an Advice transaction.

(b) Electronic Benefit Transfer (EBT) electronic manual voucher procedures. If a retailer with electronic voucher capacity uses a manual voucher, the retailer or its third-party processor must complete the manual voucher as specified in §372.1705 of this subchapter (relating to Manual Voucher Transaction Requirements) and:

(1) obtain voice authorization from the EBT call center before completing the manual voucher transaction;

(2) enter the authorization code on the manual voucher and in the Advice; and

(3) submit the Advice transaction within 15 calendar days after the date of purchase.

(c) In a dispute, a retailer must submit the manual voucher to the Texas Health and Human Services Commission (HHSC) or the retailer management EBT contractor upon request by HHSC or the retailer management contractor.

**History**
- *Source Note: The provisions of this §372.1706 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1707** Liability Implications for Manual Transactions {#sec-372.1707 omnilex-key=us-tx-regs-official--title-1--372.1707}

(a) The Texas Health and Human Services Commission's (HHSC's) manual transactions liability is only for those manual transactions performed in accordance with the written agreement under 7 CFR §274.12(g)(6) and processing standards in 7 CFR §274.12(h).

(b) HHSC reimburses a retailer for manual transactions, as required by the terms and conditions of the retailer agreement, for which an insufficient amount of benefits remain in the client's account at the time the manual voucher is presented for processing and payment.

(c) If authorization cannot be obtained before or at the time of purchase, a retailer assumes the risk of insufficient benefits being available in the client's account.

(d) A retailer using voice authorization and electronic voucher is liable if the retailer management EBT contractor rejects its or its third-party processor's submission because of failure to follow the procedures in §372.1706 of this subchapter (relating to Electronic Manual Voucher Transaction Requirements).

(e) Neither the retailer management EBT contractor nor the retailer may re-present a manual voucher for payment if insufficient funds exist when the voucher is submitted for processing and payment.

**History**
- *Source Note: The provisions of this §372.1707 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1708** Store-and-Forward as an Alternative to Manual Transaction {#sec-372.1708 omnilex-key=us-tx-regs-official--title-1--372.1708}

In compliance with 7 CFR §274.12(m), a Texas EBT third-party processor may be certified for store-and-forward approvals as an alternative to manual voucher transactions. Store-and-forward is an electronic back-up for the retailer's online system. It is also known as stand-in processing.

(1) At the retailer's own choice and liability, a retailer may store transactions when the EBT central processing system cannot be accessed for any reason and then forward the transactions to the EBT central processing system after the system again becomes available.

(2) A retailer may forward the transaction to the EBT central processing system one time within 24 hours after the system again becomes available. If the 24-hour period crosses into the beginning of a new benefit issuance period, the retailer may draw against all available benefits in the account.

**History**
- *Source Note: The provisions of this §372.1708 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1709** Liability Implications for Store-and-Forward Transactions {#sec-372.1709 omnilex-key=us-tx-regs-official--title-1--372.1709}

If there are insufficient funds to authorize the full amount of an otherwise approvable store-and-forward transaction, the balance remaining in the client's account is paid to the retailer in accordance with the following:

(1) The EBT central processing system approves a partial amount of the store-and-forward transaction, crediting the retailer with the balance remaining in the client's account through a one-step process.

(2) The transaction must be in accordance with the standard message format requirements for store-and-forward transactions.

(3) The retailer must not obtain the uncollected balance from a client's current or future month's benefits.

**History**
- *Source Note: The provisions of this §372.1709 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1710** Third-Party Processor Requirements {#sec-372.1710 omnilex-key=us-tx-regs-official--title-1--372.1710}

(a) Retailers entering the EBT system that choose to use an authorized third-party processor must choose one that is certified to the Texas EBT system.

(b) A third-party processor must:

(1) comply with performance and technical standards set forth in 7 CFR §274.12(h);

(2) execute a written agreement adopted in accordance with 7 CFR §274.12(g)(6) with the retailer management EBT contractor;

(3) meet the qualifications established in §372.1702 of this subchapter (relating to EBT System Requirements); and

(4) comply with applicable general conditions established in §372.1702 of this subchapter.

**History**
- *Source Note: The provisions of this §372.1710 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1711** Reimbursement for Electronic Benefit Transfer Transactions {#sec-372.1711 omnilex-key=us-tx-regs-official--title-1--372.1711}

(a) A retailer or third-party processor must have a bank account with a federally insured financial institution capable of accepting credits and debits in the Automated Clearing House Network (ACH) format.

(b) A retailer management EBT contractor transfers the reimbursement for Electronic Benefit Transfer transactions into the third-party processor's bank account for reimbursement to the retailer's bank account.

**History**
- *Source Note: The provisions of this §372.1711 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1712** Account Discrepancies {#sec-372.1712 omnilex-key=us-tx-regs-official--title-1--372.1712}

(a) If there is a discrepancy between the retailer management EBT contractor's settlement total and a retailer's or third-party processor's settlement total, the retailer or third party-processor must:

(1) notify the retailer management EBT contractor in writing within 10 banking business days after discovering the discrepancy; and

(2) submit all applicable documentation.

(b) The retailer management EBT contractor rejects discrepancies or adjustments reported more than 90 days after the settlement date.

**History**
- *Source Note: The provisions of this §372.1712 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1713** Transaction Disputes {#sec-372.1713 omnilex-key=us-tx-regs-official--title-1--372.1713}

(a) If a retailer or third-party processor does not receive or disagrees with the amount of an Electronic Benefit Transfer (EBT) to its bank account, the retailer or third-party processor must contact the retailer management EBT contractor to dispute the reimbursement or lack of reimbursement. (Participant or household-related disputes are resolved as required by §372.1521 of this chapter (relating to Account Balance and Transaction Errors).)

(b) A dispute may be initiated for any reason deemed valid by the initiator, including:

(1) processing errors, including duplicate processing; or

(2) incorrect manual vouchers.

(c) A dispute must be initiated with the respondent no later than 90 calendar days after the date the initiator knows or has reason to know of the dispute.

**History**
- *Source Note: The provisions of this §372.1713 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1714** Transaction Dispute Resolution {#sec-372.1714 omnilex-key=us-tx-regs-official--title-1--372.1714}

(a) The retailer management EBT contractor:

(1) investigates and resolves transaction disputes between a retailer and third-party processor; and

(2) requests information from the initiator and responder as needed.

(b) The retailer management EBT contractor responds in writing:

(1) within 10 banking business days after initiation, if the dispute is over system errors; and

(2) within 15 calendar days after initiation for all other disputes.

(c) Funds are transferred to the retailer or third-party processor only.

(d) A chargeback transaction may be used to resolve a disputed EBT program transaction. A chargeback may be issued against the:

(1) retailer management EBT contractor;

(2) retailer; or

(3) third-party processor's settlement account.

**History**
- *Source Note: The provisions of this §372.1714 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1715** Appeal of Transaction Dispute Resolution {#sec-372.1715 omnilex-key=us-tx-regs-official--title-1--372.1715}

(a) If a retailer or third-party processor disagrees with the resolution of a transaction dispute, the retailer or third-party processor:

(1) must first file a complaint in writing with the retailer management EBT contractor; and

(2) may send a written request for an informal review within 15 days after the official notice of action from the retailer management EBT contractor to the Texas Health and Human Services Commission, Lone Star Business Services, Electronic Benefit Transfer, P.O. Box 12688, Mail Code 2033, Austin, Texas 78751.

(b) If a retailer or third-party processor is dissatisfied with the results of an informal review, the retailer or third-party processor may send a written request for an administrative hearing to the Texas Health and Human Services Commission, Hearings Department, P.O. Box 149030, Mail Code W-613, Austin, Texas, 78714-9030. The administrative hearing is held in accordance with Chapter 357, Subchapter I of this title (relating to Hearings Under the Administrative Procedure Act).

**History**
- *Source Note: The provisions of this §372.1715 adopted to be effective September 1, 2009, 34 TexReg 5361.*

##### **1 Tex. Admin. Code § 372.1716** Out-of-State Transactions of Texas-issued Benefits {#sec-372.1716 omnilex-key=us-tx-regs-official--title-1--372.1716}

(a) Retailers outside of Texas may accept the Electronic Benefits Transfer (EBT) card and process transactions if they route those transactions through a third-party processor or transaction switch providers certified to the Texas EBT system.

(b) Third-party processors may accept and route transactions from retailers outside of Texas if they are certified to the Texas EBT system or if they route transactions through a switch provider certified to the Texas EBT system.

(c) Retailers outside of Texas must:

(1) provide their own equipment and arrange for their own training for electronic transaction processing; or

(2) obtain equipment and training from the state in which they are located.

(d) Retailers outside of Texas that route transactions through a switch provider must not use off-line (manual) vouchers.

(e) Disputes with out-of-state retailers involving transactions for Texas clients are resolved using the same procedures as for Texas retailers, as described in §372.1713 of this subchapter (relating to Transaction Disputes).

**History**
- *Source Note: The provisions of this §372.1716 adopted to be effective September 1, 2009, 34 TexReg 5361.*

### **Chapter 373** MEDICAID ESTATE RECOVERY PROGRAM

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 373.101** Purpose {#sec-373.101 omnilex-key=us-tx-regs-official--title-1--373.101}

The purpose of this chapter is to implement the Medicaid Estate Recovery Program (MERP), consistent with federal law 42 U.S.C. §1396p(b)(1), which requires the State Medicaid Agency, the Texas Health and Human Services Commission, to recover the costs of Medicaid long-term care benefits received by certain Medicaid recipients.

**History**
- *Source Note: The provisions of this §373.101 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.103** Applicability {#sec-373.103 omnilex-key=us-tx-regs-official--title-1--373.103}

(a) MERP may file a claim against the estate of a deceased Medicaid recipient for covered Medicaid long-term care services if the recipient:

(1) was 55 years old or older when the recipient received the services; and

(2) began receiving covered Medicaid long-term care services on or after March 1, 2005.

(b) For purposes of this chapter, an individual will be considered to be age 55 as of the first day of the month following the month in which the recipient attains the age of 55.

**History**
- *Source Note: The provisions of this §373.103 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.105** Definitions {#sec-373.105 omnilex-key=us-tx-regs-official--title-1--373.105}

For the purposes of this chapter, the following words and terms have the following meanings, unless the context clearly indicates otherwise.

(1) Began receiving Covered Medicaid Long-Term Care Services--The first date a Medicaid recipient receives a covered service approved and paid for by Medicaid.

(2) Claim--A right to recover the total amount of Medicaid assistance paid for covered Medicaid long-term care services and all related hospital and prescription drug services provided from the time the decedent was 55 years of age or older.

(3) Cost-effective--When the amount of money expected to be recovered by MERP is more than the cost of recovering that money.

(4) Covered Medicaid long-term care services--Any of the below services provided to a recipient aged 55 years or older under the State of Texas Medicaid plan under Title XIX of the Social Security Act (SSA):

(A) nursing facility services;

(B) intermediate care facilities for individuals with an Intellectual Disability or Related Condition (ICF/IID);

(C) Medicaid long-term care services provided under the following Medicaid programs:

(i) Home and Community-based Services (HCS);

(ii) Community Attendant Services (CAS);

(iii) Community Living Assistance and Support Services (CLASS);

(iv) Community Based Alternatives (CBA);

(v) Consolidated Waiver Program (CWP);

(vi) Deaf-Blind with Multiple Disabilities (DBMD);

(vii) Integrated Care Management (ICM);

(viii) STAR+PLUS long-term care services; and

(ix) Texas Home Living (TxHmL); and

(D) related costs of hospital and prescription drug services.

(5) Decedent--A deceased individual who was 55 years of age or older when they received covered Medicaid long-term care services.

(6) Estate--The real and personal property of a decedent, both as such property originally existed and as from time to time changed in form by sale, reinvestment, or otherwise, and as augmented by any accretions, additions, and substitutions included in the definition of estate found in Texas Estates Code §22.012.

(7) Federal Poverty Threshold--Income thresholds provided each year by the U.S. Census Bureau.

(8) Heir--As defined in Texas Estates Code §22.015.

(9) Intestate--To die without leaving a valid will.

(10) Legatee--As defined in Texas Estates Code §22.021.

(11) MERP--The Medicaid Estate Recovery Program. A program within the Texas Health and Human Services Commission (HHSC) administered by the Office of the Inspector General (OIG).

(12) Personal Representative--As defined in Texas Estates Code §22.031.

(13) Recipient--An individual who received covered Medicaid long-term care services.

(14) Value of real property--Property value determined by the tax appraisal district at the time of the filing of the MERP estate claim.

**History**
- *Source Note: The provisions of this §373.105 adopted
to be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

#### **Subchapter B** RECOVERY CLAIMS

##### **1 Tex. Admin. Code § 373.201** Basis for Claims {#sec-373.201 omnilex-key=us-tx-regs-official--title-1--373.201}

The acceptance of Medicaid medical assistance, as defined by Title XIX of the Social Security Act, including mandatory and optional payments under the Social Security Act, provides a basis for a Class 7 probate claim, as defined in Texas Estates Code §355.102, in favor of MERP as an interested party in the estate of the decedent.

**History**
- *Source Note: The provisions of this §373.201 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.203** Claims Procedures {#sec-373.203 omnilex-key=us-tx-regs-official--title-1--373.203}

(a) MERP may present or file a Class 7 probate claim under Texas Estates Code §355.001, against the estate of a decedent in accordance with Texas Estates Code §355.102.

(b) A claim may be filed in accordance with applicable provisions of the Texas Estates Code, including §355.060, which bars unsecured claims presented more than 120 calendar days after the notice is received by the estate administrator.

**History**
- *Source Note: The provisions of this §373.203 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.205** Medicaid Estate Recovery Program Claim {#sec-373.205 omnilex-key=us-tx-regs-official--title-1--373.205}

(a) The MERP claim will be presented to the estate's representative or filed in the appropriate Probate Court. This claim will include the amount of the claim, the date or dates the covered Medicaid long-term care services were provided, and a statement that, to MERP's knowledge, the decedent does not have:

(1) a surviving spouse;

(2) a surviving child under age 21;

(3) a surviving child of any age who is blind or disabled as defined by 42 U.S.C. §1382c;

(4) an adult child residing continuously in the decedent's homestead as an unmarried individual for at least twelve consecutive months immediately prior to the decedent's death; and

(5) an undue hardship, as outlined by these rules.

(b) A MERP claim will be filed within 120 calendar days after MERP has actual notice of the death of a decedent aged 55 years or older who received covered Medicaid long-term care services.

**History**
- *Source Note: The provisions of this §373.205 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.207** Exemptions from Claims {#sec-373.207 omnilex-key=us-tx-regs-official--title-1--373.207}

(a) A MERP claim will only be made after the death of the decedent and if there is no:

(1) surviving spouse;

(2) surviving child or children under age 21;

(3) surviving child of any age who is blind or disabled as defined by 42 U.S.C. §1382c; or

(4) adult child residing continuously in the decedent's homestead as an unmarried individual for at least twelve consecutive months immediately prior to the decedent's death.

(b) The following American Indians (AI) and Alaska Natives (AN) income, resources, and property are exempt from MERP.

(1) Certain AI/AN income and resources (such as interests in and income derived from Tribal land and other resources currently held in trust status; and judgment funds from the Indian Claims Commission and the U.S. Claims Court) that are exempt from Medicaid estate recovery by other laws and regulations;

(2) Ownership interest in trust or non-trust property, including real property and improvements:

(A) located on a reservation (any federally recognized Indian Tribe's reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska Native regions established by Alaska Native Claims Settlement Act and Indian allotments) or near a reservation as designated and approved by the Bureau of Indian Affairs of the U.S. Department of the Interior; or

(B) for any federally recognized Tribe not described in subparagraph (A) of this paragraph, located within the most recent boundaries of a prior Federal reservation.

(C) protection of non-trust property described in subparagraphs (A) and (B) of this paragraph is limited to circumstances when it passes from an Indian (as defined in section 4 of the Indian Health Care Improvement Act) to one or more relatives (by blood, adoption, or marriage), including Indians not enrolled as a member of a Tribe and non-Indians such as spouses and step-children, that their culture would nevertheless protect as family members; to a Tribe or Tribal organization; and/or to one or more Indians;

(3) Income left as a remainder in an estate derived from property protected in paragraph (2) of this subsection, that was either collected by an Indian, or by a Tribe or Tribal organization and distributed to Indian(s), as long as the individual can clearly trace it as coming from protected property;

(4) Ownership interests left as a remainder in an estate in rents, leases, royalties, or usage rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant products, animals, fish, and shellfish) resulting from the exercise of Federally-protected rights, and income either collected by an Indian, or by a Tribe or a Tribal organization and distributed to Indian(s) derived from these sources, as long as the individual can clearly trace it as coming from protected sources; and

(5) Ownership interests or usage rights to items not covered by paragraphs (1) - (4) of this subsection that have unique religious, spiritual, traditional, and/or cultural significance, or rights that support subsistence or a traditional lifestyle according to applicable Tribal law or custom.

(c) American Indians and Alaska Native income, resources, and property not exempt from Medicaid estate recovery include:

(1) ownership interests in assets and property, both real and personal, that are not described in subsection (b) of this section; or

(2) any income and assets left as a remainder in an estate that do not derive from protected property or sources in subsection (b) of this section.

(d) Government reparation payments to individuals in special populations are exempt from Medicaid estate recovery claims.

**History**
- *Source Note: The provisions of this §373.207 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.209** Undue Hardship Waivers {#sec-373.209 omnilex-key=us-tx-regs-official--title-1--373.209}

(a) MERP will not recover from estates if recovery would cause undue hardship. An undue hardship waiver request form will be provided with the MERP Notice of Intent to File a Claim. Undue hardship waiver requests must be made within 60 calendar days of the date of the MERP Notice of Intent to File a Claim.

(b) Grounds for undue hardship waivers include:

(1) the estate property subject to recovery has been the site of the operation of a family business, farm, or ranch at that location for at least 12 months prior to the death of the decedent; produces 50 percent or more of the heirs' and legatees' livelihood; and recovery by the State would affect the property and result in the heirs or legatees losing their primary source of income;

(2) heirs and legatees would become eligible for public assistance, medical assistance, or both if a recovery claim were made;

(3) allowing one or more survivors to receive the estate will enable the survivor to discontinue eligibility for public assistance, medical assistance, or both;

(4) the decedent received medical assistance as the result of a crime committed against the recipient; or

(5) other compelling reasons.

(c) An undue hardship does not exist solely because:

(1) recovery would prevent heirs or legatees from receiving an anticipated inheritance; or

(2) the circumstances giving rise to the hardship were created by, or are the result of, estate planning methods under which assets were sheltered or divested contrary to the requirements of Medicaid law in order to avoid estate recovery.

(d) After receiving a Medicaid estate recovery claim, an heir may assert that recovery against a decedent's homestead would be an undue hardship and the homestead should therefore be exempt from recovery for the cost of Medicaid long-term care services. MERP will exempt a decedent's homestead from estate recovery based on undue hardship when the following conditions have been established to MERP's satisfaction.

(1) The tax appraisal district value of the homestead for the most recent tax year at the time of the decedent's death is less than $150,000. If the tax appraisal district value of the homestead for that year exceeds $150,000, only the first $150,000 shall be exempt from estate recovery. Any equity value in excess of $150,000 is subject to estate recovery.

(2) One or more siblings or direct descendants of the decedent will inherit the homestead of the decedent, provided that each sibling or direct descendant inheriting the homestead has a gross family income below 300 percent of the federal poverty threshold as determined by the previous year's tax return.

(3) When there are multiple heirs and not all heirs qualify for the hardship waiver, only that percentage of the homestead that corresponds to the qualifying heir or heirs' share of the homestead will be exempt from Medicaid estate recovery.

(4) "300 percent of the federal poverty threshold" is a gross income test; no exclusions or deductions are allowed.

(5) MERP will consider each heir separately. Heirs will not be aggregated into one family unless the heirs are minor children who are siblings. In the case of an adult heir, the heir's family will be limited to the heir, the heir's spouse, and the heir's biological or legally adopted minor children and stepchildren residing in the household. In the case of an heir who is a minor, the heir's family will be the heir, his or her parent or parents, stepparent residing in the household, and the heir's minor siblings residing in the household, including half-, step-, and legally adopted siblings.

(e) MERP has sole authority to waive its Medicaid estate recovery claim and to grant undue hardship waivers. An undue hardship waiver determination will be made by MERP within 40 calendar days of MERP receiving the undue hardship waiver request form and all required supporting documents.

**History**
- *Source Note: The provisions of this §373.209 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.211** Right to a Review of an Undue Hardship Waiver Denial {#sec-373.211 omnilex-key=us-tx-regs-official--title-1--373.211}

(a) If MERP denies an undue hardship waiver request, the applicant may request MERP to review the decision. MERP must receive the request to review the decision within 60 calendar days of the applicant receiving notice of the denial. A review is an informal process and not a hearing.

(b) MERP will review the request within 40 calendar days from the date the request and all supporting documents are received by MERP. All requests for a review of the denial of an undue hardship waiver request must be made in writing to the address included in the denial letter.

**History**
- *Source Note: The provisions of this §373.211 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.213** Deduction Allowed for Expenses for Home Maintenance and Costs of Care {#sec-373.213 omnilex-key=us-tx-regs-official--title-1--373.213}

(a) An amount of money equal to the necessary and reasonable maintenance expenses and taxes for maintaining the home of the decedent may be deducted from the MERP claim, provided sufficient supporting documentation of these expenditures, such as receipts, is provided to MERP by estate personal representatives, heirs, or legatees. Necessary and reasonable expenses for maintaining the home include real estate taxes, utility bills, insurance, home repairs, and home maintenance expenses such as lawn care.

(b) An amount of money equal to the necessary and reasonable costs of care (including personal attendant care) directly paid for the care of the decedent that enabled the decedent to remain in his or her home and thereby delayed the institutionalization of the decedent may be deducted from the MERP claim, provided sufficient supporting documentation of these expenditures, such as receipts, is provided to MERP by estate personal representatives, heirs, or legatees.

(c) To get a deduction from MERP claims for expenses under subsections (a) or (b) of this section, a request must be made in writing and received by MERP within 60 calendar days after receiving the Notice of the Intent to File a Claim from MERP. All proof of expenses must be attached to the request.

**History**
- *Source Note: The provisions of this §373.213 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.215** Recovery Not Cost-Effective {#sec-373.215 omnilex-key=us-tx-regs-official--title-1--373.215}

No Medicaid estate recovery claim will be filed if it is not cost effective. A claim will not be cost-effective if:

(1) the value of the recoverable estate is $15,000 or less;

(2) the recoverable amount of Medicaid costs is $5,000 or less; or

(3) the cost involved in the sale of the property would be equal to or greater than the value of the property.

**History**
- *Source Note: The provisions of this §373.215 adopted
to be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.217** Claim Amount {#sec-373.217 omnilex-key=us-tx-regs-official--title-1--373.217}

(a) The amount of the MERP claim will be the amount paid for covered Medicaid long-term care services provided for the benefit of the decedent after the decedent turned 55 years old.

(b) The amount of the MERP claim may be amended both before and after MERP files the recovery claim.

(c) MERP claims include payments made directly by Medicaid to health care providers and the monthly capitation payments made to a Managed Care Organization (MCO).

**History**
- *Source Note: The provisions of this §373.217 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.219** Claim Payments {#sec-373.219 omnilex-key=us-tx-regs-official--title-1--373.219}

(a) All payments on estate recovery claims must be made payable to "Texas Medicaid Estate Recovery Program" and must be sent to the address provided in MERP's official correspondence.

(b) MERP may compromise, settle, or waive any claim that does not qualify for an undue hardship waiver upon good cause shown. Interest on the unpaid portion of any claim shall be the rate provided under Texas Government Code §2251.025(b).

**History**
- *Source Note: The provisions of this §373.219 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

#### **Subchapter C** NOTICE

##### **1 Tex. Admin. Code § 373.301** Notice Upon Application {#sec-373.301 omnilex-key=us-tx-regs-official--title-1--373.301}

(a) Written notice of the MERP provisions will be provided to individuals or their legal representative when applying for covered Medicaid long-term care services.

(b) An individual committed by a court order to an Intermediate Care Facility for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) after an evaluation of fitness or competency, or that individual's guardian, will be notified of the MERP provisions by facility staff at the time of their admission to the facility.

**History**
- *Source Note: The provisions of this §373.301 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.303** Additional Application Notice Provision to Recipients and Others {#sec-373.303 omnilex-key=us-tx-regs-official--title-1--373.303}

Written notice about MERP is provided upon a request for an application for Medicaid benefits, release from a waiver interest list, or notice of admission to a nursing facility, or an Intermediate Care Facility for Individuals with an Intellectual Disability or Related Conditions (ICF/IID). The notice is provided to:

(1) the recipient;

(2) the recipient's guardian of the person, if any, and guardian of the estate, if any, provided the name and address of the guardian or guardians are known;

(3) the recipient's agent under a durable power of attorney, if the name and address of the agent are known;

(4) the recipient's agent under a medical power of attorney, if the name and address of the agent are known; or

(5) if none of the above are known, to family members acting on behalf of the recipient, provided the name and address of those family members acting on behalf of the recipient are known.

**History**
- *Source Note: The provisions of this §373.303 adopted
to be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.305** Medicaid Application Estate Recovery Notice Contents {#sec-373.305 omnilex-key=us-tx-regs-official--title-1--373.305}

Written notice provided under §373.303 of this subchapter (relating to Additional Application Notice Provision to Recipients and Others) will include the following information:

(1) description of MERP;

(2) information as to covered Medicaid long-term care services subject to estate recovery;

(3) claim procedures found in Texas Estates Code §355.102;

(4) information about the applicable "look-back period" for transfers of property for less than market value;

(5) description of undue hardship waiver requests regarding a recovery claim and the procedures for requesting that waiver; and

(6) information about the MERP Notice of Intent to File a Claim and the Medicaid estate recovery claim on the death of a Medicaid recipient.

**History**
- *Source Note: The provisions of this §373.305 adopted
to be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

##### **1 Tex. Admin. Code § 373.307** Notice of Intent to File a Claim upon the Death of a Medicaid Recipient. {#sec-373.307 omnilex-key=us-tx-regs-official--title-1--373.307}

(a) Within 60 calendar days of being notified of the death of a Medicaid recipient, MERP will provide a Notice of Intent to File a Claim to one or more of the following:

(1) estate representative;

(2) decedent's guardian of the person and guardian of the estate, provided MERP knows the name and address of the guardian or guardians;

(3) decedent's agent under a durable power of attorney, if MERP knows the name and address of the agent;

(4) decedent's agent under a medical power of attorney, if MERP knows the name and address of the agent;

(5) a nursing facility who provided covered Medicaid services;

(6) last known address connected to the decedent; and

(7) if MERP does not know the name and address of any of the people listed above, family members who have acted on behalf of the decedent for whom MERP knows their names and addresses.

(b) MERP will provide written notice of MERP's intent to file an estate recovery claim against the estate of a decedent to individuals identified in subsection (a) of this section. The notice will include:

(1) a program overview;

(2) a questionnaire that seeks to determine whether the decedent had:

(A) a surviving spouse;

(B) a surviving child under age 21;

(C) a surviving child of any age who is blind or disabled, as defined by 42 U.S.C. §1382c; or

(D) an adult child residing in the decedent's homestead as an unmarried individual for at least twelve consecutive months immediately prior to the decedent's death.

(c) Undue hardship request forms and supporting documentation must be submitted to MERP within 60 calendar days of the date of the Notice of Intent to File a Claim. No action will be taken on an undue hardship request submitted without supporting documentation.

(d) The Notice of Intent to File a Claim will state the source and the date MERP received the notification of the death of the decedent.

**History**
- *Source Note: The provisions of this §373.307 adopted to
be effective March 1, 2005, 30 TexReg 830; amended to be effective
August 27, 2026, 51 TexReg 5531.*

### **Chapter 375** REFUGEE CASH ASSISTANCE AND MEDICAL ASSISTANCE PROGRAMS

#### **Subchapter G** LOCAL RESETTLEMENT AGENCY REQUIREMENTS

##### **1 Tex. Admin. Code § 375.701** Local Governmental and Community Input {#sec-375.701 omnilex-key=us-tx-regs-official--title-1--375.701}

(a) For purposes of this subchapter, the following definitions apply.

(1) Business day--A day that is not a Saturday, Sunday, or federal legal holiday. In computing a period of business days, the first day is excluded and the last day is included. If the last day of any period is a Saturday, Sunday, or federal legal holiday, the period is extended to include the next day that is not a Saturday, Sunday, or federal legal holiday.

(2) C.F.R.--Code of Federal Regulations.

(3) HHSC--Texas Health and Human Services Commission, or its designee.

(4) Local resettlement agency--As defined by 45 C.F.R. §400.2, means a local affiliate or subcontractor of a national voluntary agency that has entered into a grant, contract, or cooperative agreement with the United States Department of State or other appropriate federal agency to provide for the reception and initial placement of refugees in the United States.

(5) National voluntary agency--As defined by 45 C.F.R. §400.2, means one of the national resettlement agencies or a state or local government that has entered into a grant, contract, or cooperative agreement with the United States Department of State or other appropriate federal agency to provide for the reception and initial placement of refugees in the United States.

(6) Refugee--An individual admitted to the United States under section 207 of the Immigration and Nationality Act.

(b) A local resettlement agency must convene meetings at least quarterly at which representatives of the local resettlement agency have an opportunity to consult with and obtain feedback regarding proposed refugee placement from, at a minimum:

(1) local governmental entities and officials, including:

(A) municipal and county officials;

(B) local school district officials; and

(C) representatives of local law enforcement agencies; and

(2) community stakeholders, including:

(A) major providers under the local health care system; and

(B) major employers of refugees.

(c) In addition to the quarterly meetings held under subsection (b) of this section, local governmental entities and community stakeholders may request to meet with a local resettlement agency regarding refugee placement.

(1) A local resettlement agency must respond within 10 business days to a request from a local governmental entity or community stakeholder to meet.

(2) If a request for a meeting is denied, the response must be in writing and the reason for denial must be clearly stated.

(3) A copy of the denial must be submitted to HHSC by the local resettlement agency no later than three business days after it is sent to the local governmental entity or community stakeholder.

(d) To facilitate consultation and effective feedback, local governmental entities and community stakeholders may request information from a local resettlement agency related to the resettlement process.

(1) A local resettlement agency must respond within 10 business days as to whether a request for information from a local governmental entity or community stakeholder will be granted.

(2) If the request is granted, the local resettlement agency must provide the requested information no later than 20 business days from the date of the receipt of the request, to the extent not otherwise prohibited by state or federal law.

(3) If a request for information is denied, the response must be in writing and the reason for denial must be clearly stated.

(4) A copy of the denial must be submitted to HHSC by the local resettlement agency no later than three business days after it is sent to the local governmental entity or community stakeholder.

(e) A local resettlement agency must consider all feedback obtained in community consultation meetings under subsections (b) and (c) of this section in reporting annual refugee placement information to the local refugee resettlement agency's national voluntary agency for purposes of 8 United States Code (U.S.C.) §1522(b)(7)(E).

(f) A local resettlement agency must provide HHSC, local governmental entities and officials, and community stakeholders described under subsection (b) of this section a copy of proposed annual refugee placement data for purposes of 8 U.S.C. §1522(b)(7)(E).

(g) A local resettlement agency must develop and submit a final annual report to the local refugee resettlement agency's national voluntary agency and for HHSC that includes a summary regarding how community stakeholder input contributed to the development of an annual refugee placement report for purposes of 8 U.S.C. §1522(b)(7)(E).

(h) A local resettlement agency must provide HHSC with the preliminary number of refugees the local resettlement agencies recommend to the national voluntary agencies for placement throughout the State of Texas.

**History**
- *Source Note: The provisions of this §375.701 adopted to be effective May 1, 2016, 41 TexReg 2945; amended to be effective November 6, 2024, 49 TexReg 8704.*

### **Chapter 376** REFUGEE SOCIAL SERVICES

#### **Subchapter J** LOCAL RESETTLEMENT AGENCY REQUIREMENTS

##### **1 Tex. Admin. Code § 376.1001** Local Governmental and Community Input {#sec-376.1001 omnilex-key=us-tx-regs-official--title-1--376.1001}

(a) For purposes of this subchapter, the following definitions apply.

(1) Business day--A day that is not a Saturday, Sunday, or federal legal holiday. In computing a period of business days, the first day is excluded and the last day is included. If the last day of any period is a Saturday, Sunday, or federal legal holiday, the period is extended to include the next day that is not a Saturday, Sunday, or federal legal holiday.

(2) C.F.R.--Code of Federal Regulations.

(3) HHSC--Texas Health and Human Services Commission, or its designee.

(4) Local resettlement agency--As defined by 45 C.F.R. §400.2, means a local affiliate or subcontractor of a national voluntary agency that has entered into a grant, contract, or cooperative agreement with the United States Department of State or other appropriate federal agency to provide for the reception and initial placement of refugees in the United States.

(5) National voluntary agency--As defined by 45 C.F.R. §400.2, means one of the national resettlement agencies or a state or local government that has entered into a grant, contract, or cooperative agreement with the United States Department of State or other appropriate federal agency to provide for the reception and initial placement of refugees in the United States.

(6) Refugee--An individual admitted to the United States under section 207 of the Immigration and Nationality Act.

(b) A local resettlement agency must convene meetings at least quarterly at which representatives of the local resettlement agency have an opportunity to consult with and obtain feedback regarding proposed refugee placement from, at a minimum:

(1) local governmental entities and officials, including:

(A) municipal and county officials;

(B) local school district officials; and

(C) representatives of local law enforcement agencies; and

(2) community stakeholders, including:

(A) major providers under the local health care system; and

(B) major employers of refugees.

(c) In addition to the quarterly meetings held under subsection (b) of this section, local governmental entities and community stakeholders may request to meet with a local resettlement agency regarding refugee placement.

(1) A local resettlement agency must respond within 10 business days to a request from a local governmental entity or community stakeholder to meet.

(2) If a request for a meeting is denied, the response must be in writing and the reason for denial must be clearly stated.

(3) A copy of the denial must be submitted to HHSC by the local resettlement agency no later than three business days after it is sent to the local governmental entity or community stakeholder.

(d) To facilitate consultation and effective feedback, local governmental entities and community stakeholders may request information from a local resettlement agency related to the resettlement process.

(1) A local resettlement agency must respond within 10 business days as to whether a request for information from a local governmental entity or community stakeholder will be granted.

(2) If the request is granted, the local resettlement agency must provide the requested information no later than 20 business days from the date of the receipt of the request, to the extent not otherwise prohibited by state or federal law.

(3) If a request for information is denied, the response must be in writing and the reason for denial must be clearly stated.

(4) A copy of the denial must be submitted to HHSC by the local resettlement agency no later than three business days after it is sent to the local governmental entity or community stakeholder.

(e) A local resettlement agency must consider all feedback obtained in community consultation meetings under subsections (b) and (c) of this section in reporting annual refugee placement information to the local refugee resettlement agency's national voluntary agency for purposes of 8 United States Code (U.S.C.) §1522(b)(7)(E).

(f) A local resettlement agency must provide HHSC, local governmental entities and officials, and community stakeholders described under subsection (b) of this section a copy of proposed annual refugee placement data for purposes of 8 U.S.C. §1522(b)(7)(E).

(g) A local resettlement agency must develop and submit a final annual report to the local refugee resettlement agency's national voluntary agency and for HHSC that includes a summary regarding how community stakeholder input contributed to the development of an annual refugee placement report for purposes of 8 U.S.C. §1522(b)(7)(E).

(h) A local resettlement agency must provide HHSC with the preliminary number of refugees the local resettlement agencies recommend to the national voluntary agencies for placement throughout the State of Texas.

**History**
- *Source Note: The provisions of this §376.1001 adopted to be effective May 1, 2016, 41 TexReg 2950; amended to be effective November 6, 2024, 49 TexReg 8707.*

### **Chapter 377** CHILDREN'S ADVOCACY PROGRAMS

#### **Subchapter A** GENERAL

##### **1 Tex. Admin. Code § 377.1** Definitions {#sec-377.1 omnilex-key=us-tx-regs-official--title-1--377.1}

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.

(1) Child--An abused or neglected individual who is under the control or supervision of the Texas Department of Family and Protective Services and who is the subject of a suit affecting the parent-child relationship filed by a governmental entity.

(2) Court--The district court, juvenile court having the same jurisdiction as a district court, or other court expressly given jurisdiction of a suit affecting the parent-child relationship.

(3) DFPS--The Texas Department of Family and Protective Services or its designee.

(4) HHSC--The Texas Health and Human Services Commission or its designee.

(5) Participating agency or entity/public agency partner--A governmental entity that:

(A) is involved in child abuse investigations or prosecutions and offers services to child abuse victims; and

(B) participates in establishing and operating a local children's advocacy program as provided in Texas Family Code §264.403.

**History**
- *Source Note: The provisions of this §377.1 adopted to be effective July 11, 2017, 42 TexReg 3477.*

#### **Subchapter B** STANDARDS OF OPERATION FOR LOCAL COURT-APPOINTED VOLUNTEER ADVOCATE PROGRAMS

##### **1 Tex. Admin. Code § 377.101** Purpose and Definitions {#sec-377.101 omnilex-key=us-tx-regs-official--title-1--377.101}

(a) The purpose of this subchapter is to provide:

(1) requirements regarding the function and administration of a local volunteer advocate program; and

(2) requirements for contracts between the statewide volunteer advocate organization and the local volunteer advocate programs.

(b) The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise:

(1) Local volunteer advocate program--A volunteer-based, nonprofit program that provides advocacy services to abused or neglected children with the goal of obtaining a permanent placement for a child that is in the child's best interest.

(2) Statewide volunteer advocate organization--The entity with which HHSC contracts under Texas Family Code §264.603 and §377.107 of this subchapter (relating to Contract with Statewide Volunteer Advocate Organization).

**History**
- *Source Note: The provisions of this §377.101 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.103** Legal Authorization {#sec-377.103 omnilex-key=us-tx-regs-official--title-1--377.103}

The provisions of this subchapter are promulgated under Texas Family Code §264.602(c), §264.602(d), and §264.609, which authorize HHSC to adopt standards for local volunteer advocate programs, develop a scale of financial support for the local volunteer advocate programs, and adopt rules necessary to carry out the provisions of the Texas Family Code.

**History**
- *Source Note: The provisions of this §377.103 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.105** Applicability {#sec-377.105 omnilex-key=us-tx-regs-official--title-1--377.105}

This subchapter applies to local volunteer advocate programs and contracts for services with local volunteer advocate programs as specified in Texas Family Code Chapter 264, Subchapter G.

**History**
- *Source Note: The provisions of this §377.105 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.107** Contract with Statewide Volunteer Advocate Organization {#sec-377.107 omnilex-key=us-tx-regs-official--title-1--377.107}

(a) HHSC contracts with a single statewide volunteer advocate organization that satisfies subsection (b) of this section, to perform the following functions for local volunteer advocate programs:

(1) training;

(2) technical assistance; and

(3) evaluation services for the benefit of the local volunteer advocate programs.

(b) HHSC may contract only with a statewide volunteer advocate organization that:

(1) is exempt from federal income taxation under Internal Revenue Code of 1986 §501(a) and §501(c)(3); and

(2) is composed of individuals or groups of individuals who have expertise in the dynamics of child abuse and neglect, and with experience in operating local volunteer advocate programs.

(c) The contract must:

(1) include measurable goals and objectives relating to the number of:

(A) active and inactive volunteer advocates in the program; and

(B) children receiving services from the program; and

(2) follow practices to ensure compliance with standards referenced in the contract.

**History**
- *Source Note: The provisions of this §377.107 adopted
to be effective July 11, 2017, 42 TexReg 3477; amended to be effective
January 5, 2023, 47 TexReg 8981; amended to be effective March 10,
2025, 50 TexReg 1803.*

##### **1 Tex. Admin. Code § 377.109** Contracts with Local Volunteer Advocate Programs {#sec-377.109 omnilex-key=us-tx-regs-official--title-1--377.109}

(a) The statewide volunteer advocate organization with which HHSC contracts under §377.107 of this subchapter (relating to Contract with Statewide Local Volunteer Advocate Organization) must contract with local volunteer advocate programs.

(b) Eligibility Requirements for a Local Volunteer Advocate Program.

(1) To be eligible for a contract with the statewide volunteer advocate organization under Texas Family Code §264.602, a local volunteer advocate program must:

(A) operate under the auspices of state or county government, or be incorporated as part of a nonprofit organization;

(B) use individuals appointed as volunteer advocates or guardians ad litem by the court, to provide for the needs of abused or neglected children;

(C) demonstrate that the program has provided court-appointed advocacy services for at least six months;

(D) provide court-appointed advocacy services for at least ten children each month; and

(E) demonstrate that the program has local judicial support.

(2) Local judicial support may be demonstrated by a signed written agreement that defines the working relationship between the local volunteer advocate program and the court with appropriate jurisdiction.

(3) The statewide volunteer advocate organization may not contract with a person that is not eligible under this section. However, the statewide volunteer advocate organization may waive the requirement in paragraph (1)(D) of this subsection for an established program in a rural area or under other special circumstances.

(c) The statewide volunteer advocate organization must consider the following in awarding a contract to a local volunteer advocate program:

(1) the local volunteer advocate program's eligibility for, and use of, funds from local, state, or federal governmental sources, philanthropic organizations, and other sources;

(2) community support for the local volunteer advocate program, as indicated by financial contributions from civic organizations, individuals, and other community resources;

(3) whether the local volunteer advocate program provides services that encourage the permanent placement of children with their families, relatives, or through timely placement with adoptive families; and

(4) whether the local court system endorses and cooperates with the local volunteer advocate program.

(d) Contract Requirements.

(1) A contract between the statewide volunteer advocate organization and a local volunteer advocate program must require the local volunteer advocate program to:

(A) submit quarterly and annual financial reports to the statewide volunteer advocate organization, as determined by HHSC;

(B) submit quarterly and annual reports of performance factors identified by HHSC, and submit such reports to the statewide volunteer advocate organization by the deadlines designated by the statewide volunteer advocate organization;

(C) obtain annual independent financial audits or audited financial statements as required by state or federal law, and provide copies of the auditor's reports and related documents in accordance with the deadlines designated by the statewide volunteer advocate organization;

(D) cooperate with inspections and audits that HHSC makes to ensure service standards and fiscal responsibility; and

(E) provide, at a minimum:

(i) independent and factual information regarding the child, in writing, to the court and to counsel for the parties involved;

(ii) advocacy through the courts for permanent home placement and services for the child;

(iii) monitoring of the child to ensure the child's safety and to prevent the unnecessary relocation of the child to multiple temporary placements;

(iv) reports in writing to the presiding judge and to counsel for the parties involved;

(v) community education relating to child abuse and neglect;

(vi) referrals to existing community services;

(vii) procedures to safeguard the confidentiality of records or information relating to the child;

(viii) a volunteer recruitment and training program, including adequate screening procedures for volunteers; and

(ix) compliance with the standards adopted under Texas Family Code §264.602.

(2) A contract between the statewide volunteer advocate organization and a local volunteer advocate program is enforced through the use of the remedies and in accordance with the procedures provided in the Uniform Grant Management Standards for Texas (UGMS).

(3) A local volunteer advocate program must comply with the requirements and provisions of the contract between the statewide volunteer advocate organization and HHSC.

**History**
- *Source Note: The provisions of this §377.109 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.111** Scale of State Financial Support {#sec-377.111 omnilex-key=us-tx-regs-official--title-1--377.111}

(a) The statewide volunteer advocate organization must contract for services with eligible local volunteer advocate programs to expand the existing services of the local volunteer advocate programs. No contract may result in reducing the financial support that a local volunteer advocate program receives from another source.

(b) In accordance with Texas Family Code §264.602(c), the annual percentage of state financial support for a local volunteer advocate program will decline each year over a six-year period as reflected in the schedule below. The reimbursement by HHSC of expenses for a particular local volunteer advocate program incurred in any given year must not exceed the following percentage of total support needs of the local volunteer advocate program for that year, beginning on the effective date of the contract between the local volunteer advocate program and the statewide volunteer advocate organization.

Attached Graphic

**History**
- *Source Note: The provisions of this §377.111 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.113** Local Volunteer Advocate Program Administration {#sec-377.113 omnilex-key=us-tx-regs-official--title-1--377.113}

(a) Required Written Documents. A local volunteer advocate program must have in writing:

(1) a mission and purpose statement approved by the statewide volunteer advocate organization;

(2) the local volunteer advocate program's goals and objectives, with an action plan and timeline for meeting those goals and objectives;

(3) a method for evaluating the progress of accomplishing the local volunteer advocate program's goals and objectives;

(4) a funding plan based on the local volunteer advocate program's goals and objectives;

(5) personnel policies and procedures;

(6) job descriptions for employees, directors, and volunteers;

(7) procedures for volunteer recruiting, screening, training, and appointment to cases;

(8) policies for support and supervision of volunteers;

(9) a grievance procedure for employees, volunteers, current and former clients, and community members;

(10) a media/crisis communication plan;

(11) a fidelity bond;

(12) accounting procedures;

(13) a weapons prohibition policy approved by the statewide volunteer advocate organization; and

(14) a memorandum of understanding between DFPS and the local volunteer advocate program that defines the working relationship between the local volunteer advocate program and DFPS.

(b) Personnel.

(1) A local volunteer advocate program must have a maximum volunteer-to-supervisor ratio of 30:1 and a maximum case-to-supervisor ratio of 45:1.

(2) A local volunteer advocate program must endeavor to provide equal employment opportunity regardless of race, color, religion, national origin, age, sex (including pregnancy), disability, or other status protected by law and must comply with all applicable laws and regulations regarding employment.

(3) A local volunteer advocate program must endeavor to be an inclusive organization whose employees, volunteers, and directors reflect the diversity of the children and community that the program serves in terms of gender, ethnicity, and cultural and socio-economic backgrounds.

(c) Conduct.

(1) All volunteers, employees, and directors must conduct themselves in a professional manner.

(2) Volunteers, employees, and directors may not discriminate against any individual on the grounds of race, color, national origin, religion, sex (including pregnancy), age, disability, or other legally protected classes.

(3) A local volunteer advocate program may terminate a relationship with a volunteer, employee, or director who:

(A) does not act in accordance with the policies of the local volunteer advocate program; or

(B) has abused or neglected a position of trust.

(d) Confidentiality.

(1) Each local program must counsel volunteers, employees, and directors on what constitutes confidential information.

(2) A volunteer, employee, or director may not communicate any confidential information pertaining to an individual being served by a local volunteer advocate program to a person who is not authorized to possess the confidential information.

(e) Conflicts of Interest. Each local volunteer advocate program must have a written conflict-of-interest policy that:

(1) prohibits any personal, business, or financial interest that renders a volunteer, employee, or director unable or potentially unable to perform the duties and responsibilities assigned to that volunteer, employee, or director in an efficient and impartial manner; and

(2) prohibits a volunteer, employee, or director from using the position for private gain, or acting in a manner that creates the appearance of impropriety.

(f) Liability.

(1) A person is not liable for civil damages for a recommendation made or an opinion rendered in good faith, while acting in the official scope of the person's duties as a board member, staff member, or volunteer of a local volunteer advocate program.

(2) Neither HHSC nor the statewide volunteer advocate organization will be liable for the actions of local volunteer advocate program volunteers, employees, or directors. Volunteers, employees, and directors of local volunteer advocate programs must abide by the conduct, confidentiality, and conflict-of-interest requirements outlined in this section, as well as all other laws and regulations governing the prescribed conduct and activity.

**History**
- *Source Note: The provisions of this §377.113 adopted
to be effective July 11, 2017, 42 TexReg 3477; amended to be effective
March 10, 2025, 50 TexReg 1803.*

##### **1 Tex. Admin. Code § 377.115** Local Volunteer Advocate Program Personnel {#sec-377.115 omnilex-key=us-tx-regs-official--title-1--377.115}

(a) Application Process.

(1) Prospective volunteers, employees, and directors must complete:

(A) a written application;

(B) personal interview(s); and

(C) consent and release forms for appropriate background investigations.

(2) New employees must also complete employee handbook acknowledgment forms.

(b) Volunteers.

(1) A volunteer must be at least 21 years of age.

(2) A volunteer may:

(A) review applicable records;

(B) facilitate prompt and thorough review of a case;

(C) interview appropriate parties, including service providers and persons with knowledge of the case, in order to make recommendations regarding the child's best interests;

(D) attend court hearings; and

(E) make written recommendations to the court concerning the outcome that would be in the child's best interest.

(3) A volunteer may not:

(A) take a child to any location not pre-approved by the advocate program;

(B) give legal advice or therapeutic counseling;

(C) make placement arrangements for a child;

(D) give or lend money or expensive gifts to a child or family;

(E) take a child on an overnight outing; or

(F) allow a child to come into contact with someone the volunteer knows or should know has a criminal history involving violence, child abuse, neglect, drugs, or a sexual offense as described under Chapter 21 of the Texas Penal Code.

(4) A volunteer may, on an individual basis, obtain written permission from the local volunteer advocate program, for an exception to an action listed under paragraph (3) of this subsection. If a request for an exception is made, a volunteer must disclose whether anyone who resides with the volunteer, or with whom the child may come in contact through the volunteer, does not meet the background requirements of §377.117 of this subchapter (relating to Local Volunteer Advocate Program Personnel Background Checks). The basis for electing whether to grant an exception must be documented in the child's case file.

(5) A volunteer must not be concurrently assigned to more than two cases, unless the assignment is approved by the local volunteer advocate program's executive director or caseworker supervisor.

(6) A volunteer must not provide foster care to a child in the managing conservatorship of DFPS unless the volunteer is related to the child. This prohibition does not apply to:

(A) a volunteer with whom DFPS placed a child prior to June 30, 1999; or

(B) a volunteer with whom a child has been placed by an agency or person other than DFPS and the child is not in the managing conservatorship of DFPS.

(7) A volunteer may not be assigned to any case in which the volunteer is related to any party.

(c) Employees.

(1) An employee must be at least 21 years of age.

(2) If an employee also serves on the board of directors, he or she may not be a voting director.

(d) Board of Directors.

(1) The board of directors must have at least nine members, with an executive committee composed of, at a minimum, the offices of president, vice president, secretary, and treasurer.

(2) The bylaws of the local volunteer advocate program must include a rotation of directors for the board, as well as term limits for directors and executive committee officers.

(3) A director must be at least 21 years of age.

(4) At least one director from the board must attend applicable annual training provided by the statewide volunteer advocate organization or a national association.

(e) Training.

(1) A local volunteer advocate program must plan and implement a training and development program for employees and volunteers, and must inform employees and volunteers about:

(A) the background and needs of children served by the local volunteer advocate program;

(B) the operation of the court and the child welfare system; and

(C) the nature and effects of child abuse and neglect.

(2) A local volunteer advocate program must provide annual orientation for new directors and continuing education for incumbent directors, which must include information on:

(A) the applicable goals, objectives, and methods of operation of the local volunteer advocate program;

(B) current local, statewide and national association services;

(C) the court and child welfare system; and

(D) program governance.

(3) A local volunteer advocate training program must consist of at least 30 hours of pre-service training and 12 hours of in-service training per year.

(4) A local volunteer advocate program must provide cultural diversity training for volunteers, employees, and directors on an annual basis.

(5) The statewide volunteer advocate organization may review all training and training materials for volunteers, employees, and directors.

**History**
- *Source Note: The provisions of this §377.115 adopted to be effective July 11, 2017, 42 TexReg 3477.*

##### **1 Tex. Admin. Code § 377.117** Local Volunteer Advocate Program Personnel Background Checks {#sec-377.117 omnilex-key=us-tx-regs-official--title-1--377.117}

(a) Conducting a background check.

(1) A volunteer, employee, or director must be subject to a background check prior to the commencement of volunteer, employee, or director duties and no longer than every two years thereafter. A background check must include a review of the individual's information from:

(A) a fingerprint-based search conducted by the Texas Department of Public Safety that utilizes the National Crime Information Center (NCIC) database that is maintained by the Federal Bureau of Investigation and the Texas Crime Information Center (TCIC);

(B) the Texas Public Sex Offender Registry maintained by the Texas Department of Public Safety;

(C) the National Sex Offender Public Website maintained by the United States Department of Justice; and

(D) the Child Abuse and Neglect Central Registry maintained by DFPS in accordance with federal law and Texas Family Code §261.002.

(2) If a volunteer, employee, or director has lived in a state other than Texas within the last seven years, the local volunteer advocate program must conduct a criminal background check in that state.

(3) For an individual authorized to drive children, the local program must:

(A) investigate the individual's driving record and insurability; and

(B) obtain documentation of a valid, state-issued driver's license and satisfactory personal liability insurance.

(b) Ten-year bar for certain felony offenses.

(1) An individual whose background check yields a felony conviction, guilty plea, plea of no contest, or acceptance of deferred adjudication for which fewer than ten years have passed since the date of the offense, is barred from being a volunteer, employee, or director.

(2) An individual whose background check yields a felony conviction, guilty plea, plea of no contest, or acceptance of deferred adjudication for which ten years or more have passed since the date of the offense, and if that felony offense is not described under subsection (c) of this section, the local volunteer advocate program may exercise the discretion to determine that individual's eligibility for a volunteer, employee, or director position.

(c) Bar for certain offenses.

(1) An individual whose background check yields a conviction, guilty plea, plea of no contest, acceptance of deferred adjudication, or pending charge for any of these offenses is barred from being a volunteer, employee, or director:

(A) Texas Penal Code Chapter 19;

(B) Texas Penal Code Chapter 20;

(C) Texas Penal Code Chapter 20A;

(D) Texas Penal Code §§21.02, 21.07, 21.08, 21.11, or 21.12;

(E) Texas Penal Code §§22.011, 22.02, 22.021, 22.04, 22.041, 22.05, 22.07, or 22.11;

(F) Texas Penal Code Chapter 25;

(G) Texas Penal Code §28.02;

(H) Texas Penal Code Chapter 29;

(I) Texas Penal Code §30.02;

(J) Texas Penal Code §33.021;

(K) Texas Penal Code §42.072;

(L) Texas Penal Code Chapter 43;

(M) Texas Penal Code §§46.06, 46.09, or 46.10;

(N) Texas Penal Code §48.02;

(O) Texas Penal Code §§49.045, 49.05, 49.07, or 49.08;

(P) Texas Penal Code Chapter 71; or

(Q) any other offense involving violence, child abuse or neglect, assault with family violence, or a sexual offense as described under Chapter 21 of the Texas Penal Code.

(2) An individual whose background check produces any founded allegations of abuse with DFPS is barred from being a volunteer, employee, or director.

(d) An individual whose background check produces a conviction, guilty plea, plea of no contest, or acceptance of deferred adjudication of an offense, including a misdemeanor drug-related offense, that is not an offense described under subsections (b) or (c) of this section may be considered by the local volunteer advocate program to determine eligibility for a volunteer, employee, or director position.

(e) If an individual who has applied to be a volunteer, employee, or director has a pending charge described under subsections (b) or (c) of this section that would otherwise bar the individual's hiring or appointment, a new review of the application may be conducted if the charge is subsequently dismissed or if the individual is otherwise absolved of guilt.

(f) An individual whose background check produces information that includes a group of offenses or information that, if considered separately, would not bar an applicant may result in the disqualification of an applicant volunteer, employee, or director if it is determined that the offenses constitute a problematic pattern.

(g) A volunteer, employee, or director must be immediately removed from his or her position and barred from future consideration as a volunteer, employee, or director, if the volunteer, employee, or director knowingly or intentionally places a child, through the actions of the volunteer, employee, or director, in contact with a person whose criminal history involves an offense described under subsections (b) or (c) of this section.

(h) The refusal to execute consent and release forms necessary to conduct a criminal background check disqualifies an individual from serving as a volunteer, employee, or director.

**History**
- *Source Note: The provisions of this §377.117 adopted to be effective July 11, 2017, 42 TexReg 3477.*

#### **Subchapter C** STANDARDS OF OPERATION FOR LOCAL CHILDREN'S ADVOCACY CENTERS

##### **1 Tex. Admin. Code § 377.201** Purpose and Definitions {#sec-377.201 omnilex-key=us-tx-regs-official--title-1--377.201}

(a) The purpose of this subchapter is to provide:

(1) requirements regarding the function and administration of a local children's advocacy center program; and

(2) requirements for contracts between the statewide children's advocacy center organization and the local children's advocacy centers.

(b) The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise:

(1) Local children's advocacy center--An entity that is established in accordance with a memorandum of understanding executed under Texas Family Code §264.403, that operates local children's advocacy center programs.

(2) Local children's advocacy center program--A local program that:

(A) assesses victims of child abuse or neglect to determine needed services and provides the needed services;

(B) provides a facility at which a multidisciplinary team can meet to facilitate the disposition of child abuse cases; and

(C) coordinates the activities of governmental entities in relation to child abuse investigations and the delivery of services.

(3) Multidisciplinary team--A team of individuals composed in accordance with Texas Family Code §264.406 that works within a local children's advocacy center in accordance with the protocols outlined in Texas Family Code §264.4031 to review child abuse cases with the intent of coordinating the activities of entities involved in child abuse investigation and prosecution and in the provision of victim services.

(4) Statewide children's advocacy center organization--The entity with which HHSC contracts under Texas Family Code §264.409 and §377.207 of this subchapter (relating to Contract with Statewide Children's Advocacy Center Organization).

**History**
- *Source Note: The provisions of this §377.201 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

##### **1 Tex. Admin. Code § 377.203** Legal Authorization {#sec-377.203 omnilex-key=us-tx-regs-official--title-1--377.203}

The provisions of this subchapter are promulgated under Texas Family Code Chapter 264, Subchapter E, which authorizes HHSC to administer funding for children's advocacy centers.

**History**
- *Source Note: The provisions of this §377.203 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

##### **1 Tex. Admin. Code § 377.205** Applicability {#sec-377.205 omnilex-key=us-tx-regs-official--title-1--377.205}

This subchapter applies to local children's advocacy centers and the statewide children's advocacy center organization.

**History**
- *Source Note: The provisions of this §377.205 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

##### **1 Tex. Admin. Code § 377.207** Contract with Statewide Children's Advocacy Center Organization {#sec-377.207 omnilex-key=us-tx-regs-official--title-1--377.207}

(a) HHSC contracts with a single statewide children's advocacy center organization that satisfies subsection (b) of this section to perform the following functions for local children's advocacy center programs:

(1) training;

(2) technical assistance;

(3) evaluation services; and

(4) funds administration.

(b) HHSC contracts with one statewide children's advocacy center organization that:

(1) is exempt from federal income taxation under Internal Revenue Code of 1986 §501(a) and §501(c)(3); and

(2) is composed of individuals who have expertise in establishing and operating local children's advocacy centers.

(c) The contract must limit the statewide children's advocacy center organization's annual spending for the performance of obligations under Texas Family Code §264.409(a) to no more than 12 percent of the annual amount appropriated to HHSC for the purposes of the local children's advocacy center programs.

(d) The statewide organization with which HHSC contracts shall develop and adopt standards for local children's advocacy centers.

**History**
- *Source Note: The provisions of this §377.207 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

##### **1 Tex. Admin. Code § 377.209** Contracts with Local Children's Advocacy Centers {#sec-377.209 omnilex-key=us-tx-regs-official--title-1--377.209}

(a) On the execution of a memorandum of understanding under Texas Family Code §264.403, a local children's advocacy center may be established by community members and the participating agencies described by Texas Family Code §264.403(a) to serve a county or two or more contiguous counties in which a center has not been established, in accordance with Texas Family Code §264.402.

(b) The statewide children's advocacy center organization with which HHSC contracts under §377.207 of this subchapter (relating to Contract with Statewide Children's Advocacy Center Organization) shall contract with local children's advocacy centers to establish, maintain, and enhance the services provided by the centers.

(c) Eligibility of a Local Children's Advocacy Center to Contract with the Statewide Organization.

(1) To be eligible to contract with the statewide organization under Texas Family Code §264.410, a local children's advocacy center must:

(A) have a signed memorandum of understanding as provided by Texas Family Code §264.403;

(B) have a signed working protocol as provided by Texas Family Code §264.4031;

(C) have a governing board as provided by Texas Family Code §264.404;

(D) have a multidisciplinary team as provided by Texas Family Code §264.406;

(E) regularly convene the multidisciplinary team as provided by Texas Family Code §264.406;

(F) employ an executive director who is accountable to the board of directors of the local children's advocacy center and who is not the exclusive salaried employee of any governmental agency; and

(G) fulfill the duties required by Texas Family Code §264.405.

(2) The statewide children's advocacy center organization may waive requirements specified in subsection (c)(1) of this section if it determines that the waiver will not adversely affect a local children's advocacy center's ability to carry out its duties under Texas Family Code §264.405.

(d) Requirements for Contracts Awarded to Local Children's Advocacy Centers by the Statewide Children's Advocacy Center Organization.

(1) A contract between the statewide children's advocacy center organization and a local children's advocacy center under Texas Family Code §264.410 must not result in reducing the financial support the local children's advocacy center receives from another source.

(2) A contract between the statewide children's advocacy center organization and a local children's advocacy center under Texas Family Code §264.410 must be enforced through the use of remedies and in accordance with the procedures provided in the Uniform Grant Management Standards for Texas (UGMS).

(3) A contract between the statewide children's advocacy center organization and a local children's advocacy center under Texas Family Code §264.410 must require the local children's advocacy center to comply with the requirements and provisions applicable to local children's advocacy centers contained in the contract between the statewide children's advocacy center organization and HHSC under Texas Family Code §264.409.

**History**
- *Source Note: The provisions of this §377.209 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

##### **1 Tex. Admin. Code § 377.211** Operation of Local Children's Advocacy Center and Program {#sec-377.211 omnilex-key=us-tx-regs-official--title-1--377.211}

(a) A local children's advocacy center must:

(1) receive, review, and track Department of Family and Protective Services (DFPS) reports relating to the suspected abuse or neglect of a child or the death of a child from abuse or neglect to ensure a consistent, comprehensive approach to all cases that meet the criteria outlined in the multidisciplinary team working protocol adopted under Texas Family Code §264.4031;

(2) coordinate the activities of participating agencies relating to abuse and neglect investigations and delivery of services to alleged abuse and neglect victims and their families;

(3) facilitate assessment of alleged abuse or neglect victims and their families to determine their need for services relating to the investigation of abuse or neglect and provide needed services; and

(4) comply with the standards adopted under Texas Family Code §264.409(c).

(b) A local children's advocacy center must provide:

(1) facilitation of a multidisciplinary team response to abuse or neglect allegations in accordance with Texas Family Code §264.4061;

(2) a formal process that requires the multidisciplinary team to routinely discuss and share information regarding investigations, case status, and services needed by children and families;

(3) a system to monitor the progress and track the outcome of each case;

(4) a child-focused setting that is comfortable, private, and physically and psychologically safe for diverse populations at which a multidisciplinary team can meet to facilitate the efficient and appropriate disposition of abuse and neglect cases through the civil and criminal justice systems;

(5) culturally competent services for children and families throughout the duration of a case;

(6) victim support and advocacy services for children and families;

(7) forensic interviews that are conducted in a neutral, fact-finding manner and coordinated to avoid duplicative interviewing;

(8) access to specialized medical evaluations and treatment services for victims of alleged abuse or neglect;

(9) evidence-based, trauma-focused mental health services for children and nonoffending members of the child's family; and

(10) opportunities for community involvement through a formalized volunteer program dedicated to supporting the local children's advocacy center.

(c) Governing Board of a Local Children's Advocacy Center.

(1) A local children's advocacy center must be governed by a board. In addition to any other persons appointed or elected to serve on the governing board of a local children's advocacy center, the governing board must include an executive officer of, or an employee with decision-making authority selected by an executive officer of:

(A) DFPS;

(B) a law enforcement agency with jurisdiction to investigate child abuse and neglect in the area served by the local children's advocacy center; and

(C) the county or district attorney's office with jurisdiction to prosecute child abuse and neglect cases in the area served by the local children's advocacy center.

(2) Service on the board of a local children's advocacy center by an executive officer or employee, under paragraph (1) of this subsection, is an additional duty of the person's office or employment.

(3) The governing board members required under paragraph (1) of this subsection may not constitute a majority of the membership of a local children's advocacy center's governing board.

(d) Multidisciplinary Team of a Local Children's Advocacy Center.

(1) A local children's advocacy center's multidisciplinary team must include employees of the participating agencies described by Texas Family Code §264.403(a).

(2) A representative of any other entity may participate in the multidisciplinary team response as provided by the multidisciplinary team working protocol adopted under Texas Family Code §264.4031 if:

(A) the entity participates in or provides the following:

(i) child abuse or neglect investigations;

(ii) abuse or neglect investigations involving persons with a disability;

(iii) services to alleged child abuse or neglect victims; or

(iv) services to alleged victims who are persons with a disability;

(B) the local children's advocacy center and participating agencies agree in writing to the entity's participation; and

(C) the entity signs the memorandum of understating executed under Texas Family Code §264.403 and the working protocol adopted under Texas Family Code §264.4031.

(3) A local children's advocacy center's multidisciplinary team shall be actively involved in the following multidisciplinary team response:

(A) coordinating the actions of the participating agencies involved in the investigation and prosecution of cases and the delivery of services to alleged abuse or neglect victims and the victims' families; and

(B) conducting at regularly scheduled intervals multidisciplinary review of appropriate abuse or neglect cases as provided by the working protocol adopted under Texas Family Code §264.4031.

(4) A multidisciplinary team may review an abuse or neglect case in which the alleged perpetrator is not a person responsible for a child's care, custody, or welfare.

(5) A multidisciplinary team member is authorized to share with and receive from other multidisciplinary team members information made confidential by Texas Government Code Chapter 552, Texas Human Resources Code §40.005 or §48.101, or Texas Family Code §261.201 or §264.408 when acting in the member's official capacity as an employee of a participating agency described by Texas Family Code §264.403(a) or of another entity described by Texas Family Code 264.406(b).

(e) Liability.

(1) A person is not liable for civil damages based on a recommendation made or an opinion rendered in good faith, while acting in the official scope of the person's duties as a member of a multidisciplinary team or as a board member, staff member, or volunteer of a local children's advocacy center.

(2) This limitation on civil liability does not apply if a person's actions constitute gross negligence.

(f) Confidentiality Requirements Placed on a Local Children's Advocacy Center.

(1) In accordance with Texas Family Code §264.408, the files, reports, records, communications, and working papers used or developed in providing services under Texas Family Code Chapter 264 are confidential. This information is not subject to public release under Texas Government Code Chapter 552 and may be disclosed only for purposes consistent with Texas Family Code Chapter 264 without losing its confidential character. Disclosure may be made to:

(A) DFPS, DFPS employees, law enforcement agencies, prosecuting attorneys, medical professionals, and other state or local agencies that provide services to children and families; and

(B) the attorney for the alleged victim who is the subject of the records and a court-appointed volunteer advocate appointed for the alleged victim under Texas Family Code §107.031.

(2) Information related to the investigation of a report of abuse or neglect under Texas Family Code Chapter 261, and to the services provided as a result of the investigation, are confidential as provided by Texas Family Code §261.201.

(3) DFPS, a law enforcement agency, and a prosecuting attorney may share with a local children's advocacy center information that is confidential under Texas Family Code §261.201 as needed to provide services under Texas Family Code Chapter 264. Confidential information shared with or provided to a local children's advocacy center remains the confidential property of the agency that shared or provided the information to the local children's advocacy center. A request for confidential information provided to the local children's advocacy center under Texas Family Code §264.408 must be made to the agency that shared or provided the information.

(4) An electronic recording of an interview with a child or person with a disability that is made by a local children's advocacy center is the property of the prosecuting attorney involved in the criminal prosecution of the case involving the child or person with a disability. If no criminal prosecution occurs, the electronic recording is the property of the attorney involved in representing DFPS in a civil action alleging abuse, neglect, or exploitation. If the matter involving the child or person with a disability is not prosecuted, the electronic recording is the property of DFPS, if the matter is an investigation by DFPS of abuse, neglect, or exploitation. If DFPS is not investigating or has not investigated the matter, the electronic recording is the property of the agency that referred the matter to the local children's advocacy center.

(5) DFPS must be allowed access to a local children's advocacy center's electronic recordings of interviews of children or persons with a disability.

**History**
- *Source Note: The provisions of this §377.211 adopted to be effective July 11, 2017, 42 TexReg 3477; amended to be effective July 22, 2020, 45 TexReg 4965.*

### **Chapter 380** MEDICAL TRANSPORTATION PROGRAM

#### **Subchapter A** PROGRAM OVERVIEW

##### **1 Tex. Admin. Code § 380.101** Definitions of Terms {#sec-380.101 omnilex-key=us-tx-regs-official--title-1--380.101}

The following words and terms are applicable to this Chapter, Medical Transportation Program (MTP):

(1) Abuse--The willful infliction of intimidation or injury resulting in physical harm, pain, or mental anguish.

(2) Accident--An unexpected event or series of events causing loss or injury to person or property (e.g., automobile).

(3) Adjacent county(ies)--The county or counties that share a common county line or point with the client's county of residence.

(4) Advance funds--Funds authorized in advance of travel and provided to the client or attendant to cover authorized transportation services (e.g., gas money, lodging, and/or meals) for travel to a covered health care service.

(5) Ambulance service--A service paid through HHSC or its designee in an emergency, or non-emergency situation in which transportation in a vehicle other than an ambulance could endanger the recipient's health.

(6) Attendant--

(A) an adult required to accompany a prior authorized MTP client under §380.207(4) of this chapter (relating to Program Limitations);

(B) an adult that accompanies a prior authorized MTP client to provide necessary mobility, personal or language assistance to the client during the time that transportation services are provided;

(C) a service animal that accompanies a prior authorized MTP client to provide necessary mobility or personal assistance to the client during the time that transportation services are provided; or

(D) an adult that accompanies a prior authorized MTP client because a health care provider has submitted a statement of need that the client requires an attendant.

(7) Certification Period--A period of time for which a Transportation for Indigent Cancer Patient client is certified for service.

(8) Children with Special Health Care Needs (CSHCN) services program--A program funded with general revenue and federal funds administered by the Department of State Health Services. Services for eligible children include early identification, diagnosis and evaluation, resulting in early health care intervention.

(9) Covered health care service--A service included in the premium of the health care policy paid by or on behalf of an MTP client.

(10) Demand Response--Transportation that involves using performing provider dispatched vehicles in response to requests from clients or shared one-way trips.

(11) Health and Human Services Commission (HHSC)--The state agency that operates the Medical Transportation Program.

(12) Health Care Provider's Statement of Need--MTP Form 3113 or equivalent submitted by a health care provider which documents the client's need for health care services and/or special transportation accommodations.

(13) Individual Transportation Participant (ITP)--An individual who has been approved for mileage reimbursement at a rate prescribed by HHSC to provide transportation for a prior authorized MTP client to a covered health care service.

(14) Limited Status--A Medicaid client's limitation to a designated provider, either a primary care provider or primary care pharmacy, under the lock-in provisions contained in Chapter 354, Subchapter K of this title (relating to Medicaid Recipient Utilization Review and Control). Clients are limited for specific periods of time as outlined in §354.2405(c) of this title (relating to Utilization Control).

(15) Lodging--A commercial establishment such as a hotel, motel, charitable home or hospital that provides overnight lodging.

(16) Long Distance Trip--Transportation beyond a county adjacent to a client's county of residence or Medicaid managed care service delivery area for the purpose of receiving a covered health care service.

(17) Managed Transportation Organization (MTO)--

(A) a rural or urban transit district created under Chapter 458, Transportation Code;

(B) a public transportation provider defined by §461.002, Transportation Code;

(C) a regional contracted broker defined by Texas Government Code §526.0351;

(D) a local private transportation provider approved by HHSC to provide MTP services; or

(E) any other entity HHSC determines meets the requirements.

(18) Mass transit--Public transportation by bus, rail, air, ferry, or intra-city bus either publicly or privately owned, which provides general or special service transportation to the public on a regular and continuing basis. Mass transit is intercity or intra-city transportation and also includes the use of commercial air service to transport clients to an authorized service.

(19) Medicaid--A health care program provided to eligible individuals under 42 U.S.C. §1396a *et seq.;* 42 C.F.R. §431.53; Texas Human Resources Code, Chapters 22 and 32.

(20) Medically necessary--Services that are:

(A) reasonably necessary to: prevent illness(es) or medical condition(s); maintain function or to slow further functional deterioration; provide early screening, intervention, care, and/or provide care or treatment for eligible clients who have medical condition(s) that cause suffering or pain, physical deformity or limitations in function, or that threaten to cause or worsen a disability, illness or infirmity, or endanger life;

(B) provided at appropriate locations and at the appropriate levels of care for the treatment of the medical condition(s);

(C) consistent with health care practice guidelines and standards endorsed by professionally recognized health care organizations or governmental agencies;

(D) consistent with the diagnosis(es) of the condition(s);

(E) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency;

(F) not experimental or investigative; and

(G) not primarily for the convenience of the client.

(21) Medical Transportation Program (MTP)--The program that provides prior authorized nonemergency transportation services to and from covered health care services, based on medical necessity, for categorically eligible Medicaid clients enrolled in Medicaid, and eligible clients enrolled in CSHCN services program, or the Transportation for Indigent Cancer Patients program who have no other means of transportation.

(22) Minor--An individual under 18 years of age who has never been married or emancipated by court ruling.

(23) Passenger assistance--Transportation from curb at origin to curb at destination, including providing assistance, as required, to clients entering and exiting the vehicle.

(24) Performing provider--An entity that arranges or provides transportation services to a prior authorized MTP client, including subcontractors, independent contractors, lodging and meal vendors, and intercity or intra-city bus services.

(25) Prior authorization--Authorization or approval for the provision of transportation services obtained from MTP or a transportation provider before the services are rendered.

(26) Prior authorized MTP client--A client authorized by HHSC as eligible for Medicaid services under a specific category, or identified by either the CSHCN service program or the TICP program as eligible for program services, who has no other means of transportation to covered health care services.

(27) Reasonable transportation--Transportation using the most cost-effective transportation that meets the client's medical needs:

(A) within a client's local community, county of residence, or county adjacent to a client's county of residence where the client wishes to maintain an ongoing relationship or establish a relationship with a health care provider of his or her choice; or

(B) to a provider or facility within a designated Medicaid managed care service delivery area.

(28) Regional contracted broker--An entity that contracts with HHSC to provide or arrange for the provision of nonemergency transportation services under the MTP, including a full risk broker as referenced in 42 C.F.R. §440.170(a)(4) (relating to nonemergency medical transportation brokerage program).

(29) Routine medical transportation--Prior authorized medical transportation trips, other than long distance trips, to and/or from a facility where covered health care services will be provided.

(30) Service animal--A trained guide dog, signal dog, or other animal to provide assistance to a specified MTP client with a disability.

(31) Sexual harassment--Unwelcome sexual advances, requests for sexual favors, or other unwanted verbal or physical conduct of a sexual nature directed toward an individual by another individual during the provision of transportation services.

(32) Significant traditional provider--An individual or entity that has a documented record of providing transportation services for a minimum of two years.

(33) Special needs--A transportation service that requires the use of a vehicle equipped with a ramp or a mechanical lift to provide the client with a means of accessing the vehicle.

(34) Transportation provider--A regional contracted broker or an MTO.

(35) Transportation for Indigent Cancer Patients (TICP) Program--A state-funded program that provides medical transportation services to individuals diagnosed with cancer or a cancer-related illness and who meet residency and financial criteria.

**History**
- *Source Note: The provisions of this §380.101 adopted
to be effective April 10, 2001, 26 TexReg 2720; amended to be effective
May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004,
as published in the Texas Register April 30, 2004, 29 TexReg 4267;
amended to be effective August 6, 2013, 38 TexReg 4888; amended to
be effective September 1, 2014, 39 TexReg 5731; amended to be effective
April 1, 2025, 50 TexReg 833.*

#### **Subchapter B** ELIGIBILITY, PROGRAM SERVICES, PROCESSES, ADDITIONAL TRANSPORTATION CONNECTED WITH AN AUTHORIZED TRIP, LIMITATIONS, AND EXCLUSIONS

##### **1 Tex. Admin. Code § 380.201** Eligibility {#sec-380.201 omnilex-key=us-tx-regs-official--title-1--380.201}

(a) The following prior authorized Medical Transportation Program (MTP) clients are eligible to receive reasonable transportation to covered health care services if no other means of transportation are available, the mode of transportation is the most cost-effective mode available, and the facility is reasonably close and meets the client's health care needs:

(1) current Medicaid clients authorized and identified by the Health and Human Services Commission (HHSC) as eligible for Medicaid services under a specific category;

(2) Children with Special Health Care Needs (CSHCN) services program clients; and

(3) Transportation for Indigent Cancer Patients (TICP) Program clients.

(b) Eligibility for participation in the TICP Program must be determined by HHSC. The individual:

(1) must reside in Webb, Zapata, Starr, Jim Hogg, Hidalgo, Cameron, Willacy, or Nueces County and provide a copy of a federal or state ID (driver's license or identification card) and one of the following as proof of residency:

(A) a copy of a utility bill under the applicant's name; or

(B) if residing with a family member, a written verification from that family member stating that the applicant resides in the household and proof that the household is in an eligible county;

(2) must not be eligible for Medicaid;

(3) must not be eligible for CSHCN services program;

(4) must be at or below 100% of federal poverty guidelines. Before program services are provided, the monthly household gross income shall be verified by:

(A) financial information obtained through HHSC;

(B) check stub or other written verification for each person in the household who is employed. This form must contain the name, address of employer, income and dates covered for each pay period; or

(C) award letter or other written verification of unearned income (such as Social Security, Worker's Compensation, Unemployment or Veteran's Administration benefits);

(5) is permitted the following allowable deductions from the total monthly household gross income:

(A) $120 standard deduction per person in household who is employed (the standard deduction per person will be the rate set by HHSC); and

(B) dependent care:

(i) up to $200 per child under two years of age; or

(ii) up to $175 per child two years of age and older;

(6) is not permitted to take deductions on unearned income;

(7) if over the age of 18 and residing with a family member, the family member's household income is not considered. The applicant's gross income, less standard deductions, is used to determine the applicant's eligibility;

(8) has zero income and shall therefore submit written verification from two family members or individuals who can attest that the household receives no monthly earned or unearned income. Unearned income refers to monetary assistance provided by family, friends, charitable organizations, and such given to the client for household expenses;

(9) must provide initial confirmation of cancer or cancer-related diagnosis by a licensed medical physician to HHSC. The following restrictions apply:

(A) the applicant is eligible for up to four diagnostic visits to a licensed medical physician to determine cancer or cancer-related diagnosis if HHSC is provided written verification that diagnostic visits are to rule out the possibility of cancer or cancer-related illness; and

(B) confirmation of cancer or cancer-related diagnosis must be provided on or following the last diagnostic visit for transportation services to continue; and

(10) must be accepted for evaluation or treatment by a medical institution in Texas capable of providing quality cancer services.

**History**
- *Source Note: The provisions of this §380.201 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.202** Program Services {#sec-380.202 omnilex-key=us-tx-regs-official--title-1--380.202}

Transportation services prior authorized by the Medical Transportation Program (MTP) or transportation providers include:

(1) Demand response transportation services provided when fixed route services are either unavailable or do not meet the health care needs of clients. Services must be timely and provided by qualified, courteous, knowledgeable, and trained personnel;

(2) Mass transit tickets when determined to be the appropriate mode of transportation for the client, ensuring the client does not live more than a quarter (1/4) mile from a public fixed route stop, the appointment is not more than a quarter (1/4) mile from a public fixed route stop, and that mass transit tickets are received by the client before the client's appointment;

(3) Individual transportation participant services provided by volunteers who enter into an agreement and are reimbursed for mileage if they are prior authorized to drive a client to a covered health care service in a personal car;

(4) Meal and lodging services for clients and an attendant when a covered health care service requires an overnight stay outside the client's county of residence or beyond adjacent counties. Clients and attendants must receive the same quality of services provided to other guests and the lodging services must be equivalent or better than those listed in the Office of the Texas Comptroller's State Travel Management Program;

(5) Transportation to and from renal dialysis services for clients enrolled in the Medicaid program who are residing in a nursing facility, as required by the Human Resources Code;

(6) Advance funds disbursed before the covered health care service to clients when a lack of transportation funds will prevent a child from traveling to the service. Advance funds are for clients through age 20 and Children with Special Health Care Needs services program clients 21 and over who have been diagnosed with cystic fibrosis. Advanced funds may be issued to cover meals, lodging, and/or mileage;

(7) Out-of-state transport to contiguous counties or bordering counties in adjoining states (Louisiana, Arkansas, Oklahoma, and New Mexico) that are within 50 miles of the Texas border, if services are medically necessary and it is the customary or general practice of clients in a particular locality within Texas to obtain services from an out-of-state provider that is enrolled as a Texas Medicaid provider; and

(8) Commercial airline transportation services for a client and attendant to a covered health care service, when it is the most cost effective option or when necessary to meet the client's medical needs.

**History**
- *Source Note: The provisions of this §380.202 adopted to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.203** Program Requirements {#sec-380.203 omnilex-key=us-tx-regs-official--title-1--380.203}

Transportation services must be prior authorized by the Medical Transportation Program (MTP) or transportation providers. Program requirements include the following:

(1) reasonable or long distance transportation of a prior authorized MTP client to and/or from a covered health care service when:

(A) the client provides a Health Care Provider's Statement of Need or equivalent when required; or

(B) a provider will not bill Medicaid or another source for the cost of the services. This includes health care services that are provided to the client by a charitable organization but not billed to Medicaid. It does not include value-added services provided by a Medicaid managed care plan.

(2) transportation for an attendant(s) if necessary;

(3) advance funds for an eligible child and attendant(s) when lack of transportation funds will prevent the child from traveling to a covered health care service; and

(4) if a client is required to receive health care services outside their county of residence for six consecutive months, proof of residency may be required.

**History**
- *Source Note: The provisions of this §380.203 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective September 13, 2004, 29 TexReg 8796; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.205** Program Processes {#sec-380.205 omnilex-key=us-tx-regs-official--title-1--380.205}

The following processes must be followed in order to ensure safe, efficient, and cost-effective delivery of transportation services:

(1) a request for routine medical transportation must be received at least two working days in advance of the client's health care service appointment;

(2) a request for a long distance trip must be received at least five working days in advance of the client's health care service appointment;

(3) exceptions to paragraphs (1) and (2) of this section may be granted when the circumstances have been determined to be beyond the client's control. The exception will be documented in the client's record;

(4) clients with recurring visits to a health care provider may receive multiple mass transit tickets or may have more than one transportation appointment authorized in advance;

(5) a certification period for Transportation for Indigent Cancer Patients Program (TICP) clients may be retroactive to the date of the initial request for transportation services if all eligibility requirements are met, and all forms are completed and returned to HHSC. The duration of the certification period is a maximum of 12 consecutive months and minimum of 60 days;

(6) specific certification periods apply to the following applicants of the TICP Program:

(A) applicants on unearned fixed income such as Social Security, workers' compensation, unemployment or U.S. Department of Veterans Affairs benefits can be certified for a 12 month period if there are no anticipated changes in household income;

(B) applicants with earned income can be certified up to an eight month period if there are no anticipated changes in household income;

(C) applicants whose unearned or earned household income is within 10% of the federal poverty guideline can be certified up to a six month period at a time if there are no anticipated changes in household income; or

(D) applicants who have zero income can be certified up to two months at a time. Zero income requires written verification from family members or advocates who can attest that the household receives no monthly earned or unearned income.

(7) transportation providers must report any accidents with injuries to HHSC within one hour and must report any other accidents within 24 hours; and

(8) transportation providers must attempt to contract with significant traditional providers.

**History**
- *Source Note: The provisions of this §380.205 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.207** Program Limitations {#sec-380.207 omnilex-key=us-tx-regs-official--title-1--380.207}

In the following circumstances clients are not eligible to receive transportation services:

(1) transportation to and from a day activity, a personal care home or state institution, or a facility participating in another Title XIX program for which the reimbursement rate structure includes transportation funds;

(2) the intended destination is a nursing facility, except as specified in §380.202(5) of this subchapter (relating to Program Services);

(3) the client is an inpatient in a health care facility, except as specified in §380.202(5) of this subchapter;

(4) the client is under 15 years of age and:

(A) the client's parent, guardian, or another adult authorized by the parent or guardian does not accompany the client as required by §354.1133 of this title (relating to Parental Accompaniment Requirement); and

(B) the parent or guardian, if authorizing another adult to accompany the client, has not provided written authorization on a form prescribed by the Health and Human Services Commission, which will allow for the designation of one authorized adult and one alternate authorized adult;

(5) the client is 15 through 17 years of age and not accompanied, unless one of the following conditions exists:

(A) the client presents the parent's or legal guardian's signed, written consent for the transportation services to Medical Transportation Program staff, or a transportation provider; and/or

(B) the treatment to which the minor is being transported is such that the law extends confidentiality to the minor for this treatment;

(6) the client or another person or entity providing care for the client receives direct payment of worker's compensation benefits, U.S. Department of Veterans Affairs benefits, or other third-party resources for transportation to health care services on the client's behalf;

(7) the client is on limited status, unless the provider has made the referral or the client requests family planning services;

(8) TICP diagnostic visits and/or cancer or cancer-related treatments that are provided out-of-state;

(9) the client and/or attendant intentionally, knowingly, or recklessly boards the vehicle carrying an illegal knife, a club, handgun or other weapon, as defined in Penal Code, §46.01, on or about his or her person;

(10) a third-party, such as a lodging establishment, provides transportation, meals, and/or lodging at no charge for a client and attendant, for a particular appointment; or

(11) an attendant does not accompany the client on the MTP-requested trip when a Health Care Provider's Statement of Need, Form 3113 or equivalent, is on file stating the client requires an attendant(s).

**History**
- *Source Note: The provisions of this §380.207 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective September 13, 2004, 29 TexReg 8796; amended to be effective January 1, 2013, 37 TexReg 10192; amended to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.209** Program Exclusions {#sec-380.209 omnilex-key=us-tx-regs-official--title-1--380.209}

The following transportation services are not covered by the Medical Transportation Program (MTP):

(1) transportation of deceased clients;

(2) reimbursement for additional travel costs when a client elects to seek care at a more remote facility that is not supported on a Health Care Provider's Statement of Need, Form 3113 or equivalent;

(3) medical care while clients are being transported;

(4) emergency or nonemergency ambulance service;

(5) passenger assistance beyond that which is necessary to ensure that clients enter and leave vehicles safely; and

(6) transportation services for family members not previously authorized for the specific trip.

**History**
- *Source Note: The provisions of this §380.209 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

#### **Subchapter C** CLIENT RIGHTS

##### **1 Tex. Admin. Code § 380.301** Client Rights and Responsibilities {#sec-380.301 omnilex-key=us-tx-regs-official--title-1--380.301}

(a) Client Rights.

(1) Nondiscrimination. The client has a right to receive services in compliance with Title VI of the Civil Rights Act of 1964, 42 U.S.C.A. §§2000d, *et seq.;* §504 of the Rehabilitation Act of 1973, 29 U.S.C.A. §794; the Americans with Disabilities Act of 1990, 42 U.S.C.A. §12101, *et seq.;* and all amendments to each, and all requirements imposed by the regulations issued pursuant to these Acts, in particular 45 C.F.R. Part 80 (relating to race, color, national origin), 45 C.F.R. Part 84 (relating to handicap), 45 C.F.R. Part 86 (relating to sex), and 45 C.F.R. Part 91 (relating to age).

(2) Abuse report. Clients should report verbal or physical abuse or sexual harassment committed by other clients, passengers, a transportation provider's employees, or Health and Human Services Commission (HHSC) staff to the Medical Transportation Program (MTP) or the transportation provider upon arrival at the client's destination.

(3) Denial notification. If a service is denied, MTP or the transportation provider shall notify the client in accordance with Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules). This client notification does not apply to transportation services under §380.209 of this title (relating to Program Exclusions).

(4) Appeal request.

(A) For services that have been denied by a transportation provider, a client may request an internal review of the denied services to be conducted by the transportation provider, MTP, or both.

(B) For services that have been denied by MTP, a client may request an administrative review to be conducted by the MTP Program Director.

(C) At any time, a client may request a fair hearing for review of a service denial by an HHSC hearings officer. A request for a fair hearing must be in writing and mailed or hand-delivered to the MTP office in Austin.

(b) Client Responsibilities.

(1) When a client or responsible adult requests transportation, he/she must provide the following information:

(A) client name, address, and, if available, the telephone number;

(B) Medicaid, Transportation for Indigent Cancer Patients Program or Children with Special Health Care Needs services program client identification number (if applicable) or Social Security number, and date of birth;

(C) name, address, and telephone number of health care provider and/or referring health-care provider;

(D) purpose and date of trip and time of appointment;

(E) affirmation that other means of transportation are unavailable;

(F) special needs, including wheelchair lift or attendant(s);

(G) medical necessity verified by the Health Care Provider's Statement of Need, if applicable; and

(H) affirmation that advance funds are needed when a lack of transportation funds will prevent the child from traveling to a covered health care service, if applicable.

(2) Clients must reimburse HHSC or its designee for any advance funds, and any portion thereof, that:

(A) are not used for the specific prior authorized service; or

(B) when a verification that client attended the covered health services is not submitted.

(3) Clients must refrain from verbal and/or physical abuse or sexual harassment toward another client or passenger, transportation provider or performing provider employees, or HHSC employees while requesting or receiving medical transportation services.

(4) Clients must safeguard all bus tickets and/or tokens from loss and theft and must return unused tickets or tokens to the MTP or the transportation provider issuing the tickets or tokens.

(5) Clients who receive mass transit bus tickets or tokens must complete a verification form. Clients must return this verification form prior to their next request for tickets or tokens. A letter from the health care provider verifying delivery of services may be substituted for the disbursement of mass transit tickets or tokens verification form. Exceptions to this documentation may be granted when circumstances occur that are beyond the client's control. Exceptions will be documented in the client's record.

(6) Clients must not use authorized medical transportation for purposes other than travel to and from health care services.

(7) If the client does not need to use the authorized transportation services, the client or the responsible adult should contact MTP or the transportation provider to cancel the particular trip no less than four hours prior to the time of the authorized trip.

(8) Clients who receive advance funds for meals, lodging, and/or travel must return written documentation from the health care provider verifying services were provided, prior to receiving future advance funds.

(9) Clients must cancel requests for advance funds or lodging when not needed and must refund any disbursed advance funds to HHSC.

(10) Clients must provide the following when seeking reimbursement for lodging in situations where prior authorization could not be obtained in advance:

(A) original receipt from the lodging establishment showing its name and address, the client's name as an occupant, and specific services for which the occupant was charged (e.g., room rent, tax);

(B) letter from the client or attendant requesting reimbursement for out-of-pocket expenses; and

(C) copies of the client or attendant's Social Security card and valid state-issued identification.

**History**
- *Source Note: The provisions of this §380.301 adopted to be effective April 10, 2001, 26 TexReg 2720; amended to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

#### **Subchapter D** INDIVIDUAL TRANSPORTATION PARTICIPATION

##### **1 Tex. Admin. Code § 380.401** Individual Transportation Participant Requirements {#sec-380.401 omnilex-key=us-tx-regs-official--title-1--380.401}

(a) To participate in the Medical Transportation Program (MTP), all individual transportation participants (ITP) must:

(1) submit a complete ITP application to the Health and Human Services Commission (HHSC) or its designee to acquire participation status; and

(2) have and maintain a current driver's license, current vehicle insurance, current vehicle inspection sticker, and current vehicle license tags and meet all other participation requirements.

(b) In addition to the requirements in subsection (a) of this section, ITPs applying to receive mileage reimbursement for transporting eligible MTP clients other than themselves or their family members are subject to:

(1) Chapter 352 of this title (relating to Medicaid and the Children's Health Insurance Program Provider Enrollment) and Chapter 371 of this title (relating to Medicaid and Other Health and Human Services Fraud and Abuse Program Integrity), as applicable;

(2) §380.502(1) - (3) of this chapter (relating to Standards for Motor Vehicle Operators); and

(3) any additional validation processes specified by HHSC or its designee as a condition of participation.

(c) HHSC may reject any application for participation as an ITP or terminate the participation status of any ITP at HHSC's sole discretion.

(d) To receive mileage reimbursement for a trip, an ITP must return to HHSC or its designee a completed ITP service record (Form H3017) or its equivalent.

(e) The ITP must refund to HHSC or its designee any funds to which the ITP is not entitled for any reason.

**History**
- *Source Note: The provisions of this §380.401 adopted to be effective May 11, 2003, 28 TexReg 3722; transferred effective March 1, 2004, as published in the Texas Register April 30, 2004, 29 TexReg 4267; amended to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

#### **Subchapter E** REGIONAL CONTRACTED BROKERS AND MANAGED TRANSPORTATION ORGANIZATIONS

##### **1 Tex. Admin. Code § 380.501** Standards for Motor Vehicles {#sec-380.501 omnilex-key=us-tx-regs-official--title-1--380.501}

A regional contracted broker or a managed transportation organization must ensure the following minimum standards regarding the physical condition and maintenance of motor vehicles used to provide transportation services.

(1) All motor vehicles used to provide transportation services must:

(A) meet or exceed warranty and component standards for both state and federal safety mechanical operating and maintenance standards;

(B) be identified with the transportation provider name and vehicle number using letters that are at a minimum six inches in height; and

(C) be equipped with:

(i) functioning, clean, and accessible seat belts for each passenger seat position that must be stored off the floor when not in use;

(ii) an operating speedometer and odometer;

(iii) working interior lights within the passenger compartment;

(iv) adequate interior sidewall padding and ceiling covering;

(v) two exterior rear view mirrors, one on each side of the vehicle;

(vi) an interior mirror, which should be used for monitoring the passenger compartment;

(vii) a clean interior and exterior (which must be free of broken mirrors or windows, excessive grime, rust, chipped paint, and major dents);

(viii) a functional fire extinguisher (which must be secured within reach of the motor vehicle operator and visible to passengers);

(ix) a first aid kit (which must include at a minimum latex gloves, hazardous waste disposal bags, scrub brush, disinfectant, and deodorizer);

(x) working heating and cooling systems adequate for the heating, cooling, and ventilation needs of both the motor vehicle operator and the passengers; and

(xi) signage posted within the vehicle that reads: "No Smoking, Eating or Drinking." "All passengers must wear seat belts." "Concealed Weapons Prohibited."

(2) All motor vehicles used to provide transportation services must comply with all applicable state and federal laws, including the Americans with Disabilities Act (ADA) Accessibility Guidelines for Transportation Vehicles (36 C.F.R. 1192), Federal Motor Vehicle Safety Standards (49 C.F.R. 571), and Chapter 547 of the Texas Transportation Code.

**History**
- *Source Note: The provisions of this §380.501 adopted to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

##### **1 Tex. Admin. Code § 380.502** Standards for Motor Vehicle Operators {#sec-380.502 omnilex-key=us-tx-regs-official--title-1--380.502}

For any motor vehicle operator providing or seeking to provide transportation services, the regional contracted broker or a managed transportation organization (MTO) must:

(1) verify that the motor vehicle operator has a valid driver's license. A motor vehicle operator without a valid driver's license may not provide transportation services under the MTP;

(2) check the driving record information of the motor vehicle operator that is maintained by the Department of Public Safety (DPS) under Chapter 521, Subchapter C, Transportation Code. A motor vehicle operator who does not meet driving history requirements as specified in the contract between the Health and Human Services Commission (HHSC) and the regional contracted broker or MTO may not provide transportation services under the MTP;

(3) check the public criminal record information of the motor vehicle operator that is maintained by DPS and made available to the public through the DPS website. A motor vehicle operator who does not meet criminal history requirements as specified in the contract between HHSC and the regional contracted broker or MTO may not provide transportation services under the MTP. Specifically, a regional contracted broker or an MTO must:

(A) ensure motor vehicle operators do not have any findings by a law enforcement authority of driving while intoxicated or under the influence of any substance that may impair their ability to safely operate a motor vehicle within seven years prior to the initial hire date or any time after the hire date. Any motor vehicle operator who is convicted of these offenses after the hire date is immediately ineligible to provide transportation services for a period of seven years after the date of conviction;

(B) ensure motor vehicle operators do not have more than one moving violation either on or off the job within a 12-month time period;

(C) ensure motor vehicle operators do not have a felony or misdemeanor conviction within seven years of the initial hire date or any time after the hire date of:

(i) an act of abuse, neglect or exploitation of children, the elderly or persons with disabilities as defined in Texas Family Code, as amended, Chapter 261 and Texas Human Resources Code, as amended, Chapter 48;

(ii) an offense under the Texas Penal Code, as amended, against the person; against the family; against public order or decency; against public health, safety or morals; against property; or

(iii) an offense under Chapter 481 of the Texas Health and Safety Code, as amended, (Texas Controlled Substances Act); and

(D) ensure that motor vehicle operators have not been convicted or found liable for an act prohibited by Chapter 36 of the Texas Human Resources Code (Medicaid Fraud Prevention); and

(4) require all motor vehicle operators to receive training on the following topics:

(A) passenger safety (training to occur at least annually);

(B) passenger assistance (training to occur at least annually);

(C) assistive devices, including wheelchair lifts, tie-down equipment, and child safety seats (training to occur at least annually);

(D) non-discrimination, sensitivity, and diversity;

(E) customer service;

(F) defensive driving techniques (training to occur at least every two years);

(G) prohibited behavior by motor vehicle operators, including use of offensive language, use of tobacco, alcohol or drugs, and sexual harassment; and

(H) any other additional training HHSC determines to be necessary.

**History**
- *Source Note: The provisions of this §380.502 adopted to be effective August 6, 2013, 38 TexReg 4888; amended to be effective September 1, 2014, 39 TexReg 5731.*

### **Chapter 382** WOMEN'S HEALTH SERVICES

#### **Subchapter A** HEALTHY TEXAS WOMEN

##### **1 Tex. Admin. Code § 382.1** Introduction {#sec-382.1 omnilex-key=us-tx-regs-official--title-1--382.1}

(a) Governing rules. This subchapter sets out rules governing the administration of the Healthy Texas Women (HTW) program.

(b) Authority. This subchapter is authorized generally by Senate Bill 200, 84th Legislature, Regular Session, 2015, which transferred client services functions performed by the Texas Department of State Health Services to HHSC and required the HHSC Executive Commissioner to develop a transition plan which includes an outline of HHSC's reorganized structure and a definition of client services functions.

(c) Objectives. The HTW program is established to achieve the following overarching objectives:

(1) to increase access to women's health and family planning services to:

(A) avert unintended pregnancies;

(B) positively affect the outcome of future pregnancies; and

(C) positively impact the health and wellbeing of women and their families;

(2) to implement the state policy to favor childbirth and family planning services that do not include elective abortion or the promotion of elective abortion within the continuum of care or services;

(3) to ensure the efficient and effective use of state funds in support of these objectives and that state funds are not directly or indirectly used to promote or support elective abortion;

(4) to reduce the overall cost of publicly-funded health care (including federally-funded health care) by providing low-income Texans access to safe, effective services that are consistent with these objectives; and

(5) to enforce Texas Human Resources Code §32.024(c-1) and any other state law that regulates the delivery of HTW services, to the extent permitted by the Constitution of the United States.

**History**
- *Source Note: The provisions of this §382.1 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.5** Definitions {#sec-382.5 omnilex-key=us-tx-regs-official--title-1--382.5}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Abortion--As defined in Texas Health and Safety Code §245.002.

(2) Affiliate--

(A) An individual or entity that has a legal relationship with another entity, which relationship is created or governed by at least one written instrument that demonstrates:

(i) common ownership, management, or control;

(ii) a franchise; or

(iii) the granting or extension of a license or other agreement that authorizes the affiliate to use the other entity's brand name, trademark, service mark, or other registered identification mark.

(B) The written instruments referenced in subparagraph (A) of this definition may include a certificate of formation, a franchise agreement, standards of affiliation, bylaws, articles of incorporation or a license, but do not include agreements related to a physician's participation in a physician group practice, such as a hospital group agreement, staffing agreement, management agreement, or collaborative practice agreement.

(3) Applicant--A female applying to receive services in the HTW program, including a current client who is applying to renew.

(4) Budget group--Members of a household whose needs, income, resources, and expenses are considered in determining eligibility.

(5) CHIP--The Texas State Children's Health Insurance Program.

(6) Client--A female who is enrolled in the HTW program.

(7) Covered service--A service that is reimbursable under the HTW program, including HTW Plus services.

(8) Family planning services--Educational or comprehensive medical activities that enable individuals to determine freely the number and spacing of their children and to select the means by which this may be achieved.

(9) Federal poverty level--The household income guidelines issued annually and published in the *Federal Register* by the United States Department of Health and Human Services.

(10) HHSC--The Texas Health and Human Services Commission or its designee.

(11) HTW Plus--Healthy Texas Women Plus. An enhanced postpartum services package for women enrolled in the HTW program who are eligible for the services.

(12) HTW program--The Healthy Texas Women program. A program administered by HHSC as outlined in this subchapter.

(13) HTW provider--A provider that is enrolled in the Texas Medicaid program and is qualified to perform covered services in the HTW program. An HTW provider with a cost reimbursement contract with HHSC may be reimbursed for providing additional services as described in §382.21(a)(2) of this subchapter (relating to Reimbursement).

(14) Medicaid program--The Texas Medical Assistance Program, a joint federal and state program provided for in Texas Human Resources Code Chapter 32, and subject to Title XIX of the Social Security Act, 42 U.S.C. §§1396 et seq.

(15) Minor--In accordance with the Texas Family Code, a person under 18 years of age who has never been married and never been declared an adult by a court (emancipated).

(16) Third-party resource--A person or organization, other than HHSC or a person living with a female applicant or a client, who may be liable as a source of payment of the female applicant's or client's medical expenses, for example, a private health insurance company or liability insurance company.

(17) Unintended pregnancies--Pregnancies that a female reports as either mistimed or undesired at the time of conception.

(18) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §382.5 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.7** Client Eligibility {#sec-382.7 omnilex-key=us-tx-regs-official--title-1--382.7}

(a) HTW Program Criteria. A female applicant is eligible for the HTW program if she:

(1) meets the following age requirements:

(A) is 18 through 44 years of age; or

(B) is 15 through 17 years of age and has a parent or legal guardian apply, renew, and report changes to her case on her behalf;

(2) is not pregnant;

(3) meets the income eligibility requirements for the HTW program as determined by HHSC in accordance with Chapter 366 Subchapter K of this title (relating to Modified Adjusted Gross Income Methodology) and her household income is equal to or less than 204.2 percent of the federal poverty level;

(4) is a:

(A) United States citizen;

(B) a United States national; or

(C) an alien who qualifies under §366.513 of this title (relating to Citizenship);

(5) resides in Texas;

(6) does not currently receive benefits through another Medicaid program, CHIP, or Medicare Part A or B; and

(7) does not have creditable health coverage that covers the services provided in the HTW program, except as specified in subsection (f) of this section.

(b) HTW Plus Criteria.

(1) A client in the HTW program may also qualify to receive HTW Plus covered services if the client:

(A) meets the criteria in subsection (a) of this section; and

(B) has been pregnant within the past 12 months.

(2) HTW Plus services are available to a client for a period of not more than 12 months after the date of enrollment in the HTW program.

(c) Age.

(1) For purposes of subsection (a)(1)(A) of this section, a female applicant is considered 18 years of age on the day of her 18th birthday and 44 years of age through the last day of the month of her 45th birthday.

(2) For purposes of subsection (a)(1)(B) of this section, a female applicant is considered 15 years of age the first day of the month of her 15th birthday and 17 years of age through the day before her 18th birthday.

(3) A female applicant is ineligible for the HTW program if her application is received the month before her 15th birthday or the month after she turns 45 years of age.

(d) Period of eligibility. A client is deemed eligible to receive covered services for 12 continuous months from the earliest day of the application month on which the female applicant meets all eligibility criteria, unless:

(1) the client dies;

(2) the client voluntarily withdraws;

(3) the client no longer satisfies criteria set out in subsection (a) of this section;

(4) state law no longer allows the client to be covered; or

(5) HHSC determines the client provided information affecting her eligibility that was false at the time of application.

(e) Automatic Eligibility Determination.

(1) A client who is receiving Medicaid or CHIP is automatically tested for eligibility for the HTW program at the end of her Medicaid or CHIP certification period if she is not eligible for another Medicaid program or CHIP.

(2) Program coverage begins on the first day following the termination of her Medicaid or CHIP coverage.

(3) A client enrolled in the HTW program may opt out of the HTW program.

(f) Third party resources. All female applicants eligible for the HTW program must comply with §354.2313 of this title (relating to Duty of Applicant or Recipient to Inform and Cooperate). A female applicant with creditable health coverage or other third party resources that would pay for all or part of the costs of covered services may affirm, in a manner satisfactory to HHSC, her belief that someone may retaliate against her or cause physical or emotional harm if she assists HHSC by providing information or by any other means in pursuing claims against that third-party resource. A female applicant with such creditable health coverage who does not comply with §354.2313 of this title is ineligible to receive HTW benefits.

**History**
- *Source Note: The provisions of this §382.7 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.9** Initial Application and Renewal Procedures {#sec-382.9 omnilex-key=us-tx-regs-official--title-1--382.9}

(a) Application. A female, or a parent or legal guardian acting on her behalf if she is 15 through 17 years of age may apply for the HTW program by completing an application for medical assistance and providing documentation as required by HHSC.

(1) A female applicant may obtain an application:

(A) from a local benefits office of HHSC, or any other location that makes the application available;

(B) from the HTW program or HHSC website;

(C) by calling 2-1-1; or

(D) by any other means approved by HHSC.

(2) HHSC accepts every application received through the following means:

(A) in person at a local HHSC benefits office;

(B) by fax;

(C) by mail;

(D) online; or

(E) by any other means approved by HHSC.

(b) Processing timeline. HHSC processes an application for medical assistance by the 45th day after the date HHSC receives the application.

(c) Start of coverage. Program coverage for a client who is determined eligible in accordance with §382.7 of this subchapter (relating to Client Eligibility) begins on the earliest day of the application month on which the client meets all eligibility criteria.

(1) For female applicants 18 through 44 years of age a valid application has, at a minimum, the applicant's name, address, and signature.

(2) For female applicants 15 through 17 years of age a valid application has, at a minimum, the female applicant's name, address, and the signature of a parent or legal guardian.

(d) Social security number (SSN) required. In accordance with 42 U.S.C. §405(c)(2)(C)(i), HHSC requires a female applicant to provide or apply for a social security number. If a female applicant is not eligible to receive an SSN, the female applicant must provide HHSC with any documents requested by HHSC to verify the female applicant's identity.

(e) Interviews. HHSC does not require an interview for purposes of an eligibility determination. A female applicant may, however, request an interview for an initial or renewal application.

(f) Identity. A female applicant must verify her identity the first time she applies to receive covered services.

(g) Citizenship.

(1) If a female applicant is a United States citizen, she must provide proof of citizenship.

(2) If a female applicant who is otherwise eligible for the HTW program is not a United States citizen, HHSC determines her eligibility as described in §366.513 of this title (relating to Citizenship).

(3) Citizenship is only verified once, unless HHSC receives conflicting information related to citizenship. If a female applicant's citizenship has already been verified by HHSC for eligibility for the Medicaid program, the female applicant is not required to re-verify her citizenship.

(h) Renewal. A client, or a parent or legal guardian acting on behalf of the client if she is 15 through 17 years of age, may renew her enrollment in the HTW program by completing a renewal form as described in this subsection and providing documentation as required by HHSC.

(1) HHSC sends a client a renewal packet during the 9th month of her 12-month certification period for the HTW program.

(2) HHSC accepts and processes every renewal form received through the following means:

(A) in person at a local HHSC benefits office;

(B) by fax;

(C) by mail;

(D) online; or

(E) by any other means approved by HHSC.

**History**
- *Source Note: The provisions of this §382.9 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.13** Denial, Suspension, or Termination of Services and Client Appeals {#sec-382.13 omnilex-key=us-tx-regs-official--title-1--382.13}

(a) Notice and opportunity for hearing. HHSC may deny, suspend, or terminate services to an applicant or client if it determines that the applicant or client is ineligible to participate in HTW.

(b) Notice and opportunity for a fair hearing. Before HHSC finalizes the denial, suspension, or termination under subsection (a) of this section, the applicant or client is notified and provided an opportunity for a fair hearing in accordance with Chapter 357, Subchapter A, of this title (relating to Uniform Fair Hearing Rules).

(c) Appeal procedures. An applicant or client who is aggrieved by the denial, suspension, or termination of services under subsection (a) of this section may appeal the decision in accordance with Chapter 357, Subchapter A of this title. An applicant or client may not appeal a decision to deny, suspend, or terminate services if the decision is the result of a decision by the State to reduce or stop funding the program.

**History**
- *Source Note: The provisions of this §382.13 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.15** Covered and Non-covered Services {#sec-382.15 omnilex-key=us-tx-regs-official--title-1--382.15}

(a) Covered services provided through the HTW program include:

(1) contraceptive services;

(2) pregnancy testing and counseling;

(3) preconception health screenings for:

(A) obesity;

(B) hypertension;

(C) diabetes;

(D) cholesterol;

(E) smoking; and

(F) mental health;

(4) sexually transmitted infection (STI) services;

(5) limited pharmacological treatment for the following chronic conditions:

(A) hypertension;

(B) diabetes; and

(C) high cholesterol;

(6) breast and cervical cancer screening and diagnostic services:

(A) radiological procedures including mammograms;

(B) screening and diagnosis of breast cancer; and

(C) diagnosis and treatment of cervical dysplasia;

(7) immunizations;

(8) limited pharmacological treatment for postpartum depression;

(9) health history and physical exam; and

(10) covered HTW Plus services for clients who qualify for HTW Plus as described in §382.7(b) of this subchapter.

(b) In addition to the HTW services above, covered HTW Plus services include:

(1) mental health counseling/treatment, including:

(A) individual, family, and group psychotherapy services; and

(B) peer specialist services;

(2) substance use disorder treatment, including:

(A) screening, brief intervention, and referral for treatment;

(B) outpatient substance use counseling;

(C) smoking cessation services;

(D) medication-assisted treatment; and

(E) peer specialist services;

(3) cardiovascular and coronary condition management, including:

(A) cardiovascular evaluation imaging and laboratory studies;

(B) blood pressure monitoring equipment; and

(C) anticoagulant, antiplatelet, and antihypertensive medications;

(4) diabetes management, including:

(A) laboratory studies;

(B) additional injectable insulin options;

(C) blood glucose testing supplies;

(D) glucose monitoring supplies; and

(E) voice-integrated glucometers for women with diabetes who are visually impaired; and

(5) asthma management, including:

(A) medications; and

(B) supplies.

(c) Non-covered services in the HTW program include:

(1) counseling on and provision of abortion services; and

(2) other services that cannot be appropriately billed with a permissible procedure code.

**History**
- *Source Note: The provisions of this §382.15 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.17** HTW Providers {#sec-382.17 omnilex-key=us-tx-regs-official--title-1--382.17}

(a) Procedures. An HTW provider must:

(1) be enrolled as a Medicaid program provider in accordance with Chapter 352 of this title (relating to Medicaid and Children's Health Insurance Program Provider Enrollment);

(2) comply with subsection (b) of this section;

(3) complete the certification described in subsection (e) of this section; and

(4) comply with the requirements in Chapter 354, Subchapter A, Division 1 of this title (relating to Medicaid Procedures for Providers).

(5) ensure women in HTW receive information and referrals to HHSC programs like the Primary Health Care Services Program.

(b) Requirements. An HTW provider must ensure that:

(1) the HTW provider does not perform or promote elective abortions outside the scope of the HTW program and is not an affiliate of an entity that performs or promotes elective abortions; and

(2) in offering or performing a covered service, the HTW provider:

(A) does not promote elective abortion within the scope of HTW;

(B) maintains physical and financial separation between its HTW activities and any elective abortion-performing or abortion-promoting activity, as evidenced by the following:

(i) physical separation of HTW services from any elective abortion activities, no matter what entity is responsible for the activities;

(ii) a governing board or other body that controls the HTW provider has no board members who are also members of the governing board of an entity that performs or promotes elective abortions;

(iii) accounting records that confirm that none of the funds used to pay for HTW services directly or indirectly support the performance or promotion of elective abortions by an affiliate; and

(iv) display of signs and other media that identify HTW and the absence of signs or materials promoting elective abortion in the HTW provider's location or in the HTW provider's public electronic communications; and

(C) does not use, display, or operate under a brand name, trademark, service mark, or registered identification mark of an organization that performs or promotes elective abortions.

(c) Defining "promote." For purposes of subsection (b) of this section, the term "promote" means advancing, furthering, advocating, or popularizing elective abortion by, for example:

(1) taking affirmative action to secure elective abortion services for an HTW client (such as making an appointment, obtaining consent for the elective abortion, arranging for transportation, negotiating a reduction in an elective abortion provider fee, or arranging or scheduling an elective abortion procedure); however, the term does not include providing upon the patient's request neutral, factual information and nondirective counseling, including the name, address, telephone number, and other relevant information about a provider;

(2) furnishing or displaying to an HTW client information that publicizes or advertises an elective abortion service or provider; or

(3) using, displaying, or operating under a brand name, trademark, service mark, or registered identification mark of an organization that performs or promotes elective abortions.

(d) Compliance information. Upon request, an HTW provider must provide HHSC with all information HHSC requires to determine the HTW provider's compliance with this section.

(e) Certification. Before initially providing covered services and periodically thereafter, an HTW provider must certify its compliance with subsection (b) of this section using an HHSC-approved form and any other requirement specified by HHSC.

(f) HTW provider disqualification. If HHSC determines that an HTW provider fails to comply with subsection (b) of this section, HHSC disqualifies the provider from the HTW program.

(g) Client assistance and recoupment. If an HTW provider is disqualified, HHSC takes appropriate action to:

(1) assist a client to find an alternate HTW provider; and

(2) recoup any funds paid to a disqualified HTW provider for covered services performed during the period of disqualification.

**History**
- *Source Note: The provisions of this §382.17 adopted to be effective July 1, 2016, 41 TexReg 4623; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.19** Prohibition of Abortion {#sec-382.19 omnilex-key=us-tx-regs-official--title-1--382.19}

Abortion is not considered a method of family planning, and no state funds appropriated for HTW family planning services are used to pay the direct or indirect costs (including overhead, rent, phones, equipment, and utilities) of abortion procedures.

**History**
- *Source Note: The provisions of this §382.19 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.21** Reimbursement {#sec-382.21 omnilex-key=us-tx-regs-official--title-1--382.21}

(a) Reimbursement.

(1) Covered services provided through HTW are reimbursed in accordance with Chapter 355 of this title (relating to Reimbursement Rates).

(2) Entities that contract with HHSC to provide additional services related to HTW that are separate from services referenced in paragraph (1) of this subsection are reimbursed by HHSC in compliance with program standards, policy and procedures, and contract requirements unless payment is prohibited by law.

(b) Claims procedures. An HTW provider must comply with Chapter 354, Subchapter A, Divisions 1 and 5 of this title (relating to Medicaid Procedures for Providers and relating to Physician and Physician Assistant Services).

(c) Improper use of reimbursement. An HTW provider may not use any HTW funds received to pay the direct or indirect costs (including overhead, rent, phones, equipment, and utilities) of elective abortions.

(d) An HTW provider may not seek reimbursement from a client and may not deny covered services to a client based on the client's inability to pay.

**History**
- *Source Note: The provisions of this §382.21 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.23** Health-Care Provider's Request for Review of Claim Denial {#sec-382.23 omnilex-key=us-tx-regs-official--title-1--382.23}

(a) Review of denied claim. An HTW provider may request a review of a denied claim. The request must be submitted as an administrative appeal under Chapter 354, Subchapter I, Division 3 of this title (relating to Appeals).

(b) Appeal procedures. An administrative appeal is subject to the timelines and procedures set out in Chapter 354, Subchapter I, Division 3 of this title and all other procedures and timelines applicable to a health-care provider's appeal of a Medicaid claim denial.

**History**
- *Source Note: The provisions of this §382.23 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.25** Confidentiality and Consent {#sec-382.25 omnilex-key=us-tx-regs-official--title-1--382.25}

(a) Confidentiality required. An HTW provider must maintain all health care information as confidential to the extent required by law.

(b) Written release authorization. Before an HTW provider may release any information that might identify a particular client, that client must authorize the release in writing. If the client is 15 through 17 years of age, inclusive, the client's parent, managing conservator, or guardian, as authorized by Chapter 32 of the Texas Family Code or by federal law or regulations, must authorize the release.

(c) Confidentiality training. An HTW provider's staff (paid and unpaid) must be informed during orientation of the importance of keeping client information confidential.

(d) Records monitoring. An HTW provider must monitor client records to ensure that only appropriate staff and HHSC may access the records.

(e) Assurance of confidentiality. An HTW provider must verbally assure each client that her records are confidential and must explain the meaning of confidentiality.

(f) Consent for minors. HTW services must be provided with consent from the minor's parent, managing conservator, or guardian only as authorized by Texas Family Code, Chapter 32, or by federal law or regulations.

(g) An HTW provider may not require consent for family planning services from the spouse of a married client.

**History**
- *Source Note: The provisions of this §382.25 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.27** Audits and Reports {#sec-382.27 omnilex-key=us-tx-regs-official--title-1--382.27}

(a) Compliance audits. HHSC may audit any HTW provider to verify compliance with any applicable law or regulation.

(b) Reporting duties. An HTW provider must submit information to HHSC as HHSC requires.

**History**
- *Source Note: The provisions of this §382.27 adopted to be effective July 1, 2016, 41 TexReg 4623.*

##### **1 Tex. Admin. Code § 382.29** Severability {#sec-382.29 omnilex-key=us-tx-regs-official--title-1--382.29}

(a) Legislative intent. The Texas Legislature, in enacting Texas Human Resources Code §32.024(c-1), confirmed its intent that the Healthy Texas Women program, as successor to the Medicaid Women's Health Program, must be operated only in a manner that ensures that no funds spent under the program are:

(1) spent to perform or promote elective abortions; or

(2) used to contract with entities that perform or promote elective abortions or affiliates of such entities.

(b) Limitation on administration. HHSC, as the agency responsible for administering HTW, is subject to the conditions specified in Texas Human Resources Code §32.024(c-1). Its authority to operate the program is thus strictly limited, and HHSC has no authority to operate the HTW program except in compliance with such conditions.

(c) Nonseverable provisions.

(1) Section 382.5(1) of this subchapter (relating to Definitions) and §382.17 of this subchapter (relating to Health Care Providers) are necessary and integral to the implementation of the requirements of Texas Human Resources Code §32.024(c-1), the fulfillment of legislative intent, and the achievement of the objectives of HTW. As such, HHSC regards the provisions and application of these sections as essential aspects of HHSC's compliance with state law and, therefore, not severable from the other provisions of this subchapter.

(2) Accordingly, to the extent that §382.5(1), §382.17, or this section is determined by a court of competent jurisdiction to be unconstitutional or unenforceable, or to the degree an official or employee of HHSC or the State of Texas is enjoined from enforcing these sections, HHSC will regard this entire subchapter as invalid and unenforceable and will cease operation of the program.

(d) Severable provisions. To the extent that any part of this subchapter other than §382.5(1), §382.17, or this section are enjoined, HHSC may enforce the parts of the subchapter not affected by such injunctive relief to the extent that HHSC determines it can do so consistent with legislative intent and the objectives of this subchapter.

**History**
- *Source Note: The provisions of this §382.29 adopted to be effective July 1, 2016, 41 TexReg 4623.*

#### **Subchapter B** FAMILY PLANNING PROGRAM

##### **1 Tex. Admin. Code § 382.101** Introduction {#sec-382.101 omnilex-key=us-tx-regs-official--title-1--382.101}

(a) Governing rules. This subchapter sets out rules governing the administration of the HHSC Family Planning Program (FPP). This program is separate from family planning services provided through Medicaid.

(b) Authority. This subchapter is authorized generally by Senate Bill 200, 84th Legislature, Regular Session, 2015, which transferred client services functions performed by the Texas Department of State Health Services to HHSC and required the HHSC Executive Commissioner to develop a transition plan which includes an outline of HHSC's reorganized structure and a definition of client services functions.

(c) Objectives. FPP is established to achieve the following overarching objectives:

(1) to increase access to health and family planning services to:

(A) avert unintended pregnancies;

(B) positively affect the outcome of future pregnancies; and

(C) positively impact the health and well-being of women and their families;

(2) to implement the state policy to favor childbirth and family planning services that do not include elective abortion or the promotion of elective abortion within the continuum of care or services;

(3) to ensure the efficient and effective use of state funds in support of these objectives and that state funds are not directly or indirectly used to promote or support elective abortion;

(4) to reduce the overall cost of publicly-funded health care (including federally-funded health care) by providing low-income Texans access to safe, effective services that are consistent with these objectives; and

(5) to enforce any state law that regulates the delivery of non-federally funded family planning services, to the extent permitted by the Constitution of the United States.

**History**
- *Source Note: The provisions of this §382.101 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.103** Non-entitlement and Availability {#sec-382.103 omnilex-key=us-tx-regs-official--title-1--382.103}

(a) No entitlement. This subchapter does not establish an entitlement to the services described in this subchapter.

(b) Fund availability. The services described in this subchapter are subject to the availability of appropriated funds.

**History**
- *Source Note: The provisions of this §382.103 adopted to be effective July 1, 2016, 41 TexReg 4630.*

##### **1 Tex. Admin. Code § 382.105** Definitions {#sec-382.105 omnilex-key=us-tx-regs-official--title-1--382.105}

The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.

(1) Abortion--As defined in Texas Health and Safety Code §245.002.

(2) Affiliate--

(A) An individual or entity that has a legal relationship with another entity, which relationship is created or governed by at least one written instrument that demonstrates:

(i) common ownership, management, or control;

(ii) a franchise; or

(iii) the granting or extension of a license or other agreement that authorizes the affiliate to use the other entity's brand name, trademark, service mark, or other registered identification mark.

(B) The written instruments referenced in subparagraph (A) of this definition may include a certificate of formation, a franchise agreement, standards of affiliation, bylaws, articles of incorporation or a license, but do not include agreements related to a physician's participation in a physician group practice, such as a hospital group agreement, staffing agreement, management agreement, or collaborative practice agreement.

(3) Applicant--An individual applying to receive services under FPP, including a current client who is applying to renew.

(4) Budget group--Members of a household whose needs, income, resources, and expenses are considered in determining eligibility.

(5) Client--Any individual seeking assistance from an FPP health-care provider to meet their family planning goals.

(6) Covered service--A service that is reimbursable under FPP.

(7) Family Planning Program (FPP)--The non-Medicaid program administered by HHSC as outlined in this subchapter.

(8) Family Planning Program provider--A health-care provider that is contracted with HHSC and qualified to perform covered services.

(9) Family planning services--Educational or comprehensive medical activities that enable individuals to determine freely the number and spacing of their children and to select the means by which this may be achieved.

(10) Federal poverty level--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(11) Grantee--An entity that HHSC has contracted with to provide services. The grantee is the responsible entity, even if a subgrantee provides the service.

(12) Health-care provider--A physician, physician assistant, nurse practitioner, clinical nurse specialist, certified nurse midwife, federally qualified health center, family planning agency, health clinic, ambulatory surgical center, hospital ambulatory surgical center, laboratory, or rural health center.

(13) HHSC--The Texas Health and Human Services Commission or its designee.

(14) Medicaid program--The Texas Medical Assistance Program, a joint federal and state program provided for in Texas Human Resources Code Chapter 32, and subject to Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq.

(15) Minor--In accordance with the Texas Family Code, a person under 18 years of age who has never been married and never been declared an adult by a court (emancipated).

(16) Point of Service--The location where an individual can receive FPP services.

(17) Third-party resource--A person or organization, other than HHSC or a person living with an applicant or a client, who may be liable as a source of payment of the applicant's or client's medical expenses, for example, a private health insurance company or liability insurance company.

(18) Unintended pregnancies--Pregnancies that a female reports as either mistimed or undesired at the time of conception.

(19) U.S.C.--United States Code.

**History**
- *Source Note: The provisions of this §382.105 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.107** Client Eligibility {#sec-382.107 omnilex-key=us-tx-regs-official--title-1--382.107}

(a) FPP Criteria. A male or female is eligible for FPP if he or she:

(1) is 64 years of age or younger;

(2) resides in Texas; and

(3) has countable income (as calculated under §382.109 of this subchapter (relating to Financial Eligibility Requirements) that does not exceed 250 percent of the federal poverty level (FPL).

(b) Contractors determine eligibility at the point of service in accordance with program policy and procedures.

(c) Adjunctive eligibility--An applicant is considered adjunctively (automatically) eligible for FPP services at an initial or renewal eligibility screening if the applicant can provide proof of active enrollment in one of the following programs:

(1) Children's Health Insurance Program (CHIP) Perinatal;

(2) Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); or

(3) Supplement Nutrition Assistance Program (SNAP).

**History**
- *Source Note: The provisions of this §382.107 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.109** Financial Eligibility Requirements {#sec-382.109 omnilex-key=us-tx-regs-official--title-1--382.109}

Calculating countable income. FPP determines an applicant's financial eligibility by calculating the applicant's countable income. To determine countable income, FPP adds the incomes listed in paragraph (1) of this section, less any deductions listed in paragraph (2) of this section, and exempting any amounts listed in paragraph (3) of this section.

(1) To determine income eligibility, FPP counts the income of the following individuals if living together:

(A) the individual age 18 through 64 applying for FPP;

(i) the individual's spouse; and

(ii) the individual's children age 18 and younger; or

(B) the individual age 17 or younger applying for FPP;

(i) the individual's parent(s);

(ii) the individual's siblings age 18 and younger; and

(iii) the individual's children;

(2) In determining countable income, FPP deducts the following items:

(A) a dependent care deduction of up to $200 per month for each child under two years of age, and up to $175 per month for each dependent two years of age or older;

(B) a deduction of up to $175 per month for each dependent adult with a disability; and

(C) child support payments.

(3) FPP exempts from the determination of countable income the following types of income:

(A) the earnings of a child;

(B) up to $300 per federal fiscal quarter in cash gifts and contributions that are from private, nonprofit organizations and are based on need;

(C) Temporary Assistance to Needy Families (TANF);

(D) the value of any benefits received under a government nutrition assistance program that is based on need, including benefits under the Supplemental Nutrition Assistance Program (SNAP) (formerly the Food Stamp Program) (7 U.S.C. §§2011-2036), the Child Nutrition Act of 1966 (42 U.S.C. §§1771-1793), the National School Lunch Act (42 U.S.C. §§1751-1769), and the Older Americans Act of 1965 (42 U.S.C. §§3056, et seq.);

(E) foster care payments;

(F) payments made under a government housing assistance program based on need;

(G) energy assistance payments;

(H) job training payments;

(I) lump sum payments;

(J) Supplemental Security Income;

(K) adoption payments;

(L) dividends, interest and royalties;

(M) Veteran's Administration;

(N) earned income tax credit payments;

(O) federal, state, or local government payments provided to rebuild a home or replace personal possessions damaged in a disaster, including payments under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §§5121 et seq.), if the recipient is subject to legal sanction if the payment is not used as intended;

(P) educational assistance payments; and

(Q) crime victim's compensation payments.

**History**
- *Source Note: The provisions of this §382.109 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.111** Denial, Suspension, or Termination of Services and Client Appeals {#sec-382.111 omnilex-key=us-tx-regs-official--title-1--382.111}

(a) Notice and opportunity for hearing. HHSC may deny, suspend, or terminate services to an applicant or client if it determines that the applicant or client is ineligible to participate in FPP.

(b) Notice and opportunity for a fair hearing. Before HHSC finalizes the denial, suspension, or termination under subsection (a) of this section, the applicant or client is notified and provided an opportunity for a fair hearing in accordance with Chapter 357, Subchapter A of this title (relating to Uniform Fair Hearing Rules).

(c) Appeal procedures. An applicant or client who is aggrieved by the denial, suspension, or termination of services under subsection (a) of this section may appeal the decision in accordance with Chapter 357, Subchapter A of this title. An applicant or client may not appeal a decision to deny, suspend, or terminate services if the decision is the result of a decision by the State to reduce or stop funding the program.

**History**
- *Source Note: The provisions of this §382.111 adopted to be effective July 1, 2016, 41 TexReg 4630.*

##### **1 Tex. Admin. Code § 382.113** Covered and Non-covered Services {#sec-382.113 omnilex-key=us-tx-regs-official--title-1--382.113}

(a) Covered services provided through FPP include:

(1) contraceptive services;

(2) pregnancy testing and counseling;

(3) preconception health screenings for:

(A) obesity;

(B) hypertension;

(C) diabetes;

(D) cholesterol;

(E) smoking; and

(F) mental health;

(4) sexually transmitted infection (STI) services;

(5) limited pharmacological treatment for the following chronic conditions:

(A) hypertension;

(B) diabetes; and

(C) high cholesterol;

(6) breast and cervical cancer screening and diagnostic services:

(A) radiological procedures including mammograms;

(B) screening and diagnosis of breast cancer; and

(C) diagnosis and treatment of cervical dysplasia;

(7) immunizations;

(8) limited pharmacological treatment for postpartum depression;

(9) health history and physical exam;

(10) mental health counseling/treatment, including:

(A) individual, family, and group psychotherapy services; and

(B) psychological testing administration and evaluation;

(11) health behavior intervention, including:

(A) screening, brief intervention, and referral for treatment;

(B) smoking cessation services; and

(C) medication-assisted treatment;

(12) cardiovascular and coronary condition management, including:

(A) cardiovascular evaluation imaging and laboratory studies;

(B) blood pressure monitoring equipment; and

(C) antihypertensive medications; and

(13) diabetes management, including:

(A) laboratory studies;

(B) additional injectable insulin options; and

(C) blood glucose testing supplies.

(b) Non-covered services in FPP include:

(1) counseling on and provision of abortion services; and

(2) other services that cannot be appropriately billed with a permissible procedure code.

**History**
- *Source Note: The provisions of this §382.113 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.115** Family Planning Program Providers {#sec-382.115 omnilex-key=us-tx-regs-official--title-1--382.115}

(a) Procedures. An FPP provider must:

(1) be enrolled as a Medicaid program provider in accordance with Chapter 352 of this title (relating to Medicaid and Children's Health Insurance Program Provider Enrollment);

(2) comply with subsection (b) of this section;

(3) must complete the FPP certification process as described in subsection (e) of this section; and

(4) must comply with the requirements set out in Chapter 354, Subchapter A, Division 1 of this title (relating to Medicaid Procedures for Providers).

(b) Requirements. An FPP health-care provider must ensure that:

(1) the FPP provider does not perform or promote elective abortions outside the scope of FPP and is not an affiliate of an entity that performs or promotes elective abortions; and

(2) in offering or performing a covered service, the FPP provider:

(A) does not promote elective abortion within the scope of FPP;

(B) maintains physical and financial separation between its FPP activities and any elective abortion-performing or abortion-promoting activity, as evidenced by the following:

(i) physical separation of FPP services from any elective abortion activities, no matter what entity is responsible for the activities;

(ii) a governing board or other body that controls the FPP provider has no board members who are also members of the governing board of an entity that performs or promotes elective abortions;

(iii) accounting records that confirm that none of the funds used to pay for FPP services directly or indirectly support the performance or promotion of elective abortions by an affiliate; and

(iv) display of signs and other media that identify FPP services and the absence of signs or materials promoting elective abortion in the FPP provider's location or in the FPP provider's public electronic communications; and

(C) does not use, display, or operate under a brand name, trademark, service mark, or registered identification mark of an organization that performs or promotes elective abortions.

(c) Defining "promote." For purposes of subsection (b) of this section, the term "promote" means advancing, furthering, advocating, or popularizing elective abortion by, for example:

(1) taking affirmative action to secure elective abortion services for an FPP client (such as making an appointment, obtaining consent for the elective abortion, arranging for transportation, negotiating a reduction in an elective abortion provider fee, or arranging or scheduling an elective abortion procedure); however, the term does not include providing upon the patient's request neutral, factual information and nondirective counseling, including the name, address, telephone number, and other relevant information about a provider;

(2) furnishing or displaying to an FPP client information that publicizes or advertises an elective abortion service or provider; or

(3) using, displaying, or operating under a brand name, trademark, service mark, or registered identification mark of an organization that performs or promotes elective abortions.

(d) Compliance information. Upon request, an FPP provider must provide HHSC with all information HHSC requires to determine the provider's compliance with this section.

(e) Certification. Before initially providing covered services, an FPP grantee must certify its compliance with subsection (b) of this section using an HHSC-approved form and any other requirement specified by HHSC.

(f) FPP provider disqualification. If HHSC determines that an FPP provider fails to comply with subsection (b) of this section, HHSC disqualifies the provider from providing FPP services under this subchapter.

(g) Client assistance and recoupment. If an FPP provider is disqualified from providing FPP services under this subchapter, HHSC takes appropriate action to:

(1) assist a client to find an alternate FPP provider; and

(2) recoup any funds paid to a disqualified provider for covered services performed during the period of disqualification.

**History**
- *Source Note: The provisions of this §382.115 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.117** Prohibition of Abortion {#sec-382.117 omnilex-key=us-tx-regs-official--title-1--382.117}

Abortion is not considered a method of family planning, and no state funds appropriated for the FPP are used to pay the direct or indirect costs (including overhead, rent, phones, equipment, and utilities) of abortion procedures.

**History**
- *Source Note: The provisions of this §382.117 adopted to be effective July 1, 2016, 41 TexReg 4630.*

##### **1 Tex. Admin. Code § 382.119** Reimbursement {#sec-382.119 omnilex-key=us-tx-regs-official--title-1--382.119}

(a) Reimbursement.

(1) Covered services provided through FPP are reimbursed in accordance with Chapter 355 of this title (relating to Reimbursement Rates).

(2) Entities that contract with HHSC to provide additional services related to family planning that are separate from services referenced in paragraph (1) of this subsection are reimbursed by HHSC in compliance with program standards, policy and procedures, and contract requirements unless payment is prohibited by law.

(b) Claims procedures. An FPP provider must comply with Chapter 354, Subchapter A, Divisions 1 and 5 of this title (relating to Medicaid Procedures for Providers and relating to Physician and Physician Assistant Services).

(c) Improper use of reimbursement. An FPP provider may not use any FPP funds received to pay the direct or indirect costs (including overhead, rent, phones, equipment, and utilities) of elective abortions.

(d) An FPP provider may not deny covered services to a client based on the client's inability to pay.

**History**
- *Source Note: The provisions of this §382.119 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.121** Provider's Request for Review of Claim Denial {#sec-382.121 omnilex-key=us-tx-regs-official--title-1--382.121}

(a) Review of denied claim. An FPP provider may request a review of a denied claim. The request must be submitted as an administrative appeal under Chapter 354, Subchapter I, Division 3 of this title (relating to Appeals).

(b) Appeal procedures. An administrative appeal is subject to the timelines and procedures set out in Chapter 354, Subchapter I, Division 3 of this title and all other procedures and timelines applicable to an FPP provider's appeal of a Medicaid program claim denial.

**History**
- *Source Note: The provisions of this §382.121 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.123** Record Retention {#sec-382.123 omnilex-key=us-tx-regs-official--title-1--382.123}

(a) FPP grantees must maintain, for the time period specified by the HHSC, all records pertaining to client services, contracts, and payments.

(b) FPP grantees must comply with the Medicaid program record retention requirements found in §354.1004 of this title (relating to Retention of Records).

(c) All records relating to services must be accessible for examination at any reasonable time to representatives of HHSC and as required by law.

**History**
- *Source Note: The provisions of this §382.123 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.125** Confidentiality and Consent {#sec-382.125 omnilex-key=us-tx-regs-official--title-1--382.125}

(a) Confidentiality required. An FPP provider must maintain all health care information as confidential to the extent required by law.

(b) Written release authorization. Before an FPP provider may release any information that might identify a particular client, that client must authorize the release in writing. If the client is a minor, the client's parent, managing conservator, or guardian, as authorized by Chapter 32 of the Texas Family Code or by federal law or regulations, must authorize the release.

(c) Confidentiality training. An FPP provider's staff (paid and unpaid) must be informed during orientation of the importance of keeping client information confidential.

(d) Records monitoring. An FPP provider must monitor client records to ensure that only appropriate staff and HHSC may access the records.

(e) Assurance of confidentiality. An FPP provider must verbally assure each client that her records are confidential and must explain the meaning of confidentiality.

(f) Consent for minors. FPP services must be provided with consent from the minor's parent, managing conservator, or guardian only as authorized by Texas Family Code, Chapter 32, or by federal law or regulations.

(g) An FPP provider may not require consent for family planning services from the spouse of a married client.

**History**
- *Source Note: The provisions of this §382.125 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.127** FPP Services for Minors {#sec-382.127 omnilex-key=us-tx-regs-official--title-1--382.127}

(a) Minors must be provided individualized family planning counseling and family planning medical services that meet their specific needs as soon as possible.

(b) The FPP provider must ensure that:

(1) counseling for minors seeking family planning services is provided with parental consent;

(2) counseling for minors includes information on use and effectiveness of all medically approved birth control methods, including abstinence; and

(3) appointment schedules are flexible enough to accommodate access for minors requesting services.

**History**
- *Source Note: The provisions of this §382.127 adopted to be effective July 1, 2016, 41 TexReg 4630; amended to be effective May 16, 2024, 49 TexReg 3199.*

##### **1 Tex. Admin. Code § 382.129** Severability {#sec-382.129 omnilex-key=us-tx-regs-official--title-1--382.129}

(a) Legislative intent. It is the intent of the Texas Legislature that FPP must be operated only in a manner that ensures that no funds spent under the program are used to:

(1) perform or promote elective abortions; or

(2) contract with entities that perform or promote elective abortions or affiliates of such entities.

(b) Limitation on administration. HHSC, as the agency responsible for administering FPP, is subject to the conditions specified in state law and legislative appropriations. Its authority to operate the program is thus strictly limited, and HHSC has no authority to operate FPP except in compliance with such conditions.

(c) Nonseverable provisions.

(1) Section 382.105(1) of this subchapter (relating to Definitions) and §382.115 of this subchapter (relating to Family Planning Program Health Care Providers) are necessary and integral to the implementation of the requirements of state law and legislative appropriations and the achievement of the objectives of FPP. As such, HHSC regards the provisions and application of these sections as essential aspects of HHSC's compliance with state law and, therefore, not severable from the other provisions of this subchapter.

(2) Accordingly, to the extent that §382.105(1), §382.115, or this section is determined by a court of competent jurisdiction to be unconstitutional or unenforceable, or to the degree an official or employee of HHSC or the State of Texas is enjoined from enforcing these sections, HHSC will regard this entire subchapter as invalid and unenforceable and will cease operation of the program.

(d) Severable provisions. To the extent that any part of this subchapter other than §382.105(1), §382.115, or this section are enjoined, HHSC may enforce the parts of the subchapter not affected by such injunctive relief to the extent that HHSC determines it can do so consistent with legislative intent and the objectives of this subchapter.

**History**
- *Source Note: The provisions of this §382.129 adopted to be effective July 1, 2016, 41 TexReg 4630.*

### **Chapter 386** DISASTER ASSISTANCE PROGRAM

#### **Subchapter A** GENERAL INFORMATION

##### **1 Tex. Admin. Code § 386.101** What does this chapter cover? {#sec-386.101 omnilex-key=us-tx-regs-official--title-1--386.101}

This chapter covers provisions of the Federal Assistance to Individuals and Households Program, which was created by an amendment to the Stafford Act, the Disaster Mitigation Act of 2000, 42 United States Code §§5121-5206. The program:

(1) was implemented by the Federal Emergency Management Agency in October 2002; and

(2) has two provisions of assistance:

(A) Housing Assistance; and

(B) Other Needs Assistance.

**History**
- *Source Note: The provisions of this §386.101 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.102** Are the Individual and Family Grant Program and Temporary Housing Program still available? {#sec-386.102 omnilex-key=us-tx-regs-official--title-1--386.102}

No, the Disaster Mitigation Act of 2000 eliminates those programs and established the program noted in §6.101 of this chapter (relating to What does this chapter cover?).

**History**
- *Source Note: The provisions of this §386.102 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.103** How are the terms in this chapter defined? {#sec-386.103 omnilex-key=us-tx-regs-official--title-1--386.103}

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.

(1) The words "I," "my," "you," and "your" refer to an applicant for assistance with disaster-related losses or expenses.

(2) Assistance from other means--Assistance, including monetary or in-kind contributions, from:

(A) other governmental programs;

(B) insurance;

(C) volunteer or charitable organizations; or

(D) any source other than those of the individual or family.

(3) CFR--Code of Federal Regulations.

(4) DEM--Division of Emergency Management, the entity designated by the governor to administer and supervise disaster recovery operations in Texas. DEM is a division of the Texas Department of Public Safety. The director of the division serves as chairperson of the Disaster Emergency Management Council.

(5) DHS--Texas Department of Human Services.

(6) Dependent--Someone who is normally claimed as such on the federal tax return of another, according to the Internal Revenue Code. It may also mean the minor children of a couple not living together if the children live in the residence with the parent who does not actually claim them on the tax return.

(7) FEMA--Federal Emergency Management Agency, a federal agency responsible for coordinating responses to disasters among other federal, state, local, and voluntary agencies.

(8) Family--Social unit living together and composed of:

(A) legally married individuals, or couples living together as if they are married, and their dependents;

(B) a single person and his or her dependents; or

(C) persons who jointly own a residence and their dependents.

(9) Flood hazard area--Area shown on a Federal Insurance Administration map as an area prone to flooding. These areas are designated:

(A) Zone A, 100-year flood plain; and

(B) Zone V, coastal high hazard area.

(10) GFIP--Group Flood Insurance Policy, provided by the National Flood Insurance Program to disaster victims who must buy and maintain flood insurance in order to be eligible for future disaster aid for damages to flood insurable items caused by flooding.

(11) HA--Housing Assistance, funded and administered by FEMA.

(12) IHP--Federal Assistance to Individuals and Households Program, implemented by FEMA in October 2002, which has two provisions of assistance, the:

(A) HA; and

(B) Other Needs Assistance (ONA).

(13) Individual--Person who is not a member of a family as defined in this section.

(14) Major disaster--Includes:

(A) hurricane;

(B) tornado;

(C) storm;

(D) flood;

(E) high water;

(F) wind-driven water;

(G) earthquake;

(H) volcanic eruption;

(I) landslide;

(J) mudslide;

(K) snowstorm;

(L) drought;

(M) fire;

(N) explosion; or

(O) other catastrophe.

(15) NFIP--National Flood Insurance Program, a federal program that provides flood insurance to people living in communities that are designated flood prone areas.

(16) National eligibility criteria--Standards prescribed by FEMA that state and federal governments must apply when determining eligibility for grants.

(17) Necessary expense--Cost of a serious need.

(18) ONA--Other Needs Assistance, a federal grant that assists disaster victims who have serious disaster-related needs and the following necessary expenses:

(A) personal property;

(B) transportation;

(C) medical and dental;

(D) funeral;

(E) moving and storage; and

(F) other.

(19) Owner-occupied--Residence that is occupied by:

(A) the legal owner;

(B) a person who does not hold formal title to the residence but is responsible for:

(i) payment of taxes;

(ii) maintenance of the residence; and

(iii) pays no rent; or

(C) a person who has lifetime occupancy rights in the residence with formal title vested in another.

(20) Primary residence--Dwelling:

(A) where you usually live during the major portion of the calendar year; or

(B) required because of proximity to employment, including agricultural activities, that provides 50% of the household's income.

(21) SBA--U.S. Small Business Administration, a federal agency that loans money at a lower-than-usual interest rate to small businesses, individuals, and families to assist them in recovery from a disaster.

(22) Sanctioned communities--Communities NFIP designates as having special flood hazard areas but that do not participate in NFIP.

(23) Serious need--Requirement for an item or service essential to an individual or family to prevent, mitigate, or overcome a disaster-related hardship, injury, or adverse condition.

(24) State coordinating officer--Person appointed by the governor through the director of DEM to coordinate state and local disaster assistance efforts with those of federal government agencies. As the DEM director representative, the state coordinating officer exercises powers granted to the governor by the Texas Disaster Act of 1975, to the extent delegated for the disaster situation.

**History**
- *Source Note: The provisions of this §386.103 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.104** Who funds and administers the assistance within the Federal Assistance to Individuals and Households Program? {#sec-386.104 omnilex-key=us-tx-regs-official--title-1--386.104}

(a) FEMA funds and administers 100% of the Housing Assistance provisions.

(b) FEMA funds 75% of the Other Needs Assistance (ONA) provisions. The state contributes 25% of the actual cost of meeting necessary expenses or serious needs of individuals and families.

(c) DHS administers ONA in Texas.

**History**
- *Source Note: The provisions of this §386.104 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.105** Does this chapter cover Housing Assistance (HA)? {#sec-386.105 omnilex-key=us-tx-regs-official--title-1--386.105}

No, FEMA is the sole administrator of disaster assistance funding for the repair or replacement of owner-occupied primary residences through the HA provisions of the Federal Assistance to Individuals and Households Program.

**History**
- *Source Note: The provisions of this §386.105 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.106** What is Other Needs Assistance (ONA)? {#sec-386.106 omnilex-key=us-tx-regs-official--title-1--386.106}

ONA provides grants to disaster victims who have serious disaster-related needs and necessary expenses in the following categories:

(1) personal property, such as repair or replacement of:

(A) furniture;

(B) appliances;

(C) clothing; and

(D) medical personal property;

(2) transportation, such as repair or replacement of privately owned vehicles;

(3) medical and dental expenses incurred due to disaster-related injuries;

(4) funeral expenses incurred due to a disaster-related death;

(5) moving and storage expenses to avoid additional disaster damage to personal property; and

(6) other disaster-related expenses, such as the purchase of a Group Flood Insurance Policy.

**History**
- *Source Note: The provisions of this §386.106 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.107** Can Other Needs Assistance (ONA) funds be used for housing repair or replacement? {#sec-386.107 omnilex-key=us-tx-regs-official--title-1--386.107}

No, the state cannot include funds for housing repair or replacement under ONA provisions. Housing Assistance, administered by FEMA, funds housing repair or replacement.

**History**
- *Source Note: The provisions of this §386.107 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.108** What is the maximum grant amount I can receive? {#sec-386.108 omnilex-key=us-tx-regs-official--title-1--386.108}

You can receive up to $25,000 in a single disaster declaration. FEMA will adjust the grant limit annually to reflect changes in the Consumer Price Index for All Urban Consumers published by the Department of Labor.

**History**
- *Source Note: The provisions of this §386.108 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.109** Who is responsible for helping me apply for a grant? {#sec-386.109 omnilex-key=us-tx-regs-official--title-1--386.109}

FEMA and DEM are responsible for assisting you with applications. FEMA and DEM also answer questions about deadlines and other information concerning the requirements you must meet to receive assistance.

**History**
- *Source Note: The provisions of this §386.109 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter B** ELIGIBILITY CRITERIA FOR OTHER NEEDS ASSISTANCE (ONA) GRANTS

##### **1 Tex. Admin. Code § 386.201** Under what circumstances may I apply for disaster assistance? {#sec-386.201 omnilex-key=us-tx-regs-official--title-1--386.201}

You must have incurred a disaster-related necessary expense or serious need in an area declared a major disaster area.

**History**
- *Source Note: The provisions of this §386.201 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.202** Must I be a citizen to qualify for an Other Needs Assistance grant? {#sec-386.202 omnilex-key=us-tx-regs-official--title-1--386.202}

No; however, you must sign a declaration that you or your dependent is a:

(1) U.S. citizen;

(2) non-citizen national; or

(3) qualified alien in the United States.

**History**
- *Source Note: The provisions of this §386.202 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.203** What types of losses are eligible for me to receive an Other Needs Assistance (ONA) grant? {#sec-386.203 omnilex-key=us-tx-regs-official--title-1--386.203}

You must have losses in one of the two types of ONA assistance:

(1) medical, dental, and funeral expenses; or

(2) personal property, transportation, moving, and other expenses. Other expenses are:

(A) tangible items not owned at the time of the disaster;

(B) services not included in the specified categories for ONA;

(C) services FEMA and the state determine as eligible unique disaster-related necessary expenses and serious needs, which include:

(i) air purifier;

(ii) chain saw;

(iii) cord of wood;

(iv) dehumidifier;

(v) fuel for heating;

(vi) sump pump;

(vii) wet/dry vacuum; or

(viii) other item as specified in the state administrative plan;

(D) moving and storage expenses; and

(E) purchase of a Group Flood Insurance Policy.

**History**
- *Source Note: The provisions of this §386.203 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.204** What are the Other Needs Assistance (ONA) grant categories? {#sec-386.204 omnilex-key=us-tx-regs-official--title-1--386.204}

You may be awarded an ONA grant for expenses in the following categories:

(1) personal property;

(2) transportation;

(3) medical;

(4) dental;

(5) funeral; and

(6) moving and storage.

**History**
- *Source Note: The provisions of this §386.204 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.205** What types of personal property are eligible for grant assistance? {#sec-386.205 omnilex-key=us-tx-regs-official--title-1--386.205}

(a) Grants are available for the following types of personal property expenses:

(1) clothing;

(2) household items, such as furnishings or appliances;

(3) tools, specialized or protective clothing, and equipment required by an employer as a condition of employment;

(4) computers, uniforms, schoolbooks, and supplies required for educational purposes; and

(5) repairing, cleaning, or sanitizing eligible personal property items.

(b) FEMA establishes allowances for furniture, appliances, and clothing.

**History**
- *Source Note: The provisions of this §386.205 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.206** What types of disaster-related transportation expenses are covered? {#sec-386.206 omnilex-key=us-tx-regs-official--title-1--386.206}

(a) Grants may be authorized to repair, replace, or provide privately owned vehicles or to provide public transportation, within limits established by DHS.

(b) The maximum allowance is based on the average cost of providing dependable transportation.

**History**
- *Source Note: The provisions of this §386.206 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.207** Are disaster-related medical or dental expenses covered? {#sec-386.207 omnilex-key=us-tx-regs-official--title-1--386.207}

Yes, grants may be authorized to cover disaster-related medical or dental expenses.

**History**
- *Source Note: The provisions of this §386.207 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.208** Are disaster-related funeral expenses covered? {#sec-386.208 omnilex-key=us-tx-regs-official--title-1--386.208}

(a) Grants may be authorized for disaster-related funeral and burial or cremation expenses with a maximum allowance established by DHS.

(b) The maximum allowance is based on the average cost of funeral expenses in Texas during the current calendar year.

**History**
- *Source Note: The provisions of this §386.208 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.209** What types of moving and storage expenses are covered? {#sec-386.209 omnilex-key=us-tx-regs-official--title-1--386.209}

Grants may be authorized for moving and storing personal property to avoid additional disaster damage, including the evacuation, storage, and return of the personal property to your home.

**History**
- *Source Note: The provisions of this §386.209 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.210** Can I receive a grant to purchase flood insurance? {#sec-386.210 omnilex-key=us-tx-regs-official--title-1--386.210}

Grants may be authorized up to the maximum allowance established by FEMA to cover the cost of the first year's flood insurance premium if all of the following conditions exist:

(1) You had flood damage to your personal property.

(2) You are eligible for a personal property grant.

(3) Your residence is in Flood Zone A or V.

(4) Your community is participating in the National Flood Insurance Program.

**History**
- *Source Note: The provisions of this §386.210 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.211** What types of losses are ineligible for an Other Needs Assistance (ONA) grant? {#sec-386.211 omnilex-key=us-tx-regs-official--title-1--386.211}

ONA grants are not awarded for the following expenses:

(1) housing repair or replacement, which is provided by FEMA under Housing Assistance provisions;

(2) business losses, including farm businesses and self-employment;

(3) improvements or additions to personal property;

(4) landscaping;

(5) real or personal property used exclusively for recreation; or

(6) financial obligations incurred before the disaster.

**History**
- *Source Note: The provisions of this §386.211 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.212** Are any other categories of assistance covered under an Other Needs Assistance (ONA) grant? {#sec-386.212 omnilex-key=us-tx-regs-official--title-1--386.212}

(a) The federal coordinating officer, state coordinating officer, and ONA grants coordinating officer determine if an additional category of assistance needs to be available in a particular disaster situation.

(b) Other categories are related to special circumstances of a particular disaster.

(c) FEMA, DEM, or DHS determine other categories.

(d) Applicants may be entitled to receive grants to cover expenses for items in categories other than those described in §6.106 of this chapter (relating to What is Other Needs Assistance (ONA)?).

**History**
- *Source Note: The provisions of this §386.212 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.213** Must I file a claim with my insurance company(ies) if my expenses are eligible for an Other Needs Assistance (ONA) grant? {#sec-386.213 omnilex-key=us-tx-regs-official--title-1--386.213}

(a) You must file a claim for all potentially applicable types of insurance coverage and be denied by the insurance provider(s).

(b) You must accept all eligible insurance benefits.

(c) You are eligible for assistance if your insurance proceeds:

(1) have been significantly delayed through no fault of your own and you have agreed to repay the ONA assistance from the insurance proceeds once you receive them; and

(2) are less than the maximum amount of the ONA proceeds, and are insufficient to cover your serious needs and necessary expenses.

**History**
- *Source Note: The provisions of this §386.213 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.214** Must I apply for assistance from the U.S. Small Business Administration (SBA) before I can receive an Other Needs Assistance (ONA) grant? {#sec-386.214 omnilex-key=us-tx-regs-official--title-1--386.214}

(a) Yes, you must first apply to the SBA for:

(1) personal property expenses; and

(2) transportation expenses.

(b) No, you are not required to first apply to SBA for:

(1) funeral expenses;

(2) medical expenses; or

(3) dental expenses.

**History**
- *Source Note: The provisions of this §386.214 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.215** Am I eligible for an Other Needs Assistance (ONA) grant if the U.S. Small Business Administration (SBA) will not provide assistance? {#sec-386.215 omnilex-key=us-tx-regs-official--title-1--386.215}

Yes, you are eligible to receive an ONA grant if you:

(1) have been declined such assistance for financial reasons; or

(2) prove that SBA loan assistance does not meet your serious needs and necessary expenses.

**History**
- *Source Note: The provisions of this §386.215 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.216** Can I get an Other Needs Assistance grant even if I receive assistance from another source? {#sec-386.216 omnilex-key=us-tx-regs-official--title-1--386.216}

Yes, but to prevent duplication of benefits, DHS deducts assistance from other means for a particular need or expense from the total grant amount. Assistance from other means includes:

(1) Red Cross;

(2) National Flood Insurance Program;

(3) U.S. Small Business Administration; and

(4) private insurance.

**History**
- *Source Note: The provisions of this §386.216 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.217** Are there any exceptions to federal regulations regarding the duplication of benefits? {#sec-386.217 omnilex-key=us-tx-regs-official--title-1--386.217}

DHS may award grants for your emergency needs if there is an unreasonable delay in receiving assistance from other means. If you are awarded an emergency grant, you must reimburse DHS when assistance is received.

**History**
- *Source Note: The provisions of this §386.217 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.218** Do I have to accept assistance from other sources if I am eligible for an Other Needs Assistance grant? {#sec-386.218 omnilex-key=us-tx-regs-official--title-1--386.218}

You must accept all assistance from other sources for which you are eligible, including insurance proceeds and U.S. Small Business Administration loan assistance.

**History**
- *Source Note: The provisions of this §386.218 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.219** May I keep the Other Needs Assistance (ONA) grant money if I receive other assistance? {#sec-386.219 omnilex-key=us-tx-regs-official--title-1--386.219}

When you apply for assistance, you must agree to refund any portion of the ONA grant you receive or are eligible to receive from another source.

**History**
- *Source Note: The provisions of this §386.219 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.220** Why would Other Needs Assistance (ONA) deny my grant application? {#sec-386.220 omnilex-key=us-tx-regs-official--title-1--386.220}

ONA may deny assistance if you:

(1) have adequate insurance coverage and there is no indication that insurance proceeds will be significantly delayed;

(2) have refused assistance from your insurance provider;

(3) have applied for flood insurable items such as personal property assistance, but your primary residence is located in a Special Flood Hazard Area (Zones A or V) in a sanctioned community that does not qualify for and enter the National Flood Insurance Program (NFIP) within six months of the disaster declaration date;

(4) did not fulfill the condition to purchase and maintain flood insurance as a requirement of receiving previous federal disaster assistance;

(5) request assistance for business losses, including:

(A) farm businesses; and

(B) self-employment;

(6) have applied for personal property or transportation assistance but have not applied to the U.S. Small Business Administration for a loan to meet your serious needs and necessary expenses in these categories, or are denied a loan for reasons other than financial reasons;

(7) have failed to provide information requested by the DHS office administering ONA that is required to determine your eligibility for ONA assistance; or

(8) do not have disaster-related serious needs and necessary expenses.

**History**
- *Source Note: The provisions of this §386.220 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.221** Am I eligible for a grant if the U.S. Small Business Administration (SBA) denies my application for failure to maintain flood insurance required as a condition of a previous loan? {#sec-386.221 omnilex-key=us-tx-regs-official--title-1--386.221}

You are not entitled to a grant for personal property if you are required to apply to SBA for loan assistance in the current disaster and SBA denies the request because you failed to obtain or maintain a flood insurance policy required as a condition of a previous loan assistance.

**History**
- *Source Note: The provisions of this §386.221 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.222** Are there any additional restrictions on receiving a grant if flooding damaged my residence? {#sec-386.222 omnilex-key=us-tx-regs-official--title-1--386.222}

DHS may not award a grant for your personal property losses if your home is located in a flood hazard area that FEMA identified as flood prone at least one year before the disaster, unless the community in which the structure is located participates in the National Flood Insurance Program.

**History**
- *Source Note: The provisions of this §386.222 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter C** APPLYING FOR AN OTHER NEEDS ASSISTANCE GRANT

##### **1 Tex. Admin. Code § 386.301** How do I apply for an Other Needs Assistance grant? {#sec-386.301 omnilex-key=us-tx-regs-official--title-1--386.301}

Call FEMA at:

(1) 1-800-621-FEMA (3362); or

(2) 1-800-462-7585 (TDD for hearing/speech impaired).

**History**
- *Source Note: The provisions of this §386.301 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.302** Do I need identification? {#sec-386.302 omnilex-key=us-tx-regs-official--title-1--386.302}

You must provide FEMA or the state inspector a form of identification to confirm your identity.

**History**
- *Source Note: The provisions of this §386.302 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.303** How much time do I have to apply for a grant? {#sec-386.303 omnilex-key=us-tx-regs-official--title-1--386.303}

You must apply for assistance within 60 calendar days of the date on which the disaster was declared, unless FEMA extends the application deadline.

**History**
- *Source Note: The provisions of this §386.303 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.304** What if I cannot apply within 60 days of the disaster declaration? {#sec-386.304 omnilex-key=us-tx-regs-official--title-1--386.304}

FEMA may accept and process applications received within 30 days after the 60-day limitation period if FEMA determines extenuating circumstances beyond your control prevented you from applying in a timely manner.

**History**
- *Source Note: The provisions of this §386.304 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.305** What does FEMA consider extenuating circumstances if I miss the 60-day application deadline? {#sec-386.305 omnilex-key=us-tx-regs-official--title-1--386.305}

Extenuating circumstances include:

(1) hospitalization;

(2) illness; or

(3) absence from the disaster area during the specified application period.

**History**
- *Source Note: The provisions of this §386.305 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.306** Do I have the right to withdraw my application for a grant? {#sec-386.306 omnilex-key=us-tx-regs-official--title-1--386.306}

Yes, you have the right to withdraw your grant application from consideration.

**History**
- *Source Note: The provisions of this §386.306 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.307** What happens if I withdraw my application? {#sec-386.307 omnilex-key=us-tx-regs-official--title-1--386.307}

DHS will notify you in writing that your grant application has been withdrawn based on your request. The notification will inform you that you have the right to request reconsideration.

**History**
- *Source Note: The provisions of this §386.307 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.308** How will I be notified of the grant decision on my application? {#sec-386.308 omnilex-key=us-tx-regs-official--title-1--386.308}

A grant eligibility determination letter will notify you of the decision on your application. The decision letter normally is mailed the day after the decision is made.

(1) Letters approving grants include:

(A) a grant approval statement;

(B) the grant amount;

(C) the purpose for which the grant is approved;

(D) the notification of the right to request reconsideration of a grant decision; and

(E) flood insurance requirements and conditions when applicable.

(2) Letters disapproving grants include:

(A) a statement that the application is denied;

(B) the reasons for denial; and

(C) notification of the right to request reconsideration of a grant decision.

**History**
- *Source Note: The provisions of this §386.308 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.309** What do I do if my grant warrant is lost or stolen? {#sec-386.309 omnilex-key=us-tx-regs-official--title-1--386.309}

(a) You are responsible for notifying DHS if you do not receive your grant warrant within the time period specified in your grant award letter.

(b) You must notify DHS of your lost or stolen warrant before the program completion date, which is the date when all:

(1) grant determinations have been made;

(2) funds have been disbursed; and

(3) appeals have been decided.

(c) DHS will notify you of required procedures for reissue when conditions listed in subsection (b) of this section are met.

**History**
- *Source Note: The provisions of this §386.309 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.310** Why would I have to return grant funds? {#sec-386.310 omnilex-key=us-tx-regs-official--title-1--386.310}

You are required to return grant funds that are:

(1) obtained fraudulently;

(2) expended for unauthorized items or services;

(3) expended for items for which assistance is received from other means; or

(4) issued erroneously by FEMA or DHS.

**History**
- *Source Note: The provisions of this §386.310 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.311** Can I receive additional funds after the initial grant decision? {#sec-386.311 omnilex-key=us-tx-regs-official--title-1--386.311}

You may be entitled to a supplemental grant if the review and auditing process reveals the initial grant amount has not adequately met your serious needs or necessary expenses. The total grant amount may not exceed the maximum grant allowed by federal law.

**History**
- *Source Note: The provisions of this §386.311 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter D** RECONSIDERATION AND APPEALS

##### **1 Tex. Admin. Code § 386.401** What do I do if I disagree with the grant decision? {#sec-386.401 omnilex-key=us-tx-regs-official--title-1--386.401}

You may request reconsideration of a grant decision by writing DHS within 60 days of the date of the letter notifying you of the decision. Filing a timely request for reconsideration is a prerequisite to an administrative appeal.

**History**
- *Source Note: The provisions of this §386.401 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.402** What happens if I miss the 60-day deadline? {#sec-386.402 omnilex-key=us-tx-regs-official--title-1--386.402}

A request for reconsideration filed after the 60-day deadline will not be considered unless you demonstrate good cause for failure to request reconsideration within that time period.

**History**
- *Source Note: The provisions of this §386.402 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.403** What is good cause? {#sec-386.403 omnilex-key=us-tx-regs-official--title-1--386.403}

Good cause means circumstances beyond your control. The Other Needs Assistance grant coordinating officer or designee determines if your request for reconsideration shows good cause.

**History**
- *Source Note: The provisions of this §386.403 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.404** Where do I send my request for reconsideration? {#sec-386.404 omnilex-key=us-tx-regs-official--title-1--386.404}

Your decision letter indicates where to send your request.

**History**
- *Source Note: The provisions of this §386.404 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.405** What happens when I request reconsideration of the decision? {#sec-386.405 omnilex-key=us-tx-regs-official--title-1--386.405}

Upon receipt of the reconsideration request, the DHS grant coordinating officer or designee:

(1) reviews the case file to determine if needs have been met; and

(2) may request FEMA conduct a second inspection.

**History**
- *Source Note: The provisions of this §386.405 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.406** How long does it take to respond to my request for reconsideration? {#sec-386.406 omnilex-key=us-tx-regs-official--title-1--386.406}

You are notified of the reconsideration decision by letter within 60 days of DHS's receipt of your request.

**History**
- *Source Note: The provisions of this §386.406 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.407** Do I have the right to appeal the reconsideration decision? {#sec-386.407 omnilex-key=us-tx-regs-official--title-1--386.407}

The grant reconsideration notification letter contains notice of your right to appeal the reconsideration decision.

**History**
- *Source Note: The provisions of this §386.407 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.408** How do I appeal the reconsideration decision? {#sec-386.408 omnilex-key=us-tx-regs-official--title-1--386.408}

You must file a written request for an appeal with the DHS office administering the Other Needs Assistance provisions of the Federal Assistance to Individuals and Households Program within 60 days of the date of the reconsideration decision letter.

**History**
- *Source Note: The provisions of this §386.408 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.409** What steps does the Other Needs Assistance (ONA) staff take when I request a hearing? {#sec-386.409 omnilex-key=us-tx-regs-official--title-1--386.409}

When ONA receives your request for an appeal, the following activities occur:

(1) ONA staff complete DHS's Petition for Hearing form and forward the request for appeal to the DHS regional attorney in the region where you reside.

(2) The form is sent within five days of receiving the written request for appeal.

(3) During the first five days from the appeal date, ONA staff may:

(A) try to resolve any questions or concerns you may have; and

(B) reissue another reconsideration decision, if applicable.

**History**
- *Source Note: The provisions of this §386.409 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.410** When will DHS schedule my hearing? {#sec-386.410 omnilex-key=us-tx-regs-official--title-1--386.410}

The hearing officer must complete the appeal hearing and the written hearing decision within 90 days after receipt of the Petition for Hearing form from the DHS office administering the Other Needs Assistance provisions of the Federal Assistance to Individuals and Households Program.

**History**
- *Source Note: The provisions of this §386.410 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.411** Who decides my appeal? {#sec-386.411 omnilex-key=us-tx-regs-official--title-1--386.411}

A DHS hearing officer in the region where you are living at the time you file will decide your appeal.

**History**
- *Source Note: The provisions of this §386.411 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.412** Will I be able to see the records DHS has regarding my claim? {#sec-386.412 omnilex-key=us-tx-regs-official--title-1--386.412}

As part of the hearing process, the Other Needs Assistance (ONA) grant coordinating officer will permit you to examine any documents submitted by ONA to the hearing officer. The ONA office will send copies of the documents to you within five days of your request.

**History**
- *Source Note: The provisions of this §386.412 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.413** What documents must the DHS office administering Other Needs Assistance (ONA) send to the DHS Hearings Department when a disaster is declared and the ONA state administrative plan is approved? {#sec-386.413 omnilex-key=us-tx-regs-official--title-1--386.413}

ONA staff must deliver the following documents to the DHS Hearings Department:

(1) a copy of the state administrative plan;

(2) any itemized price lists applicable to the disaster; and

(3) a list of regions affected by the disaster.

**History**
- *Source Note: The provisions of this §386.413 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.414** Do DHS attorneys across the state have access to disaster-related documents? {#sec-386.414 omnilex-key=us-tx-regs-official--title-1--386.414}

The DHS Hearings Department ensures the hearing officers forward copies of the material listed in §6.413 of this chapter (relating to What documents must the DHS office administering Other Needs Assistance (ONA) send to the DHS Hearings Department when a disaster is declared and the ONA state administrative plan is approved?) to the appropriate regional attorneys for use.

**History**
- *Source Note: The provisions of this §386.414 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.415** How will I learn the decision on my appeal? {#sec-386.415 omnilex-key=us-tx-regs-official--title-1--386.415}

The hearing officer notifies you of the appeal decision in writing. After the decision is issued, Other Needs Assistance staff take any appropriate action the hearing officer may order.

**History**
- *Source Note: The provisions of this §386.415 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.416** What happens if I decide to withdraw my appeal? {#sec-386.416 omnilex-key=us-tx-regs-official--title-1--386.416}

If you decide to withdraw your appeal before the Petition for Hearing form is sent to the regional attorney, Other Needs Assistance staff will obtain a written statement from you that you wish to withdraw the appeal and close the file.

**History**
- *Source Note: The provisions of this §386.416 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.417** What DHS rules apply to my appeal? {#sec-386.417 omnilex-key=us-tx-regs-official--title-1--386.417}

In all procedural matters not superseded by this section, DHS's fair hearings rules apply, as set forth in §§79.1101-79.1105, 79.1201-79.1210, and 79.1301-79.1317 of this title (relating to Fair Hearings, Appeals Process, and Hearing Procedure).

**History**
- *Source Note: The provisions of this §386.417 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.418** What records does DHS keep of my hearing? {#sec-386.418 omnilex-key=us-tx-regs-official--title-1--386.418}

Following the ruling on your appeal, DHS keeps these records for two years:

(1) all documents submitted; and

(2) a tape recording of any oral testimony prepared by the DHS hearing officer.

**History**
- *Source Note: The provisions of this §386.418 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

#### **Subchapter E** NATIONAL FLOOD INSURANCE PROGRAM (NFIP)

##### **1 Tex. Admin. Code § 386.501** Am I required to purchase and maintain flood insurance as a condition of receiving an Other Needs Assistance (ONA) grant? {#sec-386.501 omnilex-key=us-tx-regs-official--title-1--386.501}

(a) If you receive an ONA grant, you are required to purchase and maintain flood insurance if all of the following conditions exist:

(1) you had flood damage to your personal property;

(2) you are eligible for a personal property grant;

(3) your residence is in Flood Zone A or V; and

(4) your community participates in the National Flood Insurance Program (NFIP).

(b) If the conditions in subsection (a) of this section exist, ONA will provide premiums on your behalf to the National Flood Insurance Program (NFIP) to purchase a Group Flood Insurance Policy (GFIP), defined in §6.103 of this chapter (relating to How are the terms in this chapter defined?).

(1) For purposes of this chapter, the premium for a GFIP is a necessary expense.

(2) ONA recipients are included in a GFIP, established under NFIP regulations, at 44 CFR §61.17.

**History**
- *Source Note: The provisions of this §386.501 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.502** How is a Group Flood Insurance Policy (GFIP) administered? {#sec-386.502 omnilex-key=us-tx-regs-official--title-1--386.502}

(a) DHS provides the National Flood Insurance Program (NFIP) with records of individuals who:

(1) received an ONA grant; and

(2) will be insured with a GFIP.

(b) DHS withholds the GFIP premium portion of the Other Needs Assistance (ONA) grant and provides it to NFIP for you, other individuals, and families who are eligible for coverage.

(c) DHS sends payments to NFIP to cover the premium amounts for your three-year policy term.

(d) NFIP issues a Certificate of Flood Insurance to you. Flood insurance coverage:

(1) becomes effective on the 30th day following the date NFIP receives your GFIP records and your premium payments from DHS; and

(2) ends 36 months from the inception date of the GFIP, which is 60 days from the date of the disaster declaration.

**History**
- *Source Note: The provisions of this §386.502 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.503** How much is the Group Flood Insurance Policy coverage? {#sec-386.503 omnilex-key=us-tx-regs-official--title-1--386.503}

The policy coverage is equivalent to the maximum grant amount established under §206(h)(1) of the Disaster Mitigation Act of 2000.

**History**
- *Source Note: The provisions of this §386.503 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.504** Are there any restrictions on future disaster assistance if I receive a grant that includes a flood insurance premium? {#sec-386.504 omnilex-key=us-tx-regs-official--title-1--386.504}

DHS may not award a grant for personal property if a structure is located in a designated special flood hazard area in which the sale of flood insurance is available under NFIP, unless:

(1) you obtain adequate flood insurance;

(2) you maintain such insurance for as long as you live at that property address; or

(3) your coverage equals the maximum grant established by FEMA for the Federal Assistance to Individuals and Households Program.

**History**
- *Source Note: The provisions of this §386.504 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.505** What must I do when I receive the Group Flood Insurance Policy (GFIP)? {#sec-386.505 omnilex-key=us-tx-regs-official--title-1--386.505}

(a) You must review the list of policy exclusions on the Certificate of Flood Insurance to see if you are eligible for coverage.

(b) You are not covered if you are determined to be ineligible for coverage based on the exclusions established by the National Flood Insurance Program (NFIP).

(c) If you do not review the exclusions, you may find your property is not covered by the insurance policy when you file for losses when the next flood incident occurs.

(d) If you find your damaged buildings, contents, or both, are ineligible for coverage, you must notify NFIP in writing to have:

(1) your name removed from the GFIP; and

(2) the flood insurance maintenance requirement expunged from the NFIP date-tracking system.

(e) At your request, NFIP will make the Standard Flood Insurance Policy available for reference or review.

**History**
- *Source Note: The provisions of this §386.505 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.506** How long must I maintain flood insurance on my home? {#sec-386.506 omnilex-key=us-tx-regs-official--title-1--386.506}

As a homeowner, you must maintain flood insurance coverage on the residence at the flood-damaged property address for as long as the structure exists if you ever wish to receive federal assistance with any subsequent flood losses to real property, personal property, or both. Any subsequent owner of that real estate must maintain flood insurance coverage to be eligible for federal assistance.

**History**
- *Source Note: The provisions of this §386.506 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.507** If I am a renter, how long must I maintain flood insurance? {#sec-386.507 omnilex-key=us-tx-regs-official--title-1--386.507}

As a renter, you must maintain flood insurance coverage on the contents of the dwelling for as long as you reside at the flood-damaged property address. The restriction is lifted once you move from the rental unit.

**History**
- *Source Note: The provisions of this §386.507 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.508** What happens if I fail to maintain my flood insurance policy on flood-damaged property? {#sec-386.508 omnilex-key=us-tx-regs-official--title-1--386.508}

(a) DHS may not make a grant to you, any individual, or any family who received federal disaster assistance for flood damage that occurred after September 23, 1994, if:

(1) that property received federal flood-disaster assistance in a disaster declared after September 23, 1994;

(2) a flood insurance purchase and maintenance requirement was levied as a condition or result of receiving that federal disaster assistance; and

(3) flood insurance was, in fact, not maintained in an amount at least equal to the maximum grant amount.

(b) If that property was determined to be ineligible for National Flood Insurance Program (NFIP) coverage and is in a special flood hazard area located in a community participating in NFIP, DHS may continue to make grants to you and those individuals or families who receive additional damage in all subsequent declared major disasters involving floods.

**History**
- *Source Note: The provisions of this §386.508 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.509** Could I be eligible for a Group Flood Insurance Policy if I live in a community that does not participate in or is sanctioned by the National Flood Insurance Program (NFIP)? {#sec-386.509 omnilex-key=us-tx-regs-official--title-1--386.509}

No, however, you may become eligible if your community qualifies for and enters into NFIP during the six-month period described in 44 CFR §206.110(k)(2).

**History**
- *Source Note: The provisions of this §386.509 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.510** What grants am I eligible to receive if I live in a community that does not participate or is sanctioned by the National Flood Insurance Program (NFIP)? {#sec-386.510 omnilex-key=us-tx-regs-official--title-1--386.510}

(a) You are only eligible for grants for non-flood insurable items.

(b) You are not eligible for flood insurance premium or personal property grants until the community enters into NFIP.

**History**
- *Source Note: The provisions of this §386.510 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

##### **1 Tex. Admin. Code § 386.511** Will my application be accepted if my community's petition to FEMA to join the National Flood Insurance Program (NFIP) delays the process? {#sec-386.511 omnilex-key=us-tx-regs-official--title-1--386.511}

You must apply for disaster assistance within the 60-day time limit specified in §6.303 of this chapter (relating to How much time do I have to apply for a grant?). If you are denied a personal property grant because your community is sanctioned by NFIP when the disaster is declared, your application will be reconsidered if your community subsequently joins NFIP before the end of 18-month program assistance period for ONA awards.

**History**
- *Source Note: The provisions of this §386.511 adopted to be effective April 6, 2003, 28 TexReg 2956; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013.*

### **Chapter 390** INFORMATION PRACTICES

#### **Subchapter A** STANDARDS RELATING TO THE ELECTRONIC EXCHANGE OF HEALTH INFORMATION

##### **1 Tex. Admin. Code § 390.1** Definitions {#sec-390.1 omnilex-key=us-tx-regs-official--title-1--390.1}

Unless otherwise defined in this section, each term used in these rules has the meaning assigned by the Health Insurance Portability and Accountability Act (HIPAA).

(1) Access--The physical or logical capability to interact with or otherwise make use of information.

(2) Authorized purpose--A purpose expressly authorized by applicable law, regulation, or agreement.

(3) Authorized user--A person:

(A) who is authorized to process, view, handle, examine, interpret, or analyze confidential information;

(B) who has a demonstrable need to know and have access to the confidential information; and

(C) who has agreed in writing to be bound by the use and disclosure requirements pertaining to confidential information.

(4) CFR--The Code of Federal Regulations.

(5) Confidential information--Any communication or record (whether oral, written, electronically stored or transmitted, or in any other form) that consists of or includes any or all of the following information that must be protected from unauthorized use or disclosure as required by applicable state or federal law (e.g. constitutional, statutory, judicial, and legal agreement requirements):

(A) information designated as confidential under the laws of the State of Texas and of the United States;

(B) personally identifiable information (PII), meaning information that can be used to uniquely identify, contact, or locate a single individual or can be used with other sources to uniquely identify a single individual;

(C) PII about or concerning an individual who receives government benefits under one or more public assistance programs administered or overseen by HHSC (also referred to as "client information");

(D) protected health information (PHI), including without limitation electronic PHI (ePHI) or unsecured PHI, as defined by HIPAA;

(E) sensitive personal information (SPI), with the meaning assigned by the Texas Identity Theft Act, Chapter 521 of the Texas Business and Commerce Code;

(F) federal tax information, with the meaning assigned in the Internal Revenue Code, Title 26 of the United States Code (U.S.C.) and regulations adopted under that code;

(G) Social Security Administration data, meaning information or data made by the Social Security Administration and disclosed to a state agency for its administration of federally funded benefit programs under various provisions of the Social Security Act, such as §1137 (42 U.S.C. §1320b-7), including the state-funded state supplementary payment programs under Title XVI of the Act, in accordance with the requirements of the Privacy Act of 1974, as amended by the Computer Matching and Privacy Protection Act of 1988, 5 U.S.C. §552a;

(H) to the extent permitted under the laws and constitution of the State of Texas, all information designated by HHSC or any other state agency as confidential, including all information designated as confidential under the Texas Public Information Act, Texas Government Code, Chapter 552; and

(I) information that is used, developed, received, or maintained by HHSC or any other state agency, its contractor, or other participating state agencies for the purpose of fulfilling a duty or obligation under an agreement that has not been publicly disclosed.

(6) Covered entity--Has the meaning assigned by the Medical Records Privacy Act, Health and Safety Code §181.001(b)(2).

(7) De-identified information--Information excluded from the definition of PHI, for which there is no reasonable basis to believe that the information can be used to identify an individual when individual identifiers have been removed from the information in accordance with HIPAA, 45 CFR §164.514(b)(2).

(8) Disclose--Has the meaning assigned by the Medical Records Privacy Act, Health and Safety Code §181.001(b)(2-a). See also the definition of "exchange" in this section.

(9) Exchange--To disclose.

(10) HHSC--The Health and Human Services Commission.

(11) HIPAA--Collectively, the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. §§1320d et seq., and regulations adopted under that act, as modified by the Health Information Technology for Economic and Clinical Health Act (HITECH) (P.L. 111-105), and regulations adopted under that act at 45 CFR Parts 160 and 164.

(12) Individual--The subject of confidential information, and includes the subject's legally authorized representative who qualifies under HIPAA as a legally authorized representative of the individual, as defined by Texas law, for example, without limitation as provided in Texas Occupations Code §151.002(6); Texas Health and Safety Code §166.164; or Texas Probate Code §3.

(13) State agency--A department, commission, board, office, council, authority, or other agency, other than an institution of higher education, in the executive or judicial branch of state government that is created by the Constitution or a statute of this state.

(14) Use--Has the meaning assigned by HIPAA.

**History**
- *Source Note: The provisions of this §390.1 adopted to be effective January 27, 2013, 38 TexReg 291.*

##### **1 Tex. Admin. Code § 390.2** Standards {#sec-390.2 omnilex-key=us-tx-regs-official--title-1--390.2}

(a) A covered entity that electronically exchanges, uses, or discloses PHI, at a minimum, must comply with the following standards for confidential information in any form, to the extent applicable:

(1) HIPAA Privacy, Security and Breach Notification Regulations;

(2) the Texas Medical Records Privacy Act, Chapter 181 of the Texas Health and Safety Code;

(3) the Texas Identity Theft Act, Chapter 521 of the Texas Business and Commerce Code; and

(4) any other applicable state or federal law or regulation that requires that confidential information be safeguarded, used, or disclosed only for authorized purposes by authorized users, including without limitation:

(A) requirements applicable to the following specific types of data:

(i) Cancer: Texas Health and Safety Code §82.008 and §82.009; Title 25 Texas Administrative Code (TAC) §91.9 (relating to Confidentiality and Disclosure);

(ii) HIV/AIDS: Texas Health and Safety Code §81.103, HIV/AIDS Test Results, and 40 TAC §8.288 (relating to Confidentiality of Test Results);

(iii) Genetic: Genetic Information Nondiscrimination Act of 2008 (GINA) Pub. L. No. 110-233 and applicable regulations promulgated under that act; Texas Insurance Code, Chapter 546, Subchapter C; Texas Labor Code §21.403 and §21.404; Texas Occupations Code, Chapter 58;

(iv) Sexual assault: Texas Health and Safety Code, Chapter, 44, Subchapter C;

(v) Communicable diseases: Texas Health and Safety Code §81.046; 25 TAC §97.10 (relating to Confidential Nature of Case Reporting and Records);

(vi) Mental health: Texas Health and Safety Code, Chapter 611, Mental Health Records/Substance Abuse Records;

(vii) Substance abuse or substance use disorder: 42 CFR Part 2, Confidentiality of Alcohol and Drug Abuse Patient Records; Texas Health and Safety Code, Chapter 611, Mental Health Records/Substance Abuse Records;

(viii) Immunizations: Texas Health and Safety Code §161.0073 and §161.009; 25 TAC §100.2 (relating to Confidentiality);

(ix) Bureau of Vital Statistics: Texas Government Code §552.115; Texas Health and Safety Code Chapters 192 and 193, §195.005; 25 TAC Chapter 181 (relating to Vital Statistics);

(x) Reports of abuse or neglect: Texas Human Resources Code, Chapter 48, Report of Abuse or Neglect of Elderly or Disabled Persons; Texas Health and Safety Code §161.132; Family Code Chapter 261, Reports of Child Abuse;

(xi) Federal tax information: Internal Revenue Code, Title 26, 26 U.S.C. §6103; IRS Publication 1075;

(xii) Social Security Administration data: 42 U.S.C. §1306, 20 CFR Part 401;

(xiii) Occupational diseases: Texas Health and Safety Code §84.006; 25 TAC §99.1 (relating to General Provisions);

(xiv) Family planning: 25 TAC §56.11 (relating to Confidentiality); and

(xv) Recipients of government benefits: requirements for use of disclosure of client information about or concerning recipients of government benefits such as Medicaid, the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or the Children's Health Insurance Program (CHIP), by HHSC or its designee(s), third party, or business associate: 7 CFR §272 (SNAP); 45 CFR §205.50 (TANF); 42 CFR §§431.300 et seq. (Medicaid); 42 CFR §457.1110 (CHIP);

(B) requirements applicable to data held by the following specific types of providers, facilities, and services:

(i) Hospitals: Texas Health and Safety Code, Chapter 241, Subchapter G, Hospital Disclosures of Health Care Information; 25 TAC §133.42 (relating to Patient Rights);

(ii) Nursing facilities: Texas Health and Safety Code, Chapter 242, §242.134 and §242.501(8), Nursing Home Resident Rights; 40 TAC §19.407 (relating to Privacy and Confidentiality);

(iii) Intermediate care facilities for persons with an intellectual disability or related conditions (ICF/IID): Texas Health and Safety Code, Chapter 252, §252.126 and §252.134;

(iv) Freestanding emergency medical care facilities: Texas Health and Safety Code Chapter 254; 25 TAC §131.53 (relating to Medical Records);

(v) Ambulatory surgical centers: Texas Health and Safety Code, Chapter 243, 25 TAC §135.5 (relating to Patient Rights);

(vi) Emergency medical services: Texas Health and Safety Code, Chapter 773, §§773.079 - 773.096; 25 TAC §157.11 (relating to Requirements for an EMS Provider License);

(vii) Physicians: Texas Occupations Code, Chapter 159, Physician-Patient Communication;

(viii) Chiropractors: Texas Occupations Code §§201.402 - 201.405, Chiropractor-Patient Confidentiality;

(ix) Dentists: Texas Occupations Code §§258.051 et seq., Dental-Patient Confidentiality;

(x) Labs: Clinical Laboratory Improvement Amendments (CLIA) (1988); 42 CFR §493.1291;

(xi) Pharmacists: Texas Occupations Code, Chapter 562, §562.052, Confidential Records of Pharmacists;

(xii) Podiatrists: Texas Occupations Code, Chapter 202, Subchapter I, §§202.401 et seq., Podiatrist Privilege and Confidentiality;

(xiii) Personal health record vendors: Health Breach Notification Rule for Vendors of Personal Health Records, 16 CFR Part 318;

(xiv) End stage renal disease facilities: Texas Health and Safety Code §251.011; 25 TAC §117.42 (relating to Patient Rights);

(xv) Special care facilities (AIDS): 25 TAC §125.33 (relating to Resident Rights);

(xvi) Private psychiatric hospitals and crisis stabilization units: Texas Health and Safety Code §577.013: 25 TAC Chapter 134 (relating to Private Psychiatric Hospitals and Crisis Stabilization Units);

(xvii) Birthing centers: 25 TAC §137.53 (relating to Clinical Records);

(xviii) Applicable health professions regulated by 25 TAC Chapter 140 (relating to Health Professions Regulation) confidentiality requirements under 25 TAC Chapter 140 or other applicable law for, such as:

(I) licensed chemical dependency counselors and treatment facilities, Texas Occupations Code §504.251; 25 TAC §140.424 (relating to Standards for Private Practice); Texas Health and Safety Code, Chapter 464; 25 TAC Chapter 448 (relating to Standard of Care);

(II) medical radiologic technologists, 25 TAC §140.514 (relating to Disciplinary Actions);

(III) dyslexia therapists and dyslexia practitioners, 25 TAC §140.586 (relating to Code of Ethics; Duties and Responsibilities of License Holders); and

(IV) promotores or community health workers: 25 TAC §146.11 (relating to Professional and Ethical Standards); and

(C) requirements applicable to data about the following specific types of individuals:

(i) Minors: Texas Family Code §§32.003, 32.004, 151.003, 153.073, 153.074, and 153.132; Texas Occupations Code §159.005; Texas Civil Practice and Remedies Code §129.001;

(ii) Children with Special Health Care Needs Services Program: 25 TAC §38.5 (relating to Rights and Responsibilities of a Client's Parents, Foster Parents, Guardian, or Managing Conservator, or an Adult Client); and

(iii) Early and Periodic Screening, Diagnosis, and Treatment: 25 TAC §33.30 (relating to Confidentiality of Records).

(b) These standards do not apply to de-identified information.

**History**
- *Source Note: The provisions of this §390.2 adopted to be effective January 27, 2013, 38 TexReg 291.*

### **Chapter 391** PURCHASE OF GOODS AND SERVICES BY THE TEXAS HEALTH AND HUMAN SERVICES COMMISSION

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 391.101** Purpose {#sec-391.101 omnilex-key=us-tx-regs-official--title-1--391.101}

The purpose of these rules is to:

(1) provide transparency to the public, the legislature, state agencies, and vendors on the procedures followed by HHSC procurement personnel;

(2) provide for consistent and uniform management of procurement and contracting processes; and

(3) obtain best value when purchasing goods and services to better serve Texas residents and businesses.

**History**
- *Source Note: The provisions of this §391.101 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

##### **1 Tex. Admin. Code § 391.103** Authority {#sec-391.103 omnilex-key=us-tx-regs-official--title-1--391.103}

(a) This chapter implements the procurement authority delegated to HHSC and each health and human services agency pursuant to Texas Government Code §2155.144 for the purchase of certain goods and services, and establishes special contracting methods, protest procedures, contract claim procedures, vendor responsibilities, and contract monitoring standards.

(b) If a federal law or regulation imposes different requirements than this chapter, as a condition of the receipt of federal funds, HHSC will follow the federal requirements to the extent of any conflict with this chapter and document the procurement file accordingly.

**History**
- *Source Note: The provisions of this §391.103 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

##### **1 Tex. Admin. Code § 391.105** Exceptions {#sec-391.105 omnilex-key=us-tx-regs-official--title-1--391.105}

(a) This chapter does not apply to:

(1) the lease, purchase, or lease-purchase of real property;

(2) interstate or international agreements executed in accordance with applicable law;

(3) an agreement under the Interagency Cooperation Act, Texas Government Code, Chapter 771;

(4) an agreement under the Interlocal Cooperation Act, Texas Government Code, Chapter 791; or

(5) the award of a grant when the substance of the transaction refers to either:

(A) an expenditure of funds from the State Treasury to a person or entity that does not provide consideration or a benefit to the state in exchange for the funds as defined in the Texas Comptroller's Texas Grant Management Standards or its successor, or

(B) a subaward provided to a subrecipient to carry out part of a federal award received by the pass-through entity as defined in the Code of Federal Regulations, Title 2 §200.1, or its successor.

(b) Subchapter B of this chapter (relating to Procurement and Special Contracting Methods) does not apply to the purchase of common goods and services delegated to HHSC and each health and human services agency by the Comptroller for the direct consumption or use in the day-to-day support of administrative operations.

**History**
- *Source Note: The provisions of this §391.105 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

##### **1 Tex. Admin. Code § 391.107** Definitions {#sec-391.107 omnilex-key=us-tx-regs-official--title-1--391.107}

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Bid--An offer, submitted in response to an Invitation for Bids, to contract with the state.

(2) Bidder--An individual or entity that submits a bid. The term includes anyone acting on behalf of the individual or entity that submits a bid, such as an agency, employee or representative.

(3) Competitive range--Consists of the offers or proposals that have a reasonable chance of being selected for award considering the evaluation criteria and basis for award as stated in the solicitation.

(4) Comptroller--The Texas Comptroller of Public Accounts or an authorized representative.

(5) Contract--A written agreement, including a purchase order, between HHS and a contractor for the purchase of goods or services.

(6) Contract Advisory Team--An interagency oversight team responsible for reviewing and making recommendations on the solicitation documents for state agency contracts in accordance with Texas Government Code, Chapter 2262, Subchapter C.

(7) Contract file--Encompasses the procurement file and any other documentation related to the management and monitoring of the resulting contract.

(8) Contractor--A business entity or individual that has a contract to provide goods or services to HHS.

(9) DFPS--The Texas Department of Family and Protective Services.

(10) Electronic State Business Daily (ESBD)--The state's online directory listing procurement opportunities.

(11) Emergency purchase--A procurement that must occur quickly to prevent a hazard to life, health, safety, welfare, or property or to avoid undue additional cost to the state.

(12) Group purchasing organization (GPO)--A program administered by a business entity that offers discount prices on goods and services to participants in the program.

(13) Health care program--A program or activity administered or funded by a state agency to provide health care services, research, education, or goods.

(14) HHS--The Texas Health and Human Services system. For the purposes of this chapter, unless specifically stated otherwise in certain subchapters, the HHS system includes HHSC and the Texas Department of State Health Services.

(15) HHSC--The Texas Health and Human Services Commission.

(16) Historically underutilized business (HUB)--A business as defined in Texas Government Code §2161.001(2).

(17) Interested parties--Respondents connected to a solicitation, response evaluation, or contract award that is being protested.

(18) Invitation for Bids (IFB)--A formal written competitive sealed bid solicitation that involves price and specifications as the most important considerations when evaluating bids.

(19) Notice of intent to award--A publicly posted document that provides notice of HHS's intent to award a contract; may also be referred to as a tentative award.

(20) Open enrollment --A method of contracting that does not involve a competitive element, but instead is based upon vendor eligibility and non-negotiable contracts and predetermined rates.

(21) Procurement--Refers to all aspects of the sourcing activities, including drafting and issuing the solicitation, evaluation of responses, selection of successful respondents, the negotiation of contracts, and the actual purchasing of goods or services.

(22) Procurement file--Written documentation pertaining to the management of a procurement.

(23) Procurement method--The procedure employed by HHS to acquire goods and services.

(24) Procurement personnel--HHSC personnel involved in purchasing and contract development activities.

(25) Proposal--A written response to a solicitation; may also be referred to as a solicitation response.

(26) Proprietary--A product or service that has a distinctive feature or characteristic not shared or provided by competing or similar products or services.

(27) Protest--A challenge to the terms of a solicitation or the award of a contract.

(28) Protestant--Any respondent that files a protest in connection with a solicitation, evaluation, or award of a contract in accordance with Subchapter C of this chapter (relating to Protests).

(29) Purchase preference--A preference in the procurement of goods or services established in state or federal law.

(30) Quality Assurance Team--An interagency oversight team responsible for reviewing and providing recommendations on contracts for the development or implementation of major information resources projects in accordance with Texas Government Code §2054.158.

(31) Quote--An estimated price for goods or services.

(32) Request for Offers (RFO)--A written solicitation requesting the submission of offers for information technology goods and services.

(33) Request for Proposals (RFP)--A written solicitation for purchases acquired by the competitive sealed proposal method.

(34) Request for Qualifications (RFQ)--A written solicitation utilized to purchase services where respondents are evaluated on their qualifications.

(35) Respondent--An individual or entity that submits a written response to a solicitation.

(36) Reverse auction--A bidding process conducted in accordance with Texas Government Code §2155.062.

(37) Sole source--A type of proprietary purchase where the good or service is only available for purchase through a single vendor.

(38) Solicitation--An Invitation for Bids, Request for Offers, Request for Proposals, Request for Qualifications, or similar instrument that HHSC publicly posts.

(39) Specifications--A set of requirements to be satisfied by a product, material, or service.

(40) TCCO--The Texas Civil Commitment Office.

(41) Value engineering--An organized effort directed at analyzing designed building features, systems, equipment, and material selections for the purpose of achieving essential functions at the lowest life cycle cost consistent with required performance, quality, reliability, and safety.

(42) Vendor--A provider of goods or services.

**History**
- *Source Note: The provisions of this §391.107 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

#### **Subchapter C** PROTESTS

##### **1 Tex. Admin. Code § 391.301** Purpose {#sec-391.301 omnilex-key=us-tx-regs-official--title-1--391.301}

The purpose of this subchapter is to set forth procedures for resolving protests relating to purchases as required by Texas Government Code §2155.076.

**History**
- *Source Note: The provisions of this §391.301 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.303** Applicability {#sec-391.303 omnilex-key=us-tx-regs-official--title-1--391.303}

(a) For purposes of this subchapter, HHS is defined as the Texas Health and Human Services Commission, the Texas Department of State Health Services, the Texas Department of Family and Protective Services, and the Texas Civil Commitment Office.

(b) A respondent may protest a solicitation, response evaluation, or contract award if the respondent is able to specifically identify a statutory or regulatory provision that HHS allegedly violated.

(c) This subchapter does not apply to:

(1) the award of grants or subcontracts;

(2) interagency or interlocal agreements executed in accordance with applicable law;

(3) open enrollment contracts;

(4) rejected applications, purchases, or contract awards in relation to HHSC's group purchasing organizations program; or

(5) direct contract awards as specified in §391.247 of this chapter (relating to Direct Contract Award).

(d) HHSC will not consider protests filed pursuant to this subchapter as contested cases under the Administrative Procedure Act, Texas Government Code, Chapter 2001.

**History**
- *Source Note: The provisions of this §391.303 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

##### **1 Tex. Admin. Code § 391.305** Filing of a Protest {#sec-391.305 omnilex-key=us-tx-regs-official--title-1--391.305}

(a) To be considered timely, the protest must be filed:

(1) no later than the date that responses to a solicitation are due, if the protest concerns the solicitation; or

(2) no later than 10 business days after the notice of intent to award or, in the event of no notice of intent to award, after the notice of award, if the protest concerns the evaluation or award.

(b) A protestant must file a protest with the Deputy Executive Commissioner of Procurement and Contracting Services, Texas Health and Human Services Commission, by electronic mail submission to HHSC_PCS_Protest@hhs.texas.gov.

(c) A protest must contain:

(1) a specific identification of the statutory or regulatory provision that the protestant alleges has been violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision identified in the protest;

(3) a precise statement of the relevant facts, including sufficient documentation that the protest has been timely filed and a description of the resulting adverse impact to the protestant;

(4) a statement of any issues of law or fact that the protestant contends must be resolved; and

(5) a statement of the argument and authorities that the protestant offers in support of the protest.

**History**
- *Source Note: The provisions of this §391.305 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.307** Review and Disposition of Protests {#sec-391.307 omnilex-key=us-tx-regs-official--title-1--391.307}

(a) Upon receipt of a protest, the Deputy Executive Commissioner of Procurement and Contracting Services may:

(1) dismiss the protest if:

(A) it is not timely; or

(B) it does not meet the requirements of §391.305 of this subchapter (relating to Filing of a Protest);

(2) solicit written responses to the protest from other interested parties; or

(3) attempt to resolve the protest by mutual agreement.

(b) The Deputy Executive Commissioner of Procurement and Contracting Services may confer with the HHSC Chief Counsel at any time during the review of the protest.

(c) If the protest is not dismissed or resolved by mutual agreement, the Deputy Executive Commissioner of Procurement and Contracting Services will issue a written determination on the protest.

(1) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that no violation of the specific statutory or regulatory provision cited by the protestant has occurred, they shall so inform the protestant and other interested parties by letter that sets forth the reasons for the determination.

(2) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS violated the specific statutory or regulatory provision cited by the protestant in a case where HHS has not awarded a contract, they shall so inform the protestant and other interested parties by letter that sets forth the reasons for the determination and any appropriate remedial action.

(3) If the Deputy Executive Commissioner of Procurement and Contracting Services determines that HHS violated the specific statutory or regulatory provision cited by the protestant in a case where HHS awarded a contract, they shall so inform the protestant and other interested parties by letter that sets forth the reasons for the determination, which may include ordering the contract void.

(4) The Deputy Executive Commissioner of Procurement and Contracting Services' written determination is the final administrative action by HHSC on a protest filed under this subchapter unless the protestant files an appeal of the determination under subsection (d) of this section.

(d) The protestant may appeal the Deputy Executive Commissioner of Procurement and Contracting Services' determination on a protest to the HHSC Executive Commissioner. The appeal must be in writing and submitted by electronic mail to HHSCExecutiveCommissioner@hhs.texas.gov no later than 10 business days after the date of the Deputy Executive Commissioner of Procurement and Contracting Services' determination. The appeal shall be limited to review of the Deputy Executive Commissioner of Procurement and Contracting Services' determination. The protestant must mail or deliver copies of the appeal to other interested parties, and each copy must contain a certified statement that such copies have been provided.

(1) A protest or appeal that is not timely filed shall not be considered unless good cause for delay is shown or the HHSC Executive Commissioner determines that an appeal raises issues that are significant to HHSC's procurement practices or procedures in general.

(2) The HHSC Executive Commissioner may confer with the HHSC Chief Counsel at any time during the review of the appeal.

(3) The HHSC Executive Commissioner will review the appeal of the Deputy Executive Commissioner of Procurement and Contracting Services' determination and render a final decision on the protest issues.

(4) A decision issued in writing by the HHSC Executive Commissioner shall be the final administrative action of HHSC on a protest determination that is appealed under this subchapter.

**History**
- *Source Note: The provisions of this §391.307 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.309** Contract Awards During Protest {#sec-391.309 omnilex-key=us-tx-regs-official--title-1--391.309}

A contract will not be awarded that is subject to a properly filed protest until HHSC provides a final written disposition of the protest in accordance with §391.307 of this subchapter (relating to Review and Disposition of Protests). The HHSC Executive Commissioner may waive this requirement if the HHSC Executive Commissioner determines that HHSC must award a contract, without delay, to protect the best interests of the state.

**History**
- *Source Note: The provisions of this §391.309 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

#### **Subchapter D** STANDARDS OF CONDUCT FOR VENDORS

##### **1 Tex. Admin. Code § 391.401** Purpose {#sec-391.401 omnilex-key=us-tx-regs-official--title-1--391.401}

The purpose of this subchapter is to provide guidelines for vendors interested in working with HHS during all stages of the process, including when vendors assume the role of respondents, or contractors. Vendors, their personnel, and agents must conduct themselves in an ethical manner.

**History**
- *Source Note: The provisions of this §391.401 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.403** Respondent Responsibility During Discussions and Negotiations {#sec-391.403 omnilex-key=us-tx-regs-official--title-1--391.403}

A respondent participating in discussions or negotiations regarding a pending solicitation shall refrain from discussing respondent's participation in or information regarding the discussions or negotiations with any person or entity other than HHS until such discussions or negotiations with HHS have concluded. Failure to comply with this section may result in the disqualification of a solicitation response or cancellation of any awarded contract.

**History**
- *Source Note: The provisions of this §391.403 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.405** Responsibilities of Vendors {#sec-391.405 omnilex-key=us-tx-regs-official--title-1--391.405}

(a) Contractors, respondents, and vendors interested in working with HHS are required to implement standards of conduct for their own personnel and agents on terms at least as restrictive as those applicable to HHS. These standards must adhere to ethics requirements adopted in rule, in addition to any ethics policy, or code of ethics approved by the HHSC Executive Commissioner. A respondent must sign and submit all ethics, disclosure, confidentiality, and other forms required under the procurement and any resulting contract. HHS may examine a respondent's standards of conduct in the evaluation of a bid, offer, proposal, quote, or other applicable expression of interest in a proposed purchase of goods or services.

(b) Any potential contractor or respondent may not offer, give, or agree to give any procurement personnel any benefit.

(c) No potential contractor or respondent, or agent of a potential contractor or respondent, may, in connection with the development of a contract or procurement, directly contact an HHS employee, unless that HHS employee is the designated point of contact for that contract or procurement.

(d) Every respondent must disclose potential or actual conflicts of interest with HHS.

(e) As a condition of contracting with HHS, any vendor or contractor, must:

(1) cooperate with any audit conducted by the state auditor; and

(2) cooperate with any audit conducted by HHSC or any entity designated by HHSC, including the Office of Inspector General.

(f) Any vendor that violates a provision of this subchapter may be barred from receiving future contracts or may have an existing contract cancelled. Additionally, HHSC may report the vendor's actions to the Comptroller for statewide debarment, or law enforcement.

(g) A statement describing the standards of conduct for respondents shall be included in every solicitation.

(h) The responsibilities and restrictions for respondents and contractors described in this section apply to subcontractors.

**History**
- *Source Note: The provisions of this §391.405 adopted to be effective May 12, 2021, 46 TexReg 3017.*

#### **Subchapter E** HISTORICALLY UNDERUTILIZED BUSINESSES

##### **1 Tex. Admin. Code § 391.501** Historically Underutilized Business Program {#sec-391.501 omnilex-key=us-tx-regs-official--title-1--391.501}

In compliance with Texas Government Code §2161.003, HHSC adopts by reference the Texas Comptroller of Public Accounts' rules in Texas Administrative Code, Title 34, Chapter 20, Subchapter D, Division 1 (relating to Historically Underutilized Businesses).

**History**
- *Source Note: The provisions of this §391.501 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.503** Mandatory Review of Historically Underutilized Business Subcontracting Plan {#sec-391.503 omnilex-key=us-tx-regs-official--title-1--391.503}

HHSC may require respondents to participate in a mandatory review of their historically underutilized business subcontracting plan during the procurement process. Notice of such requirement and instructions for respondents will be provided in the solicitation document.

**History**
- *Source Note: The provisions of this §391.503 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

#### **Subchapter F** CONTRACTS

##### **1 Tex. Admin. Code § 391.601** Open Enrollment Contracts {#sec-391.601 omnilex-key=us-tx-regs-official--title-1--391.601}

(a) HHS and DFPS may use the open enrollment contracting method if the best interests of the state are served by enrolling multiple vendors.

(b) An open enrollment under this section must be conducted in a transparent and fair manner that reasonably provides interested and eligible vendors equal opportunity to obtain a contract.

**History**
- *Source Note: The provisions of this §391.601 adopted to be effective May 12, 2021, 46 TexReg 3017; amended to be effective May 10, 2022, 47 TexReg 2732.*

##### **1 Tex. Admin. Code § 391.603** Contract Monitoring Roles and Responsibilities {#sec-391.603 omnilex-key=us-tx-regs-official--title-1--391.603}

The contract monitoring roles and responsibilities of the HHSC internal audit staff and other inspection, investigative, or compliance staff are as follows:

(1) The Internal Audit Division will perform internal audit activities, which will include assisting and consulting regarding contract monitoring issues, based on the results of a risk assessment or upon request for consulting services. The Internal Audit Division will also perform audits of the contract management function and systems when audits are warranted by the results of risk assessment or included in the audit plan approved by HHSC's Executive Commissioner pursuant to Texas Government Code §2102.005 and §2102.008.

(2) The Procurement and Contracting Services Division will seek to improve contract compliance by maintaining a system of record serving as a central repository for HHS contracts so HHS can perform management, reporting, and contract compliance reviews.

(3) HHS reports criminal activity related to HHS contracts to the appropriate authorities as set out in statute.

(4) The contract manager or project manager that oversees a contract will monitor and report to other appropriate HHS divisions regarding contract compliance.

(5) HHSC's Historically Underutilized Business Program will assist the administering division or divisions and contract management staff in monitoring HHS contracts in connection with applicable historically underutilized and minority business contract requirements.

(6) HHSC's Compliance and Quality Control Division will continually review procurement policies and procedures, templates and forms, manuals, and large solicitation documents to ensure compliance with state law and the State of Texas Procurement and Contract Management Guide.

**History**
- *Source Note: The provisions of this §391.603 adopted to be effective May 12, 2021, 46 TexReg 3017.*

##### **1 Tex. Admin. Code § 391.605** Enhanced Contract Monitoring {#sec-391.605 omnilex-key=us-tx-regs-official--title-1--391.605}

(a) HHSC shall identify contracts that require enhanced monitoring.

(b) In determining which contracts require enhanced monitoring, HHSC shall consider factors, including:

(1) contract amount;

(2) risk;

(3) special circumstances of the project; and

(4) the scope of the goods or services provided.

(c) HHSC shall adopt procedures to administer the enhanced contract monitoring program.

(d) Information on contracts that require enhanced monitoring will be reported to the HHSC Executive Commissioner at least quarterly. The HHSC Executive Commissioner will be notified immediately of any serious issues or risks that are identified with respect to such a contract.

(e) This section does not apply to a memorandum of understanding, interagency contract, interlocal agreement, or contract for which there is not a cost.

**History**
- *Source Note: The provisions of this §391.605 adopted to be effective May 12, 2021, 46 TexReg 3017.*

### **Chapter 392** PURCHASE OF GOODS AND SERVICES FOR SPECIFIC HEALTH AND HUMAN SERVICES COMMISSION PROGRAMS

#### **Subchapter A** PURPOSE AND APPLICABILITY

##### **1 Tex. Admin. Code § 392.1** Purpose and Applicability {#sec-392.1 omnilex-key=us-tx-regs-official--title-1--392.1}

(a) This chapter provides specific criteria to govern the purchase of goods and services by HHSC for programs whose needs are not addressed by the general criteria listed in Chapter 391 of this title (relating to Purchase of Goods and Services by Health and Human Services Agencies). The criteria in this chapter are limited to the specific programs enumerated in each subchapter and do not apply to any other purchase of goods or services by HHSC.

(b) If any provision in this Chapter conflicts with a provision outside of Title 1, this Chapter controls.

**History**
- *Source Note: The provisions of this §392.1 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter B** EARLY CHILDHOOD INTERVENTION (ECI) SERVICES

##### **1 Tex. Admin. Code § 392.101** Purpose {#sec-392.101 omnilex-key=us-tx-regs-official--title-1--392.101}

The purpose of this subchapter is to establish contract requirements for Early Childhood Intervention (ECI) service delivery. The following statutes and regulations authorize or require the rules in this subchapter:

(1) Texas Human Resources Code, Chapter 73;

(2) Texas Human Resources Code, Chapter 117;

(3) Individuals with Disabilities Education Act, Part C (20 U.S.C. §§1431-1444); and

(4) implementing federal regulations 34 C.F.R. Part 303.

**History**
- *Source Note: The provisions of this §392.101 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.103** Definitions {#sec-392.103 omnilex-key=us-tx-regs-official--title-1--392.103}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Applicant--A person or organization that applies for a DARS ECI contract through a non-competitive process, including contract renewal.

(2) Application--An application for a DARS ECI contract through a non-competitive process, including contract renewal.

(3) Competition--A process using a solicitation instrument that allows the simultaneous and comparative evaluation of proposals or offers from two or more qualified respondents acting independently.

(4) Contract--A written agreement between DARS ECI and a subrecipient to deliver all ECI system requirements within a designated region of Texas.

(5) DARS--The Texas Department of Assistive and Rehabilitative Services.

(6) Monitoring--Ongoing activities to ensure compliance with the contract, state and federal laws and regulations, and applicable DARS rules, policy and procedures, including subsequent amendments. Monitoring includes desk reviews of financial data, client records, and other pertinent information and comprehensive on-site visits, follow up on-site visits, and focused on-site visits.

(7) Office of Management and Budget (OMB) Circulars--Financial management policies issued by the Office of Management and Budget (OMB) in the Executive Office of the President and made applicable to Texas and its subgrantees and contractors by regulations of the U.S. Department of Education or other funding agencies. The circulars are found in Title 2 of the Code of Federal Regulations or in official White House publications.

(8) Proposal--A binding offer submitted by a respondent in response to a request for proposals (RFP).

(9) Respondent--A person or entity that submits an oral, written, or electronic response to a solicitation instrument. A respondent may also be referenced as an "offeror" or "proposer."

(10) Solicitation--A document requesting submittal of bids or proposals for goods or services in accordance with the advertised specifications. May also apply to grant arrangements.

(11) Subrecipient--A non-federal agency that expends federal funds received from a pass-through entity to carry out objectives of the federal program or award.

(12) TKIDS--Texas Kids Intervention Data System (TKIDS). DARS' automated data system established by Human Resources Code, §73.0051(k) used to plan, manage, and maintain records of client services.

(13) UGMS--Uniform Grant Management Standards (UGMS) adopted under the authority of Texas Government Code, Chapter 783.

(14) Uniform Grant and Contract Management Act (UGCMA)--Texas Government Code, Chapter 783.

**History**
- *Source Note: The provisions of this §392.103 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.105** Application and Program Requirements for Early Childhood Intervention Services {#sec-392.105 omnilex-key=us-tx-regs-official--title-1--392.105}

(a) Funds for early childhood intervention (ECI) services are available to public or private agencies that are current or potential providers of ECI services for eligible children.

(b) DARS may use a competitive procurement process to ensure that DARS obtains the best value in purchasing services.

(c) The application or proposal for ECI services must consist of the forms and related materials that the applicant must complete to apply to receive funding for providing ECI services.

(d) An application or proposal must be submitted in accordance with DARS' instructions.

(e) An application or proposal that is late or substantially incomplete may be accepted or returned to the applicant or respondent at the discretion of DARS.

**History**
- *Source Note: The provisions of this §392.105 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.107** Contract {#sec-392.107 omnilex-key=us-tx-regs-official--title-1--392.107}

(a) An approved applicant must enter into a contract with DARS before being allocated funds. A contract is not fully executed until it has been signed by DARS and the applicant.

(1) The contract must be signed by an official authorized to enter into such agreements on behalf of the contractor.

(2) The contract cannot be altered without authorized officials of both the contractor and DARS providing written approval before the effective date of the change. In emergency circumstances as determined by DARS in its sole discretion, the DARS ECI assistant commissioner may sign and offer a contract amendment to a contractor and may allow the contractor to accept by performance. DARS ECI may require a contractor's signature on the amendment before payment for the amended services.

(3) No payment or advance of funds is made until the contract is fully executed.

(4) By signing the contract the applicant agrees to all terms included in the contract and to adherence to state and federal laws and regulations, and applicable DARS rules, policy, and procedures, including subsequent amendments.

(5) The contract may be renewed if the contract provides for renewal, and the contractor meets the renewal criteria in DARS rules and the contract.

(b) The contract must:

(1) contain provisions requiring the contractor to comply with applicable requirements in this chapter, including:

(A) state and federal laws and regulations, and applicable DARS policy and procedures, including subsequent amendments; and

(B) the fiscal requirements for administering, accounting, auditing, and recovering funds as authorized by the UGCMA, UGMS, the CFR, and OMB Circulars;

(2) state the contract number of children, when applicable;

(3) authorize DARS to adjust the contract amount as appropriate;

(4) authorize DARS to impose adverse actions for noncompliance with contract terms and conditions, state and federal laws and regulations, and applicable DARS rules, policy, and procedures, including subsequent amendments in accordance with the provisions of the Human Resources Code, §73.0051;

(5) incorporate all or part of the application as part of the contract;

(6) include clearly defined goals, outputs, and measurable outcomes that directly relate to program objectives; and

(7) contain other provisions required by DARS.

(c) Any modifications resulting from changes in state or federal laws and regulations or judicial interpretation of laws and regulations that occur during the contract period are automatically made part of the contract and go into effect on the effective date of the law, regulation, or judicial interpretation.

(d) DARS assigns the effective date of the contract.

(e) The contract must be concurrent with the state fiscal year, unless DARS approves the contract for a different period.

(f) The contract must identify the counties in which the contractor is authorized to perform ECI services. Contractors that share counties must jointly develop a service area agreement to serve those counties. This service area agreement must be approved by DARS.

(1) A request to change the designated service area must be:

(A) submitted to the DARS ECI assistant commissioner; and

(B) approved by the DARS ECI assistant commissioner before implementation.

(2) DARS will not incur additional expenses as a result of a request to change a service area when the provision of services is at the same level for the same number of children.

(g) The contract terms and conditions may be amended by mutual agreement between DARS and the contractor during the contract period.

(1) Except for reductions to the contract amount based on applicable contract provisions, the amendment must be in writing and signed by an authorized official of the contractor and the authorized DARS representatives. In emergency circumstances as determined by DARS in its sole discretion, the DARS ECI assistant commissioner may sign and offer a contract amendment to a contractor and may allow the contractor to accept by performance. The DARS ECI assistant commissioner may require a contractor's signature on the amendment before payment for the amended services. DARS does not pay for the performance of services or work not authorized by a properly executed contract amendment.

(2) DARS develops a written contract amendment when contract changes are determined necessary. A contract amendment may be necessary for reasons including:

(A) sanctions for the contractor's noncompliance or failure to meet program requirements;

(B) changes in federal or state law that make continued fulfillment of the contract, on the part of either party, unreasonable or impossible;

(C) changes to the assigned service area; or

(D) awards or adjustments for other reasons.

**History**
- *Source Note: The provisions of this §392.107 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.109** Transition of Contractors {#sec-392.109 omnilex-key=us-tx-regs-official--title-1--392.109}

(a) Unless prohibited by law, a contractor must provide at least 120 days notice before terminating or non-renewing a contract to provide adequate time for DARS to provide statewide coverage by securing a new contractor.

(b) During the transition to the new contractor, the existing contractor must:

(1) continue to provide services to families;

(2) continue to cooperate with DARS;

(3) continue to participate in Texas Health and Human Services Commission's Random Moment Time Study;

(4) continue to file Medicaid Administrative Claims as appropriate;

(5) continue to bill other funding sources; and

(6) assist with the transition of families and children, including the secure transfer of all client files, to the new contractor(s).

(c) Unless prevented by law, or unless as a result of an adverse action on the contract, DARS will provide at least 90-days notice before nonrenewing a contract.

(d) In order to provide statewide coverage as required by the Individuals with Disabilities Education Improvement Act Part C, DARS may employ an exception to a competitive procurement in the case of a contract termination for which a competitive procurement to replace the contractor is not practical to avoid a significant risk to services to children and families.

(e) DARS may employ an exception to a competitive procurement when a contractor's enrollment falls to a level that creates a financial risk to DARS.

**History**
- *Source Note: The provisions of this §392.109 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.111** Data Collection and Reporting {#sec-392.111 omnilex-key=us-tx-regs-official--title-1--392.111}

(a) The contractor must collect and report data as required by rules, the contract, and in accordance with applicable instruction manuals. Data must be submitted in the form, manner, and timeframe specified by DARS. Required data may include: client data, including personally identifiable information regarding children served or referred; services received by individual eligible children; family information, including family size and income; service-provider information, including information about the contractor's individual employees or subcontractors; agency and contractor revenue and expenditure information; and other information that might be determined necessary by DARS to perform the contractor's legally authorized functions, including documentation of early childhood intervention services planned and provided, billing and reimbursement functions, and other purposes.

(b) The contractor must report accurate client, service, and service provider information to DARS through TKIDS.

**History**
- *Source Note: The provisions of this §392.111 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter D** DARS CONTRACT MANAGEMENT REQUIREMENT

##### **1 Tex. Admin. Code § 392.301** Purpose and Applicability {#sec-392.301 omnilex-key=us-tx-regs-official--title-1--392.301}

The purpose of this subchapter is to establish general contracting rules for consumer goods and services contracts with the Texas Department of Assistive and Rehabilitative Services (DARS).

**History**
- *Source Note: The provisions of this §392.301 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.303** Definitions {#sec-392.303 omnilex-key=us-tx-regs-official--title-1--392.303}

The following words and terms, when used in this subchapter have the following meanings, unless the context clearly indicates otherwise.

(1) Amendment--A formal revision or addition to a contract.

(2) Bid--An offer to contract with the state submitted in response to a bid invitation.

(3) Commissioner--The Chief Executive Officer of the Texas Department of Assistive and Rehabilitative Services.

(4) Contract--A promise, or a set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. It is an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. The term also encompasses the written document that describes the terms of the agreement. For state contracting purposes, it generally describes the terms of a purchase of goods or services from a vendor or service contractor; however, the term also encompasses grant arrangements.

(5) Contract Assignment--The transfer of contractual rights held by one party to another party.

(6) Contractor--An entity or person holding a written agreement with a purchasing entity to provide goods and services; or a recipient or sub-recipient holding a written agreement with a grantor or sub-recipient to carry out all or part of a program.

(7) Contract records--All financial and programmatic records, supporting documents, papers, statistical data, or any other written or electronic materials that are pertinent to each specific contract instrument.

(8) Corrective action plan--Specific steps to be taken by a contractor to resolve identified deficiencies and/or to address concerns that the contracting agency has regarding the contractor's compliance with contract terms or other applicable laws, rules, or regulations. The corrective action plan may also focus on improving contractor performance (as it relates to service delivery, reporting, and/or financial stability).

(9) DARS--The Texas Department of Assistive and Rehabilitative Services.

(10) DARS policies--For the purposes of this chapter only, the standards that DARS provides to contractors that stipulate performance expectations for contractors to provide goods or services under the contract.

(11) Effective date--The date of complete execution of the contract or the date upon which the parties agree the contract takes effect.

(12) Entity--An association, organization, governmental or business body, or existing body or class of persons that is chartered or organized for representing the interest of persons.

(13) Grant--An award of financial assistance, including cooperative agreements, in the form of money, property in lieu of money, or other financial assistance paid or furnished by the state or federal government to an eligible grantee to carry out a program in accordance with rules, regulations, and guidance provided by the grantor agency.

(14) Memorandum of Understanding (MOU)--A written document evidencing the understanding or agreement of two or more parties regarding the subject matter of the agreement. Because the underlying agreement may or may not be legally binding and enforceable in and of itself, a memorandum of understanding may or may not constitute a contract. It is generally considered a less formal way of evidencing an agreement, and is ordinarily used in state government only between or among state agencies or other government entities. The term is used interchangeably with "memorandum of agreement."

(15) Program--DARS activities designed to deliver services or benefits provided by statute.

(16) Subcontract--A written agreement between the original contractor and a third party to provide all or a specified part of the goods, services, work, and/or materials required in the original contract.

**History**
- *Source Note: The provisions of this §392.303 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.305** General Requirements for Contracting {#sec-392.305 omnilex-key=us-tx-regs-official--title-1--392.305}

(a) To contract with DARS, the contractor must:

(1) meet eligibility requirements for contracting;

(2) if applicable, have and maintain the appropriate license(s);

(3) submit all documents and information required by DARS;

(4) comply with all applicable DARS and Texas Health and Human Services Commission rules and policies and terms of the contract with DARS;

(5) comply with all local, state, and federal regulations that apply to the contract;

(6) be authorized by law or the Secretary of State to conduct business in the state of Texas;

(7) certify in writing that the contractor's taxes due to the state of Texas are current;

(8) ensure that staff members providing services are competent, professionally ethical, and qualified for positions held. Qualifications of staff members must meet all requirements established by state policy and regulations. The contractor must ensure that all staff members meet minimum qualifications; staff credentials supporting those qualifications must be on file at the time of hire; and staff credentials must be made available to DARS staff members upon request;

(9) provide for such fiscal control and fund accounting as may be necessary to ensure proper disbursement and accounting of funds provided by DARS and in accordance with DARS policies;

(10) maintain accurate and complete records and prepare and distribute reports according to the terms of the contract;

(11) ensure that any contractor facility in which services are provided is:

(A) such that the safety and health of the staff and consumers is protected; and

(B) accessible to individuals receiving services and complies with the requirements of the Architectural Barriers Act of 1968, the Uniform Federal Accessibility Standards, the Americans with Disabilities Act of 1990, and Section 504 of the Rehabilitation Act;

(12) have adequate operating funds available for conducting business on the effective date of the contract;

(13) have an adequate staff to provide services on the effective date of the contract;

(14) notify DARS and HHSC in writing of changes to contract information according to the requirements of the contract. Unless otherwise specified in the contract, the contractor must notify DARS and HHSC:

(A) within 10 calendar days after any address change, including the location of the contractor's office, physical address, or mailing address;

(B) immediately of any change in administrator or director; and

(C) within seven working days of any change in the contact telephone number designated in the contract; and

(15) report suspected violation of rules or laws to the appropriate investigative authority. This includes reporting abuse, neglect, and exploitation issues to the Texas Department of Family and Protective Services (DFPS) or to the appropriate Texas Department of Aging and Disability Services (DADS) licensing staff.

(b) To provide services, a contractor must maintain adequate:

(1) funding for provision of services; and

(2) staff for the provision of services.

(c) A contractor or potential contractor may not offer, give, or agree to give a DARS employee anything of value.

(d) A contractor or potential contractor may not engage in any activity that presents a real or apparent conflict of interest.

(e) A former DARS employee may not represent or receive compensation from any person concerning any contractual matter in which the former employee participated during his or her employment with the state.

(f) DARS may choose not to enter into a contract:

(1) when, in DARS' opinion, the contractor, potential contractor, or a controlling party has a documented, unsatisfactory history in contracting with DARS or with another health and human services agency;

(2) if the contractor or potential contractor:

(A) subcontracts any direct care services without specific authorization from DARS and HHSC; and/or

(B) assigns or transfers the contract without prior written approval of DARS and HHSC.

(g) DARS or HHSC assigns the effective date of a contract.

(h) Goods or services purchased or reimbursed by DARS may be inspected or monitored at the discretion of DARS or HHSC.

(i) DARS or HHSC may require corrective action, suspend consumer referrals, and/or impose an adverse action against a contractor for failure to comply with the terms of the contract and/or DARS or HHSC rules, policies, and procedures.

(j) A contractor must participate in orientation relating to DARS and HHSC contract requirements before providing goods or services under a contract for the first time.

(k) A contractor shall ensure that any facility in which services are provided includes among the staff members, or shall obtain the services of, people able to communicate in the native language of applicants and consumers who have limited English speaking ability and ensure that appropriate modes of communication are used for all consumers.

(l) Contractors that provide vocational rehabilitation services shall take affirmative action to employ and advance in employment qualified individuals with disabilities.

**History**
- *Source Note: The provisions of this §392.305 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.307** Complaints {#sec-392.307 omnilex-key=us-tx-regs-official--title-1--392.307}

Upon request from the consumer, the contractor must notify the consumer of the name, mailing address, and telephone number of DARS for the purpose of directing complaints.

**History**
- *Source Note: The provisions of this §392.307 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.309** Record Requirements {#sec-392.309 omnilex-key=us-tx-regs-official--title-1--392.309}

(a) The contractor must maintain all financial and contract-related records:

(1) according to recognized fiscal and accounting practices such as Generally Accepted Accounting Principles (GAAP); and

(2) in accordance with the DARS or HHSC contract requirements, rules, policies and procedures.

(b) When required by DARS or HHSC, the contractor must use the official DARS form to document services delivered.

(c) The contractor must maintain all records about the services provided to individuals in programs administered by DARS as required under each contract from the date the services were provided. If litigation or claim involving these records is still ongoing at the conclusion of the required time the contract specifies to maintain the records, the contractor must maintain the records until all litigation or claims are resolved.

(d) The contractor must maintain all work papers and records supporting information reported on cost reports, budgets, or other cost surveys for the duration stated in the contract after the end of the fiscal year in which the services were provided. If litigation or claim involving these records is still ongoing at the conclusion of the required time the contract specifies to maintain the records, the contractor must maintain the records until all litigation or claims are resolved.

**History**
- *Source Note: The provisions of this §392.309 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.311** Access to Contractor Facilities and Records {#sec-392.311 omnilex-key=us-tx-regs-official--title-1--392.311}

(a) Contractors must allow DARS and HHSC and all appropriate federal and state agencies or their representatives access to contractor facilities to examine and copy contract records and supporting documents about services provided. The contractors and subcontractors must make the records available at reasonable times and for reasonable periods.

(b) If a contractor is terminating business operations, the contractor must ensure that:

(1) records are stored and accessible; and

(2) someone is responsible for adequately maintaining the records.

**History**
- *Source Note: The provisions of this §392.311 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.313** Contract Monitoring {#sec-392.313 omnilex-key=us-tx-regs-official--title-1--392.313}

(a) Any service purchased or reimbursed by DARS may be monitored at the discretion of DARS or HHSC.

(b) DARS and HHSC may conduct compliance monitoring reviews of the contractor's services to determine if the contractor is in compliance with the contract and with program rules and requirements. These reviews are conducted at the location where the contractor is providing the services unless DARS or HHSC specifies a different location. DARS and HHSC assess contractor performance based on contract standards.

(c) During the monitoring review, the contractor must provide:

(1) adequate working space for reviewing the records;

(2) every record DARS or HHSC requests for review; and

(3) copies, or access for DARS and HHSC staff to make needed copies, of documents.

(d) During the monitoring review, DARS or HHSC may:

(1) review a sample of consumer records to determine the contractor's compliance with contract requirements;

(2) interview consumers and staff members;

(3) observe consumers and staff members;

(4) consult with others, as appropriate; and

(5) conduct other activities, as appropriate.

(e) DARS or HHSC may expand a compliance monitoring review period or the review sample at any time.

(f) DARS and HHSC also conduct fiscal monitoring, which is the review of documentation that supports the contractor's billing, as it exists at the time the DARS or HHSC staff reviews the billing documentation. DARS or HHSC may recoup payment if the service delivery documentation does not support the contractor's billing.

(g) DARS and HHSC may conduct a fiscal monitoring review:

(1) in conjunction with a compliance monitoring review;

(2) independent of a compliance monitoring review;

(3) when a contract is terminated;

(4) as a result of a complaint; or

(5) at other times as DARS or HHSC considers necessary.

(h) Fiscal monitoring is designed to ensure that:

(1) DARS received the goods or services paid for;

(2) The total amount paid by DARS was allowable under the contract; and

(3) The contractor maintained the financial records and internal controls necessary to adequately account for claims under the contract.

(i) DARS and HHSC may use sampling methods in monitoring and auditing contracts.

(j) The contractor has the burden of proof in establishing entitlement to payments made under the contract.

(k) The contractor must provide the same accommodations for fiscal monitoring as related to compliance monitoring.

**History**
- *Source Note: The provisions of this §392.313 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.315** Corrective Action Plan {#sec-392.315 omnilex-key=us-tx-regs-official--title-1--392.315}

The contractor must prepare and implement a corrective action plan in response to findings of deficiencies by DARS or HHSC or other federal or state oversight authorities. The corrective action plan must be negotiated to the satisfaction of DARS and HHSC. DARS or HHSC may subsequently monitor and document the contractor's compliance with the corrective action plan.

**History**
- *Source Note: The provisions of this §392.315 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.317** Adverse Actions {#sec-392.317 omnilex-key=us-tx-regs-official--title-1--392.317}

(a) DARS or HHSC may impose an adverse action when the contractor fails to follow the terms of the contract or fails to comply with DARS or HHSC rules, policies, and procedures. DARS or HHSC may impose adverse actions for reasons including:

(1) DARS' or HHSC's determination that consumer health and safety is jeopardized;

(2) the contractor's failure to comply with its corrective action plan;

(3) the contractor's failure to follow an agreed-upon audit resolution payment plan;

(4) the contractor's failure to submit an acceptable cost report, if applicable;

(5) the contractor's failure to comply with the contract or program requirements;

(6) the contractor's failure to maintain a current required license or the contractor allowing the expiration of any required license, if applicable;

(7) the contractor's relocation to a new facility address that does not have the appropriate license, if applicable;

(8) the contractor's exclusion from contracting with DARS, any health and human services program, or the federal government; or

(9) validated report(s) of abuse, neglect, or exploitation when the perpetrator is an owner, employee, or volunteer who has direct access to consumers.

(b) Types of adverse actions may include:

(1) Recoupment. DARS or HHSC collects money the contractor owes as the result of overpayments or other billing irregularities.

(2) Vendor hold. DARS or HHSC withholds the contractor's contract payments. DARS or HHSC may put one or all of the contractor's contracts on vendor hold. The vendor hold is released when DARS or HHSC determines that the contractor has resolved the reason(s) for the hold. In addition to the reasons listed in subsection (a) of this section, DARS or HHSC may place a vendor hold on the contractor's contract(s):

(A) to recoup overpayments made to the contractor; or

(B) to recover any audit exceptions assessed against the contractor.

(3) Denial of claim. DARS or HHSC denies payment in whole or part for a claim filed within program time limits.

(4) Suspension of subcontractor's participation or payments; termination of subcontract. DARS or HHSC directs a contractor to suspend a subcontractor's participation, suspend a subcontractor's payments, or terminate a subcontract.

(5) Involuntary contract termination. DARS or HHSC may terminate a contract for cause by citing the contractor's failure to comply with the terms of the contract or with DARS or HHSC rules, policies, and procedures.

(6) Suspension. DARS or HHSC temporarily suspends the contractor's right to conduct business with DARS. The causes for and conditions of suspension are described in §392.323 of this subchapter (relating to Causes and Conditions of Suspension).

(7) Debarment. DARS or HHSC does not allow a contractor to conduct business with DARS, in any capacity, for a certain period of time. The causes for and conditions of debarment are described in §392.321 of this subchapter (relating to Causes and Conditions of Debarment).

**History**
- *Source Note: The provisions of this §392.317 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.319** Debarment and Suspension of Current and Potential Contractor Rights {#sec-392.319 omnilex-key=us-tx-regs-official--title-1--392.319}

(a) Requirements in this section apply to all types of contracts with DARS.

(b) Debarment is the termination of rights to continue an existing contract, to receive a new contract, to participate as a contractor or manager, to provide goods or services to DARS consumers either directly or indirectly while working for a DARS or HHSC contractor, or to make a bid, offer, application, or proposal for a DARS or HHSC contract. The debarment is for a specified time commensurate with the seriousness of the violation, the extent of the violation, prior impositions of sanctions or penalties, willingness to comply with program rules and directives, and other pertinent information. Generally, debarment does not exceed six years. Where conditions warrant, a longer period may be imposed.

(c) Suspension is the temporary suspension of a contractor's or potential contractor's rights to conduct business with DARS or HHSC. A suspension is in effect until an investigation, hearing, or trial is concluded and DARS can make a determination about:

(1) the contractor's future right to contract or subcontract; or

(2) a potential contractor's future right to have DARS or HHSC consider its offer, bid, proposal, or application.

(d) For purposes of both debarment and suspension of contractual rights, DARS or HHSC may impute the conduct of an individual, corporation, partnership, or other association to the contractor, potential contractor, or the responsible entity of the contractor or potential contractor with whom the individual, corporation, partnership, or other association is employed or otherwise associated. Even though the underlying conduct may have occurred while an individual, corporation, partnership, or other association was not associated with the contractor or potential contractor, suspension of contractual rights or debarment may be imposed. Remedial actions taken by the responsible officials of the contractor or potential contractor are considered in determining whether either suspension of contractual rights or debarment is warranted.

**History**
- *Source Note: The provisions of this §392.319 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.321** Causes and Conditions of Debarment {#sec-392.321 omnilex-key=us-tx-regs-official--title-1--392.321}

(a) DARS or HHSC may remove contractual rights from an individual, a corporation, a partnership, or a division of a contractor or legal entity for causes including the following:

(1) being found guilty, pleading guilty, pleading nolo contendere, or receiving a deferred adjudication in a criminal court relating to:

(A) obtaining, attempting to obtain, or performing a public or private contractor subcontract;

(B) engaging in embezzlement, theft, forgery, bribery, falsification or destruction of records, fraud, receipt of stolen property, or any other offense indicating moral turpitude or a lack of business integrity or honesty;

(C) being involved with dangerous drugs, controlled substances, or other drug-related offense;

(D) violating federal antitrust statutes;

(E) committing an offense involving physical or sexual abuse or neglect;

(2) being debarred from contracting by any unit of the federal government or any unit of a state government;

(3) violating DARS or HHSC contract provisions including failing to perform according to the terms, conditions, and specifications or within the time limit(s) specified in a DARS or HHSC contract, including the following:

(A) failing to abide by applicable federal and state statutes, such as those regarding persons with disabilities and those regarding civil rights;

(B) having a record of failure to perform or of unsatisfactory performance according to the terms of one or more contracts or subcontracts, if that failure or unsatisfactory performance has occurred within five years preceding the determination to debar. This subparagraph applies only for actions occurring after the effective date of these rules. Failure to perform and unsatisfactory performance includes the following:

(i) failing to correct contract performance deficiencies after receiving written notice about them from DARS, HHSC, or their authorized agents;

(ii) failing to repay or make and follow through with arrangements satisfactory to DARS or HHSC to repay identified overpayments or other erroneous payments, or assessed liquidated damages or penalties;

(iii) failing to meet standards that are required for licensure or certification, or that are required by state or federal law, DARS or HHSC rules or standards incorporated in contracts concerning DARS contracts;

(iv) failing to execute contract amendments required by DARS or HHSC;

(v) billing for services or merchandise not provided to the consumer;

(vi) submitting cost reports containing costs not associated with or not covered by the contract or DARS rules and instructions. Intent to increase individual or statewide rates or fees by submitting unallowable costs must be shown for a single cost report, but intent may be inferred when a pattern of submitting cost reports with unallowable costs is shown;

(vii) submitting a false report or misrepresentation which, if used, may increase individual or statewide rates or fees;

(viii) charging consumer or patient fees contrary to DARS or HHSC rules or policy;

(ix) failing to notify and reimburse DARS or its agents for services DARS paid for when the contractor received reimbursement from a liable third party;

(x) failing to disclose or make available, upon demand, to DARS or its representatives (including appropriate federal and state agencies) records the contractor is required to maintain;

(xi) failing to provide and maintain services within standards required by statute, regulation, or contract; or

(xii) violating the Human Resources Code provisions applicable to the contract or any rule or regulation issued under the Code;

(4) submitting an offer, bid, proposal, or application that contains a false statement or misrepresentation or omits pertinent facts or documents that are material to the procurement;

(5) engaging in abusive or neglectful practice that results in or could result in death or injury to the consumer served by the contractor; or

(6) knowingly and willfully using a debarred person or legal entity as an employee, independent contractor, or agent to perform a contract with DARS or HHSC.

(b) In accordance with terms specified by DARS or HHSC, individuals, parts of entities, and entities that have been debarred may not:

(1) receive a contract;

(2) be allowed to retain a contract that has been awarded before debarment;

(3) bid or otherwise make offers to receive a contract or subcontract;

(4) participate in DARS programs that do not require the contractor to sign a contract or agreement;

(5) either personally or through a clinic, group, corporation, or other association, bill to or receive payment from DARS for any services or supplies provided by the debarred entity on or after the effective date of the debarment. Additionally, DARS will not pay for any services ordered, prescribed, or delivered by the debarred entity for DARS recipients after the date of debarment. No costs associated with a debarred entity, including the salary, fringe, overhead, payments to, or any other costs associated with an employee, owner, officer, director, board member, independent contractor, manager, or agent who was debarred may be included in a DARS cost report or any other document that will be used to determine an individual payment rate, a statewide payment rate, or a fee; or

(6) provide goods or services to DARS consumers either directly or indirectly while working for a DARS contractor.

(c) Debarment may be applied against an individual, a corporation, a partnership, a division of a contractor, or an entire legal entity, or a specified part of a legal entity.

(d) Even a single occurrence of a violation may result in debarment or suspension if it is severe. Other adverse actions may be taken if the violation is isolated or less severe.

**History**
- *Source Note: The provisions of this §392.321 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.323** Causes and Conditions of Suspension {#sec-392.323 omnilex-key=us-tx-regs-official--title-1--392.323}

(a) DARS or HHSC may suspend a contractor's or potential contractor's contractual rights whenever DARS or HHSC finds that there is a reasonable basis to believe that grounds for debarment exist. Suspension may be imposed immediately following DARS' or HHSC's notification to a contractor or potential contractor. In addition, suspension may be imposed on a potential contractor if the contractor has an outstanding indictment or DARS or HHSC has information about an offense that is grounds for indictment.

(b) The conditions of suspension are:

(1) DARS or HHSC may withhold payments, wholly or partly, to the affected contractor during the period of suspension.

(2) DARS or HHSC may refuse to accept a bid, offer, application, or proposal from, or to award a contract to, the affected potential contractor during the period of suspension.

(3) DARS or HHSC may cease referrals of additional consumers to the suspended entity and may transfer existing consumers to other contractors.

(c) If DARS or HHSC determines that the underlying reasons for suspension have been resolved in favor of the contractor, DARS or HHSC must, if applicable:

(1) pay the withheld payments for any services that were provided during the suspension and that met the terms of an existing contract; and

(2) resume contract payments and consumer referrals.

(d) If DARS or HHSC determines that underlying reasons for the suspension have not been resolved in favor of the contractor, DARS or HHSC institutes debarment proceedings.

(e) In accordance with terms specified by DARS or HHSC, individuals and entities whose contractual rights have been placed in suspension may not:

(1) receive a contract;

(2) submit an offer, bid, application, or proposal for a contract; or

(3) provide goods or services to DARS or HHSC consumers either directly or indirectly while working for a DARS contractor.

(f) A suspension may be applied against an individual, an entire legal entity, or a specified part of a legal entity.

**History**
- *Source Note: The provisions of this §392.323 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.325** Evidence for Debarment or Suspension {#sec-392.325 omnilex-key=us-tx-regs-official--title-1--392.325}

The sufficiency of evidence required depends on the cause of the suspension or debarment.

(1) If there is evidence that the contractor or potential contractor has been found guilty, pleaded guilty, pleaded no contest, or received a deferred adjudication in criminal court relating to an activity prohibited in this chapter, that is sufficient evidence to suspend or debar. If the decision that caused debarment is reversed on appeal, the contractor must provide written proof of the reversal to have its contract rights restored. DARS or HHSC restores contract rights unless the contractor is also debarred or suspended on other grounds.

(2) If the cause is debarment from contracting by any unit of the federal government or any unit of a state government, it is sufficient to offer official notice from the other state or federal agency that the entity has been debarred. The notice may be addressed to either DARS or HHSC.

(3) Other causes of debarment or suspension may be established by evidence of failure to meet contracting terms or standards, including evidence of the severity or recurrence of violations of performance requirements.

**History**
- *Source Note: The provisions of this §392.325 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.327** Notice for Debarment or Suspension {#sec-392.327 omnilex-key=us-tx-regs-official--title-1--392.327}

Written notices of suspension or debarment must include the following, as applicable:

(1) the grounds for the action;

(2) the length of the debarment;

(3) the conditions that might cause a suspension to be released;

(4) a statement explaining the effect of the suspension or debarment; and

(5) a statement of whether the suspension or debarment is in effect throughout DARS or just in a particular DARS program.

**History**
- *Source Note: The provisions of this §392.327 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.329** Appeals {#sec-392.329 omnilex-key=us-tx-regs-official--title-1--392.329}

(a) A contractor has the right to appeal any adverse action imposed by DARS.

(b) To appeal an adverse action, the contractor, referred to in this subchapter as the appellant, must ensure that DARS receives a written request for an appeal within 30 days of the contractor's receipt of the notice of adverse action.

(c) The appellant must ensure that the request for an appeal:

(1) clearly states that the purpose of the letter is to appeal DARS' adverse action;

(2) is received by DARS at the address provided in the notice of adverse action letter;

(3) is received by DARS according to time frames provided in this section; and

(4) includes all required information and documentation as outlined in this section.

(d) To be considered, the appeal must include the following:

(1) A statement of facts describing how a decision, action, or inaction by DARS deviated from contract terms, published policy, or state or federal laws or regulations;

(2) The appellant's claim, including pertinent contract sections;

(3) A statement of the issue(s) in dispute;

(4) A brief statement about why DARS' decision is wrong;

(5) Copies of evidence or documentation supporting the appeal; and

(6) The action requested.

(e) In the request for an appeal letter, the appellant may also request a meeting with DARS. This request should include a description of any special accommodations needed for the appellant, witnesses, or representatives. At the meeting, the appellant:

(1) may be represented by a person of his or her selection; and

(2) will be provided with an opportunity to present evidence and information to support his or her position.

(f) If the appeal does not meet the requirements of this chapter, DARS will notify the appellant that their request for an appeal is denied because it did not meet requirements.

(g) DARS provides a written decision to the appellant within 30 days after conclusion of the meeting, or if no meeting is held, within 45 days after the date DARS receives the appeal, unless the appropriate DARS representative extends the time.

**History**
- *Source Note: The provisions of this §392.329 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.331** Request for Reconsideration {#sec-392.331 omnilex-key=us-tx-regs-official--title-1--392.331}

(a) After DARS issues a decision on an appeal, the appellant may submit in writing a request for reconsideration.

(b) An appellant may submit a request for reconsideration only if the appellant's request for an appeal met the requirements set out in §392.329 of this subchapter (relating to Appeals).

(c) Requests for reconsideration must be addressed to the DARS commissioner and must be received by DARS within 20 days after the date DARS issues the decision on the appeal.

(d) The DARS commissioner may designate a representative(s) to receive the request for reconsideration and issue a decision on behalf of DARS.

(e) The request for reconsideration must:

(1) clearly state that the purpose of the letter is to request reconsideration of DARS' decision on an appeal;

(2) specifically point out any errors in the appeal decision;

(3) specify all relief requested; and

(4) state all reasons why the relief should be granted.

(f) DARS issues a decision on the request for reconsideration no later than 45 days after receipt of the request for reconsideration. The decision may affirm, reverse, or modify the adverse action previously imposed by DARS.

(g) The decision on the request for reconsideration is the final decision of DARS. However, if the contractor believes DARS breached the contract, the contractor may pursue further action according to Government Code, Chapter 2260.

**History**
- *Source Note: The provisions of this §392.331 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter E** CONTRACT MANAGEMENT FOR DSHS FACILITIES AND CENTRAL OFFICE

##### **1 Tex. Admin. Code § 392.401** Purpose and Applicability {#sec-392.401 omnilex-key=us-tx-regs-official--title-1--392.401}

(a) The purpose of this subchapter is to provide rules governing the management of contracts by Texas Department of State Health Services (DSHS) facilities and Central Office.

(b) This subchapter does not apply to:

(1) Medicaid provider contracts; or

(2) leases or contracts for sale of real property.

**History**
- *Source Note: The provisions of this §392.401 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.403** Definitions {#sec-392.403 omnilex-key=us-tx-regs-official--title-1--392.403}

The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Best value--The optimum combination of economy and quality that is the result of fair, efficient, and practical procurement decision-making and that achieves health and human services procurement objectives as described in Texas Government Code, §2155.144.

(2) Business entity--A sole proprietorship, including an individual, partnership, firm, corporation, holding company, joint-stock company, receivership, trust, or any other entity recognized by law.

(3) Central Office--DSHS's administrative offices in Austin.

(4) Consultant contract--A contract to retain the services consistent with Texas Government Code, Chapter 2254, Subchapter B, to exclude:

(A) practitioners of professional services (as defined in this section);

(B) private legal counsel;

(C) investment counselors;

(D) actuaries; or

(E) medical or dental services providers.

(5) Consumer--A person with mental illness or mental retardation receiving services funded by DSHS.

(6) Consumer services contract--A contract for the provision of services delivered to a consumer or consumers.

(7) Contract--A written agreement, including a purchase order, between a facility or Central Office and a business entity that obligates the entity to provide goods or services in exchange for money or other valuable consideration.

(8) Contract director--The DSHS employee who is responsible for contracts management.

(9) Contract management--Developing specifications or scope of work or contractor qualifications, evaluating responses, and procuring, negotiating, drafting, awarding, executing, monitoring, and enforcing a contract.

(10) Contractor--A business entity that provides goods or services in exchange for money or other valuable consideration pursuant to a contract.

(11) Facility--Any state hospital, state school, or state center operated by the Texas Department of State Health Services.

(12) Higher authority--The DSHS employee to whom the contract director reports, as follows:

(A) at a facility--the superintendent, director, or executive director.

(B) at Central Office--

(i) the deputy commissioner for finance and administration; or

(ii) the director of the Support Services division.

(13) Local authority--An entity designated by the DSHS commissioner in accordance with the Texas Health and Safety Code, §533.035(a).

(14) Performance contract--A written agreement between DSHS and a local authority for the provision of one or more functions as described in the Texas Health and Safety Code, §533.035(a).

(15) Professional services--Services as described in Texas Government Code, §2254.002.

(16) DSHS--The Texas Department of State Health Services.

(17) DSHS Contracts Manual--A publication of DSHS's internal policies and procedures relating to contracting.

**History**
- *Source Note: The provisions of this §392.403 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.405** Accountability {#sec-392.405 omnilex-key=us-tx-regs-official--title-1--392.405}

(a) DSHS employees and officers may not have a conflict of interest in contracts management. An employee or officer has a conflict of interest when the employee, officer, or a person related within the second degree of consanguinity or affinity to the employee or officer, intends to have or has:

(1) actual employment with a respondent or contractor;

(2) paid consultation with a respondent or contractor;

(3) membership on a respondent's or contractor's board of directors;

(4) ownership of 10% or more of the voting stock of shares of a respondent or contractor;

(5) ownership of 10% or more or $5,000 or more of the fair market value of a respondent or contractor; or

(6) received funds from a respondent or contractor in excess of 10% of the employee's, officer's, or related person's gross income for the previous year.

(b) DSHS employees and officers who participate in contracts management may not:

(1) accept or solicit any gift, favor, service, or benefit from a respondent or contractor that might reasonably tend to influence the officer or employee in the discharge of official duties relating to contract management, or that the officer or employee knows or should know is being offered with the intent to influence the officer's or employee's official duties; or

(2) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised official powers or for having performed official duties in favor of another respondent or contractor.

(c) DSHS employees who participate in contracts management shall comply with additional standards of ethical conduct contained in the DSHS manuals and applicable state law.

(d) A respondent and its officers and employees may not have a conflict of interest in the solicitation for which the respondent submits a response. A person has a conflict of interest when that person is related within the second degree of consanguinity or affinity to a DSHS employee or officer participating in the contract management for that contract.

(e) A respondent may not attempt to induce any business entity to submit or not submit a response.

(f) A respondent must arrive at its response independently and without consultation, communication, or agreement for the purposes of restricting competition.

(g) A respondent and its officers and employees may not have a relationship with any person, at the time of submitting the response or during the contract term, that may interfere with fair competition.

(h) A respondent and its officers and employees may not participate in the development of specific criteria for award of the contract, nor participate in the selection of the business entity to be awarded the contract.

(i) When contracting with former and retired employees and officers, DSHS must ensure compliance with applicable state law, including the Texas Government Code, §§572.054, 659.0115, and 2252.901.

(j) Except for the contracts management of construction contracts and performance contracts, all contracts management must be conducted in accordance with the requirements of the DSHS or HHSC Contracts Manual.

(k) All contracts must contain standard terms and conditions as described in the DSHS Contracts Manual unless an exception is granted by HHSC.

(l) DSHS is prohibited from contracting with a business entity that:

(1) is held in abeyance or barred from the award of a federal or state contract;

(2) is not in good standing for state tax, pursuant to the Texas Business Corporation Act, Texas Civil Statutes, Article 2.45;

(3) is not residing or located in Texas unless the business entity has a Texas sales tax permit or certifies that the entity does not sell taxable goods or services within Texas, pursuant to the Texas Government Code, §2155.004;

(4) is on warrant hold status, pursuant to the Texas Government Code, §403.055; or

(5) is ineligible to receive a contract, pursuant to the Texas Family Code, §231.006.

(m) DSHS must ensure that its contractors comply with all contract provisions regardless of whether a contractor subcontracts a portion of the contract.

(n) DSHS may make advance payments to a contractor provided the payments meet a public purpose, ensure adequate consideration, and are accompanied by sufficient controls to ensure accomplishment of the public purpose. With the exception of contracts paid on a capitated basis, at the end of each contract period the contractor must return to DSHS any state or federal funds received from or through DSHS that have not been expended or encumbered within the term of the contract.

(o) DSHS may recoup improper payments when it is verified that a contractor has been overpaid because of improper billing or accounting practices or failure to comply with the contract terms. The determination of impropriety is based on federal, state, and local laws and rules; DSHS procedures; contract provisions; or statistical data on program use compiled from paid claims and other sources of data. DSHS will recoup payments for contracted services not received by DSHS.

(p) DSHS shall ensure quality services are provided to consumers, including during the transition from one contractor to another.

(q) All purchases of goods and services may be made only pursuant to a contract.

**History**
- *Source Note: The provisions of this §392.405 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.407** Provisions for Certain Contracts {#sec-392.407 omnilex-key=us-tx-regs-official--title-1--392.407}

(a) All consumer services contracts must include provisions stating:

(1) the clearly defined performance expectations which directly relate to the community service's objectives, including goals, outputs, and measurable outcomes, and that the contractor must provide services in accordance with such expectations;

(2) that no consumer will be excluded from participation in, denied the benefits of, or unlawfully discriminated against, in any program or activity funded by the contract on the grounds of race, color, national origin, religion, sex, age, disability, or political affiliation in accordance with applicable law;

(3) that all consumer-identifying information will be maintained by the contractor as confidential, in accordance with applicable law;

(4) that the contractor, its licensed staff, and other appropriate staff (as identified in the contract) will be credentialed before services are delivered to consumers by such contractor and staff;

(5) that any allegation of abuse, neglect, or exploitation of consumers under the contract will be reported in accordance with applicable law, DSHS rules, and Texas Department of Family and Protective Services rules;

(6) that AIDS/HIV workplace guidelines, similar to those adopted by DSHS and AIDS/HIV confidentiality guidelines and consistent with state and federal law, will be adopted and implemented by the contractor;

(7) that the contractor will comply with relevant DSHS rules, certifications, accreditations, and licenses, as specified in the contract;

(8) that any allegation involving the clinical practice of a physician, dentist, registered nurse, or licensed vocational nurse, be referred to the contractor's medical, dental, or nursing director (as appropriate to the discipline involved) for review for possible peer review and reporting to disciplinary boards; and

(9) the accounting, reporting, and auditing requirements with which the contractor must comply.

(b) All contracts for residential services must include the standards and conditions that are described in subsection (a) of this section and provisions stating:

(1) that services will be provided in accordance with consumers' treatment plans; and

(2) that the contractor must comply with Title 25, Chapter 414, Subchapter K (relating to Criminal History Clearances) regarding conducting criminal history clearances of its applicants, employees, and volunteers, and that if an applicant, employee, or volunteer of the contractor has a criminal history relevant to his or her employment as described in Title 25, Chapter 414, Subchapter K, then the contractor will take appropriate action with respect to the applicant, employee, or volunteer, including terminating or removing the employee or volunteer from direct contact with consumers served by the contractor.

**History**
- *Source Note: The provisions of this §392.407 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.409** Performance Contracts and Ownership of Goods {#sec-392.409 omnilex-key=us-tx-regs-official--title-1--392.409}

(a) If a performance contract provision requires the local authority to acquire a good through a subcontract, then the performance contract provision must identify the local authority or DSHS as the owner of the good.

(b) If a performance contract provision requires the local authority to subcontract with a business entity to develop or create intellectual property (e.g., computer software), then the performance contract provision must state the requirements to be included in the subcontract that relate to:

(1) ownership of the intellectual property;

(2) DSHS's and/or the local authority's right to use, modify, reproduce, or disseminate the intellectual property to others; and

(3) indemnity of the local authority and DSHS should the subcontractor violate the intellectual property rights of a third party.

**History**
- *Source Note: The provisions of this §392.409 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter F** CONTRACT MANAGEMENT FOR SUBSTANCE ABUSE PROGRAMS

##### **1 Tex. Admin. Code § 392.501** Purpose {#sec-392.501 omnilex-key=us-tx-regs-official--title-1--392.501}

The purpose of this subchapter is to provide criteria for the procurement of all substance abuse programs funded by DSHS, as required by Texas Health and Safety Code §461.0141.

**History**
- *Source Note: The provisions of this §392.501 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.503** Definitions {#sec-392.503 omnilex-key=us-tx-regs-official--title-1--392.503}

The words and terms used in this subchapter shall have meanings set forth in Title 25, Part 1, Chapter 441, Subchapter A (relating to Definitions) unless indicated otherwise.

**History**
- *Source Note: The provisions of this §392.503 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.505** Allocation of Funds {#sec-392.505 omnilex-key=us-tx-regs-official--title-1--392.505}

(a) Funds available for regional services will be allocated for each of the 11 Health and Human Services (HHS) regions through an approved statewide funding methodology.

(b) DSHS will establish terms and conditions needed to fulfill State and Federal funding mandates.

(c) DSHS will develop goals and identify services to be purchased based on its statewide service delivery plan as well as input from other interested parties.

**History**
- *Source Note: The provisions of this §392.505 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.507** Competitive Procurement of Client Services {#sec-392.507 omnilex-key=us-tx-regs-official--title-1--392.507}

DSHS will fund substance abuse services through competitive and noncompetitive procedures in accordance with Texas Health and Safety Code §461.0141.

**History**
- *Source Note: The provisions of this §392.507 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.509** Eligibility Criteria {#sec-392.509 omnilex-key=us-tx-regs-official--title-1--392.509}

(a) An application shall not be considered for competitive funding unless the applicant meets the following criteria on the application due date and continues to meet them throughout the selection and funding process.

(1) The applicant shall be established as a legal entity under State statutes and regulations.

(2) The applicant shall be in compliance with any Commission agreed order.

(3) The applicant shall be registered to do business in Texas and shall have a Texas address. A post office box address may be used when the application is submitted, but the applicant must be able to conduct business out of a physical location in Texas before funds will be released.

(4) Staff members, including the executive director, of a public or nonprofit entity shall not serve on their employer's governing board.

(5) The applicant shall be in good standing with any State or Federal agency that has a contracting relationship with the applicant. If a State or Federal agency has suspended or terminated an applicant's contract for deficiencies in performance of the contract, that applicant is not eligible to apply through a RFP unless all issues have been satisfactorily resolved as demonstrated by written documentation from the State or Federal agency. Additionally, an applicant is not eligible if it is debarred from participation in any Federal assistance program.

(6) Applicants that have previously been funded by DSHS shall be in compliance with the following requirements:

(A) If the applicant has been suspended or terminated by DSHS at any time in the past, all issues shall be satisfactorily resolved (demonstrated by written documentation from DSHS).

(B) If the applicant owes a refund to DSHS, the applicant shall be on schedule with the terms of the repayment agreement or shall have satisfactorily discharged the financial obligation.

(C) The applicant shall have submitted an annual audit as required by the grant agreement or contract and either corrected all deficiencies or submitted and maintained compliance with a corrective action plan that DSHS has accepted.

(b) DSHS may establish additional application criteria in a RFP or other form of solicitation.

(c) Applicants must continue to meet application criteria after funds are awarded or be subject to sanctions.

(d) Treatment applicants must be appropriately licensed and in good standing on the first effective service day proposed.

(e) DSHS may deny funding to an applicant if any person who has an ownership or controlling interest in the applicant organization, or who is an agent or managing employee of the applicant, has been convicted of a criminal offense related to involvement in any program established under Medicare, Medicaid, or the Title XX block grant.

(f) DSHS may refuse to fund an applicant who cannot demonstrate that the location where services will be provided is in compliance with all applicable local and State zoning, building, health, fire, and safety standards.

**History**
- *Source Note: The provisions of this §392.509 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.511** Policy and Procedures Manuals {#sec-392.511 omnilex-key=us-tx-regs-official--title-1--392.511}

(a) DSHS must maintain a funding policy manual pursuant to Texas Health and Safety Code §461.0142.

(b) DSHS must require contractors to maintain an up-to-date manual that includes all policies and procedures required by DSHS's funding policy manual.

(1) Policies shall be approved by the board, reviewed periodically, and revised as needed.

(2) Procedures shall be approved by the chief executive officer, reviewed periodically, and revised as needed.

(3) The policy and procedures manual shall be current, consistent with current Commission rules, individualized to the program, well organized, and easily accessible to all staff at all times.

(4) Contractors shall require each employee to read the policies and procedures applicable to the position and maintain documentation signed by the employee that the policies and procedures have been read and understood.

**History**
- *Source Note: The provisions of this §392.511 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter G** CONTRACTING WITH PROVIDERS FOR CERTAIN DSHS PROGRAMS

##### **1 Tex. Admin. Code § 392.601** Provision of Contracts for Primary Health Care Services {#sec-392.601 omnilex-key=us-tx-regs-official--title-1--392.601}

(a) Primary health care services, as described in Title 25, Part 1, Chapter 39 (relating to Primary Health Care Services Program) will be delivered through a network of contractors.

(b) Services may be limited as to frequency, duration, and cost for budgetary and administrative reasons.

(c) In order to conserve funds and effectively administer the program, the department shall contract on a Request for Proposal basis for primary health care services.

(d) The Department of State Health Services (DSHS) shall publish public notice of Requests for Proposal, release the applications, and select providers in accordance with state law and department policy.

(e) DSHS may deny, modify, suspend, or terminate the approval of providers for submitting false or fraudulent claims or failing to provide and maintain quality services according to medically acceptable standards. A provider's performance under its contract may subject the provider to review, fraud referral to the appropriate authority, and/or administrative sanctions.

(f) An applicant and/or a current contractor who is aggrieved in connection with the award of a department contract to provide primary health care services may file a protest in accordance with DSHS policy.

**History**
- *Source Note: The provisions of this §392.601 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.603** Provider Application and Contract to Provide FFS Oral Health Treatment Services {#sec-392.603 omnilex-key=us-tx-regs-official--title-1--392.603}

(a) A prospective provider who meets the criteria to provide fee-for-service (FFS) oral health treatment services, as described in Title 25, Part 1, §49.10 (relating to Provider Participation Requirements to Provide FFS Oral Health Treatment Services), is eligible to contract with the Department of State Health Services to provide oral health treatment benefits. To apply for program participation, a prospective provider must, after receiving information on the program including the schedule of current fees, sign a contract with DSHS. After the contract is properly executed, the prospective provider will be provided written notice of approval to participate in the FFS program and a copy of the program manual.

(b) The contract between the provider and DSHS may be terminated without cause by either party with a 30-day written notice. DSHS may modify, suspend, or terminate the contract of any provider for due cause. Due cause includes but is not limited to:

(1) breach of contract;

(2) suspension or revocation of the provider's license by the Texas State Board of Dental Examiners (TSBDE);

(3) disciplinary action(s) taken by the TSBDE;

(4) submission of false or fraudulent claims;

(5) amendment or judicial interpretation of federal or state laws or other requirements in a way that would make it infeasible or impossible for either party to fulfill the agreement, or if either party is unable to agree on changes necessary for continuation of the agreement;

(6) any violation of policies, procedures, rules, or requirements; or

(7) any other reason authorized by rule, regulation, statute, or contract.

(c) An administrative review and due process hearing is available to any provider for the resolution of conflict between DSHS and the provider.

(d) DSHS may not terminate a contract during the pendency of a hearing. DSHS may withhold payments during the pendency of a hearing, but DSHS must pay the withheld payments and resume contract payments if the final determination is favorable to the provider.

(e) Subsections (c) and (d) of this section do not apply if a contract is canceled by DSHS because of exhaustion of funds, expires according to its terms, or is otherwise voided by law.

**History**
- *Source Note: The provisions of this §392.603 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.605** Kidney Health Care Provider Requirements and Effective Dates {#sec-392.605 omnilex-key=us-tx-regs-official--title-1--392.605}

(a) Definitions. The terms in this section have the same meaning as those defined in Title 25, Part 1, §61.2 (relating to Definitions).

(b) Requirements. To qualify as a provider for the Kidney Health Care (KHC) program, as described in Title 25, Part 1, Chapter 61, Subchapter A (related to Kidney Health Care), a provider must do as follows.

(1) Outpatient dialysis facilities must:

(A) execute an agreement with the program;

(B) have Medicare certification and a Medicare End-Stage Renal Disease (ESRD) provider number;

(C) be a current Texas Medicaid provider;

(D) be licensed by the department as an ESRD facility;

(E) reimburse the program for any overpayments upon request; and

(F) not be on suspension as a KHC provider, as a Texas Medicaid provider, as a Medicare certified ESRD facility, or as a licensed Texas ESRD facility.

(2) An out-of-state outpatient dialysis facility must:

(A) meet all the requirements in paragraph (1)(A) - (C) and (E) of this subsection;

(B) be licensed by its state, if applicable;

(C) be a Medicaid provider in its state; and

(D) not be on suspension as a KHC provider, as a Texas Medicaid provider, as a Medicaid provider in its state, as a Medicare-certified ESRD facility, or by the ESRD licensing authority of its state.

(3) Any outpatient dialysis facility may be given interim approval according to the following:

(A) client applications for KHC benefits may be submitted by the facility during the period of interim approval.

(B) interim approval extends no longer than six months from the date the program mails the agreement to the facility.

(C) if interim approval lapses, the unexecuted agreement is nullified and a new agreement with term dates and the period of interim approval may be initiated by the program.

(D) claims for outpatient dialysis services shall not be considered for payment by the program until the program has a fully executed agreement with the facility.

(E) claim filing deadlines apply, as contained in Title 25, Part 1 §61.8 (relating to Claim Filing Deadlines).

(4) A pharmacy, including a mail order pharmacy, must execute an agreement as a KHC provider through the Health and Human Services Commission Pharmacy Contracts and Rebates unit or designated contractor.

(5) A physician or certified registered nurse anesthetist (CRNA) must:

(A) execute an agreement with the program;

(B) be licensed to practice medicine in the State of Texas, if a physician;

(C) be certified to practice within the scope of his or her certification in the State of Texas, if a CRNA;

(D) be a Texas Medicaid provider;

(E) not be on suspension as a KHC provider, as a physician licensed to practice medicine in the State of Texas, as a CRNA certified to practice within the scope of the certification in the State of Texas, or as a Texas Medicaid provider; and

(F) reimburse the program for any overpayments upon request.

(6) An out-of-state physician and a CRNA must:

(A) meet all the requirements in paragraph (5)(A), (D) and (F) of this subsection;

(B) be licensed to practice medicine in the state in which services are provided, if a physician; or

(C) be certified to practice within the scope of his or her certification in the state in which services are provided, if a CRNA; and

(D) not be on suspension as a KHC provider, as a Texas Medicaid provider, as a physician licensed to practice medicine in the state in which services are provided, as a CRNA certified to practice within the scope of the certification in the state in which services are provided.

(7) A hospital or ambulatory surgical center (ASC) must:

(A) execute an agreement with the program;

(B) be in compliance with all applicable laws to provide hospital or ASC services in the State of Texas;

(C) be a current Texas Medicaid provider;

(D) have Medicare certification;

(E) not be on suspension as a KHC provider, as a hospital authorized under applicable law to provide hospital services in the State of Texas, as an ASC licensed to provide ASC services in the State of Texas, as a Texas Medicaid provider, or as a Medicare certified hospital or ASC; and

(F) reimburse the program for any overpayments upon request.

(8) An out-of-state hospital or ASC must:

(A) meet all the requirements in paragraph (7)(A), (C), (D) and (F) of this subsection;

(B) be licensed to provide hospital or ASC services in the state in which services are provided;

(C) not be on suspension as a KHC provider, as a Texas Medicaid provider, as a Medicaid provider in its state, as a hospital licensed to provide hospital services in the state in which services are provided, as an ASC licensed to provide ASC services in the state in which services are to be provided, or as a Medicare certified hospital or ASC;

(9) A Medicare Prescription Drug Plan (PDP) must:

(A) execute an agreement with the program;

(B) be Medicare approved as a PDP and maintain approval;

(C) share and exchange data in an acceptable format with the program for the coordination of drug benefits under the Medicare PDP (Part D);

(D) accept a program payment for premiums; and

(E) reimburse the program for any overpayments upon request.

(c) Effective dates.

(1) The effective date of all outpatient dialysis facility agreements shall be on or after the Medicare ESRD certification date.

(2) The effective date of all pharmacy agreements shall be determined by the Health and Human Services Commission Pharmacy Contracts and Rebates unit or its designated contractor.

(3) The effective date of all other provider agreements, listed in subsection (a)(5) - (9) of this section, shall be the first day of the sixth month prior to the program's receipt of the completed and signed provider agreement.

**History**
- *Source Note: The provisions of this §392.605 adopted to be effective June 17, 2015, 40 TexReg 3638.*

##### **1 Tex. Admin. Code § 392.607** Breast and Cervical Cancer Services Provider Applicant Requirements {#sec-392.607 omnilex-key=us-tx-regs-official--title-1--392.607}

To be funded to provide Breast and Cervical Cancer Services, as those services are described in Title 25, Part 1, Chapter 61, Subchapter C (relating to Breast and Cervical Cancer Services), applicants shall demonstrate:

(1) evidence of a population in need;

(2) evidence of ability to contact and serve priority populations;

(3) evidence of ability to comply with tracking, follow-up, and reporting requirements;

(4) evidence of ability to comply with quality assurance standards;

(5) evidence of identified local diagnostic and treatment resources;

(6) evidence of intent to comply with DSHS screening policies and guidelines;

(7) evidence of ability to apply financial eligibility standards;

(8) evidence of ability to comply with all other department standards, policies, and requirements; and

(9) evidence that Breast and Cervical Cancer Services funds will not be used to supplant existing funding for similar services.

**History**
- *Source Note: The provisions of this §392.607 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter I** DARS CONTRACTS FOR DEAF AND HARD OF HEARING

##### **1 Tex. Admin. Code § 392.801** Contracts for Deaf and Hard of Hearing Services {#sec-392.801 omnilex-key=us-tx-regs-official--title-1--392.801}

(a) This rule only applies to contracts or grants issued for the Office for Deaf and Hard of Hearing Services.

(b) Before DARS or HHSC contracts with or provides a grant to an agency, organization, or individual to provide direct services to persons who are deaf or hard of hearing, DARS or HHSC makes reasonable efforts to notify all potential service providers of the availability and purpose of the contract or grant.

(c) The notice includes a request that all interested service providers submit within a specified period a contract or grant proposal for DARS' of HHSC's consideration. The notice also states the criteria that DARS or HHSC will consider in determining which applicant will be awarded the contract or grant.

(d) DARS and HHSC review all proposals submitted under this section and awards the contract or grant to the applicant that is best able to provide the needed services. DARS or HHSC may not award contracts or grants to a former employee of the Office for Deaf and Hard of Hearing Services within two years after the person's employment with the Office ceased.

(e) To ensure an equitable distribution of contract or grant funds, DARS has developed a formula to divide those funds among the agencies, organizations, or individuals that are awarded the contracts or grants.

**History**
- *Source Note: The provisions of this §392.801 adopted to be effective June 17, 2015, 40 TexReg 3638.*

#### **Subchapter J** INDEPENDENT LIVING SERVICES PROGRAM CONTRACTS

##### **1 Tex. Admin. Code § 392.901** Independent Living Services Program Contracts {#sec-392.901 omnilex-key=us-tx-regs-official--title-1--392.901}

(a) The following words and terms, when used in this section, have the following meanings:

(1) CIL--A center for independent living as defined under Texas Human Resources Code §117.001(1-a).

(2) HHSC--The Texas Health and Human Services Commission or its designee.

(3) Program--The independent living services program pursuant to Texas Human Resources Code §117.079.

(b) This section applies to independent living services contracts, whether by grant or other form of agreement, under the Program.

(c) In contracting with a CIL to provide independent living services under the Program, HHSC considers, as applicable:

(1) governing law, rules, and regulations;

(2) the CIL's ability to provide the services sought to be contracted;

(3) the CIL's performance monitoring data generated pursuant to Texas Human Resources Code §117.080(d);

(4) any of the CIL's subcontractors performing services under the Program; and

(5) any other factors that HHSC determines necessary or reasonable.

(d) In contracting with organizations or other persons that are not CILs to provide independent living services under the Program, HHSC considers, as applicable:

(1) governing law, rules, and regulations;

(2) the organization's or other person's ability to provide the services sought to be contracted;

(3) the organization's or other person's performance monitoring data generated under the Program; and

(4) any other factors that HHSC determines necessary or reasonable.

(e) In contracting with organizations and other persons to provide independent living services under the Program, CILs must consider:

(1) governing law, rules, and regulations; and

(2) other factors that HHSC determines necessary or reasonable.

(f) HHSC monitors contracts with CILs and organizations or other persons that provide independent living services through contracts with HHSC under the Program in accordance with HHSC's contract management handbook published pursuant to Texas Government Code §2261.256.

(g) Each CIL that contracts with organizations or other persons to provide independent living services under the Program is required to monitor its contracts. Each CIL must also report subcontract performance data to HHSC, as required by its contract. Contract monitoring under this subsection is subject to review by HHSC in performance monitoring pursuant to Texas Human Resources Code §117.080(d).

**History**
- *Source Note: The provisions of this §392.901 adopted to be effective August 31, 2016, 41 TexReg 6476.*

### **Chapter 393** INFORMAL DISPUTE RESOLUTION AND INFORMAL RECONSIDERATION

##### **1 Tex. Admin. Code § 393.1** Informal Dispute Resolution for Nursing Facilities and Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) {#sec-393.1 omnilex-key=us-tx-regs-official--title-1--393.1}

(a) The Texas Health and Human Services Commission (HHSC) provides an informal dispute resolution (IDR) process for nursing facilities and intermediate care facilities for individuals with an intellectual disability or related conditions (ICF/IID) (hereinafter referred to collectively as "facility") through which a facility may dispute deficiencies/violations cited against that facility by the State survey agency, or its designee.

(b) The HHSC IDR Department must receive a facility's written request for an IDR no later than the tenth calendar day after the facility's receipt of the official statement of deficiencies/violations from the State survey agency, or its designee. The facility must submit its written request for an IDR on the form designated for that purpose by HHSC. HHSC will make that form publicly available, e.g., maintained on the HHSC website.

(c) Within three business days of its receipt of the facility's written request for an IDR, HHSC will notify the facility and the State survey agency's regional office under which the facility operates of its receipt of the request.

(d) Within five calendar days of HHSC's receipt of the facility's request for an IDR, HHSC must receive from the facility the facility's rebuttal letter and attached supporting documentation. The rebuttal letter must contain:

(1) a list of the deficiencies/violations disputed (only those deficiencies/violations listed on the IDR request form and addressed in the rebuttal letter and supporting documentation will be reviewed);

(2) the reason or reasons each deficiency/violation is disputed; and

(3) the outcome desired by the facility for each disputed deficiency/violation.

(e) The facility submits its supporting documentation or information in the following format.

(1) Organize the attachments by deficiency/violation and cross-reference to the disputed deficiency/violation in the rebuttal letter.

(2) Ensure all information is labeled and legible.

(3) Highlight information relevant to the disputed deficiency/violation, such as a particular portion of a narrative.

(4) Describe the relevance of the documentation or information to the disputed deficiency/violation.

(5) Do not de-identify documents that name residents referenced in disputed deficiencies/violations.

(f) If the facility substantially complies with the procedures set out in subsections (d) and (e) of this section, HHSC will proceed with its review of the facility's IDR request.

(g) It is the facility's responsibility to present sufficient credible information to HHSC to support the outcome requested by the facility.

(h) Possible outcomes of an IDR for nursing facilities and ICF/IID are:

(1) a determination that there is insufficient evidence to sustain a deficiency/violation;

(2) a determination that there is insufficient evidence to sustain a portion of or a finding of a deficiency/violation;

(3) a determination that there is sufficient evidence to sustain a deficiency/violation;

(4) a determination that there is insufficient evidence to sustain the deficiency/violation as cited but that there is sufficient evidence to sustain a different citation;

(5) a determination that there is insufficient evidence to sustain the severity and scope assessment but that there is sufficient evidence to sustain a reduced severity and scope assessment (for Immediate Jeopardy or Substandard Quality of Care only); or

(6) a determination that there is sufficient evidence to sustain the severity and scope assessment as cited.

(i) HHSC will not conduct an IDR based on alleged surveyor misconduct, alleged State survey agency failure to comply with survey protocol, complaints about existing federal or State standards, or attempts to clear previously corrected deficiencies/violations.

(j) Upon receipt of the facility's IDR request, the State survey agency must submit to HHSC the following supporting documentation:

(1) resident identifier list;

(2) report of contact; and

(3) Automated Survey Processing Environment (ASPEN) event ID number.

(k) Any information related to an IDR request that is received by HHSC from either the facility or the State survey agency will be made available by HHSC to the opposing party. Parties have until the end of the second business day after receipt of such shared IDR information to respond to HHSC about that information. HHSC will share any responses with the opposing party.

(l) HHSC may request additional information from the facility and/or the State survey agency. Both parties will be notified of the request for additional information and have until the end of the second business day after notification to respond to the request. The opposing party will be provided with copies of the response submitted to HHSC.

(m) All responses to shared information as described in subsections (j) and (k) of this section must be received no later than the tenth calendar day after the facility's rebuttal letter and supporting documentation are submitted.

(n) Ex parte communications by the facility or by the State survey agency with HHSC personnel conducting the IDR are prohibited.

(o) An eligible facility may participate in an IDR conference provided that the facility requested an IDR conference on the IDR request form.

(p) Any IDR conference will be scheduled by HHSC, or its designee on or before the 22nd calendar day after HHSC received the IDR request. If the facility is unable to participate on the scheduled date, the IDR conference will be cancelled, and the IDR will continue as though no conference had been requested.

(q) The IDR conference is an informal opportunity for an eligible facility to present important information previously submitted in the facility's rebuttal letter or responses to shared information. The facility and the State survey agency may attend any IDR conference, but neither party may present information that was not previously included in the Statement of Deficiencies/Licensing Violations, submitted in the provider's rebuttal letter, or responses to shared information as set forth in subsections (j), (k), and (l) of this section. While the facility may ask clarifying questions related to the information in the Statement of Deficiencies/Licensing Violations, the questions are strictly limited to the review in question.

(r) HHSC will complete the IDR no later than the 30th calendar day after its receipt of the facility's written request. The IDR recommendation shall be in writing, address all the issues raised by the facility, and explain the rationale for the recommendation.

(s) The time frames designated in the IDR process shall be computed in accordance with Texas Government Code §311.014.

(t) HHSC may issue and enforce operating procedures concerning the IDR process and the conduct of IDR participants. IDR participants must comply with any such procedures. HHSC may deny an IDR request if the information submitted is incorrect, incomplete, or otherwise not in compliance with applicable HHSC operating procedures.

(u) The State survey agency may revise an IDR recommendation as a result of a review and subsequent determination that the IDR recommendation may violate a federal law, regulation, or the CMS State Operations Manual.

(v) HHSC may contract with an appropriate disinterested organization to adjudicate disputes between a facility and the State survey agency. Texas Government Code §2009.053 does not apply to the selection of an appropriate disinterested organization. For purposes of this section, a reference to HHSC with respect to HHSC's role in the IDR process includes an organization with which HHSC has contracted for the purpose of performing IDR, and a contracted organization is bound by the same requirements to which HHSC is bound for the purposes of conducting an IDR. The results of an IDR conducted by a contracted organization serve only as a recommendation to the State survey Agency. The State survey Agency maintains responsibility for and makes final IDR decisions.

**History**
- *Source Note: The provisions of this §393.1 adopted to be effective February 17, 2004, 29 TexReg 1345; amended to be effective January 1, 2015, 39 TexReg 10395; amended to be effective February 15, 2021, 46 TexReg 1031.*

##### **1 Tex. Admin. Code § 393.2** Informal Dispute Resolution for Assisted Living Facilities {#sec-393.2 omnilex-key=us-tx-regs-official--title-1--393.2}

(a) The Texas Health and Human Services Commission (HHSC) provides an informal dispute resolution (IDR) process for assisted living facilities (ALFs) through which an ALF may dispute violations cited against that ALF by the State survey agency.

(b) The HHSC IDR Department must receive the ALF's written request for an IDR no later than the tenth calendar day after the ALF's receipt of the official statement of violations. The ALF must submit its written request for an IDR on the form designated for that purpose by HHSC. HHSC will make that form publicly available, e.g., maintained on the HHSC website.

(c) Within three business days of its receipt of the ALF's written request for an IDR, HHSC will notify the ALF and the State survey agency's regional office under which the ALF operates of its receipt of the request.

(d) Within 15 calendar days of HHSC's receipt of the ALF's request for an IDR, HHSC must receive from the ALF the ALF's rebuttal letter and attached supporting documentation. The rebuttal letter must contain:

(1) a list of the violations disputed (only those violations listed on the IDR request form and addressed in the rebuttal letter and supporting documentation will be reviewed);

(2) the reason or reasons each violation is disputed; and

(3) the outcome desired by the ALF for each disputed violation.

(e) The ALF submits its supporting documentation or information in the following format:

(1) organize the attachments by violation and cross-reference to the disputed violation in the rebuttal letter;

(2) ensure all information is labeled and legible;

(3) highlight information relevant to the disputed violation, such as a particular portion of a narrative;

(4) describe the relevance of the documentation or information to the disputed violation; and

(5) do not de-identify documents that name residents referenced in disputed deficiencies/violations.

(f) If the ALF substantially complies with the procedures set out in subsections (d) and (e) of this section, HHSC will proceed with its review of the ALF's IDR request.

(g) HHSC will give full consideration to all factual arguments raised during the IDR process.

(h) Full consideration will be given during the IDR process to the information provided by the ALF and the State survey agency.

(i) Both parties will be given a reasonable opportunity to submit arguments and information supporting the position of the ALF or the State survey agency, and to respond to arguments and information presented against them, provided that the ALF submits its arguments and supporting information by the tenth business day after the date of the receipt of the materials specified by Texas Health and Safety Code Chapter 247.051(a)(3).

(j) The State survey agency bears the burden of proving the violation of a standard or standards.

(k) Assuming a violation has been established, it is then the ALF's responsibility to present sufficient credible information to HHSC to support the outcome requested by the ALF.

(l) Possible outcomes of an IDR are:

(1) a determination that there is insufficient evidence to sustain a violation;

(2) a determination that there is insufficient evidence to sustain a portion or a finding of a violation;

(3) a determination that there is sufficient evidence to sustain a violation;

(4) a determination that there is insufficient evidence to sustain the violation as cited but that there is sufficient evidence to sustain a different citation;

(5) a determination that there is insufficient evidence to sustain the severity and scope assessment but that there is sufficient evidence to sustain a reduced severity and scope assessment (for Immediate Threat only); or

(6) a determination that there is sufficient evidence to sustain the severity and scope assessment as cited.

(m) HHSC will not conduct an IDR based on alleged surveyor misconduct, alleged State survey agency failure to comply with survey protocol, complaints about existing State standards, or attempts to clear previously corrected violations.

(n) Upon receipt of the ALF's IDR request, the State survey agency must submit to HHSC the following supporting documentation:

(1) resident identifier list;

(2) report of contact; and

(3) Automated Survey Processing Environment (ASPEN) event ID number.

(o) Any information related to an IDR request that is received by HHSC from either the ALF or the State survey agency will be made available by HHSC to the opposing party. Parties have until the end of the second business day after receipt of such shared IDR information to respond to HHSC about that information. HHSC will share any responses with the opposing party.

(p) HHSC may request additional information from either party in the dispute. Both parties will be notified of the request for additional information and have until the end of the second business day after notification to respond to the request. The opposing party will be provided with copies of the response submitted to HHSC.

(q) All responses to shared information as described in (o) and (p) above must be received no later than the tenth calendar day after the facility's rebuttal letter and supporting documentation are submitted.

(r) Ex parte communications by the ALF or by the State survey agency with HHSC personnel conducting the IDR are prohibited.

(s) An eligible ALF may participate in an IDR conference provided that the ALF requested an IDR conference on the IDR request form.

(t) Any IDR conference will be scheduled by HHSC, or its designee on or before the 30th calendar day after HHSC received the IDR request. If the ALF is unable to participate on the scheduled date, the IDR conference will be cancelled and the IDR will continue as though no conference had been requested.

(u) The IDR conference is an informal opportunity for an eligible ALF to present important information previously submitted in the ALF's rebuttal letter or responses to shared information. The ALF and the State survey agency may attend any IDR conference but neither party may present information that was not previously included in the Statement of Licensing Violations, submitted in the provider's rebuttal letter, or responses to shared information. While the facility may ask clarifying questions related to the information in the Statement of Licensing Violations, the questions are strictly limited to the review in question.

(v) HHSC will complete the IDR no later than the 90th calendar day after its receipt of the ALF's written request. The IDR recommendation shall be in writing, address all the issues raised by the ALF, and explain the rationale for the recommendation.

(w) The time frames designated in the IDR process shall be computed in accordance with Texas Government Code §311.014.

(x) HHSC may issue and enforce operating procedures concerning the IDR process and the conduct of IDR participants. IDR participants must comply with any such procedures. HHSC may deny an IDR request if the information submitted is incorrect, incomplete, or otherwise not in compliance with applicable HHSC operating procedures.

(y) HHSC may contract with an appropriate disinterested organization to adjudicate disputes between an ALF and the State survey agency. Texas Government Code §2009.053 does not apply to the selection of an appropriate disinterested organization. For purposes of this section, a reference to HHSC with respect to HHSC's role in the IDR process includes an organization with which HHSC has contracted for the purpose of performing IDR, and a contracted organization is bound by the same requirements to which HHSC is bound for the purposes of conducting an IDR. The results of an IDR conducted by a contracted organization serve only as a recommendation to the State survey Agency. The State survey Agency maintains responsibility for and makes final IDR decisions.

**History**
- *Source Note: The provisions of this §393.2 adopted to be effective January 1, 2015, 39 TexReg 10395; amended to be effective February 15, 2021, 46 TexReg 1031.*

##### **1 Tex. Admin. Code § 393.3** Informal Dispute Resolution for Texas Home Living and Home and Community-based Service Providers {#sec-393.3 omnilex-key=us-tx-regs-official--title-1--393.3}

(a) The Texas Health and Human Services Commission (HHSC) provides an informal dispute resolution (IDR) process for Texas Home Living (TxHmL) and Home and Community-based Service (HCS) providers (hereinafter referred to collectively as "provider") through which a provider may dispute violations cited against that provider by the State survey agency.

(b) The HHSC IDR Department must receive a provider's written request for an IDR no later than the tenth calendar day after the provider's receipt of the official Statement of Licensing Violations from the State survey agency or its designee. The provider must submit its written request for an IDR on the form designated for that purpose by HHSC. HHSC makes that form publicly available, e.g., maintained on the HHSC website.

(c) Within three business days of its receipt of the provider's written request for an IDR, HHSC notifies the provider and the State survey agency of its receipt of the request.

(d) Within five calendar days of HHSC's receipt of the provider's request for an IDR, HHSC must receive from the provider the provider's rebuttal letter and attached supporting documentation. The rebuttal letter must contain:

(1) a list of the violations disputed (only those violations listed on the IDR request form and addressed in the rebuttal letter and supporting documentation are reviewed);

(2) the reason or reasons each violation is disputed; and

(3) the outcome desired by the provider for each disputed violation.

(e) The provider submits its supporting documentation or information in the following format:

(1) organize the attachments by violation and cross-reference to the disputed violation in the rebuttal letter;

(2) ensure all information is labeled and legible;

(3) highlight information relevant to the disputed violation, such as a particular portion of a narrative;

(4) describe the relevance of the documentation or information to the disputed violation; and

(5) do not de-identify documents that name individuals referenced in disputed violations.

(f) If the provider substantially complies with the procedures set out in subsections (d) and (e) of this section, HHSC proceeds with its review of the provider's IDR request.

(g) It is the provider's responsibility to present sufficient credible information to HHSC to support the outcome requested by the provider.

(h) Possible outcomes of an IDR for TxHmL and HCS are:

(1) a determination that there is insufficient evidence to sustain a violation;

(2) a determination that there is insufficient evidence to sustain a portion of or a finding of a violation;

(3) a determination that there is sufficient evidence to sustain a violation;

(4) a determination that there is insufficient evidence to sustain the violation as cited but that there is sufficient evidence to sustain a different violation;

(5) a determination that there is insufficient evidence to sustain the severity and scope assessment but that there is sufficient evidence to sustain a reduced severity and scope assessment (for Immediate Threat only); or

(6) a determination that there is sufficient evidence to sustain the severity and scope assessment as cited.

(i) HHSC will not conduct an IDR based on alleged surveyor misconduct, alleged State survey agency failure to comply with survey protocol, complaints about existing federal or State standards, or attempts to clear previously corrected citations.

(j) Upon receipt of the provider's IDR request, the State survey agency must submit the following to HHSC:

(1) resident identifier list; and

(2) Automated Survey Processing Environment (ASPEN) event ID number.

(k) HHSC makes all information related to an IDR request that it receives from either the provider or the State survey agency available to the opposing party. Parties have until the end of the second business day after receipt of such shared IDR information to respond to HHSC about that information. HHSC shares any such responses with the opposing party.

(l) HHSC may request additional information from the provider or the State survey agency. HHSC notifies both parties of the request for additional information and that they have until the end of the second business day after notification to respond to the request. HHSC provides opposing parties with copies of any such response submitted to HHSC.

(m) All responses to shared information as described in subsections (j) and (l) of this section must be received no later than the tenth calendar day after the provider's rebuttal letter and supporting documentation are submitted.

(n) Ex parte communications by the provider or by the State survey agency with HHSC personnel conducting the IDR are prohibited.

(o) A provider may participate in an IDR conference provided that the provider requested an IDR conference on the IDR request form.

(p) HHSC, or its designee, schedules the IDR conference on or before the 22nd calendar day after HHSC received the IDR request. If the provider is unable to participate on the scheduled date, the IDR conference is cancelled, and the IDR continues as though no conference had been requested.

(q) The IDR conference is an opportunity for an eligible provider to present important information previously submitted in the provider's rebuttal letter or responses to shared information. The provider and the State survey agency may attend any IDR conference, but neither party may present information that was not previously included in the Statement of Licensing Violations, submitted in the provider's rebuttal letter, or responses to shared information as set forth in subsections (j), (k), and (l) of this section.

(r) HHSC completes the IDR no later than the 30th calendar day after its receipt of the provider's written request. The IDR recommendation shall be in writing, address all the issues raised by the provider, and explain the rationale for the recommendation.

(s) The time frames designated in the IDR process shall be computed in accordance with Texas Government Code §311.014.

(t) HHSC may issue and enforce operating procedures concerning the IDR process and the conduct of IDR participants. IDR participants must comply with any such procedures. HHSC may deny an IDR request if the information submitted is incorrect, incomplete, or otherwise not in compliance with applicable HHSC operating procedures.

(u) The State survey agency may revise an IDR recommendation as a result of a review and subsequent determination that the IDR recommendation may violate a federal law, regulation, or State of Texas rule.

(v) HHSC may contract with an appropriate disinterested organization to adjudicate disputes between a provider and the State survey agency. Texas Government Code §2009.053 does not apply to the selection of an appropriate disinterested organization. For purposes of this section, a reference to HHSC with respect to HHSC's role in the IDR process includes an organization with which HHSC has contracted for the purpose of performing IDR, and a contracted organization is bound by the same requirements to which HHSC is bound for the purposes of conducting an IDR. The results of an IDR conducted by a contracted organization serve only as a recommendation to the State survey Agency. The State survey Agency maintains responsibility for and makes final IDR decisions.

**History**
- *Source Note: The provisions of this §393.3 adopted to be effective February 15, 2021, 46 TexReg 1031; amended to be effective March 20, 2023, 48 TexReg 1553.*

### **Chapter 395** CIVIL RIGHTS

#### **Subchapter A** GENERAL PROVISIONS

##### **1 Tex. Admin. Code § 395.1** Purpose {#sec-395.1 omnilex-key=us-tx-regs-official--title-1--395.1}

(a) The purpose of this chapter is:

(1) to implement federal and state civil rights laws and regulations that prohibit discrimination in programs and services administered directly by or through contract or other arrangements with the HHS agencies;

(2) to describe the civil rights responsibilities of the HHS agencies; and

(3) to establish the role of HHSC's Civil Rights Office in implementing federal and state civil rights laws and regulations governing HHS agencies.

(b) This chapter applies to HHS agencies and the entities with which they contract to provide programs and services.

**History**
- *Source Note: The provisions of this §395.1 adopted to be effective May 9, 2011, 36 TexReg 2827.*

##### **1 Tex. Admin. Code § 395.2** Definitions {#sec-395.2 omnilex-key=us-tx-regs-official--title-1--395.2}

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.

(1) Applicant--A person who applies in writing, electronically, orally, or through a designated representative to participate in a program funded, in whole or in part, by an HHS agency.

(2) Complainant--A person who alleges discrimination in access to or the delivery of program services or benefits funded, in whole or in part, by an HHS agency on the basis of race, color, national origin, age, sex, disability, religion, or political belief. (Not all bases apply to all programs.) Political belief is considered a protected class only in the Supplemental Nutrition Assistance Program (SNAP). Other groups may be added as protected classes pursuant to applicable federal or state statutes or rules.

(3) Complaint--An oral or written allegation of discrimination or retaliation made by a complainant.

(4) Contractor--An entity that contracts or agrees through other arrangements with a state agency to provide services or benefits on behalf of an HHS agency. This includes any subcontractor that provides services or benefits on behalf of an HHS agency.

(5) Discrimination--Treatment of an individual that is based on his or her membership in a legally protected class and that has an adverse effect on the individual.

(6) Electronic and information resources (EIR)--Information technology and any equipment or interconnected system or subsystem of equipment that is used in the creation, conversion, or duplication of data or information. EIR includes telecommunication products, information kiosks, transaction machines, websites, multimedia, and office equipment.

(7) HHS agency--The Texas Health and Human Services Commission and the Texas health and human services agencies identified in Government Code §521.0001.

(8) HHSC--The Texas Health and Human Services Commission.

(9) HHSC Civil Rights Office (CRO)--The functional area within HHSC responsible for ensuring that the HHS agencies comply with applicable state and federal civil rights laws and regulations as well as HHSC's civil rights policies and procedures.

(10) Limited English proficiency (LEP)--A term describing individuals who do not speak English as their primary language and who have limited ability to read, speak, write, or understand English.

(11) Participant--An individual who receives assistance, services, or benefits under any HHS agency program or service.

(12) Protected class--A group or class of persons having a characteristic, quality, belief, or status defined by federal and state civil rights laws and regulations as protected from discrimination. Protected classes or groups, which differ between programs, include race, color, national origin, sex, age, religion, or disability, and may include political belief. Political belief is considered a protected class only in SNAP. Veteran status is a protected class only as to employment-related complaints pursuant to state and federal law. Other groups may be added as protected classes pursuant to applicable federal or state statute or rules.

(13) Retaliation--Adverse treatment of an individual because he or she filed a complaint, participated in the complaint process, or otherwise opposed discriminatory practices.

**History**
- *Source Note: The provisions of this §395.2 adopted
to be effective May 9, 2011, 36 TexReg 2827; amended to be effective
April 1, 2025, 50 TexReg 834.*

#### **Subchapter B** RESPONSIBILITIES OF HEALTH AND HUMAN SERVICES AGENCIES

##### **1 Tex. Admin. Code § 395.11** HHS Agency Responsibilities {#sec-395.11 omnilex-key=us-tx-regs-official--title-1--395.11}

(a) Discrimination and retaliation prohibited. The HHS agencies prohibit:

(1) discrimination in the administration and operation of an HHS program or service, directly or through contractual or other arrangements, on the basis of race, color, national origin, sex, age, disability, religion, or, for the Supplemental Nutrition Assistance Program (SNAP) only, political belief; and

(2) retaliation against an individual because the individual opposed discriminatory practices.

(b) Accessibility.

(1) HHS agency programs, services, and facilities must:

(A) be accessible to all people regardless of race, color, national origin, sex, age, disability, religion, or, for SNAP only, political belief;

(B) provide equal opportunities for community and faith based organizations to participate as program and service providers; and

(C) incorporate written guidelines provided by the HHSC Civil Rights Office (CRO) regarding contractors' responsibilities under civil rights laws, regulations, and HHS civil rights policies and procedures into the HHS agency's services delivery contracts.

(2) HHS agencies must take reasonable steps to give applicants and participants with limited English proficiency (LEP) access to HHS agency programs and services.

(3) HHS agencies must take reasonable steps to give persons with disabilities access to HHS agency programs and services, including electronic and information resources.

(c) Affirmative action. In compliance with federal law, an HHS agency may take affirmative action when administering a program to overcome the effects of prior discrimination on the basis of race, color, or national origin, or conditions that result in limiting participation because of the individual's protected class.

(d) Public information.

(1) HHS agencies must inform the public, applicants, participants in HHS agency programs (including any other agency, institution, or organization participating in a program through contractual or other arrangements), and other interested persons of the following:

(A) their rights under HHS civil rights policies, including the right to file a civil rights complaint of discrimination;

(B) the addresses of the HHSC CRO where complaints may be filed; and

(C) contact information for appropriate external civil rights enforcement agencies.

(2) HHS agencies provide the information required in paragraph (1) of this subsection through agency websites, written materials, prominently displayed posters, and other methods of communication; and upon request.

(3) HHS agencies must take reasonable steps to make civil rights policies available in appropriate languages to applicants who have limited English proficiency (LEP). HHS agencies must provide similar information through alternative means to applicants and participants with disabilities.

(e) Staff training.

(1) HHS agencies must inform agency employees about the protections against discrimination provided by state and federal civil rights laws, regulations, and HHS civil rights policies and procedures. HHS agencies must make the information available by:

(A) publishing HHS civil rights policies in agency circulars and memoranda and on agency intranets;

(B) publishing the non-discrimination policy in agency newsletters, annual reports, and other media; and

(C) including non-discrimination policy materials in employee orientation, in-service training, management training, and supervisor training programs.

(2) HHS agencies must provide periodic civil rights training to employees of HHS agencies. HHS agencies must take reasonable steps to give employees with disabilities meaningful access to the training.

(3) HHS civil rights training includes curriculum prescribed by applicable civil rights statutes and regulations, methods of administration, instructions, and guidance. Training curriculum should include:

(A) requirements of the Civil Rights Act of 1964, as amended; the Americans with Disabilities Act of 1990, as amended; Section 504 of the Rehabilitation Act of 1973; the Food and Nutrition Act of 2008; Title IX of the Education Amendments of 1972; and other applicable state and federal civil rights laws and regulations;

(B) procedures for filing and investigating complaints of discrimination;

(C) requirements for language assistance;

(D) collection and use of data; and

(E) civil rights compliance review of policies and procedures.

**History**
- *Source Note: The provisions of this §395.11 adopted to be effective May 9, 2011, 36 TexReg 2827.*

##### **1 Tex. Admin. Code § 395.12** Role of the HHSC Civil Rights Office {#sec-395.12 omnilex-key=us-tx-regs-official--title-1--395.12}

(a) The HHSC Civil Rights Office (CRO) provides information about civil rights policies and procedures to the HHS agencies. The HHSC CRO provides guidance and technical assistance to each HHS agency so that personnel with supervisory responsibilities in HHS agencies and HHS agency contractors are able to address compliance issues related to civil rights laws, regulations, and HHS civil rights policies and procedures.

(b) The HHSC CRO staff provides information about applicable civil rights laws and regulations to institutions, organizations, contractors, and individuals upon request.

(c) The HHSC CRO receives and investigates complaints alleging violations of civil rights laws, regulations, and HHS civil rights policies and procedures.

**History**
- *Source Note: The provisions of this §395.12 adopted to be effective May 9, 2011, 36 TexReg 2827.*

#### **Subchapter C** COMPLAINTS

##### **1 Tex. Admin. Code § 395.21** Complaints and Complaint Procedures {#sec-395.21 omnilex-key=us-tx-regs-official--title-1--395.21}

(a) The HHSC Civil Rights Office (CRO) sets policies and procedures to address complaints resulting from alleged discrimination.

(b) A complainant may file a complaint against an HHS agency or an HHS agency contractor with the HHSC Civil Rights Office (CRO) or with an HHS agency by personal contact, letter, e-mail, Internet, telephone, or other means.

(1) A complainant must file a complaint within 180 calendar days after the alleged discriminatory act. The HHSC CRO Director may extend the time period for filing a complaint.

(2) When an HHS agency employee or contractor receives a complaint, the employee or contractor must forward the complaint within 10 calendar days to the HHSC CRO for processing.

(3) The HHS agency employee or contractor must advise the complainant, at the services delivery point, of the right to file a complaint with the federal enforcement agency or the HHSC CRO, or both entities.

(c) The HHSC CRO will examine and process the complaint promptly if it determines that a complaint will be investigated.

**History**
- *Source Note: The provisions of this §395.21 adopted to be effective May 9, 2011, 36 TexReg 2827.*

##### **1 Tex. Admin. Code § 395.22** Complaint Records {#sec-395.22 omnilex-key=us-tx-regs-official--title-1--395.22}

(a) The HHSC Civil Rights Office (CRO) maintains records pertaining to the complaint according to applicable federal and state records retention requirements.

(1) The records include the details of the investigation as well as any action taken by the HHS agency.

(2) HHSC CRO discloses information pertaining to the complaint of discrimination and the investigation only when necessary for the investigation, in resolving the complaint, and in accordance with the Texas Public Information Act.

(b) HHS agencies must make complaint records available for review to appropriate federal and state officials.

**History**
- *Source Note: The provisions of this §395.22 adopted to be effective May 9, 2011, 36 TexReg 2827.*

#### **Subchapter D** COMPLIANCE MONITORING

##### **1 Tex. Admin. Code § 395.31** HHS Agency Compliance {#sec-395.31 omnilex-key=us-tx-regs-official--title-1--395.31}

(a) The HHSC Civil Rights Office (CRO) periodically conducts compliance reviews to determine if programs and services administered by HHS agencies, directly or through contractual, licensing, or other arrangements, are in compliance with applicable civil rights requirements. The HHSC CRO Director, or designee, determines the offices, programs, or facilities that will be reviewed and the time frames in which they will be reviewed for civil rights compliance.

(b) HHSC CRO's compliance review standards, methods, and activities are set in accordance with civil rights laws, regulations, methods of administration, instructions, and guidance.

**History**
- *Source Note: The provisions of this §395.31 adopted to be effective May 9, 2011, 36 TexReg 2827.*

##### **1 Tex. Admin. Code § 395.32** Contractor Compliance {#sec-395.32 omnilex-key=us-tx-regs-official--title-1--395.32}

(a) HHS agencies must not participate in a contract or other arrangement for the provision of services and benefits that has the effect of subjecting applicants or participants to discrimination.

(1) HHS agencies must include a requirement in each contract or other arrangement that the contractor or other provider of services and benefits must provide services and benefits without discrimination.

(2) If required by federal or state law, regulation, or policy, HHS agencies must obtain a written assurance from each service delivery contractor or other provider that the contractor or provider must comply with all applicable civil rights laws and regulations.

(3) HHS agencies must instruct employees and contract staff who regularly visit contracted service facilities and have contact with families of applicants and participants to notify the HHSC Civil Rights Office (CRO) of any suspected discriminatory act, or any discrepancies in the intake, processing, and treatment of applicants and participants that appear to be based on a protected class.

(b) The HHSC CRO may conduct periodic compliance reviews of contractors and other providers of services or benefits not directly provided by HHSC or an HHS agency.

**History**
- *Source Note: The provisions of this §395.32 adopted to be effective May 9, 2011, 36 TexReg 2827.*

#### **Subchapter E** EMPLOYMENT PRACTICES

##### **1 Tex. Admin. Code § 395.41** Employment Practices {#sec-395.41 omnilex-key=us-tx-regs-official--title-1--395.41}

HHS agencies must not discriminate in their employment and recruitment practices. HHSC maintains comprehensive policies and procedures applicable to all the HHS agencies intended to ensure that each HHS agency's employment and recruitment practices will not discriminate or retaliate or have a discriminatory effect.

(1) HHS agencies must prominently display written materials on Equal Employment Opportunity in their offices and on agency websites.

(2) The HHSC Civil Rights Office will issue workforce analyses and will work with HHS agencies to develop recruitment plans as required by state or federal laws and regulations.

**History**
- *Source Note: The provisions of this §395.41 adopted to be effective May 9, 2011, 36 TexReg 2827.*

### **Chapter 396** EMPLOYEE TRAINING AND EDUCATION

##### **1 Tex. Admin. Code § 396.1** Purpose and Applicability {#sec-396.1 omnilex-key=us-tx-regs-official--title-1--396.1}

(a) The purpose of this chapter is to implement Texas Government Code Chapter 656, Subchapter C, State Employees Training Act.

(b) This chapter applies to eligible employees of the Texas Health and Human Services Commission, the Texas Department of Aging and Disability Services, the Texas Department of State Health Services, the Texas Department of Family and Protective Services, the Texas Department of Assistive and Rehabilitative Services (collectively, "HHS Agencies"), and any successor agency to one of the foregoing agencies.

**History**
- *Source Note: The provisions of this §396.1 adopted to be effective February 25, 2016, 41 TexReg 1222.*

##### **1 Tex. Admin. Code § 396.2** Educational and Training Assistance {#sec-396.2 omnilex-key=us-tx-regs-official--title-1--396.2}

(a) The Health and Human Services Commission will develop educational and training assistance policies that are applicable to all HHS agency administrators and employees and are consistent with the State Employees Training Act, Texas Government Code Chapter 656, Subchapter C.

(1) The educational and training assistance policies will include eligibility criteria for administrator and employee participation in any available assistance opportunity as well as an explanation of the administrators' and employees' responsibilities and potential liabilities as participants.

(2) The Health and Human Services Commission makes the educational and training assistance policies available to all HHS agency administrators and employees.

(b) In accordance with Texas Government Code Chapter 656, Subchapter C, the Texas Health and Human Services Commission will only reimburse an HHS agency administrator or employee for tuition expenses for a program course successfully completed at an accredited institution of higher education or private or independent institution of higher education.

(c) The Texas Health and Human Services Commission executive commissioner must authorize the tuition reimbursement payment before an HHS agency administrator or employee is reimbursed.

**History**
- *Source Note: The provisions of this §396.2 adopted to be effective February 25, 2016, 41 TexReg 1222.*

## **Part 19** TEXAS CYBER COMMAND

### **Chapter 477** INFORMATION SECURITY STANDARDS

#### **Subchapter A** DEFINITIONS

##### **1 Tex. Admin. Code § 477.1** Applicable Terms and Technologies for Information Security Standards {#sec-477.1 omnilex-key=us-tx-regs-official--title-1--477.1}

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Access--The physical or logical capability to view, interact with, or otherwise make use of information resources.

(2) Agency Head--The top-most senior executive with operational accountability for an agency, department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, that is created by the constitution or a statute of the state; or institutions of higher education, as defined in Texas Education Code §61.003.

(3) Application--As defined in Texas Government Code §2054.003(1).

(4) Availability--The security objective of ensuring timely and reliable access to and use of information.

(5) Cloud Computing--Has the same meaning as "Advanced Internet-Based Computing Service" as defined in Texas Government Code §2157.007(a).

(6) Cloud Computing Service--The meaning assigned by Special Publication 800-145 issued by the United States Department of Commerce National Institute of Standards and Technology as the definition existed on January 1, 2015.

(7) Confidential Information--Information that must be protected from unauthorized disclosure or public release based on state or federal law or other legal agreement.

(8) Confidentiality--The security objective of preserving authorized restrictions on information access and disclosure, including means for protecting personal privacy and proprietary information.

(9) Control--A safeguard or countermeasure, including devices, policies, procedures, techniques, or other measures, that are prescribed to meet security requirements of an information system or organization to preserve. Controls may include security features, management constraints, personnel security, and security of physical structures, areas, and devices.

(10) Control Standards Catalog--The document that provides state agencies and higher education institutions state specific implementation guidance for alignment with the National Institute of Standards and Technology (NIST) SP (Special Publication) 800-53 security controls.

(11) Custodian--See information custodian.

(12) Department--The Department of Information Resources.

(13) Destruction--The result of actions taken to ensure that physical and digital media cannot be reused as originally intended and that information is technologically infeasible or prohibitively expensive to recover.

(14) Electronic Communication--A process used to convey a message or exchange information via electronic media. It includes the use of electronic mail (email), Internet access, Instant Messaging (IM), Short Message Service (SMS), facsimile transmission, and other paperless means of communication.

(15) Encryption (encrypt or encipher)--The conversion of plaintext information into a code or cipher text using a variable called a "key" and processing those items through a fixed algorithm to create the encrypted text that conceals the data's original meaning.

(16) FedRAMP--Federal Risk and Authorization Management Program.

(17) Guideline--Recommended, non-mandatory controls that help support standards or serve as a reference when no applicable standard is in place.

(18) High Impact Information Resources--Information Resources whose loss of confidentiality, integrity, or availability could be expected to have a severe or catastrophic adverse effect on organizational operations, organizational assets, or individuals. Such an event could:

(A) cause a severe degradation in or loss of mission capability to an extent and duration that the organization is not able to perform one or more of its primary functions;

(B) result in major damage to organizational assets;

(C) result in major financial loss; or

(D) result in severe or catastrophic harm to individuals involving loss of life or serious life-threatening injuries.

(19) Information--Any communication or representation of knowledge such as facts, data, or opinions in any medium or form, including textual, numerical, graphic, cartographic, narrative, electronic, or audiovisual forms.

(20) Information Custodian--A department, agency, or third-party service provider responsible for implementing the information owner-defined controls and access to an information resource.

(21) Information Owner(s)--A person(s) with statutory or operational authority for specified information and responsibility for establishing the controls for its generation, collection, processing, dissemination, and disposal.

(22) Information Resources--As defined in Texas Government Code § 2054.003(7).

(23) Information Resources Manager--As defined in Texas Government Code § 2054.071.

(24) Information Security Program--The policies, standards, procedures, elements, structure, strategies, objectives, plans, metrics, reports, services, and resources that establish an information resources security function within an institution of higher education or state agency.

(25) Information System--A discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information. An Information System normally includes, but is not limited to, hardware, software, network infrastructure, information, applications, communications, and people.

(26) Integrity--The security objective of guarding against improper information modification or destruction, including ensuring information non-repudiation and authenticity.

(27) ITCHE--Information Technology Council for Higher Education.

(28) Local Government - As defined by Texas Government Code § 2054.003(9).

(29) Low Impact Information Resources--Information resources whose loss of confidentiality, integrity, or availability could be expected to have a limited adverse effect on organizational operations, organizational assets, or individuals. Such an event could:

(A) cause a degradation in mission capability to an extent and duration that the organization is able to perform its primary functions, but the effectiveness of the functions is noticeably reduced;

(B) result in minor damage to organizational assets;

(C) result in minor financial loss; or

(D) result in minor harm to individuals.

(30) Moderate Impact Information Resources--Information Resources whose loss of confidentiality, integrity, or availability could be expected to have a serious adverse effect on organizational operations, organizational assets, or individuals. Such an event could:

(A) cause a significant degradation in mission capability to an extent and duration that the organization is able to perform its primary functions, but the effectiveness of the functions is significantly reduced;

(B) result in significant damage to organizational assets;

(C) result in significant financial loss; or

(D) result in significant harm to individuals that does not involve loss of life or serious life-threatening injuries.

(31) Network Security Operations Center (NSOC)--As established by Texas Government Code §2059.101.

(32) Nonconfidential Data--Information that is not required to be or may not be protected from unauthorized disclosure or public release based on state or federal law or other legal agreement.

(33) Personal Identifying Information (PII)--A category of personal identity information as defined by Texas Business and Commerce Code § 521.002(a)(1).

(34) Procedure--Instructions to assist information security staff, custodians, and users in implementing policies, standards, and guidelines.

(35) Program Manual--Program manual for the Texas risk and authorization management program.

(36) Residual Risk--The risk that remains after security measures have been applied.

(37) Risk--The effect on the entity's missions, functions, image, reputation, assets, or constituencies considering the probability that a threat will exploit a vulnerability, the safeguards already in place, and the resulting impact. Risk outcomes are a consequence of Impact levels defined in this section.

(38) Risk Assessment--The process of identifying, evaluating, and documenting the probability and level of impact on an organization's mission, functions, image, reputation, assets, or individuals that may result from the operation of information systems. Risk Assessment incorporates threat and vulnerability analyses and considers mitigations provided by planned or in-place security controls.

(39) Risk Management--The process of aligning information resources risk exposure with the organization's risk tolerance by either accepting, transferring, or mitigating risk exposures.

(40) Security Assessment--The testing or evaluation of security controls to determine the extent to which the controls are implemented correctly, operating as intended, and producing the desired outcome with respect to meeting the security requirements for an information system or organization.

(41) Security Incident--An incident that meets one of the requirements enumerated at Texas Government Code §2054.603(a)(1)(A) - (B).

(42) Sensitive Personal Information--A category of personal identity information as defined by Texas Business and Commerce Code §521.002(a)(2).

(43) Standards--Specific mandatory controls that help enforce and support the information security policy.

(44) State-controlled data--Any and all data that is created, processed, or stored by a state agency.

(45) StateRAMP--The risk and authorization management program, built upon the National Institute of Standards and Technology Special Publication 800-53 and modeled after the FedRAMP program, that provides state and local governments a common method for verification of cloud security.

(46) Statewide Technology Centers--As defined in Texas Government Code §2054.375(2).

(47) Threat--Any circumstance or event with the potential to adversely impact organizational operations (including mission, functions, image, or reputation), organizational assets, or individuals by the unauthorized access, destruction, disclosure, modification of information, and/or denial of service.

(48) TX-RAMP--the Texas Risk and Authorization Management Program.

(49) User of Information Resources--An individual, process, or automated application authorized to access an information resource in accordance with federal and state law, agency policy, and the information-owner's procedures and rules.

(50) Vulnerability Assessment--A documented evaluation containing information described in Texas Government Code §2054.077(b), which includes the susceptibility of a particular system to a specific attack.

**History**
- *Source Note: The provisions of this §477.1 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; amended to be effective November
16, 2023, 48 TexReg 6579; transferred effective August 1, 2026, as
published in the June 26, 2026, issue of the Texas Register, 51 TexReg
4213.*

##### **1 Tex. Admin. Code § 477.2** Institution of Higher Education {#sec-477.2 omnilex-key=us-tx-regs-official--title-1--477.2}

A university system or institution of higher education as defined by Texas Education Code § 61.003.

**History**
- *Source Note: The provisions of this §477.2 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
March 16, 2016, 41 TexReg 1831; amended to be effective November 17,
2021, 46 TexReg 7775; transferred effective August 1, 2026, as published
in the June 26, 2026, issue of the Texas Register, 51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.3** State Agency {#sec-477.3 omnilex-key=us-tx-regs-official--title-1--477.3}

A department, commission, board, office, council, authority, or other agency in the executive or judicial branch of state government, other than an institution of higher education, that is created by the constitution or a statute of this state.

**History**
- *Source Note: The provisions of this §477.3 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.4** Responsibilities of the State's Chief Information Security Officer {#sec-477.4 omnilex-key=us-tx-regs-official--title-1--477.4}

The State's Chief Information Security Officer shall oversee the development of a statewide information security framework and statewide information security policies and standards, including:

(1) Providing information security leadership, strategic direction, and coordination for the State and State Information Security program;

(2) Developing and overseeing the implementation of policies, standards, and guidelines on information security;

(3) Coordinating the development of policies, standards, and guidelines with agencies, governmental entities, and offices operating or exercising control of State systems or State-controlled data;

(4) Providing strategic direction to the State Network Security Operations Center and Statewide Technology Centers; and

(5) Reporting to the Executive Director of the department and state leadership the status and effectiveness of the State Information Security Program.

**History**
- *Source Note: The provisions of this §477.4 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.5** Texas Risk and Authorization Management Program Responsibilities and Mandatory Standards {#sec-477.5 omnilex-key=us-tx-regs-official--title-1--477.5}

(a) Mandatory Standards for Cloud Computing Services Subject to the Texas Risk and Authorization Management Program.

(1) The department shall define mandatory standards for Texas cloud computing services identified by subsection (a) of this section in the program manual published on the department's website. Revisions to this document will be executed in compliance with subsection (d) of this section.

(2) The mandatory standards established by the department shall include at least the below stated baseline standards for:

(A) TX-RAMP Level 1 Baseline - This baseline is required for cloud computing services that are subject to TX-RAMP certification and categorized by a state agency as Low Impact Information Resources; and

(B) TX-RAMP Level 2 Baseline - This baseline is required for cloud computing services that are subject to TX-RAMP and categorized by a state agency as Moderate or High Impact Information Resources.

(3) The department shall establish the categories and characteristics of cloud computing services that are subject to TX-RAMP requirements in the program manual published on the department's website pursuant to subsection (a)(1).

(b) Responsibilities of Cloud Computing Service Vendors:

(1) To be certified under TX-RAMP, a cloud computing service vendor shall:

(A) Provide evidence of compliance with TX-RAMP requirements for the cloud computing service as detailed by the program manual; and

(B) Demonstrate continuous compliance in accordance with the program manual.

(2) Primary contracting vendors who provide or sell cloud computing services subject to TX-RAMP, including resellers who provide or sell these services, shall present evidence of certification of the cloud computing service being sold to the state agency or institution of higher education in accordance with the program manual. Such certification is required for all cloud computing services subject to TX-RAMP being provided through the contract or in furtherance of the contract, including services provided through subcontractors or third-party providers.

(3) Subcontractors or third-party providers responsible solely for servicing or supporting a cloud computing service provided by another vendor shall not be required to provide evidence of certification.

(c) Responsibilities of the Department:

(1) Prior to publishing new or revised program standards as required by subsections (a) - (b) of this section, the department shall:

(A) solicit comment through the department's electronic communications channels for the proposed standards to be changed from the Information Resources Managers and Information Security Officers of state agencies and institutions of higher education and ITCHE; and

(B) after reviewing the comments provided, present the proposed program manual to the department's Board and obtain approval from the Board for publication.

(2) The department shall:

(A) perform assessments to certify cloud computing services provided by cloud computing vendors; and

(B) publish on the department's website the list of cloud computing products certified under TX-RAMP.

(d) Acceptance of External Assessments.

(1) The department shall accept a vendor's compliance with FedRAMP or StateRAMP authorizations in satisfaction of the baselines established by subsection (a) once the department receives evidence of compliance with the respective program.

(2) At the department's discretion, another state's risk and authorization management program certification may be accepted in satisfaction of the baselines established by subsection (a) once certification is demonstrated by the vendor in alignment with program manual standards.

(3) At the department's discretion, the department may allow a third-party security assessment or third-party audit to satisfy certain mandatory program standards. A vendor may demonstrate satisfaction of certain mandatory program standards by submitting a third-party security assessment or third-party audit that the department has authorized to align with and satisfy these standards.

**History**
- *Source Note: The provisions of this §477.5 adopted
to be effective November 16, 2023, 48 TexReg 6579; transferred effective
August 1, 2026, as published in the June 26, 2026, issue of the Texas
Register, 51 TexReg 4213.*

#### **Subchapter B** INFORMATION SECURITY STANDARDS FOR STATE AGENCIES

##### **1 Tex. Admin. Code § 477.20** Responsibilities of the Agency Head {#sec-477.20 omnilex-key=us-tx-regs-official--title-1--477.20}

(a) The agency head of each state agency is ultimately responsible for the agency's information resources.

(b) The agency head or their designated representative shall:

(1) designate an Information Security Officer who has the explicit authority and the duty to administer the information security requirements of this chapter agency wide;

(2) allocate resources for ongoing information security remediation, implementation, and compliance activities that reduce risk to a level acceptable to the agency head;

(3) ensure that senior agency officials and information-owners, in collaboration with the Information Resources Manager and Information Security Officer, support the provision of information security for the information systems that support the operations and assets under their direct or indirect (e.g., cloud computing or outsourced) control;

(4) ensure that the state agency has trained personnel to assist the agency in complying with the requirements of this chapter and related policies;

(5) ensure that senior agency officials support the state agency Information Security Officer in developing, at least annually, a report on the state agency information security program, as specified in §202.21(b)(10) and §202.23(a) of this chapter;

(6) approve high residual risk management decisions as required by §202.25(4) of this chapter;

(7) review and approve at least annually the agency information security program required under §202.24 of this chapter; and

(8) ensure that information security management processes are integrated with state agency strategic and operational planning processes.

**History**
- *Source Note: The provisions of this §477.20 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.21** Responsibilities of the Information Security Officer {#sec-477.21 omnilex-key=us-tx-regs-official--title-1--477.21}

(a) Each state agency shall have a designated Information Security Officer in accordance with Texas Government Code § 2054.136. The Information Security Officer shall report to executive level management, has explicit authority for information security for the entire state agency, and complies with all other requirements of Texas Government Code § 2054.136.

(b) The Information Security Officer shall be responsible for:

(1) developing and maintaining an agency-wide information security plan as required by Texas Government Code § 2054.133;

(2) developing and maintaining information security policies and procedures that address the requirements of this chapter and the agency's information security risks;

(3) working with the business and technical resources to ensure that controls are utilized to address all applicable requirements of this chapter and the agency's information security risks;

(4) providing for training and direction of personnel with significant responsibilities for information security with respect to such responsibilities;

(5) providing guidance and assistance to senior agency officials, information-owners, information custodians, and end users concerning their responsibilities under this chapter;

(6) ensuring that:

(A) risk assessments are performed by the information owners and supported by the information-custodians at least biennially for systems containing confidential data and periodically for systems containing agency sensitive or public data; and

(B) security assessments are conducted biennially for systems containing confidential data and periodically for systems containing agency sensitive or public data;

(7) reviewing the agency's inventory of information systems and related ownership and responsibilities;

(8) recommending and collaborating to establish policies, procedures, and practices, in cooperation with the agency Information Resources Manager, information-owners, and custodians, necessary to ensure the security of information and information resources against unauthorized or accidental modification, destruction, access, exposure, or disclosure;

(9) coordinating the review of security requirements and specifications, and verifying that security requirements are identified and risk mitigation plans are developed and contractually agreed and obligated prior to the acquisition of new information systems and/or related services and applications;

(10) verifying that security requirements are identified and risk mitigation plans are developed and implemented prior to the deployment of internally-developed information systems and/or related applications or services;

(11) reporting, at least annually, directly to the agency head the status and effectiveness of the security program and its controls;

(12) informing any relevant parties in the event of noncompliance with this chapter and/or with the state agency's information security policies; and

(13) all other duties required by Texas Government Code § 2054.136.

(c) The Information Security Officer, with the approval of the agency head, may issue exceptions to information security requirements or controls in this chapter. Any such exceptions shall be justified, documented, and communicated.

**History**
- *Source Note: The provisions of this §477.21 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
March 16, 2016, 41 TexReg 1831; amended to be effective November 17,
2021, 46 TexReg 7775; transferred effective August 1, 2026, as published
in the June 26, 2026, issue of the Texas Register, 51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.22** Staff Responsibilities {#sec-477.22 omnilex-key=us-tx-regs-official--title-1--477.22}

(a) Information owners, custodians, and users of information resources shall, in consultation with the state agency Information Resources Manager and Information Security Officer, be identified and their responsibilities defined and documented by the state agency. The following distinctions among owner, custodian, and user responsibilities should guide determination of these roles:

(1) Information Owner Responsibilities. The owner or their designated representative(s) are responsible for:

(A) classifying information under their authority or responsibility, with the concurrence of the agency head or their designated representative(s), in accordance with the state agency's established information classification categories;

(B) approving access to information resources and periodically reviewing access lists based on documented risk management decisions;

(C) formally assigning custody of information or an information resource;

(D) coordinating data security control requirements with the Information Security Officer;

(E) conveying data security control requirements to custodians;

(F) providing authority to custodians to implement security controls and procedures;

(G) justifying, documenting, and being accountable for exceptions to security controls issued by the Information Security Officer for the information for which the Information Owner is responsible;

(H) coordinating and obtaining approval for exceptions to security controls with the state agency Information Security Officer; and

(I) performing risk assessments as provided under §202.25 of this chapter.

(J) Information owners, in coordination with the information custodian, shall ensure that information resources provide a clear and conspicuous prohibition against unauthorized access or use as detailed by Texas Penal Code § 33.02(b-1).

(2) Information Custodian Responsibilities. Custodians of information resources, including third party entities providing outsourced information resources services to state agencies shall:

(A) implement controls required to protect information and information resources required by this chapter based on the classification and risks specified by the information owner(s) or as specified by the policies, procedures, and standards defined by the state agency information security program;

(B) provide owners with information to evaluate the cost-effectiveness of controls and monitoring;

(C) adhere to monitoring techniques and procedures, approved by the Information Security Officer, for detecting, reporting, and investigating incidents;

(D) supply any information and/or documents necessary to provide appropriate information security training to employees; and

(E) ensure information is recoverable in accordance with risk management decisions.

(3) User Responsibilities. The user of information resources has the responsibility to:

(A) use the resource only for the purpose specified by the agency or information owner;

(B) comply with information security controls and agency policies to prevent unauthorized or accidental disclosure, modification, or destruction of information and information resources; and

(C) formally acknowledge that they will comply with the security policies and procedures in a method determined by the agency head or his or her designated representative.

(4) State agency information resources designated for use by the public shall be configured to enforce security policies and procedures without requiring user participation or intervention. Information resources must require the acceptance of a banner or notice prior to use.

(b) State agency information resources designated for use by the public shall be configured to enforce security policies and procedures without requiring user participation or intervention. Information resources must require the acceptance of a banner or notice prior to use.

**History**
- *Source Note: The provisions of this §477.22 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.23** Security Reporting {#sec-477.23 omnilex-key=us-tx-regs-official--title-1--477.23}

(a) Each Information Security Officer shall directly report to the agency head, at least annually, on the adequacy and effectiveness of information security policies, procedures, practices, compliance with the requirements of this chapter, and:

(1) effectiveness of current information security program and status of key initiatives;

(2) residual risks identified by the state agency risk management process; and

(3) state agency information security requirements and requests.

(b) Each state agency shall submit to the department a Biennial Information Security Plan in accordance with Texas Government Code § 2054.133.

(c) At least every two years, each state agency shall complete and submit an information security assessment in compliance with the requirements of Texas Government Code § 2054.515 and this subsection.

(1) The agency's Biennial Information Security Plan may be considered to satisfy the information security assessment requirements of Texas Government Code § 2054.515(a)(1) if the agency's Biennial Information Security Plan assesses:

(A) The security of the agency's information resources systems, network systems, and digital data storage systems;

(B) The measures in place to establish digital data security; and

(C) The vulnerabilities of the agency's information resources, including an evaluation determining how well the organization's security policies protect its data and information systems.

(2) To comply with Texas Government Code § 2054.515(a)(2), a state agency must complete a data maturity assessment in alignment with the requirements established at 1 Texas Administrative Code § 218.10.

(3) Upon completion of its information security assessment, a state agency shall report the results of its assessment to the department in the form and manner identified by the department. A state agency must comply with a request for the results of its assessment received from the Office of the Governor, Lieutenant Governor, or speaker of the House of Representatives.

(d) Each state agency shall assess the significance of a security incident based on the business impact on the affected resources and the current and potential technical effect of the incident (e.g., loss of revenue, productivity, access to services, reputation, unauthorized disclosure of confidential information, or propagation to other networks). Security incidents shall be promptly reported to immediate supervisors and the agency Information Security Officer.

(1) A state agency shall report security incidents to the department within 48 hours of discovery in the form and manner specified by the department where the security incident is assessed to:

(A) propagate to other state systems;

(B) result in criminal violations that shall be reported to law enforcement in accordance with state or federal information security or privacy laws;

(C) involve the unauthorized disclosure or modification of confidential information, e.g., sensitive personal information as defined in Texas Business and Commerce Code § 521.002(a)(2) and other applicable laws that may require public notification; or

(D) be an unauthorized incident that compromises, destroys, or alters information systems, applications, or access to such systems or applications in any way.

(2) If the security incident is assessed to involve suspected criminal activity (e.g., violations of Texas Penal Code Chapter 33 or Texas Penal Code Chapter 33A), the state agency shall contact law enforcement, as required, and the security incident shall be investigated, reported, and documented in accordance with the legal requirements for handling of evidence.

(3) Depending on the nature of the incident, it will not always be feasible to gather all the information prior to reporting. In such cases, incident response teams shall continue to report information to the department as it is collected. The department shall instruct state agencies as to the manner in which they shall report such information to the department. Supporting vendors or other third parties that report security incident information to an agency shall submit such reports to the agency in the form and manner specified by the department, unless otherwise directed by the agency. Agencies shall ensure that compliant reporting requirements are included in any contract where incident reporting may be necessary.

(4) Ten days after the date of the eradication, closure, and recovery from a security incident, a state agency shall notify the department and the chief information security officer in the form and manner prescribed by the department of the security incident details and an analysis of the security incident cause.

(e) A local government shall report security incidents that are assessed by the entity to meet the criteria listed in subsection (d)(1) of this section to the department within 48 hours of discovery.

(1) A local government must submit its report of the security incident in the form and manner specified by the department.

(2) A local government is not required to report a security incident described by subsection (d) of this section where statute expressly states that compliance with the department reporting requirements is excluded for a security incident of that type.

(3) Ten days after the date of the eradication, closure, and recovery from a security incident, a local government shall notify the department and the chief information security officer in the form and manner prescribed by the department of the security incident details and an analysis of the security incident cause.

**History**
- *Source Note: The provisions of this §477.23 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
March 16, 2016, 41 TexReg 1831; amended to be effective November 17,
2021, 46 TexReg 7775; amended to be effective November 16, 2023, 48
TexReg 6579; transferred effective August 1, 2026, as published in
the June 26, 2026, issue of the Texas Register, 51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.24** Agency Information Security Program {#sec-477.24 omnilex-key=us-tx-regs-official--title-1--477.24}

(a) Each state agency shall develop, document, and implement an agency-wide information security program, approved by the agency head under §202.20 of this chapter, that includes protections based on risk for all information and information resources owned, leased, or under the custodianship of any department, operating unit, or employee of the state agency including outsourced resources to another state agency, contractor, or other source (e.g., cloud computing). The program shall include:

(1) periodic assessments in alignment with minimum legal reporting requirements of the risk and impact that could result from the unauthorized access, use, disclosure, disruption, modification, or destruction of information, information systems, and applications that support the operations and assets of the agency;

(2) policies, controls, standards, and procedures that:

(A) are based on the risk assessments required by §202.25 of this chapter;

(B) cost-effectively reduce information security risks to a level acceptable to the agency head;

(C) ensure that information security is addressed throughout the lifecycle of agency information resources; and

(D) ensure compliance with:

(i) the requirements of this subchapter;

(ii) minimally acceptable system configuration requirements as determined by the state agency; and

(iii) the control catalog published by the department;

(3) strategies to address risk to high impact information resources;

(4) plans for providing information security for networks, facilities, and systems or groups of information systems and applications based on risk;

(5) a process for planning, implementing, evaluating, and documenting remedial action to address any deficiencies in the information security policies, procedures, and practices of the agency; and

(6) a process to justify, grant, and document any exceptions to specific program requirements in accordance with requirements and processes defined in this chapter.

(b) State agencies are responsible for:

(1) defining all information classification categories except the Confidential Information category, which is defined in Subchapter A of this chapter, and establishing the controls for each;

(2) administering an ongoing information security awareness education program in compliance with the requirements of Texas Government Code § 2054.5191 - .5192 for all users; and

(3) introducing information security awareness and informing new employees of information security policies and procedures during the onboarding process.

**History**
- *Source Note: The provisions of this §477.24 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.25** Managing Security Risks {#sec-477.25 omnilex-key=us-tx-regs-official--title-1--477.25}

A risk assessment of the agencies' information and information systems shall be performed and documented.

(1) Risks and impacts will be ranked, at a minimum, as either "High," "Moderate," or "Low."

(2) The schedule of future risk assessments will be documented.

(3) Risk assessment results, vulnerability reports, and similar information shall be documented and presented to the Information Security Officer or their designated representative(s).

(4) Approval of the security risk acceptance, transference, or mitigation decision shall be the responsibility of:

(A) the Information Security Officer or their designee(s), in coordination with the information owner, for systems identified with a Low or Moderate residual risk.

(B) The agency head for all systems identified with a High residual risk.

**History**
- *Source Note: The provisions of this §477.25 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.26** Security Control Standards Catalog {#sec-477.26 omnilex-key=us-tx-regs-official--title-1--477.26}

(a) Mandatory Requirements. Mandatory security controls shall be defined by the department in a Control Standards document published on the department's website.

(b) Minimum Requirements for Security Controls. The controls required by subsection (a) of this section shall include:

(1) minimum information security requirements for all State information, information systems, and applications; and

(2) standards to be used by all agencies to provide levels of information security according to risk categorizations.

(c) A review of the agency's information security program for compliance with these standards will be performed at least biennially, based on business risk management decisions, by individual(s) independent of the information security program and designated by the agency head or their designated representative(s).

(d) Development of Control Standards. Prior to publishing new or revised standards as required by subsections (a) and (b) of this section, the department shall:

(1) solicit comment through the department's electronic communications channels for proposed standards from the Information Resources Managers, ITCHE, and Information Security Officers of agencies and institutions of higher education at least 30 days prior to publication of proposed standards;

(2) after reviewing comments provided in paragraph (1) of this subsection, present proposed standards to the department's Board and obtain approval from the Board for publication; and

(3) minimize the impact to an affected agency to the extent possible by:

(A) ensuring that such standards and guidelines do not require the use or procurement of specific products, including any specific hardware or software;

(B) ensuring that such standards provide for flexibility to permit alternative solutions to provide equivalent levels of protection for identified information security risks; and

(C) using flexible standards and guidelines that permit the use of commercial off-the-shelf developed information security products.

(4) New standards required by the department will have an effective date, not to exceed 18 months from the date of adoption, after which agencies are required to adhere to the new standard.

(e) Application of More Stringent Standards. The agency head may employ standards for the cost-effective information security of information, information resources, and applications within or under the supervision of that state agency that are more stringent than the standards the department prescribes under this section if the more stringent standards:

(1) contain at least the applicable standards issued by the department; and/or

(2) are consistent with applicable federal law, policies, and guidelines issued under state rule, industry standards, best practices, or deemed necessary to adequately protect the information held by the state agency.

**History**
- *Source Note: The provisions of this §477.26 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
February 10, 2022, 47 TexReg 489; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.27** Texas Risk and Authorization Management Program for State Agencies {#sec-477.27 omnilex-key=us-tx-regs-official--title-1--477.27}

A state agency contracting for cloud computing services that store, process, or transmit data of the state agency shall:

(1) confirm that vendors contracting with the state agency to provide cloud computing services for the state agency are certified through TX-RAMP prior to entering or renewing a cloud computing services contract on or after January 1, 2022; and

(2) require a vendor contracting with the state agency to provide cloud computing services for the state agency that are subject to the state risk and authorization management program to maintain TX-RAMP compliance and certification throughout the term of the contract.

**History**
- *Source Note: The provisions of this §477.27 adopted
to be effective November 17, 2021, 46 TexReg 7775; amended to be effective
November 16, 2023, 48 TexReg 6579; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

#### **Subchapter C** INFORMATION SECURITY STANDARDS FOR INSTITUTIONS OF HIGHER EDUCATION

##### **1 Tex. Admin. Code § 477.70** Responsibilities of the Institution Head {#sec-477.70 omnilex-key=us-tx-regs-official--title-1--477.70}

(a) The agency head of each state institution of higher education is ultimately responsible for the security of state information resources.

(b) The agency head or their designated representative shall:

(1) designate an Information Security Officer who has the explicit authority and the duty to administer the information security requirements of this chapter institution wide;

(2) allocate resources for ongoing information security remediation, implementation, and compliance activities that reduce risk to a level acceptable to the institution head;

(3) ensure that senior institution of higher education officials and information-owners, in collaboration with the Information Resources Manager and Information Security Officer, support the provision of information security for the information systems that support the operations and assets under their direct or indirect (e.g., cloud computing or outsourced) control;

(4) ensure that the institution of higher education has trained personnel to assist the institution of higher education in complying with the requirements of this chapter and related policies;

(5) ensure that senior institution of higher education officials support the institution of higher education Information Security Officer in developing, at least annually, a report on institution of higher education information security program, as specified in §202.71(b)(10) and §202.73(a) of this chapter;

(6) approve high residual risk management decisions as required by §202.75(4) of this chapter;

(7) review and approve at least annually institution of higher education information security program required under §202.74 of this chapter; and

(8) ensure that information security management processes are part of the institution of higher education strategic planning and operational processes.

**History**
- *Source Note: The provisions of this §477.70 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.71** Responsibilities of Information Security Officer {#sec-477.71 omnilex-key=us-tx-regs-official--title-1--477.71}

(a) Each institution of higher education shall have a designated Information Security Officer in accordance with Texas Government Code §2054.136. The Information Security Officer shall report to executive level management, has explicit authority for information security for the entire agency, and complies with all other requirements of Texas Government Code § 2054.136.

(b) The Information Security Officer shall be responsible for:

(1) developing and maintaining an institution-wide information security plan as required by Texas Government Code § 2054.133;

(2) developing and maintaining information security policies and procedures that address the requirements of this chapter and the institution's information security risks;

(3) working with the business and technical resources to ensure that controls are utilized to address all applicable requirements of this chapter and the institution's information security risks;

(4) providing for training and direction of personnel with significant responsibilities for information security with respect to such responsibilities;

(5) providing guidance and assistance to senior institution of higher education officials, information owners, information custodians, and end users concerning their responsibilities under this chapter;

(6) ensuring that:

(A) risk assessments are performed by the information-owners and supported by the information-custodians at least biennially for systems containing confidential data and periodically for systems containing institution of higher education sensitive or public data; and

(B) security assessments are conducted biennially for systems containing confidential data and periodically for systems containing institution of higher education sensitive or public data;

(7) reviewing the institution's inventory of information systems and related ownership and responsibilities;

(8) recommending and collaborating to establish policies, procedures, and practices, in cooperation with the institution Information Resources Manager, information-owners and custodians, necessary to ensure the security of information and information resources against unauthorized or accidental modification, destruction, or disclosure;

(9) verifying that security requirements are identified and risk mitigation plans are developed and contractually agreed and obligated prior to the acquisition of new information systems and/or related services and applications;

(10) verifying that security requirements are identified and risk mitigation plans are developed and implemented prior to the deployment of internally-developed information systems and/or related applications or services;

(11) reporting, at least annually, to the agency head the status and effectiveness of the security program and its controls;

(12) informing any relevant parties in the event of noncompliance with this chapter and/or with the institution's information security policies; and

(13) all other duties required by Texas Government Code § 2054.136.

(c) The Information Security Officer, with the approval of the agency head, may issue exceptions to information security requirements or controls in this chapter. Any such exceptions shall be justified, documented and communicated.

**History**
- *Source Note: The provisions of this §477.71 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
March 16, 2016, 41 TexReg 1831; amended to be effective November 17,
2021, 46 TexReg 7775; transferred effective August 1, 2026, as published
in the June 26, 2026, issue of the Texas Register, 51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.72** Staff Responsibilities {#sec-477.72 omnilex-key=us-tx-regs-official--title-1--477.72}

(a) Information owners, custodians, and users of information resources shall, in consultation with the institution Information Resources Managers and Information Security Officer, be identified and their responsibilities defined and documented by the state institution of higher education. The following distinctions among owner, custodian, and user responsibilities should guide determination of these roles:

(1) Information Owner Responsibilities. The owner or their designated representative(s) are responsible for:

(A) classifying information under their authority or responsibility, with the concurrence of the agency head or their designated representative(s), in accordance with the institution of higher education's established information classification categories;

(B) approving access to information resources and periodically reviewing access lists based on documented risk management decisions;

(C) formally assigning custody of information or an information resource;

(D) coordinating data security control requirements with the Information Security Officer;

(E) conveying data security control requirements to custodians;

(F) providing authority to custodians to implement security controls and procedures;

(G) justifying, documenting, and being accountable for exceptions to security controls issued by the Information Security Officer for the information for which the Information Owner is responsible;

(H) coordinating and obtaining approval for exceptions to security controls with the agency Information Security Officer; and

(I) performing risk assessments as provided under §202.75 of this subchapter.

(J) Information owners, in coordination with the information custodian, shall ensure that information resources provide a clear and conspicuous prohibition against unauthorized access or use as detailed by Texas Penal Code § 33.02(b-1).

(2) Information Custodian Responsibilities. Custodians of information resources, including third party entities providing outsourced information resources services to state institutions of higher education shall:

(A) implement controls required to protect information and information resources required by this chapter based on the classification and risks specified by the information owner(s) or as specified by the policies, procedures, and standards defined by the institution of higher education information security program;

(B) provide owners with information to evaluate the cost-effectiveness of controls and monitoring;

(C) adhere to monitoring techniques and procedures, approved by the Information Security Officer, for detecting, reporting, and investigating incidents;

(D) supply any information and/or documents necessary to provide appropriate information security training to employees; and

(E) ensure information is recoverable in accordance with risk management decisions.

(3) User Responsibilities. The user of information resources has the responsibility to:

(A) use the resource only for the purpose specified by the institution or information owner;

(B) comply with information security controls and institutional policies to prevent unauthorized or accidental disclosure, modification, or destruction of information and information resources; and

(C) formally acknowledge that they will comply with the security policies and procedures in a method determined by the institution head or his or her designated representative.

(b) Institution information resources designated for use by the public shall be configured to enforce security policies and procedures without requiring user participation or intervention. Information resources must require the acceptance of a banner or notice prior to use.

**History**
- *Source Note: The provisions of this §477.72 adopted to be
effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.73** Security Reporting {#sec-477.73 omnilex-key=us-tx-regs-official--title-1--477.73}

(a) Each Information Security Officer shall directly report to the agency head, at least annually, on the adequacy and effectiveness of information security policies, procedures, practices, compliance with the requirements of this chapter, and:

(1) effectiveness of current information security program and status of key initiatives;

(2) residual risks identified by the institution of higher education risk management process; and

(3) institution of higher education information security requirements and requests.

(b) Each institution of higher education shall submit to the department a Biennial Information Security Plan in accordance with Texas Government Code §2054.133.

(c) At least every two years, each institution of higher education shall complete and submit an information security assessment in compliance with the requirements of Texas Government Code §2054.515 and this subsection.

(1) The institution of higher education's Biennial Information Security Plan may be considered to satisfy the information security assessment requirements of Texas Government Code §2054.515(a)(1) if the institution's Biennial Information Security Plan assesses:

(A) The security of the institution's information resources systems, network systems, and digital data storage systems;

(B) The measures in place to establish digital data security; and

(C) The vulnerabilities of the institution's information resources, including an evaluation determining how well the organization's security policies protect its data and information systems.

(2) To comply with Texas Government Code §2054.515(a)(2), an institution of higher education must complete a data maturity assessment in alignment with the requirements established at 1 Texas Administrative Code §218.10.

(3) Upon completion of its information security assessment, an institution of higher education shall report the results of its assessment to the department in the form and manner identified by the department. An institution of higher education must comply with a request for the results of its assessment received from the Office of the Governor, Lieutenant Governor, or speaker of the House of Representatives.

(d) Each state institution of higher education shall assess the significance of a security incident based on the business impact on the affected resources and the current and potential technical effect of the incident (e.g., loss of revenue, productivity, access to services, reputation, unauthorized disclosure of confidential information, or propagation to other networks). Confirmed or suspected incidents shall be reported to immediate supervisors and the institution of higher education Information Security Officer.

(1) An institution of higher education shall report security incidents to the department within 48 hours of discovery in the form and manner specified by the department where the security incident is assessed to:

(A) propagate to other state systems;

(B) result in criminal violations that shall be reported to law enforcement in accordance with state or federal information security or privacy laws;

(C) involve the unauthorized disclosure or modification of confidential information, e.g., sensitive personal information as defined in Texas Business and Commerce Code §521.002(a)(2) and other applicable laws that may require public notification; or

(D) be an unauthorized incident that compromises, destroys, or alters information systems, applications, or access to such systems or applications in any way.

(2) If the security incident is assessed to involve suspected criminal activity (e.g., violations of Texas Penal Code Chapters 33 or 33A), the institution of higher education shall contact law enforcement, as required, and the security incident shall be investigated, reported, and documented in accordance with the legal requirements for handling of evidence.

(3) Depending on the nature of the incident, it will not always be feasible to gather all the information prior to reporting. In such cases, incident response teams shall continue to report information to the department as it is collected. The department shall instruct state institutions of higher education as to the manner in which they shall report such information to the department. Supporting vendors or other third parties that report security incident information to an institution of higher education shall submit such reports to the institution of higher education in the form and manner specified by the department, unless otherwise directed by the institution of higher education. Institutions of higher education shall ensure that compliant reporting requirements are included in any contract where incident reporting may be necessary.

(4) Ten days after the date of the eradication, closure, and recovery from a security incident, an institution of higher education shall notify the department and the chief information security officer in the form and manner prescribed by the department of the security incident details and an analysis of the security incident cause.

**History**
- *Source Note: The provisions of this §477.73 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
March 16, 2016, 41 TexReg 1831; amended to be effective November 17,
2021, 46 TexReg 7775; amended to be effective November 16, 2023, 48
TexReg 6579; transferred effective August 1, 2026, as published in
the June 26, 2026, issue of the Texas Register, 51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.74** Institution Information Security Program {#sec-477.74 omnilex-key=us-tx-regs-official--title-1--477.74}

(a) Each institution of higher education shall develop, document, and implement an institution of higher education-wide information security program, approved by the agency head or delegate under §202.70 of this subchapter, that includes protections based on risk for all information and information resources owned, leased, or under the custodianship of any department, operating unit, or employee of the institution of higher education including outsourced resources to another institution of higher education, contractor, or other source (e.g., cloud computing). The program shall include:

(1) periodic assessments in alignment with minimum legal reporting requirements of the risk and impact that could result from the unauthorized access, use, disclosure, disruption, modification, or destruction of information, information systems, and applications that support the operations and assets of the institution of higher education;

(2) policies, controls, standards, and procedures that:

(A) are based on the risk assessments required by §202.75 of this chapter;

(B) cost-effectively reduce information security risks to a level acceptable to the institution head;

(C) ensure that information security is addressed throughout the lifecycle of institution of higher education information resources; and

(D) ensure compliance with:

(i) the requirements of this subchapter;

(ii) minimally acceptable system configuration requirements, as determined by the institution of higher education; and

(iii) the control catalog published by the department.

(3) strategies to address risk to high impact information resources;

(4) plans for providing information security for networks, facilities, and systems or groups of information systems and applications based on risk;

(5) a process for planning, implementing, evaluating, and documenting remedial action to address any deficiencies in the information security policies, procedures, and practices of the institution of higher education; and

(6) a process to justify, grant and document any exceptions to specific program requirements in accordance with requirements and processes defined in this chapter.

(b) State institutions of higher education are responsible for:

(1) defining all information classification categories except the Confidential Information category, which is defined in Subchapter A of this chapter, and establishing the controls for each;

(2) administering an ongoing information security awareness education program in compliance with the requirements of Texas Government Code § 2054.5191 - .5192 for all users; and

(3) introducing information security awareness and inform new employees of information security policies and procedures during the onboarding process.

**History**
- *Source Note: The provisions of this §477.74 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.75** Managing Security Risks {#sec-477.75 omnilex-key=us-tx-regs-official--title-1--477.75}

A risk assessment of the institution's information, information systems, and applications shall be performed and documented.

(1) Risks and impacts will be ranked, at a minimum, as either "High," "Moderate," or "Low."

(2) The schedule of the future risk assessments will be documented.

(3) Risk assessment results, vulnerability reports, and similar information shall be documented and presented to the Information Security Officer or their designated representative(s).

(4) Approval of the security risk acceptance, transference, or mitigation decisions shall be the responsibility of:

(A) the Information Security Officer or their designee(s), in coordination with the information owner, for systems identified with Low or Moderate residual risk.

(B) The institution of higher education head for all systems identified with a High residual risk.

**History**
- *Source Note: The provisions of this §477.75 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
November 17, 2021, 46 TexReg 7775; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.76** Security Control Standards Catalog {#sec-477.76 omnilex-key=us-tx-regs-official--title-1--477.76}

(a) Mandatory Requirements. Mandatory security controls shall be defined by the department in a Control Standards document published on the department's website.

(b) Minimum Requirements for Security Controls. The controls required by subsection (a) of this section shall include:

(1) minimum information security requirements for all institution information, information systems, and applications; and

(2) standards to be used by all institutions of higher education to provide levels of information security according to risk categorizations.

(c) A review of the institution's information security program for compliance with these standards will be performed at least biennially, based on business risk management decisions, by individual(s) independent of the information security program and designated by the institution of higher education head or their designated representative(s).

(d) Development of Control Standards. Prior to publishing new or revised standards as required by subsections (a) and (b) of this section, the department shall:

(1) solicit comment through the department's electronic communications channels for proposed standards from the Information Resources Managers, ITCHE, and Information Security Officers of agencies and institutions of higher education at least 30 days prior to publication of proposed standards;

(2) after reviewing comments provided in paragraph (1) of this subsection, present proposed standards to the department's Board and obtain approval from the Board for publication; and

(3) minimize the impact to an affected institution of higher education to the extent possible by:

(A) ensuring that such standards and guidelines do not require the use or procurement of specific products, including any specific hardware or software;

(B) ensuring that such standards provide for flexibility to permit alternative solutions to provide equivalent levels of protection for identified information security risks; and

(C) using flexible standards and guidelines that permit the use of commercial off-the-shelf developed information security products.

(4) New standards required by the department will have an effective date, not to exceed 18 months from the date of adoption, after which institutions of higher education are required to adhere to the new standard.

(e) Application of More Stringent Standards. The agency head may employ standards for the cost-effective information security of information, information resources, and applications within or under the supervision of that institution of higher education that are more stringent than the standards the department prescribes under this section if the more stringent standards:

(1) contain at least the applicable standards issued by the department; and/or

(2) are consistent with applicable federal law, policies and guidelines issued under state rule, industry standards, best practices, or deemed necessary to adequately protect the information held by the institution of higher education.

**History**
- *Source Note: The provisions of this §477.76 adopted
to be effective March 17, 2015, 40 TexReg 1357; amended to be effective
February 10, 2022, 47 TexReg 489; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*

##### **1 Tex. Admin. Code § 477.77** Texas Risk and Authorization Management Program for Institutions of Higher Education {#sec-477.77 omnilex-key=us-tx-regs-official--title-1--477.77}

An institution of higher education contracting for cloud computing services that store, process, or transmit data of the institution of higher education shall:

(1) confirm that vendors contracting with the institution of higher education to provide cloud computing services for the institution of higher education are certified through TX-RAMP prior to entering or renewing a cloud computing services contract on or after January 1, 2022; and

(2) require a vendor contracting with the institution of higher education to provide cloud computing services for the institution of higher education that are subject to the state risk and authorization management program to maintain program compliance and certification throughout the term of the contract.

**History**
- *Source Note: The provisions of this §477.77 adopted
to be effective November 17, 2021, 46 TexReg 7775; amended to be effective
November 16, 2023, 48 TexReg 6579; transferred effective August 1,
2026, as published in the June 26, 2026, issue of the Texas Register,
51 TexReg 4213.*